Updated: Feb 14, 2022
Welcome to this 13th issue of the Chain Reaction newsletter for the week commencing 14th February 2022.
In the news last week we saw the founders behind the BAYC (Bored Ape Yacht Club) get doxxed by Buzzfeed, consultancy KPMG and investment firm Blackrock make moves into the world of crypto as well as a backtrack from the central bank of Russia as they have now approved cryptocurrency after initially pushing to ban it.
Across videos, local finance news channel, ausbiz, continued their set of education crypto content this time looking at tokenisation, NFTs and more.
For those interested in learning more about this space, check out the Education section where we dive deeper into the Cuve (liquidity) wars as well as a dive into the numbers behind crypto thanks to TikTok/Twitter content from 2 of our founding members.
If you like what you see and you're interested in continuing these awesome DeFi conversations, join us on our Discord: https://discord.com/invite/ZRCTDdsVEF
What you can expect in this newsletter
In the News
Videos of the week
Charts and Data
Around the world of social media
In the news
CryptoSlate - Initial Litigation Offerings (ILOs) show blockchain isn’t a solution looking for a problem - Whilst not new, ILOs are in the spotlight in a $1 billion hemp grower lawsuit in California. Investors in this case get a multiple of their investment if the case settles but nothing in the event of dismissal. Using blockchain technology, instead of only accredited investors being able to buy into ILOs, now investors with as little as $100 can get involved.
Unreal demand? Irregular sales worth billions fire up wild NFT market - With a $50.6m transaction then a $49.6m transaction passing hands back and forth between the same two wallets, and many more like this on LooksRare, it certainly adds to the inflated volume that people are seeing on this NFT exchange. Whilst it looks bad, this Twitter thread argues otherwise.
NFT Evening - Balloonsville Admit to Being A Rugpull, Then Blame Magic Eden - Yet another NFT rugpull with Balloonsville deleting all of their social media and making off with 5,000 SOL but not before taunting buyers for trusting ‘the biggest money hungry apes’ (Magic Eden). This has raised questions regarding Magic Eden’s vetting process - the platform has since de-rugged the Balloons and offered minters and holders the option for a refund.
CoinDesk - SEC Requests Comments on Concerns About Grayscale's Spot Bitcoin ETF Proposal - The U.S. Securities and Exchange Commission (SEC) has expressed concerns about how Grayscale will head off share manipulation, fraud and other possible issues in its proposal to convert its Grayscale Bitcoin Trust (GBTC) into a bitcoin spot exchange-traded fund (ETF), according to a notice Friday. More details in the article.
CoinTelegraph - Softbank backed startup to offer retail crypto trading - DriveWealth (which some know as the entity which enabled zero cost brokerage for Australians trading US stocks on Stake) has launched 2 crypto related offerings with DriveDigital, a subsidiary crypto exchange and DriveLiquidity which provides liquidity for partners to invest in crypto assets. Stake is not alone in using Drivewealth so let’s see how this drives adoption across the globe.
Coindesk - KPMG Canada Adds Crypto to Its Balance Sheet - KPMG Canada has acquired an undisclosed amount of Bitcoin and Ethereum on its balance sheet. This investment is in-line with their bullish view on cryptoassets and their expanding blockchain services. The firm is apparently receptive to future innovative opportunities according to spokesperson Roula Meditskosa.
According to a source within Blackrock, the asset manager has been preparing to offer investor clients the ability to trade cryptocurrency through their proprietary software Aladdin. This strategy is likely part of Blackrock’s increasing involvement in blockchain with the firm already trading CME Bitcoin futures in addition to plans for a blockchain ETF.
9News - What is the metaverse, and what are the key issues around it? - A dive into the metaverse for those who are newly accustomed to it. Seeing articles like this form maintream news sites is great as we are all about education here. They go through what it is, what it looks like, what people can do and who the major players are. Worth a look if you're just getting started.
Blockworks - Russia Moves to Recognize Crypto as a Form of Currency - In a big backtrack from the Bank of Russia initially wanting to outlaw crypto (then President Putin wanting to keep crypto mining) comes this bit of news. It is set to be classed as an analog of currency but requires identity checks and other restrictions. Still, progress is progress.
CoinTelegraph - Venezuelans reportedly hit by new Bitcoin tax of up to 20% - Following up from the 30% tax India is putting on cryptocurrencies (after approving the use of them) comes Venezuela and their new tax bill aiming to collect between 2% to 20%.
