Uncovering 1intro: Analyzing the Incident and Project-KOL Agreements

On the evening of April 14th, 1intro, claimed to be the first native LBP project on Solana, launched its token $1INTRO through the LBP mechanism.  Solana, as one of the hottest trading blockchains this year, has seen many projects with significant wealth effects. However, it has also seen a large number of fraudulent projects, with many wild projects that initially promised pre-sale payments ultimately pulling the rug, causing players to suffer losses. Therefore, a native LBP on Solana seems timely, potentially filling the narrative and token issuance gap in the Solana ecosystem.  But the higher the expectation, the greater the disappointment.  If you search for 1intro on Twitter, you will find that many KOLs were promoting this project enthusiastically 1-2 weeks ago, placing high hopes on it. However, the price changes in the LBP process tell the most honest story.  At the opening, $1INTRO surged to a high of $1.13, translating to a fully diluted valuation (FDV) of approximately $1 billion. However, its price quickly plummeted, with the token price dropping by over 90% within just one day.  Additionally, with a pre-set token sale quantity of 200 million, only 62.27 million had been sold by the time of writing, showing slow progress.Overvaluation and KOLs Holding

2024-04-16Deep Dive

Bitcoin miners could dump $5B in BTC after halving

There could be a large outflow of Bitcoin from miners in the months following the Bitcoin halving as in previous cycles, according to a market analyst.  Bitcoin miners could potentially liquidate $5 billion worth of BTC after the halving, according to calculations by the head of research at 10x Research, Markus Thielen, in an April 13 analyst note.  “The overhang from this selling could last four to six months, explaining why Bitcoin might go sideways for the next few months — as it has done following past halvings,” he added.  Thielen said that the same could happen again, with crypto markets potentially facing “a significant challenge in a six-month ‘summer’ lull.”  Bitcoin prices remained range bound between $9,000 and $11,500 in the five months that followed the 2020 halving.  This year, the halving will occur around April 20, just six days away, so markets may not see any significant upward trajectory until around October if history rhymes.  Additionally, miners tend to stock up on BTC, “leading to a supply/demand imbalance and a subsequent rally in Bitcoin prices,” leading up to the halving, he said.  This has already occurred, with BTC prices surging 74% in 2024 to reach an all-time high of $73,734 on March 14 before correcting

2024-04-15Deep Dive

Nigeria’s Binance crackdown threatens Web3 industry

Nigeria is feeling the consequences of actions against Binance executives, with investors withdrawing from deals and partnerships, particularly in the web3 sector. They mention Nigerias perceived lack of safety for business and government hostility, citing the Binance case as evidence, according to Lucky Uwakwe, the chairman of Nigerias Blockchain Industry Coordinating Committee (BICCoN).  In an interview with Cointelegraph, Uwakwe, head of Nigeria‘s intercommunity working group involving Blockchain Nigeria User Group (BNUG), Cryptography Development Initiative of Nigeria (CDIN), and Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), expressed investors’ concerns.  According to Uwakwe, investors worry about potential repercussions similar to Binances fate when investing in local Web3 companies. He pointed out that already invested parties are gradually divesting.  Binance executives Tigran Gambaryan and Nadeem Anjarwalla came to Nigeria in February following claims that the exchange manipulated the country‘s fiat currency, the naira. The executives were detained and slammed with five counts bordering on money laundering after a meeting with the Nigerian government over Binance’s regulatory woes.  Uwakwe stated that the governments approach to the Binance issue is adversely impacting the entire nation. By pursuing fines against Binance, the government is essentially undermining the entire industry, sacrificing potential growth for short-term measures.  When asked about the possibility

2024-04-15Deep Dive

This Week Noteworthy Events (April 15, 2024, to April 21, 2024)

