Is It So Hard to Value Blockchain Tokens?
Weekly News Recap: 🐐 AI fuels GOAT memecoin surge, 💰 Trump’s DeFi project raises $12M, 🔒 FBI arrests SEC X hacker, 💥 Radiant Capital hit by $50M exploit, and more!
You are reading the Unchained Weekly newsletter, where we cover all the major news in the crypto space, providing insights into the market's latest trends, regulatory shifts, and technological advancements. Stay informed with your no-hype resource for all things crypto.
What’s a Fair Value for Crypto Networks Like BTC, ETH and SOL?
Valuing decentralized networks such as Bitcoin, Ethereum, and Solana is tricky. In this episode, Jon Charbonneau breaks down the key factors that determine the value of blockchain networks and how Layer 2s impact these valuations.
How do you determine the value of decentralized networks like Bitcoin, Ethereum, or Solana? It’s not as straightforward as traditional investments.
Jon Charbonneau, general partner at crypto investment firm DBA, joins Unchained after writing a paper that dives deep into the complexities of valuing blockchain networks. He explains why applying traditional equity models to networks such as Bitcoin falls short, how tax inefficiencies in staking rewards impact valuations, and whether Layer 2 solutions like Optimism and Arbitrum are helping or hurting the long-term value of Layer 1 blockchains.
Also, he looks at the big question—are these networks sustainable in the long run?
Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.
Weekly News Recap
GOAT Memecoin Rises Sparked by AI Agent
The GOAT memecoin, created just days ago via the Solana-based platform Pump.Fun, surged to a market cap of over $350 million on Wednesday. The sudden rise was fueled by an AI agent named Terminal of Truth, whose online interactions sparked the creation of the coin. GOAT, which started as a joke referencing an old internet meme, gained traction after the AI agent posted about a fictional “goatse religion” on Oct. 10. Shortly after, a wallet created the GOAT token on Pump.Fun.
Terminal of Truth fully endorsed the memecoin, encouraging followers to build a "goatse metaverse." The AI’s wallet has since received over 1.9 million GOAT tokens, valued at approximately $500,000. GOAT’s liquidity pools on Solana’s Raydium have drawn significant interest, and the memecoin now has around 20,000 holders.
Trump-Backed DeFi Project Raises $12 Million in First 24 Hours
World Liberty Financial, the decentralized finance (DeFi) project endorsed by GOP presidential candidate Donald Trump, raised only approximately $12 million in the first 24 hours of its initial token sale. The sale, which began on October 15, has significantly underperformed compared to the $300 million the project aims to raise. Despite the shortfall, the sale attracted over 10,000 unique wallets, though technical issues, including frequent website crashes, plagued the launch.
The WLFI token, priced at $0.015, is non-transferable for a year and serves as a governance token, allowing holders to participate in protocol decisions. Trump and his sons are heavily involved, with Trump himself holding the title of "Chief Crypto Advocate."
FBI Arrests Alabama Man for SEC X Hack That Spiked Bitcoin Price
FBI agents have arrested Eric Council Jr., a 25-year-old Alabama man, in connection with the January 9 hack of the Securities and Exchange Commission’s X account, which caused a temporary spike of more than $1,000 in the price of bitcoin. According to the Department of Justice, Council allegedly carried out a SIM swap attack to gain control of the SEC’s social media account. He and his co-conspirators then posted a fake tweet claiming the SEC had approved spot bitcoin ETFs for listing on all U.S. securities exchanges.
The false announcement led to an immediate surge in bitcoin’s price, which then quickly dropped by over $2,000 once the SEC regained control of the account and confirmed the tweet was a hoax. Council faces charges of conspiracy to commit aggravated identity theft and access device fraud, and is expected to appear in U.S. District Court in Alabama.
Radiant Capital Halts Lending After $50 Million Exploit
Radiant Capital, a DeFi protocol, paused its lending markets on Wednesday following a major exploit that resulted in the loss of over $50 million. The attack targeted Radiant's operations on both Binance Smart Chain (BSC) and Arbitrum, with the attacker gaining control of the protocol’s multisignature wallet, allowing them to drain funds.
The exploit, which involved the compromise of three out of 11 private keys required to manage Radiant’s contracts, resulted in the loss of assets such as USDC, WBNB, and ETH. Radiant Capital is collaborating with security firms to investigate the breach. This marks the second major exploit for the protocol this year, following a $4.5 million loss in January. Radiant's native token, RDNT, dropped 9% following the attack.
