Welcome to The Wise Guy,
Where we take cryptocurrency seriously, but we also know how to have a good time.
That’s why we’ve curated the crème de la crème from not one, not two, but FIVE newsletters.
MilkRoad, Defiant, Messari, Bankless, and CoinDesk Node.
Defiant’s Top Story
🔄 Lido Set to Complete Final Token Unlock
In an important milestone for Lido, the decentralized finance (DeFi) platform, the final major unlock event has taken place, releasing 8.8 million LDO tokens into circulation on August 25. This event has increased the token’s supply by 1%. It is worth noting that the tokens were initially sold to Dragonfly Capital in August last year as a strategic move to ensure financial stability during a bearish period.
While the token unlock may have caused a short-term pullback in the market, it has ultimately strengthened the bullish case for LDO. With this event, the circulating supply of LDO is now secured against significant dilution in the future. However, a small portion of LDO tokens, only 0.027%, will remain locked until April 2024, exclusively reserved for early investors.
Overall, this final token unlock not only improves Lido’s market position but also enhances investor confidence in the platform’s long-term sustainability. Lido will continue to make strides in the DeFi space as it strives for innovation and growth.
💼 Uniswap Surpasses Coinbase in Spot Volume
In an impressive feat, Uniswap has consistently surpassed the renowned centralized exchange, Coinbase, in quarterly spot trading volume throughout this year. The latest data indicates that Uniswap’s user base is proving to be more loyal compared to Coinbase, with activity on the decentralized exchange dropping by only 50% from Q4 2021. In contrast, Coinbase experienced an 83% decline during the same period.
This milestone serves as a significant boost for the broader DeFi industry, highlighting that a decentralized protocol like Uniswap can compete head-to-head with leading centralized exchanges and emerge victorious. The data showcases the popularity and resilience of Uniswap, as it continues to attract users with its innovative features and decentralized nature.
Looking ahead, Uniswap is poised to further solidify its market dominance with the highly anticipated launch of its v4 iteration and UniswapX DEX aggregator. These forthcoming developments are expected to bring even more excitement and value to the DeFi ecosystem, providing users with enhanced functionalities and opportunities.
Messari’s Desk
friend.tech, the pioneer as crypto’s first viral social application on Layer 2 (L2) solutions, has experienced an incredible surge in interest and activity.
The unprecedented frenzy reached its peak on August 21, 2023, when transaction count on Base, the underlying blockchain, soared to an impressive 1.4 million. Surprisingly, this number surpassed the transaction counts of Ethereum individually or the combined counts of OP Mainnet and Arbitrum One.
However, as quickly as the interest rose, activity on friend.tech has cooled off in recent days.
The number of traders and trade volumes have declined by 40% and 80%, respectively, from their peak levels.
Users have expressed concerns about high fees on trades, slow load times, and a steep pricing curve. The dedicated team behind friend.tech is actively working on potential solutions to address these issues and will continue to iterate on the product.
Nevertheless, friend.tech has had a tangible impact on Base. It has effectively solved the cold-start problem faced by new platforms by driving an extraordinary surge in both user adoption and activity. In just five days, Base unique addresses increased by an impressive 315 thousand, marking a notable 34% growth.
With users already having capital and wallets set up on Base, it is highly likely that they will continue to explore and experiment with other platform launches as well.
Notably, prominent DeFi products such as Uniswap, Aave, 1inch, and SushiSwap have already made their presence felt on Base. The increase in Base users serves as an encouraging incentive for more protocols to follow suit and launch their offerings on this thriving blockchain.
Bankless’ Desk
⚡DOJ Arrests Tornado Cash Co-Founder: U.S. Government Cracks Down on DeFi
In a bold and aggressive move against the decentralized finance (DeFi) space, the U.S. Justice Department has filed charges against two founders of Tornado Cash, a popular privacy-focused protocol.
The arrest of Roman Storm and charges of federal money laundering and sanctions violations have sent shockwaves through the crypto community. Co-founder Roman Semenov, on the other hand, is currently evading authorities as his whereabouts remain unknown.
The government’s astonishing claim is that the developers of Tornado Cash were directly responsible for the illicit use of the protocol, specifically highlighting its usage by North Korea’s Lazarus Group. The Office of Foreign Assets Control (OFAC) even imposed sanctions on Roman Semenov.
The Treasury has accused the founders of continuing to develop and promote the mixing service, despite knowing that it was being used by the Lazarus Group to launder hundreds of millions of dollars’ worth of stolen virtual currency for the benefit of the Kim regime.
Amidst these developments, one co-founder, Alex Pertsev, was already arrested by Dutch authorities in August last year. The charges against the Tornado Cash founders mark one of the most significant legal actions taken against DeFi thus far.
💼 Fears of PEPE Rug Begin to Mount: Investors Concerned About Token Movements
While most cryptocurrencies have remained relatively stable this week, memecoin PEPE has experienced a sharp decline of nearly 20%. The drop was primarily driven by concerns surrounding irregular token movements from the founding team, raising fears of a potential rug pull.
