The Chainsaw Weekly Wrap

The Chainsaw Weekly Wrap: Unraveling The Past 7 Days In Web3

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GM legends. As always, it was another colossal week for those involved in the wild world of Web3, let’s take a look at what went down in this edition of The Chainsaw Weekly Wrap. 

This week in Web3

Monday kicked things off with a massive announcement from the Bahamas, with Sam Bankman-Fried (SBF) agreeing to be extradited to the US where he faces a litany of charges from three different regulatory agencies. If he’s found guilty of all the charges brought before him, he’ll face up to 115 years in federal prison. 

The tables turn on SBF

On Wednesday the failed crypto founder signed the extradition papers and boarded a plane to the US to face legal action. Unfortunately for SBF, his ex-girlfriend and ex-CEO of Alameda Research, Caroline Ellison, along with FTX co-founder Gary Wang, pled guilty to fraud charges and agreed to cooperate with US investigators.

Ellison made some fairly candid statements to the Commodity Futures Trading Commission (CFTC) where she admitted to knowing all about transferring funds from FTX to Alameda to make “very illiquid investments” as well as being able to access user assets with needing approval from FTX.

This is pretty terrible news for SBF, who just went on what’s been dubbed an ‘apology tour’ where he desperately tried to clear his name of any wrongdoing and pinned the collapse of FTX on a series of “mistakes”. Caroline’s painfully honest comments to the CFTC show that SBF had to have at the very least, some level of awareness of what was occurring at FTX. 

FTX founder Sam Bankman-Fried leaves Manhattan Federal Court via Getty Images

Despite this, this morning SBF was released on a US$250 million bond package, the largest bond amount in US financial history. The bond was paid for by one anonymous signatory along with SBF’s parents who reportedly re-mortgaged their Palo Alto home to cover the US$25 million bond bill. SBF will move back in with his parents, and is only allowed to leave the house for medical treatment and physical exercise.

Continuing the FTX-related theme that’s consumed the crypto landscape this week, FTX creditors (the people who still have money stuck on the defunct exchange) hired top-tier law firm Paul Hastings to represent them in the bankruptcy proceedings. 

Leave DeFi alone says Brian Armstrong

In the wake of the FTX collapse, other CEOs of other major crypto exchanges have come out in support of tighter regulation on centralised entities. Brian Armstrong, the CEO of Coinbase said that while regulators should definitely be widening their scope on centralised crypto exchanges to make sure that another FTX-like meltdown doesn’t occur, they should leave Decentralised Finance (DeFi) protocols alone.

“Decentralised arrangements do not involve intermediaries. Open-source code and smart contracts are ‘the ultimate form of disclosure’,” Armstrong said in an accompanying blog post, adding that with DeFi on-chain transparency is “built in by default” and regulators would be wise to leave DeFi out of their administrative clampdown of crypto. 

Binance acquires Voyager Digital

While Coinbase was busy defending DeFi, Binance was busy buying up Voyager Digital, with the world’s largest crypto exchange agreeing to acquire the bankrupt crypto lender and all of its assets for a cool US$1 billion. Binance didn’t stop there, they also acquired Indonesian crypto exchange Tokocrypto. Binance has always been a majority shareholder of the company but the move injected more cash and increased shareholding.

Bitcoin miners are having a bad time

In more simply wonderful news for the crypto sector, the largest Bitcoin miner by computing power Core Scientific (CORZ) stunned its investors by filing for bankruptcy. Another big Bitcoin miner Greenidge also warned that bankruptcy is becoming more likely as its finances continue to worsen. 

Metaverse investment keeps on going 

Also, The Chainsaw team added up the amount of money invested in the metaverse over the course of this year and we found that roughly US$130 billion had been poured into developing virtual worlds. Even though the Metaverse and its many iterations had been a little on the ‘crappier’ side — to put it nicely — official research from both Gartner and McKinsey say that that’s to be expected. According to the global consulting giants, the Metaverse is supposed to be a little sucky right now, as it’s in the same phase as the internet was in the early 2000s. 

