Reddit Avatars Take NFT Market By Storm |
|
| The NFT bull market may be back.
The catalyst comes not from Yuga Labs, Coinbase, or SudoSwap. Instead, it comes from Reddit. Yep, that web2 message board that everybody uses but nobody admits to is now responsible for the best NFT momentum since people were dropping their life savings on virtual land.
It’s funny how the world works.
Collectible Avatars
The story of Reddit NFTs began back in July when they announced a partnership with Polygon to build an NFT avatar marketplace. Users could mint and purchase avatars (on Reddit’s wallet, Vault) and then use them as their Reddit profile picture, or re-sell them on secondary marketplaces.
Looking at the data, it’s hard not to call the initiative a success. The Trojan Horse?
Even if you couldn’t care less about NFTs, you should be thrilled reading that Reddit has onboarded 3 million new people into crypto.
Crypto’s greatest hurdle on its road to mass adoption is its complexity. It’s like a graduate-level course to learn what crypto is, how to buy it, and how to keep it safe. Naturally, this doesn’t entice many people to leave the comfort of the traditional financial system.
Reddit NFTs (partly) solve this. They are a crypto Trojan Horse. People on Reddit start off just buying cool “digital collectibles,” but soon enough, some among them start buying other NFTs. Then, they start exploring Bitcoin and Ethereum. Next, they go down the DeFi rabbit hole. Before you know it, they are full-blown degens.
Will this happen to everyone who buys a Reddit NFT? No. But with Reddit having 50 million daily active users, even a small percentage of users is enough to make a big difference. |
|
MakerDAO To Deposit $1.6B of USDC Into Coinbase |
|
| Back in September, we wrote about MakerDAO’s decision around whether to accept an offer from Coinbase to custody $1.6 billion USDC at a 1.5% interest rate into Coinbase Prime.
As we wrote at the time: “We’re not sure if Maker will accept Coinbase’s offer. What we are sure of is that it’s an important decision.” Well, with the governance vote passing with 75% votes in favor, we now have our answer.
What Does This Mean For Maker?
In a lot of ways, the move makes complete sense. An additional $24 million in annual revenue is nothing to sneeze at, especially considering that most DeFi protocols are breaking even or in the red. Combine that with the relative safety of Coinbase and the fact that the USDC would otherwise be unproductively sitting around, and you have what looks like a clear win for Maker.
Not to mention, the news falls on the heels of MakerDAO’s $500 million investment into US Government bonds which marks another big step in boosting protocol growth and revenue.
Of course, not everyone in the Maker community is enthused. A loud minority of people believe Maker is taking on too many centralized counterparty risks, especially in a world where governments sanction code. To these decentralists, it’s only a matter of time until Maker is attacked, and by partnering with Coinbase and practically the US Government, they are just making an attack easier.
What About For Coinbase?
On the other hand, for Coinbase, this is a clear-cut win.
They pick up $1.6 billion for cheap, which they can use to extend the reach of USDC, and land a partnership with one of the most important DeFi protocols.
Pretty sweet deal if you ask us.
Finally, What About For DeFi?
If you are a DeFi investor, now might be a good time to pray to whoever your God is.
MakerDAOs forays into Coinbase and Bonds, while good ‘business’ moves, do nothing to boost its censorship resistance. If anything, it makes an attack more likely.
Considering that MakerDAOs stablecoin DAI is deeply embedded into DeFi, any collapse in Maker would be catastrophic for DeFi.
At this point, we just have to hope that we survive long enough for truly decentralized stablecoins to come to the market. |
|
If you already own crypto or crypto stocks, read this warning immediately. |
|
| The man who predicted the 2020 crash sees major warning signs. “A historic financial reset in 2023 could cause a run on the banks unlike anything we’ve seen in our country’s history,” he says.
But few people realize this could actually happen on U.S. soil. Or what a sizable impact it could have on your wealth, especially if you have large amounts of cash in the bank right now.
In his latest public appearance, he is now urging you to move your money out of cash and popular stocks and into a new vehicle 50 years in the making.
“This is by far the best way to protect and grow your money in what will surely be a very difficult transition for most people."
Click here for the full story, and his free recommendation. |
|
Chinese Agents Caught Using Bitcoin Bribes |
|
| If you were on Twitter this past Monday, you probably noticed that your timeline was bombarded by the news of the DOJ national security press conference. Unfortunately for the attention spans of America’s youth, the rumored TikTok ban did not come to fruition.
