Is It Time to Pay Attention to Bitcoin Again?
Weekly News Recap: 📈 Reddit's bitcoin and ether IPO reveal, 🔓 Starknet's token schedule revision, ✈️ Do Kwon's impending US extradition, 📊 Ethena's $350M high-yield attraction, 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. Your no-hype resource.
Stacks’ Muneeb Ali On Why Bitcoin Is Exciting Once Again
In this episode of Unchained, Muneeb Ali, the co-creator of Stacks, co-creator of Stacks, delves into the current state and future potential of Bitcoin. Muneeb, with a comprehensive background in blockchain technology, evaluates the significant developments within Bitcoin's infrastructure.
He observes, "I think in the last five years, this is probably the most exciting time for Bitcoin," highlighting a period of notable innovation and change. The discussion covers a range of topics, from the complexities of Ordinal Inscriptions and their reception within the Bitcoin community to the advancements in Bitcoin's Layer 1 and Layer 2 technologies. A significant focus is on BitVM, a development that Muneeb suggests could profoundly impact Bitcoin's functionality, particularly in the realm of smart contracts.
Listen to the episode on Apple Podcasts, Spotify, Fountain, Overcast, Podcast Addict, Pocket Casts, Pandora, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform.
Weekly News Recap
Do Kwon Extradited to the US
Terraform Labs co-founder Do Kwon is set to be extradited to the United States, where he faces serious fraud charges. This decision, made by the High Court in Montenegro, overrules a previous request by South Korea for Kwon's extradition. The charges against Kwon are linked to substantial financial losses suffered by U.S. investors, related to the collapse of US Terra, an algorithmic stablecoin developed by Terraform Labs.
The sequence of events leading to this decision began with Kwon's arrest in March 2023 in Montenegro. He was apprehended for using a counterfeit passport while attempting to leave the country. Although Kwon initially agreed to be extradited to South Korea, the situation took a turn when a Montenegro court, in June, found him guilty of document forgery and sentenced him to four months in prison. Despite an appeal, Kwon lost and served his sentence.
The extradition ruling follows a series of legal challenges faced by Kwon. The U.S. Securities and Exchange Commission has levied civil charges against him and Terraform Labs, accusing them of raising billions from investors through the sale of crypto asset securities, many of which were unregistered transactions. This trial, initially scheduled for January but delayed due to logistical challenges, is now set to take place in late March.
Starknet Launches STRK Token With High Valuation, Revises Unlock Schedule
Starknet, a Layer 2 blockchain network on Ethereum, initiated the much-discussed distribution of 728 million STRK tokens to about 1.3 million wallets, causing its market capitalization to reach nearly $1.3 billion and a fully diluted valuation (FDV) of $18.9 billion at the time of writing. This positions STRK among the top 10 tokens by FDV, surpassing long-standing networks like Arbitrum, Optimism, and Avalanche in valuation, though not in total value locked (TVL).
However, the token's launch wasn't without controversy. Starknet faced backlash from its community, particularly over the exclusion of active members from the airdrop due to not meeting specific wallet criteria.
On Thursday, StarkWare, the company behind Starknet, responded to one of the criticisms by announcing a change to the lockup schedule for tokens held by its early contributors and investors.
Originally, about a third of the tokens, or about 1.3 billion of them, held by early supporters were set to unlock on April 15. However, after “listening to feedback,” StarkWare has revised this plan. Now, only 0.64% of the initially minted 10 billion tokens, or 64 million tokens, will unlock on April 15, a sharp decrease from the planned 13.4%, or 1.34 billion tokens.
This gradual unlocking will continue at a rate of 0.64% monthly until March 15, 2025, shifting to 1.27% monthly for the following 24 months, and ending on March 15, 2027. Under this new schedule, 580 million tokens will be unlocked by the end of 2024, substantially less than the 2 billion that was previously scheduled.
On last week’s podcast, StarkWare CEO Eli Ben-Sasson said that the original lockup period for STRK tokens was not misaligned with the company's goals but was influenced by early governance and payment utility plans for the token.
Reddit's IPO Filing Reveals Bitcoin and Ether Investments
Reddit, the popular social media platform, disclosed its investment in bitcoin (BTC) and ether (ETH) as part of its initial public offering (IPO) filing. The company, which plans to go public on the New York Stock Exchange under the ticker "RDDT," joins a small group of corporations such as MicroStrategy and Tesla that hold direct digital asset investments in their treasuries.
In a landmark filing with the U.S. Securities and Exchange Commission (SEC), Reddit disclosed not only its investment in cryptocurrencies but also its acquisition of Ether and Polygon (MATIC) as payment for virtual goods sales. While the exact amount of tokens held remains undisclosed, the company indicated that the net carrying value of these digital assets is currently "immaterial."
Ethena's High-Yield DeFi Platform Draws Over $350M Amid Skepticism
Ethena, a decentralized finance platform, has garnered attention by attraccting over $350 million since its public launch, offering an alluring 27.6% annual yield on its USDe stablecoins. This yield, derived from a combination of staking ether and shorting ether futures, has raised eyebrows in the crypto community.
The platform operates by allowing users to deposit various stablecoins and receive USDe, which can then be staked or supplied to other DeFi platforms for additional yield. However, skepticism surrounds the sustainability of Ethena's model, particularly its reliance on high funding rates from short positions and the inherent risks involved.
