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  • Arbitrum’s Foundation Caught in Dispute: Power Struggles and Token Returns on the Horizon

    Arbitrum’s Foundation Caught in Dispute: Power Struggles and Token Returns on the Horizon

    Disputes between the Arbitrum Foundation and its blockchain community are heating up following the organization’s proposal to fund its operations with 750 million ARB tokens— worth nearly $1 billion. The proposal has been met with disagreement from the ARB community, with 55% of voters opposing the plan and 42% abstaining.

    The conflict between the two parties started when the Foundation transferred the funds without consultation, prompting ARB holders to propose a plan to return the tokens to the DAO Treasury.

    In an attempt to patch up its relationship with its community, the Arbitrum Foundation offered two new improvement proposals, AIP-1.1, which put the Foundation’s budget, transparency and spending under community government oversight and AIP-1.2, lowering the proposal threshold from 5 million ARB tokens to 1 million ARB, to make governance more accessible.

    The move comes at a time when major exchanges are trading the token, but with some members of the community believing the deal to be in violation of United States security laws. A recent Discord post by a community member said that s/he was filing a securities fraud lawsuit against the Foundation in the coming days and advised them to cease trading immediately.

    Analytics from the layer-2 analytics site L2Beat shows Arbitrum’s blockchain to hold 65% of the Ethereum layer 2 market share with hundreds of thousands of eligible users claiming ARB tokens during its launch on March 23. An overwhelming user demand led to the crashed of the airdrop claim page shortly after the launch.

    In response to the standoff, the Arbitrum Foundation submitted two additional proposals, AIP-1.1 and AIP-1.2, in an effort to quell the unrest. AIP-1.1 proposes to place the foundation’s remaining 700 million ARB tokens in a “smart contract-controlled lockup” and unlocking them over time, until the community approves a budget for the tokens. Meanwhile, AIP-1.2 amends the current governance documents to enable token holders to post an improvement proposal with only 1 million ARB tokens.

    Arbitrum Foundation community lead, eli_defi, stressed that the organization will not move the funds until it has received approval for an acceptable budget from the token holders.

    In the aftermath of the crypto governance meltdown, the community members now have to face the possibility that the tokens distributed by the airdrop have been traded in violation of United States securities law. Meanwhile, the two proposals put forward by the Arbitrum Foundation will be subject to discussions and a vote in the coming days, which will likely determine its future relationship with the ARB community. It is yet unclear how these recent development will affect the market’s sentiment towards the token and whether the proposal to return 700 million ARB tokens will be passed.

  • Revolutionizing the Space with Binance Smart Chain: Lower Transaction Fees for Faster, Cheaper, and More Secure Transactions

    Revolutionizing the Space with Binance Smart Chain: Lower Transaction Fees for Faster, Cheaper, and More Secure Transactions

    Blockchain technology has great potential for revolutionizing the financial sector, but the scalability issue has prevented it from becoming a mainstream payment method. In order to unlock blockchain’s full potential and make it easier to use, Layer 2 (L2) scaling solutions have been developed to provide users with faster, cheaper, and more secure transactions. Binance Smart Chain (BSC) is one such network that seeks to become an industry leader with its innovative approach to L2 solutions.

    The BSC network recently announced a new proposal to lower transaction fees, allowing users to choose fees below the current 5 gwei rate, with options to go as low as 3 or 4 gwei, depending on their financial needs. The aim is to make transactions faster, cheaper, and more secure. In addition to providing users with more attractive fees, this proposition is also expected to help sustain the BNB economy and optimize block utilization.

    The network is targeting a throughput increase from 140 million gas limit and 2,200 transactions per second (TPS) to 300 million gas limit and 5,000 TPS. They plan to achieve this by introducing a communication layer to provide real-time tech support for developers and users, upgrading Web3 applications, and by increasing the number of validator quorums from 29 to 100. The blockchain also intends to launch their new Layer 2 infrastructure, zkBNB, and BNB Greenfield, the blockchain-based Web3 infrastructure.

    This past year, BSC has made strides in increased user activity, with daily transactions going up by nearly 60%, however, its success has not been without major disruptions. BSC suffered a temporary halt in operations following a $600 million hack in October and several decentralized finance protocols within its network have witnessed hacks throughout the year.