On Thursday, the multi-signature wallet controlled by the PepeCoin team transferred a staggering 16 trillion PEPE tokens, equivalent to nearly $17 million, to four different exchanges. In addition, the team made changes to their multi-signature wallet parameters, lowering the number of required signatures for transactions from five out of eight to a more concerning two out of eight signatures.
Although the team still holds 10.7 trillion PEPE, this significant movement coupled with an absence of official communication has sparked worry among users about the team’s intentions and potential abandonment of the token.
U.S. Dollar Under Threat? Brazil’s President Calls for Common Currency in BRICS Nations
The supremacy of the U.S. Dollar as the world’s reserve currency is facing increasing challenges. This week, Brazil’s President surprised many by urging BRICS nations (Brazil, Russia, India, China, and South Africa) to create a common currency for international trade.
The proposed move aims to reduce vulnerability to fluctuations in the value of the U.S. Dollar. While the discussion of a BRICS currency was not initially on the agenda, the suggestion highlights growing global frustrations with the current economic order.
Implementing such a currency poses significant challenges due to the economic disparity among BRICS nations. Nevertheless, the call for a common currency signals the broader desire for change and explores alternatives to the existing monetary system.
Milk Road’s Fed Analysis
1st Place:Akash Network (AKT)
Akash is a decentralized marketplace for cloud computing resources, enabling users to buy and sell computing power. This week, AKT saw impressive returns of +12% and has soared by +130% over the last 30 days.
The reasons behind its success can be attributed to the hype surrounding artificial intelligence, with NVIDIA’s strong earnings report igniting enthusiasm in the AI space.
Akash’s unique “reverse auction” system, where users set their desired price and providers compete for it, also contributed to its growth. Additionally, the announcement of GPU support on the platform further boosted investor confidence.
2nd Place: Optimism (OP)
Optimism is a Layer-2 scaling solution known for significantly reducing transaction costs compared to Ethereum. Users have saved over $1 billion in gas fees through Optimism. This week, OP experienced a notable 16% increase in returns.
The launch of the OP Stack, which allows others to utilize Optimism’s resources to create their own Layer-2 networks, played a significant role in its success. With big names in the crypto industry such as Coinbase, Binance, and DeBank utilizing OP Stack, Optimism is well-positioned to benefit from the fees generated by these chains.
3rd Place: The Crypto Scammer Who Duped the DEA – In an astonishing turn of events, a crypto scammer managed to trick the DEA and successfully received $55,000 from a test transaction.
The DEA had seized $500,000 in crypto as part of an investigation, but during the standard processing of the seized funds, they inadvertently sent a test amount to the scammer’s fake address. Using a technique called address poisoning, the scammer created a wallet address similar to the U.S. Marshals’ official address, leading the DEA to mistakenly send the funds. By the time authorities noticed the deception, the scammer had already moved the funds to different wallets.
CoinDesk’s Best Story
🔒 Algo Gone Wrong
Prime Trust’s Troubles In a recent court filing, Prime Trust, a crypto custodian, revealed the loss of $6 million in client funds and $2 million from its treasury due to its investment in the failed terraUSD algorithmic stablecoin.
The company faced additional challenges as it had to reimburse clients’ ETH, spending a hefty $76 million. Earlier, Prime Trust had acknowledged shortfalls in customer accounts, with approximately $861,000 in crypto and nearly $83 million in fiat missing.
💡 Coinbase’s Decentralization Pledge
Coinbase, the reputed crypto exchange, has unveiled its plan to decentralize Base, its successful Ethereum scaling layer. Called the “Base Neutrality Principles,” Coinbase aims to align its network with the vision of Optimism’s “Superchain,” a layer 2 network.
Base, built using Optimism’s OP Stack, has garnered significant interest. Additionally, Coinbase is in talks with Canada’s major banks to explore the acceptance of cryptocurrencies.
💰 FTX’s Strategy to Recoup Losses Bankrupt crypto exchange
FTX is actively looking for ways to return as much cash as possible to its creditors. With an estimated $3 billion in crypto holdings, FTX plans to sell, stake, and hedge its assets to mitigate potential losses from price drops and inflation. The exchange intends to meticulously trade Bitcoin and Ethereum while staking other assets. FTX has also tapped Galaxy Digital to assist as a potential trading adviser.
🚨 Data Breach Concerns
The bankruptcy of FTX, Genesis, and BlockFi has taken an alarming turn as customer data of these firms was compromised.
A third-party agent responsible for managing creditor claims experienced a hack, compromising emails. Although passwords and account information were not compromised, this incident may lead to an increase in phishing attempts.
Twice weekly crypto goodness, coming your way! Catch us every Monday, Tuesday and Friday. And hey, don’t forget to check us out on Wednesdays for all the latest AI news – because why limit yourself to just one kind of intelligence?