However, not all was lost, as the press conference did gift us one of the wildest stories of the year.
Strap in for a tale of deception, betrayal, and Bitcoin.
Bitcoin Bribery
The story begins like all good stories do: with an espionage plot.
In this case, the central characters are Chinese intelligence officers Gouchun He and Zheng Wang. These two gentlemen were tasked with obtaining classified information about an ongoing investigation into, as reported by WSJ, Chinese telecommunications giant Huawei Technologies Co.
Now, instead of stealing the files James Bond or Jason Bourne style, He and Wang decided on a more modern method: using Bitcoin as a bribe. $61,000 in Bitcoin bribes, to be exact.
From He’s and Wang’s perspectives, using Bitcoin made sense. The privacy of crypto makes it a much better bribery tool than Venmo, especially when using a crypto mixer like CoinJoin, which enhances the stealth levels of the transaction even more. At the time, it looked like a safe bet.
Obviously, the fact we’re now talking about it means it wasn’t.
So, what went wrong?
Well, unluckily for He and Wang, they bribed a double agent working for the US government. All the privacy tools in the world won’t help you get out of that one.
Another Crypto Mixer Controversy
Although the story is entertaining, it is not the best look for crypto.
In our previous coverage of the Tornado Cash sanctions, we’ve discussed the gray area that is crypto mixers. These tools, while definitely having legitimate purposes, also attract nefarious actors. We saw it with Tornado Cash, and we’re seeing it again with CoinJoin.
The path forward is unclear. Nobody wants to see crypto get censored. At the same time, unless you’re Xi Jinping, nobody wants to see crypto enabling Chinese espionage.
Hopefully, crypto mixers will be able to find a happy medium in the near future. |
|
FTX CEO In Hot Water Over Regulation Suggestions |
|
| FTX CEO Sam Bankman-Fried (SBF) is many things.
A crypto mogul. A philanthropist. A political donor of insane proportions. A lender of last resort. A vegan. A bad dresser. A man in desperate need of a haircut.
Now, after his thoughts on crypto regulation, many people are adding “crypto villain” to the list.
The Regulatooor
Most reasonable people in crypto recognize that regulation is not always bad. Clear and fair regulatory guidelines are necessary for crypto to take that next step into mainstream adoption.
However, what SBF advocates for in his post goes far beyond what could be considered beneficial for the industry. - The requirement that front-ends (the interface that users actually interact with) become registered broker-dealers with KYC obligations.
- The requirement that stablecoins be fully backed by U.S. dollars, treasury notes, or bills.
- Complete OFAC compliance.
- The recommendation that ‘trusted actors,’ i.e., exchanges like FTX, keep and share blacklists of addresses suspected of being associated with crime.
Again, we recognize the need for crypto regulation. It’s crucial to the future of the space. But these guidelines are so out of line with the DeFi ethos that it’s almost hard to believe somebody in crypto wrote them. - Front-ends are how people interact with DeFi protocols. To require front-end KYC is to turn DeFi into FedFi.
- Requiring that stablecoins be fully backed by U.S. dollars would help to prevent a collapse a la Terra. But, it would also hamstring the industry from developing future decentralized and capital-efficient stablecoins.
- Complete OFAC compliance sounds good, but then you realize OFAC includes entire nations, such as Iran. If we’re going to let the government tell us you can’t transact with anybody from an entire country, you once again don’t have DeFi anymore, you have FedFi.
- A key component of DeFi is that it is permissionless and accessible to all. If ‘trusted actors’ have the power to blacklist people arbitrarily, what are we even doing here? At that point, we might as well just use traditional finance systems.
A Snake In The Grass?
On some level, we shouldn’t be surprised this is coming from SBF. This is the same man who said he didn’t care about the crypto ethos, just the money.
And although regulation will be a component of crypto in the future, and perhaps it is better to start having an open conversation about it, many believe that SBF should not speak for the entire industry.
These people believe that SBF cares about SBF, not crypto. He will do whatever it takes to ensure that FTX succeeds in the long run. If it means donating millions of dollars to politicians, he’ll do it. If it means selling out the industry where he made his fortune, it’s clear he’ll do that too. |
|
Other Content You Might Enjoy |
|
|
|