    The progress that BSC has made this far towards providing a more secure and efficient blockchain network is remarkable. By making transactions faster and cheaper via their L2 scaling solutions, they are creating an ecosystem that can compete with rival blockchain networks. As the network continues to grow, increasing its validator quorum and launching its Layer 2 infrastructure, BSC promises to be an intriguing development in the blockchain industry moving forward.

  • Ethereum Shanghai Upgrade – All you need to know

    Ethereum Shanghai Upgrade – All you need to know

    Ethereum Shanghai Upgrade is scheduled for April 12th and includes key economical changes to Ethereum and fee optimizations that will improve the network. This upgrade is part of Ethereum’s upgrade plan into Ethereum 2.0 – a faster, cheaper and more stable public blockchain. The main purpose of the Shanghai Upgrade is financial – it will allow stakers and validators to withdraw staked ETH from the Beacon Chain, which has been locked since December 2020. Some users have feared that this change will unlock $26 billion USD worth of Ethereum, potentially causing Ethereum’s prices to fall.

    Staked Ethereum is Unlocking

    The key feature of the Shanghai Upgrade is Ethereum Improvement Proposal (EIP) 4895, which will enable validators to withdraw staked ETH. Validators have staked approximately 16 million ETH to secure the network. Validators can participate in validating blocks by staking 32 ETH in the chain, and each staked ETH increases the likelihood of a validator receiving block rewards.

    Validators have been staking ETH and earning rewards for validating blocks since the launch of Ethereum’s Beacon Chain in December 2020. However, the rewards earned by validators have been locked since the transition to PoS consensus in September 2022. With the Shanghai Upgrade, validators will finally be able to withdraw their rewards.

    The withdrawal of staked ETH has been successfully simulated on the Zhejiang testnet. The Zhejiang testnet is the first of three testnets that will run the simulation. The Sepolia and Goerli testnets will follow, running the simulation in the coming weeks.

    Key Improvements (EIP) in the Shanghai Upgrade:

    EIP-3651: Warm COINBASE – This EIP aims to lower the gas cost of accessing the COINBASE address, which is a software component that allows developers to receive new tokens.

    EIP-3855: PUSH0 instruction – This EIP aims to lower the gas cost of deploying contracts by introducing a new PUSH0 instruction.

    EIP-3860: Limit and meter initcode – This EIP introduces a gas cost limit and meter for contract initialization code, which should help to reduce gas costs for developers.

    EIP-4895: Beacon Chain push withdrawals as operations – This EIP is one of the key features of the Shanghai upgrade, as it allows validators to withdraw staked ETH from the Beacon Chain.

    EIP-6049: Deprecate SELFDESTRUCT – This EIP aims to reduce the risk of contract failure by deprecating the SELFDESTRUCT instruction, which can lead to the loss of funds if used improperly.

    These EIPs will reduce gas costs related to Maximal Extractable Value payments when accessing the COINBASE address, lower gas costs for developers, cap developer gas costs in certain cases, and address a similar concern.

    The Shanghai Upgrade does not include EIP-4844, which facilitates the “sharding” of the Ethereum blockchain into multiple chains to enhance scalability. Sharding is a scalability solution that divides the whole network of a blockchain into multiple smaller networks called shards.

    Validators will have two options for withdrawing their staked ETH. The first option is to create a “withdrawal credential” to unstake their staking rewards accumulated over the past years. The second option is to exit the Beacon Chain completely by unstaking all of their 32 ETH, which is the maximum allowed per validator.

    The Shanghai Upgrade is expected to have a significant impact on the market. Approximately 16 million staked ETH will be available for withdrawal, and traders are paying attention to how the market may move. Some traders believe that the upgrade will trigger a selling wave, with many taking profit once staked ETH is unlocked. Others believe that the upgrade will encourage more staking.

    Conclusion

    The Ethereum Shanghai Upgrade is a minor upgrade for the Ethereum network (albeit a large upgrade in terms of unlocked Ethereum). The Ethereum core developers use this upgrade to stabilize the network rather than to deploy aggressive changes. This is why most of the improvements are smaller quality of life improvements rather than fundamental architecture changes.

    The biggest impact of Shanghai has to do with staking and locked tokens. It will enable validators to withdraw staked ETH from the Beacon Chain, which has been locked since December 2020. The upgrade includes several other EIPs that aim to reduce gas costs for Ethereum developers. While it is unclear how the upgrade will impact the market in the short term, it is certain that traders will be watching how much of the available ETH will be cashed out, which could push the price of ETH down.

  • What is Blur NFT Marketplace?