Solana Network Repair Update Expected to Launch Today  Mert Mumtaz, CEO of Helius, the Solana ecosystem development platform, stated that the current issues with Solana, specifically its network instability, are not due to protocol design flaws but rather bugs in specific implementations.  Mert Mumtaz explained that the protocol design is like the overall design of a car, while the specific implementation is like different models of cars from various brands. Having issues with one model doesnt mean all cars have design flaws. Solana uses the QUIC network protocol, but the current QUIC implementation version has some defects and bugs. Therefore, Solana only needs to replace the problematic parts without changing the entire model.  He revealed that the implementation being developed by Firedancer does not have the same issues. The repair update is expected to be released today, and if other issues are found during the testing process, the launch time may be delayed. Besides technical issues, he believes that Solana also needs to consider long-term economic sustainability factors. After fixing the bugs, clearer planning for the on-chain fee market and economic incentive measures can be made.Arbitrum Foundation Grant Program Phase Three Applications to Open on April 15th  According to official announcements, the Arbitrum Foundation

2024-04-15Deep Dive

Nine VCs Reflect on Q1 Crypto Funding: Rebounding but Falling Short of Previous Bull Market

Tom Schmidt, a partner at Dragonfly Capital, said, “If the cryptocurrency venture capital landscape of 2023 was a pot of cold water, then the first quarter of 2024 is when the water starts to boil and bubbles begin to form.”  According to PitchBook data, the cryptocurrency and blockchain sectors raised a total of $2.52 billion in the first quarter of 2024. This is about 25% higher than the $2.02 billion raised in the fourth quarter of 2023.  David Nage, portfolio manager at Arca, stated, “Its an unusually busy period right now, feels like 2021 all over again. 2021s fundraising was like having a gun to your head, you had to do it, and that feeling is back.” Nage said his firm tracked over 690 cross-stage financings that occurred in the first quarter, which is about 30% to 40% higher than the low point of 2023.  Alex Felix, co-founder and chief investment officer of CoinFund, commented, “In the first quarter, the financing outlook for crypto venture capital is cautiously optimistic, and companies have moved past the financing difficulties of the previous two years.”  Felix added that despite a significant year-over-year decline in venture capital and cryptocurrency financing in 2023 (about 65%), trading activity has clearly

2024-04-12Deep Dive

Bitcoin ETF battle heats up as BlackRock closes in on Grayscale

It has been three months since spot bitcoin ETFs began trading and BlackRocks fund appears to be on pace to usurp Grayscales as the biggest of the crypto-based investment vehicles on offer.  According to Trackinsight data compiled by The Block Data Dashboard, BlackRocks IBIT fund had $18.2 billion in assets under management compared to Grayscales $23.2 billion.  As Grayscales GBTC fund, which charges a higher fee than BlackRocks, has consistently shed capital since it began trading, BlackRocks ETF has been slowly narrowing the gap in terms of assets under management, or AUM. Grayscales fund had about $23.4 billion in AUM two months ago compared to BlackRocks $4.4 billion, according to The Block Data Dashboard.  Grayscales ETF started with nearly $30 billion in AUM as the firms exchange-traded fund is a conversion of its flagship fund. The funds declining AUM is likely due, in part, to Genesis selling GBTC shares, said Eric Balchunas, senior ETF analyst at Bloomberg.  In terms of trading volume, Grayscales fund has also been gradually losing market share, down from about 50% when the spot bitcoin ETFs launched on Jan. 11 to 23.5% as of Tuesday.  Grayscale‘s fund shed $154.9 million in outflows on Tuesday, while BlackRock’s took in $128.7 million in

2024-04-11Deep Dive

MarginFi sees $155 million outflow amid leadership shakeup

Edgar Pavlovsky, the creator of Solana-based crypto lending and borrowing platform MarginFi, announced his departure from the protocol on Wednesday due to internal disagreements. This has largely caused major outflows from one of the most used DeFi protocols on Solana.  According to DefiLlama, MarginFi saw net outflows worth $155 million from around Pavlovskys resignation announcement. Its total value locked also dropped to $524 million, compared to$738 million on Tuesday and $811 million on April 1.  “I don‘t agree with the way things have been done internally or externally,” Pavlovsky wrote on X. “I’ve told everyone involved I dont really care about tokens, or money, or any of that.”  Pavlovsky added that the departure is ultimately his failure as founder of MRGN Inc., the company behind the DeFi project.  MarginFi also confirmed Pavlovskys exit, noting that its products and operations are unaffected. “His departure is a function of internal operational disagreements and of his own personal reasons, and we respect his privacy,” MarginFi said in its X post.  Pavlovsky‘s resignation came just hours after Solana liquid staking protocol SolBlaze posted its accusations against MarginFi, claiming that it acted in bad faith by not distributing tokens allocated to users per SolBlaze’s depositor reward guidelines. SolBlaze rewards BlazeStake

