Commentary from the Desk: November 30, 2022
Performance
Source: The Tie
- dYdX and GMX have significantly outperformed the market over the last 30 days. The main narrative here is that users will want to trade derivatives on a permissionless venue, where margin/deposits cannot be lent out.
- Aside from Solana, which, of course, has sold off due to FTXs involvement with the ecosystem, Avalanche continues to underperform, potentially due to a lack of meaningful catalysts. Both chains have seen significant drop-off in TVL over the last month, as well as a significant decline in DAUs.
- MATIC and BNB lead the L1 pack, as both retain strong narratives in this post-FTX environment.
News
Last week, all eyes were (and still are) on DCG, Genesis, and Grayscale; the contagion resumed early this week with BlockFi declaring bankruptcy on Monday. The prominent crypto-lending firm halted withdrawals on November 11th, and now joins the list of large, previously trusted institutions in this space that have gone under.
- BlockFi indicated that it had more than 100k creditors, along with assets and liabilities ranging from $1-$10 billion, per the firm’s bankruptcy filing.
- The lender had struggled to stay afloat during the Terra/Luna collapse in May and lost $355 million in on-exchange balance during the FTX blow up.
- BlockFi is now suing Emergent Fidelity, an entity belonging to SBF, over shares of Robinhood that were pledged to BlockFi as collateral.
Other notable news:
- Wrapped Bitcoin, an ERC-20 version of Bitcoin allowing users to use Bitcoin in DeFi, has traded at a discount since the FTX implosion.
- The fears were stirred as a result of Alameda being the largest wBTC merchant; but this does not mean that Alameda custodied the tokens, it simply means that they accepted BTC in order to send to BitGo to mint wBTC.
- Many on Crypto-Twitter started to meme wETH, a critical component of Ethereum infrastructure that allows the ETH token to be used in DeFi, functioning similarlt to wBTC.
- Both assets are backed 1:1, and this is verifiable on-chain.
ICYMI
- Beto O’Rourke returned $1 million check from FTX’s Sam Bankman-Fried
- Brazilian Chamber of Deputies Approves Bill Regulating Crypto Transactions
- Ethereum developers decided on eight proposals for the Shanghai update
- Coinbase Wallet to End Support for Bitcoin Cash, Ethereum Classic, Ripple's XRP and Stellar's XLM
- Genesis Creditors Seek Options to Keep Crypto Brokerage Out of Bankruptcy
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