"sorry" The Chainsaw Weekly Wrap

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

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While the rest of the world paused to gather around the Christmas tree and celebrate the end of the year with family and loved ones, the sleepless world of crypto just kept whirring away. Here’s everything that went down in crypto and Web3 in this edition of The Chainsaw Weekly Wrap. 

Trigger warning, this wrap up contains financial gore and details how the crypto industry limped its way into the closing days of 2022. 

This Week in Web3 

The week kicked off in typical fashion with Sam Bankman-Fried (SBF) and his seemingly endless stream of antics dominating the headlines. 

As always, here’s everything SBF

US District Judge Ronnie Abrams recused herself from presiding over SBF’s trial after revealing that her husband is a partner at a law firm that provided legal advice to FTX in 2021. 

As result SBF was appointed a new judge, Lewis Kaplan, who has a history of supervising some pretty high-profile legal cases, currently overseeing a defamation lawsuit against Donald Trump and formerly presiding over sexual misconduct charges pressed against Prince Andrew. 

Four FTX customers launched a class action lawsuit against the failed crypto exchange, arguing that the roughly one million individual customers should be prioritised in reparations ahead of institutional investors.

While all of this went down SBF managed to once again piss off nearly everyone in the crypto community after prominent finance blogger ‘litquidity’ posted photos of Bankman-Fried “chilling” on his laptop in a business lounge at JFK airport. 

Pharma Bro ‘Martin Shkreli’ gave some advice for SBF on Laura Shin’s Unchained Podcast, where he told the failed founder to shave his head, deepen his voice and start listening to rap music if he wants to fit in with the “testosterone-filled” prison environment. 

Oh yeah, and the creators of South Park weighed in on the FTX controversy with what might be one of the best takes yet. 

Solana can’t catch a break

Solana (SOL), formerly hailed as a potential “Ethereum-killer” has had its viability thrown into question as the price of the token sinks endlessly into the red. Solana plummeted nearly 20% this week, after being pummelled by the fallout from FTX, with SBF’s Alameda Research being one of the blockchain network’s biggest backers. 

Making things even more difficult for the Layer 1 blockchain, two of the network’s largest NFT projects, Y00ts and DeGods are migrating to different blockchains. DeGods will jump ship to Ethereum while Y00ts will go to the Ethereum scaling solution, Polygon (MATIC).

Speaking in a Monday Twitter space, the creator of the NFT projects, Rohun Vora, better known by his pseudonym ‘Frank’ said that the growth of both projects had basically “capped out” on Solana. At the time of writing Solana is down a staggering 95% for the year. 

The Bitcoin miners aren’t alright

Alarm bells over the current state of Bitcoin (BTC) miners were set off when Core Scientific (CORZ), the largest publicly-traded Bitcoin mining company filed for bankruptcy. Another major Bitcoin miner Greenidge also underwent a complex “debt restructuring process” as miners everywhere struggled to hold their ground. 

Things worsened this week when a major storm swept across the United States, forcing miners to ramp down their operations in a bid to maintain stability in the country’s electricity grid. 

Soaring electricity costs combined with the plummeting price of Bitcoin has created a vicious death spiral for Bitcoin miners, many of whom loaded up on loans and short-term debt during the bull market as they rushed to expand their operations. 

So how bad is it for Bitcoin miners right now? Well, it’s definitely not pretty. New data from the Bitcoin mining analytics provider Hashrate Index highlighted the staggering US$4 billion in debt accumulated by public Bitcoin mining companies in the United States. 

Public Bitcoin miners ranked by their outstanding debt via Hashrate Index.

In spite of all this, Bitcoin perma-bull Michael Saylor couldn’t stop buying up BTC, announcing that his company MicroStrategy had purchased another 2,395 Bitcoin for an average price of US$42 million. The announcement came after MicroStrategy sold US$11.8 million worth of Bitcoin for “tax reasons”. 

Kraken says goodbye to Japan

Kraken, one of the world’s largest cryptocurrency exchanges, has decided to pack up shop in Japan, with plans to finalise its exit by January 31 next year. In a Wednesday blog post, the company explained that the move was triggered by the “current market conditions in Japan” that was only worsened by the combination of “a weak crypto market globally.”

Pudgy Penguins buck the trend

While the majority of the industry was slammed in one way or another, some segments of the crypto space firmly bucked the trend. The floor price of the popular Pudgy penguins NFT collections went haywire, growing more than 70%, with ongoing efforts from the collections’ new CEO Luca Netz putting Pudgy’s in an extremely solid position financially. 

What are you gonna do, arrest me?

In what can only be described as painfully ironic, Avraham Eisenberg, the hacker behind the US$110 million Mango Markets was arrested in Puerto Rico, after tempting fate a little too well. 

The news comes after Eisenberg bashfully taunted both the authorities and the investors that he took advantage of with his strange, yet nifty hack of DeFi protocol Mango Markets. In the hack Eisenberg leveraged his controlling share of Mango tokens to force members of Solana-based protocol to give up any potential legal recourse in exchange for returning US$47 million worth of stolen funds. 

Obviously, his grand plan failed, with a recently unsealed complaint allowing the Federal Bureau of Investigation (FBI) to slap Eisenberg with one count commodities fraud and one count of commodities manipulation. 

Bitcoin & Ethereum hobble into 2023

In what’s almost certainly going to go down as the worst year for cryptocurrency, the prices of digital assets have all but spluttered into the end of this week. Bitcoin (BTC), still the largest cryptocurrency by market value, closed the week trading at US$16,621, marking a total decline of 64.3% from the beginning of the year. 

Bitcoin’s price was kept flat by continued sideways trading action in the US equities markets as well as increasing inflation and interest rates, which tend to drive investors away from risk-on assets like Bitcoin and tech stocks.

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Despite Ethereum emerging the clear winner in the recently revisited Layer 1 wars — with Solana (SOL) seemingly determined to keep diving towards new lows — its price struggled to reflect its newfound dominance, down 1.7% for the week. At the time of writing Ethereum’s native token Ether (ETH) is worth US$1,197 and flexes a total market value of US$144 billion.

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Winners and Losers

While winners sure were hard to find this week, the award for the ‘biggest gainer’ in crypto of the past seven days landed convincingly in the hands of a relatively unknown Decentralised Autonomous Organisation (DAO) called BitDAO (BIT). 

BitDAO’s native BIT token surged more than 16% over the course of the last seven days, currently changing hands for US$0.33 a pop. 

In a close second was ‘OKB’ — the native token of the OKX exchange — which grew a touch over 10% for the week. 

The biggest loser of the week was the Chain token (XCN) which took a convincing lead into the red, diving more than 36%. This marks more in the way of continued losses for Chain’s XCN token, which has been on a consistent downward tear for the past 7 months, falling more than 92% from its all time high in May this year. 

Following Chain into the red was Solana (SOL) with a staggering 19% weekly plummet, as the fallout from FTX continues to slam the price of the Layer 1 blockchain’s native SOL token. This continual and substantial downward price action has thrown Solana’s “Ethereum-killer” status into question, as the crypto space questions whether or not the programmable blockchain can survive.

That’s it for this edition of The Chainsaw Weekly Wrap.

As always here’s some memes.

The Chainsaw Weekly Wrap meme
The Chainsaw Weekly Wrap meme
The Chainsaw Weekly Wrap meme