All Been Crypto — Week 26 April 2024

Apologies for last weeks missing ABC was in Dubai at the inaugural Token2049 — key takeaways, lots of crypto folks moving there particularly from Europe mainly for tax reasons. Big Russian community most visible at the keynote from Telegram founder Pavel Durov which felt like a popstar coming on stage. They announced Tether native on Telegram’s TON network with no transaction fees for starts. Current Binance CEO Richard Teng talked compliance getting him Dubai VASP license while former CEO CZ looking at 3 years in prison. And then of course there was a lot of talk about BTC innovation and L2s while everyone quietly watched the Halving happen as expected. Looking at this weeks price action pretty muted BTC/ETH flat WoW around the 65k and 3k level with MEME coins the big gainers recovering from last weeks bleeding BONK, PEPE up 70/40% respectively while TON had a sell the news -22% and ENA -12% taking a beating after the basis trade juice has dried up. In the news two SEC lawyers that were behind the Debt Box fiasco (see ABC 22 March) allegedly got pushed to resign, while Consensys launching a lawsuit against the SEC calling ETH a security. Another attack on privacy with prominent Bitcoin mixer Samourai Wallet devs getting arrested. The FBI is warning Americans not to use unregistered crypto currency money transmitting services. Banter between Morpho and Aave continues, another rugpull ZKasion went away with 33mm and of course we have more raisins Pantera looking for 1bn for their new crypto fund. Next week we’ll see Hong Kong have it’s first spot BTC/ETH EFTs start trading so enjoy reading and the ride!

Bat Tai Chi — btc21@mail.com

HEADLINES:

4th Halving and what next

Almost like clockwork every 4 years block rewards are cut in half. This time from 6.25 to 3.125 per block. Since ordinals the value of the first SAT in the post halving block is not just symbolic but actually got a hefty bid selling for 33.3 BTC. Unsurprisingly there was a bit of a fee war for getting this one. We also saw the kick off of Runes protocol (if you need a primer Dan Held has a good one). But outside of that everything went very mundane. You had the occasional mainstream headline about the event but nothing out of the ordinary and price has also been holding stead and so has the meme pool. With demand for blockspace now underpinned by different primitives and L2s building on top of the Bitcoin Chain we might not see the same miner shakeout that we usually have post halving. Hash rate has been barely impacted.

Samourai Wallet founders got arrested

Was another sad week for onchain privacy. The DOJ went after the Devs behind the prominent Bitcoin Mixer Samourai Wallet and judging form how they handled the Tornado Cash case they are in for a hard time. There was of course an outcry from OGs about how this is bad for everyone and these tools are crucial for preserving one of the core values of some of the community i.e. on-chain privacy but of course that will likely not change anything and Keonne Rodriguez and William Lonergan Hill are likely facing a long time behind bars. Authorities say the wallet processed over $2 billion in unlawful transactions, including at least $100 million via illegal dark web marketplaces like the Silk Road and Hydra Market. The FBI even issued a warning this week about not using unlicensed services.

Renzo Depegging and implications for LRTs

We had quite a big scare when Renzo briefly depegged >50% on some DeFi venues as auto liquidations pushed price lower. The protocol is one of the largest liquid restaking platforms (LRT) with ~3bn TVL. They caused a dump after they came out with the deadline for snapshot of Phase 1 points allocation ahead of a potential TGE. Again nobody can ever talk about TGE and this being related to points otherwise you open yourself up to legal scrutiny (but that’s another story). So market started dumping ezETH thinking they will get more points at the others, this was into relatively thin liquidity because you can’t withdraw ETH yet so it relies on secondary pools. I’m highlighting this because it in my view is symbolic for the risks that are inherent with these protocols (here it’s just liquidity risk) and also how concentrated and crowded the market has become.DCFGod got a good take on this, we likely see others play the points gravy train for longer and might even consider allowing un-staking before TGE.

QUOTES:

I’m gonna put the entire US budget on blockchain. Every American can look at every budget item in the entire budget, anytime they want, 24 hours a day.

R.F. Kennedy Jr. — Independent president candidate

We don’t take this step [suing the SEC] lightly, but we feel compelled to act. Ethereum is for everyone

Joseph Lubin — Ethereum’s co-founder and CEO of Consensys

Today I realized I haven’t felt grass between my toes or smelled a flower in over a decade!

Ross Ulbricht — Founder of Silkroad