2024-04-11Deep Dive

Policy Analysis: Uniswap Receives Wells Notice from SEC

Uniswap founder Hayden Adams announced on social media that Uniswap has officially received a Wells Notice from the SEC. In response to this news, the price of UNI dropped by over 5%, falling from 11.2 U to a low of 9 U, and is currently trading at around 9.4 U.What is Wells Notice?  The Wells Notice is a letter sent by the SEC after concluding an investigation into an individual or company, informing them that the SEC intends to take enforcement action against them. The notice informs the investigated party that the SEC has concluded they violated securities laws. It indicates that the SEC has identified potential litigation and provides the notified party with an opportunity to explain why enforcement action should not be taken.  Key elements include: the SEC has preliminarily characterized the investigated company and its operations, but its not a formal, final complaint, and the investigated company still has the opportunity to respond. In essence, receiving a Wells Notice means there will be a definite impact and theres a possibility of the situation worsening, but the ultimate outcome cannot be predicted at present.Uniswaps Response  Hayden Adams stated, “I believe our product offerings are lawful and prepared to fight.” Uniswap issued

2024-04-11Deep Dive

Ex-Ethereum Advisor Steven Nerayoff Sues U.S. Government for $9.6 Billion Over 'Fabricated' Charges

An early Ethereum network adviser is suing the U.S. government for $9.6 billion, alleging federal agents “maliciously” investigated and prosecuted him.  In a legal complaint filed on TK, Steven Nerayoffs lawyers allege government agents fabricated federal charges against their client in 2019.  According to the lawsuit, as part of their “collective and concerted fishing expedition,” federal agents subpoenaed, surveilled and even arrested Nearyoff, despite knowing the charges against him were “factually and legally baseless.”  “Federal agents and officers… launched an unhinged and unlawful, four-year campaign against Mr. Nerayoff,” lawyers said in the complaint.  Nerayoff was arrested in 2019 for allegedly extorting 10,000 ether from a crypto startup. The legal battle that ensued lasted roughly four years, ending when the US government dismissed the lawsuit in May 2023.  Nerayoffs lawyers allege that federal agents actions have caused their client “significant damages and injuries.”  

2024-04-10Deep Dive

Etherfi maintains lead in liquid restaking niche with over $3.8 billion in deposits

Etherfi continues to lead the liquid restaking market, managing over 1.07 million ETH, which translates to roughly $3.8 billion in user deposits.  Etherfi enables users to access restaking yields via EigenLayer, highlighting its role in the growing niche.  Liquid restaking has experienced notable growth this year, driven largely by increased deposits on EigenLayer, which intends to utilize ETH deposits to strengthen third-party protocols. This, in turn, boosts the total value locked in LRTs, with Etherfi holding a considerable portion of this value.  While Etherfi leads liquid restaking, other protocols also contribute hugely to the market. These include Renzo at $2.9 billion, Puffer at $1.4 billion, Kelp with over $840 million, Swell with $345 million, and Eigen at $340 million, according to The Blocks data dashboard.  Restaking allows users to employ their staked ETH — or a corresponding liquid staking token — on platforms like EigenLayer for restaking purposes. EigenLayer then allocates this ETH to support other Ethereum-based applications, termed “actively validated services”, thereby broadening Ethereums security framework.  Liquid restaking offers the benefit of engaging with EigenLayer‘s services while maintaining liquidity and accessibility of users’ ETH capital. These protocols continue to accept ether deposits, restake them, and issue derivative tokens, offering users additional incentives to participate

2024-04-10Deep Dive
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