Decentralized Diaries For The Week of 11/15/22


By Christopher Hamman

What a week!

Cryptocurrency prices dipped sharply following troubles at the former second-largest cryptocurrency exchange. 

The New York Fed and the banking guys seem to like everything crypto but don’t know how best to say so!

CPI numbers helped prop cryptocurrency prices slightly.

A new term has come up because of high-profile failures; Proof of Reserves. 

Here are the headlines. 

Bitcoin Falls to $15k and Steadies at $16k

Bitcoin prices fell to $15,799 early in the week following contagion fears after massive withdrawals worth over $3 billion from cryptocurrency exchanges. 

Prices recovered slightly and are above $16,000 after positive CPI from the Bureau of Labor Statistics. 

The cryptocurrency markets have remained in limbo with new facts emerging from the FTX saga and its embattled former CEO Sam Bankman-Fried.

FTX Files for Chapter 11 Bankruptcy

After a protracted and publicized battle to swim to safer shores, FTX Exchange finally filed for Chapter 11 bankruptcy. This follows several attempts by Founder Sam Bankman-Fried to get an additional $8 billion in investments to steady the company. 

According to a Twitter post, FTX Exchange, Alameda research, and 130 other associated entities are involved in the filing process in Delaware. 

Before the filing, FTX Exchange was in talks with Binance and its CEO Changpeng “CZ” Zhao. Bankman-Fried has stepped down as the top gun but will remain on the board. John J. Ray III has been appointed as the new CEO.

Voyager Reopens Bidding Process After FTX’s Chapter 11 Filing 

Following FTX Exchange’s chapter 11 bankruptcy filing, distressed cryptocurrency lender Voyager Digital indicated that it reopened the bidding process for the sale of its assets.

The company also revealed that communications with alternative investors exist while maintaining that a $5 million “good faith” deposit made by FTX is in escrow. 

Leading Cryptocurrency Exchanges Publish “Proof of Reserves” to Bolster Confidence

As a consequence of FTX’s bankruptcy and the ongoing drama, major cryptocurrency exchanges have either revealed wallets with token balances or are in the process of doing so. 

The move is aimed at improving industry confidence and serves as a self-regulatory measure. 

Binance led the charge by publishing its proof-of-reserves with over $69 billion in assets. Other exchanges promised users fully audited wallets for public inspection. 

Binance Labs Includes 12 Projects in its Incubation Program

Startup accelerator Binance labs announced the addition of 12 projects to its incubation program. The projects cover payments, Web3, DeFi, privacy, gaming, and tooling sectors.

Ledger, Solana Improve Mobile Security 

Ledger, the hardware token cryptocurrency manufacturer, revealed an extension of its partnership with Solana Labs. Solana Mobile is integrated into Ledger’s ecosystem with several tools that enable ease of use and security. 

Ledger unveiled a series of additions to its software ecosystem, including Ledger Live and Ledger Connect.

NY Fed, Banks and Institutions Experiment with “Regulated Liability Networks” 

The New York Federal Reserve, Mastercard, SWIFT, and several banks, including HSBC, BNY Mellon, and Citi, are expected to reveal the results of an experiment that deals with “Regulated Liability Networks”; a means of transmitting tokenized instruments across financial institutions. 

Though in its early stages, the experiment could rival the status quo, where unregulated cryptocurrency tokens across many blockchains hold sway. 

Aptos and Google Cloud Collaborate

Layer 1 blockchain Aptos announced a partnership with Google Cloud that will enable the listing and indexing of several Aptos nodes on Google Cloud’s infrastructure and BigQuery Service. 

In addition, both organizations will encourage talent growth via a hackathon and startup incubation through an accelerator program in the coming year.

Solana’s Metaplex Proposal Introduces Asset Class to Enforce Royalties

Metaplaex Foundation, the institution that supervises the Solana metaplex ecosystem, published a proposal that could allow a new asset class “the MIP-1” to enforce royalties within Web3 ecosystems. 

If the proposal sees the light of day, permissionless and independent transfer of earnings will now be possible using the digital asset class.

The proposal would also help address royalty issues that content creators and users face during interactions within the web3 space. 

Ark Investment Management Adds to its Coinbase Stock Holdings

The Cathie Wood-led Ark Investments expanded its Coinbase investments by about $2.9 million. 

Ark Investment Management bought 237,675 shares, with the Ark innovation exchange-traded fund (ARKK) (ETF) gaining 207,527 shares, the ARK Fintech Innovation ETF (ARKF) gaining 7,732 shares, and the ARK Next generation ETF (ARKW) gaining 22,416 shares.

The investment comes following YoY losses and general chaos in the cryptocurrency markets. 

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