Critics point out the potential for a decrease in ether's funding rates, which could undermine the high yield and threaten the stability of USDe. Additionally, concerns about the impact of large-scale shorts on the market and the robustness of Ethena's $10 million insurance fund against negative funding rates add to the apprehension.
Circle Ends USDC Minting on TRON Blockchain
Circle, the issuer of the USDC stablecoin, announced an immediate halt to the minting of USDC on the TRON blockchain. Circle's phased discontinuation plan includes supporting transfers of USDC to other blockchains through February 2025 for customers of Circle Mint, a tool used by institutions for minting and redeeming stablecoins.
Retail holders of USDC on TRON have the option to transfer their stablecoins between blockchains or redeem them for fiat currency through various crypto exchanges and brokerages.
The decision follows Circle's refutation of claims linking it to terrorist financing and its denial of banking services to TRON founder Justin Sun. In response to allegations by the nonprofit Campaign for Accountability, Circle clarified in a memo to U.S. Senators Sherrod Brown and Elizabeth Warren that Sun, “Circle does not “bank” Justin Sun. Neither Mr. Sun nor any entity owned or controlled by Mr. Sun, including the TRON Foundation or Huobi Global, currently have accounts with Circle.” This announcement also coincides with Circle's recent filing for an initial public offering (IPO) in the U.S., reflecting its ongoing efforts to comply with regulatory standards.
GitHub Spam: The Unintended Consequence of Crypto Airdrops
The recent airdrops by projects like Celestia and Starknet, rewarding GitHub contributors, have unintentionally spurred a new trend: airdrop farming on GitHub. Developers are facing an influx of low-quality contributions, primarily from airdrop hunters seeking to mimic successful airdrop recipients. For instance, one Starknet contributor received 1,800 tokens for a simple spell check, worth about $3,200 at pre-launch prices.
This phenomenon has led to over 1,000 spam comments on the Scroll GitHub repository, burdening the development team. Toghrul Maharramov, a senior researcher at Scroll, told DL News that spamming GitHub with trivial contributions like typo fixes is a waste of time for both the spammers and the project teams.
Surge in Worldcoin’s WLD Token
The WLD token of Worldcoin has seen a significant surge this week, rising over 100%. The curious thing is that this increase appears linked not to Worldcoin's achievements, but to founder Sam Altman, also the CEO of OpenAI. The launch of OpenAI's new AI product, Sora, seems to be driving WLD's value, illustrating the influence of high-profile individuals in the crypto market.
This trend is exemplified by WLD's fluctuation in response to Altman's role changes at OpenAI, despite no direct link between Worldcoin and OpenAI. Key beneficiaries of this rise are the liquidators of Three Arrows Capital and FTX's bankruptcy estate, holding substantial amounts of WLD. Their stakes, gained from early investments, could potentially aid in creditor recoveries, though immediate liquidation isn't possible due to vesting schedules.
Pudgy Penguins Eclipse Bored Apes as Yuga Labs Undergoes Leadership Change
In a surprising twist in the NFT market, Pudgy Penguins' floor price briefly surpassed that of the esteemed Bored Ape Yacht Club (BAYC). The Pudgy Penguins collection achieved a floor price of 22.7 ETH, overtaking BAYC's 22.15 ETH. This significant growth has been observed since Luca Schnetzler became the CEO of Pudgy Penguins in April 2022, leading to strategic expansions and partnerships.
In parallel, Yuga Labs, the creator of BAYC, announced some changes and expansions. The company acquired Proof, known for the Moonbirds NFT collection, planning to integrate Moonbirds into its metaverse project, Otherside. This acquisition marks Yuga Labs' continued dominance and diversification in the NFT space.
Additionally, Yuga Labs has seen a shift in leadership, with co-founder Greg Solano, known as Garga, taking over as CEO. This change follows Daniel Alegre's ten-month tenure. The leadership transition occurs at a time when Yuga Labs faces increased competition in the NFT market, exemplified by the brief floor price lead of Pudgy Penguins.
FixedFloat Exchange Suffers $26.1 Million Heist
Over the weekend, crypto exchange FixedFloat was hacked, resulting in a loss of approximately $26.1 million in Bitcoin and Ethereum. The breach was first indicated by unusual transaction activity on the platform, with on-chain data revealing the theft of 409 Bitcoin (valued at $21.1 million) and 1,728 Ether (approximately $4.85 million).
The issue surfaced on February 17 when users reported issues with transaction processing on FixedFloat. Initially dismissed as "minor technical problems" by the exchange's team, it later emerged that an exploit had occurred. While the team acknowledged the breach, they have yet to provide detailed comments on the incident.
Blockchain security experts have discovered that the attacker has begun laundering the stolen funds through exchanges such as eXch.cx and HitBTC.
Fun bits: Budgeting Like a Crypto Minimalist
Virginia's foray into the crypto world might not break the bank, as their new Blockchain and Cryptocurrency Commission is set to operate on a modest budget of just $17,192 a year. That's right, in the land where digital currencies often spell big bucks, Virginia is counting pennies for its 2025 and 2026 crypto adventures.
This budget, slightly less grandiose than their Artificial Intelligence Commission's $22,048 yearly allowance, will primarily cover the exhilarating world of meeting and travel expenses. It's like planning a road trip with a focus on budget motels and packed lunches.
With 15 members on board, the commission is tasked with demystifying blockchain and digital assets, all while keeping an eye on the fiscal odometer. It’s crypto advice with a side of budget-friendly pragmatism. Virginia's message? You can explore the exciting world of cryptocurrencies without splashing the cash!