A renewed push for social media alternatives

The words ‘decentralised social media’ became a thing this week, with Mozilla — the creators of popular web browser Firefox — pledging to start exploring options outside the scope of traditional social media. According to the company’s CPO, traditional social media platforms like Twitter and Facebook are disproportionately controlled by erratic, profit-motivated billionaires that treat “outrage as engagement.”

33% of singles want to date in the metaverse

Oh yeah and a new survey from Dating.com found that a staggering 33% of single people are willing to give dating in the Metaverse a crack. According to the survey, single peeps are planning to pursue this virtual option as a type of “transitional dating,” placing a greater emphasis on virtual communication before physically connecting with a potential partner.

Show me the money!

The holiday festivities have unfortunately not translated into equally elevated levels of crypto fund raising. Still, there are some notable green shoots which include: 

  • Amber has completed a new US$300 million Series C funding round. The funds aim to help the firm tackle some of the “significant drawdowns” of Amber’s products as an aftermath of the FTX default.
  • The proof-of-stake (PoS) blockchain Axelar launched on December 19 a US$60 million startup funding program dedicated to accelerating the development of decentralised applications and protocols that can replace centralised exchanges.
  • Bitcoin development company Layer 2 Labs raised US$3 million to bring drivechains to Bitcoin. Drivechains are a type of sidechain – a secondary blockchain that interacts with a primary blockchain and aims to offer a better user experience (UX).
  • Foundation raised US$7 million to develop bitcoin-centric tools which enable what they call `digital sovereignty”, a set of tools that includes a ‘truly air gapped’ hardware wallet (i.e. one that never touches the internet).
  • Hologram company Proto, whose displays can showcase NFTs, received an undisclosed amount of funding from Christie’s VC portfolio after multiple collaborations.
  • Fiat-to-crypto platform Utorg raised US$5 million in a seed round led by Dragonfly. It is aiming to build a “super app” that merges the old and new worlds of finance, the company said.

All in all, not bad for crypto winter ay’. 

Markets

Well no surprises here: crypto markets are still having a bit of a tough time with another subpar week for digital assets coming to a close. Despite mostly negative news dominating the headlines, Bitcoin (BTC) held relatively strong over the past seven days, down only 3.5% for the week. 

Interestingly enough, stronger than expected economic data released by the Department of Labor on Thursday spooked investors, who worried that a more resilient economy would lead the US Federal Reserve to keep hiking interest rates for a little longer than they first thought. Strangely, this means that until the US economy starts doing worse, the prices of crypto assets are likely to fall further.

BTC is currently changing hands for US$16,800 a pop, as the asset continues on its multi-week sideways crab walk. If we take a look at overall market momentum for Bitcoin using the Relative Strength Index as a measuring stick, the flagship cryptocurrency looks relatively stable all things considered. BTC’s daily RSI currently sits at 48, which means from technical standpoint that the asset is ever so slightly ‘oversold’.

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As always Ethereum followed Bitcoin on its sideways and slightly-downwards trajectory, falling 4.2% for the week.

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Winners and Losers

Usually we keep this list for movements in the top 50 tokens, but this week a tiny token called Popsicle Finance (ICE) went on such a blistering run that we decided to include it. On Wednesday, the ICE token went on a 350% run, surging from US$0.12 to a peak of US$0.58 within 24 hours. 

The news came as the blockchain developer Daniele Sestagalli broke a four-month-long silence on Twitter claiming that she is refocusing her attention on developing ‘OG popiscle finance’. 

The biggest loser this week was financial services token Chain (XCN) which continued its prolonged downward slump, falling another 40% this week. Chain was followed in a close second by the self custody-focused Trust Wallet Token (TWT) which after seeing some wild upward price action in the wake of the FTX debacle, slid 30% for the week. 

That’s it for this edition of The Chainsaw Weekly Wrap. Have a very merry weekend from the crew here at The Chainsaw!

Here are the memes that slapped as hard as SBF’s handcuffs this week.