Videos of the week
CoinBureau - Crypto Gaming Guilds: The NEXT BEST GameFi Play?! - In this video, Guy from CoinBureau breaks down all you need to know about gaming guilds and how they play a part in the play-to-earn/GameFi ecosystem. Did you know that guilds help give early access to things like land and they often get beta access to new games. Considering they are often DAOs, they can also have a strong influence on games themselves. Learn that and more in this video. 25mins
The Defiant - Doxxes, Hacks, Bailouts and Cancellations - Highlights of the past week where a lot of controversial details bubbled to the surface in the world of DeFi. From hacks at Wormhole to anonymous hacks to old tweets coming up to haunt people. What week. 5mins
Whiteboard Crypto - What is Harmony One? ONE Explained with Animations (Price Prediction) - What is Harmony ONE? Harmony is a blockchain that runs the Ethereum Virtual Machine using a special form of sharding and a proof of stake consensus mechanism, but is attempting to join all the blockchains in a 'harmonious' manner. 12mins
ausbiz - "Salty Pirate Crew" NFT project - Aussie ship sets sail - In this interview with Salty Pirate Crew founder, Barret Ovens and what they’re setting out to achieve with their NFT collection and the DAO they’ve built around it and how they are bridging NFTs and the real-world. 14mins
ausbiz - Tokenisation - the democratisation of private equity - In this video, it’s a chat with Ian Lowe, CEO of Dacxi to discuss tokenisation and what are the benefits of tokenising different asset classes with a variety of examples. Democratising opportunities for investors is a key benefit here.
Glassnode - The Week Onchain: Is a Bitcoin Bottom in? - Week 6, 2022 (Bitcoin onchain Analysis) - The Week Onchain show which came out on the 9th February 2022 goes through the short squeeze influence, 30-day performance for bitcoin as well as some momentum oscillators.23mins
Coin Bureau - Reading Crypto White Papers: How To Find GEMS!! 💎 - If you’ve ever wanted to learn more about white papers and what to look out for, then check out this video from Guy and the Coin Bureau team. 20mins
Charts and Data
Top 10 cryptocurrencies by market cap as at the 13th February 2021 11:08am AEST on CoinGecko. Retesting the $42k mark after hitting $45k during the week in recover still sees bitcoin up on the last 7 days. Others are slightly down in the top 10.
One thing we highlighted from the on-chain metrics (specifically SVAB - spent volume age bands) provided by Glassnode was how the selling going on in the market earlier this year was not widespread. As you can see below, those with coins 1-month to 6-months old had spikes during that period.
Those with more experience - e.g. HODLers of 6-month to 5-years were much calmer during these periods
But what was very really interesting was seeing a spike in volume in the 5 to 7 year group on 1st February 2022. On that date the price of bitcoin was around $38,784. They could have purchased this anywhere between 1 February 2017 (5 years ago) and 1 Feburuary 2015 (7 years ago). During that period, bitcoin traded in a range between ~$200 to ~$1,100. Basically, that’s a gain between 38 times to 193 times however much their investment was.
Check out Glassnode for more great insights like this.
Social post of the week
In an unwanted doxxing, the founders of the Bored Ape Yacht Club (#BAYC) NFTs were unveiled by news outlet, Buzzfeed. Many took to Twitter to serve their displeasure at this unwarranted event unveiling as well as to highlight that the artist behind the series was not included. Buzzfeed missing the mark a few times here. https://twitter.com/BagHoldingNFTs/status/1491268660953976839
Just another day in crypto it seems with this bit of news about the Bitfinex saga which on paper looks like a great trade. Steal $76m, repay victims slowly, see original coins shoot up in value to billions. Though the duo behind this are going away for a very long time it would seem. Not a great trade at all. https://twitter.com/JackNiewold/status/1491196199256608770
From UniSwap to SushiSwap and back again and now Curve with the highest total value locked amongst Decentralised Exchanges. All was fine until Convex Finance entered and provided a more efficient way for users to gain Curve tokens. Then began the Convex Bribing Economy where instead of needing to own CVX tokens to get votes in Curve pools, you could just bribe CVX holders to vote on pools you want them to vote in with services like Votium enabling you to delegate vote but with the downside of having a lot of leftover amounts of various coins that aren’t worth the gas fees to exchange them. Finally, there’s REDACTED Cartel which acts as a hedge fund where users buy BTRFLY tokens and REDACTED uses an optimised version of the bribing strategy to earn more CRV and CVX.
The author notes that Tokemak and their TOKE token which isn’t acquiring CRV or CVX but you can vote on how liquidity is deployed. But of course this gets looked at by REDACTED and their aiming to control a significant amount of TOKE so they can influence things and so it goes.
The war will continue this year but as an end user, you’re either buying into an all-in-one that finds the best yield for you or you can enjoy the complicated path and do it yourself. Will be interesting to see where this goes in 2022, that’s for sure!
Numbers and Analysis on TikTok and Twitter
We also need to highlight that one of our members, The HappySpender, has been doing some awesome intros to numeric analysis with her audience. Check it out here - https://www.tiktok.com/@the_happyspender?lang=en
Also, check out our content on Twitter as we start going through some insights as well - https://twitter.com/AusDeFi/status/1491540073501712384
Thanks again to our various newsletter contributors
Cam Crossley (see LinkedIn)
Jordan Franklin (aka The Happy Spender on TikTok/Instagram)
Rohan Agarwal (see LinkedIn)
Leo Luk (see LinkedIn)
David Gikandi (see LinkedIn)
Gururaj Sundaram (see LinkedIn)
Nicholas Bishop (see LinkedIn)
Arturo Rodriguez (see LinkedIn)
Mark Monfort (see LinkedIn)