Grayscale Seeks SEC Approval to Convert Fund Into ETF
Grayscale Investments has filed with the U.S. Securities and Exchange Commission (SEC) to convert its $524 million Digital Large Cap Fund into a spot crypto exchange-traded fund (ETF). The filing, submitted on October 14 by the New York Stock Exchange on Grayscale’s behalf, marks an effort to offer investors access to a basket of top cryptocurrencies in a single, more liquid investment vehicle.
The fund is primarily weighted towards bitcoin, which makes up 75% of its assets, followed by ether at 19%, with smaller holdings in SOL, XRP, and AVAX. If approved, this would be Grayscale's first multi-crypto ETF, expanding beyond its existing single-asset offerings.
The SEC’s stance on cryptocurrencies such as XRP, SOL, and AVAX remains uncertain due to ongoing legal battles. ETF industry expert Nate Geraci commented that the filing could be preparing for a potential shift in regulatory policy, especially if the U.S. sees a change in administration after the 2024 election.
Kamala Harris Proposes Crypto Framework to Support Black Men
Vice President Kamala Harris, who has largely avoided taking a strong stance on cryptocurrency, is now advocating for a regulatory framework focused on protecting Black men who invest in digital assets. The proposal is part of her "Opportunity Agenda for Black Men," released less than a month before the presidential election. Harris' plan emphasizes the role of new technologies in expanding financial access, particularly for Black men, who have been early adopters of crypto, with over 20% having invested in it.
While Harris has previously supported innovation in areas like AI and digital assets, her focus on crypto has remained limited. By contrast, her Republican opponent, Donald Trump, has openly backed the crypto industry and criticized regulatory crackdowns. Harris’ proposal is aimed at addressing wealth inequality, framing crypto as a tool for financial inclusion, specifically for Black men.
Vitalik Buterin Proposes Major Changes to Ethereum's Network
Ethereum co-founder Vitalik Buterin has outlined significant updates for Ethereum in two new blog posts. His first proposal would lower the financial barrier for solo validators from the current 32 ETH (about $84,000) to 1 ETH ($2,600), making staking more accessible. Buterin also aims to accelerate transaction finalization times, reducing them from the current 15 minutes to just 12 seconds by implementing "single-slot finality." These changes, he believes, would help improve Ethereum's speed and inclusivity without compromising decentralization.
Meanwhile, according to research by The DeFi report, Ethereum's validators could face new challenges with the upcoming launch of Uniswap's layer 2 network, Unichain. Research indicates that Uniswap Labs and UNI token holders could capture millions in fees currently paid to Ethereum validators, significantly impacting Ethereum's validator income. As Unichain is set to handle its own validation and fee structures, many are concerned about the shifting dynamics in the Ethereum ecosystem, though some critics argue that liquidity migration is not guaranteed.
Tether Explores Lending Opportunities
Tether, the issuer of the world’s largest stablecoin, USDT, is reportedly exploring new moves into traditional finance, including lending money to commodity traders. According to a Bloomberg report, the company has been in early discussions with several commodity trading firms about potential U.S. dollar lending opportunities. This move would leverage Tether’s substantial cash reserves, allowing traders to use USDT for transactions involving commodities, particularly in regions facing U.S. sanctions.
Tether CEO Paolo Ardoino confirmed that these talks are in the "early stages" and emphasized that any investments in commodity trading would be separate from the company's stablecoin reserves. Tether, which reported $5.2 billion in profit for the first half of 2024, continues to diversify its investments, including holdings in U.S. Treasuries, precious metals, and corporate bonds.
Praxis Secures $525 Million
Praxis, the self-proclaimed world’s first "Network State," has raised $525 million to build a futuristic city specifically designed to foster advancements in crypto, artificial intelligence, energy, and biotech. The project, led by 28-year-old co-founder Dryden Brown, has attracted investments from major firms such as Arch Lending, GEM Digital, and angel investors such as Farcaster CEO Dan Romero.
The city's location is yet to be determined, but Praxis aims to create a hub for entrepreneurs and innovation, promoting the values of Western civilization.
Fun Bits: Crypto Debates, Receipts, and Salty Rejections
Crypto Twitter never disappoints when it comes to drama, and this week was no exception. Steven Goldfeder of Arbitrum and Kyle Samani of Multicoin Capital got into a spicy exchange over, well, tokens. Samani threw some shade, claiming Arbitrum issued a “100% superfluous token.” Goldfeder didn’t miss a beat and fired back with a cheeky “Sorry we didn’t let you into the Series A, bro.” To prove his point, he even shared a screenshot of an old conversation in which Samani appeared very interested.
Samani’s response? “I guess you got me,” but he shrugged it off, insisting it was still for the best.