    What is Blur NFT Marketplace?

    Blur.io is the leading Ethereum-based NFT Marketplace, offering professional traders batch shelf and floor-sweeping transactions, order book NFT transactions, and the ability to browse and purchase NFTs from other marketplaces with instant liquidity.

    What is Blur.io and its Marketplace Fees?

    Blur.io is a professional NFT trading platform that offers a convenient and cost-effective solution for traders. It does not charge any transaction fees and recommends a default royalty rate of 0.5% for buyers, which can be customized or even set to 0. Blur.io is a trader-friendly platform that allows users to easily buy, sell, and trade NFTs with no hassle. It also provides a secure and reliable environment for users to store their digital assets. With its user-friendly interface and low fees, Blur.io is the perfect platform for professional NFT traders.

    Blur’s Team

    Blur is a revolutionary product founded by MIT-graduate @PacmanBlur and supported by venture capitalists Paradigm. It is designed to help users protect their personal information online and keep their digital identity safe. Blur offers a range of features such as password management, secure form filling, and anonymous browsing. It also provides a secure payment system and a virtual credit card to help users protect their financial information. With Blur, users can enjoy a secure online experience and protect their personal data from hackers and other malicious actors.

    $BLUR Token Airdrop

    Blur, the NFT platform, recently completed its $BLUR token airdrop after Season 1 of its incentivization program. Traders earned up to $3 million in $BLUR tokens and the project launched at a $400 million valuation. Blur is now gearing up for Season 2 of its airdrop program, and the best way to earn $BLUR tokens is to use the platform by buying, selling and listing your NFTs. With the potential to earn up to $3 million in tokens, Blur is an exciting opportunity for NFT traders to get involved in the crypto space.

    Blur is currently doing its season 2 of airdrops. Learn how to maximise your potential airdrops with our guide. Blur Airdrop Guide: How to Get Season 2 Rewards?

    BLUR Tokenomics

    Blur has minted 3 billion BLUR tokens, with 51% allocated to the community, 29% to past and future core contributors, 19% to investors, and 1% to advisors. A community treasury of 360 million BLUR tokens, equivalent to 12% of the total token supply, can be claimed by NFT traders, historical users of Blur, and creators. 39% of the BLUR supply will be distributed through contributor grants, community initiatives, and incentive programs, with 10% allocated to the next incentive release. (https://www.smallhandsbigart.com/) The vesting of BLUR tokens will occur continuously according to a set schedule for each group of token recipients.

    Marketplace Growth

    Blur is the world’s largest NFT Marketplace, having flipped OpenSea within 6 months of its release. It has achieved this success due to its user-friendly UI, low fees and deeper liquidity for NFTs. With over 400,000 active users and $1.4 billion in traded volume, Blur is the go-to platform for NFT traders. Its incentives program has helped it become the leading NFT Marketplace, offering users a secure and reliable platform to buy, sell and trade digital assets. With its innovative features and competitive fees, Blur is the perfect platform for anyone looking to get involved in the NFT space.

    Conclusion

    Blur is revolutionizing the NFT market in 2023 with its $BLUR token airdrop providing an eye-watering return on investment and reducing the cost of trading. The project has taken the digital art and NFT market by storm and recently flipped OpenSea in volume. It offers users an intuitive platform to trade, purchase and list their NFTs with no transaction fees or royalties charged, and is backed by some of the biggest crypto funds in the industry. With its innovative approach to the NFT market, Blur is set to become the go-to platform for digital art and NFT trading in the coming years.

  • What is zkSync? The L2 Blockchain.

    What is zkSync? The L2 Blockchain.

    zkSync is a Layer 2 solution for Ethereum that provides unlimited scaling and privacy. It is built on zero knowledge (ZK) rollup architecture and is designed to address the inherent drawbacks of Ethereum such as slow transactions and high gas fees due to limited throughput. Layer 2 blockchain protocols separate ownership from computation, allowing for smart contracts to hold all assets on the main chain while the off-chain component is responsible for computation and storage. As a result, zkSync provides a high transaction rate and L1 level of security, allowing users to transfer Ether and ERC20 tokens quickly and securely.

    Layer 2 on Ethereum

    zkSync Era is the first zero-knowledge EVM for Ethereum, launched by Matter Labs in February 2023. It is an open-source project with an MIT/Apache 2.0 license and offers developers the ability to deploy and test their dApps on the mainnet. The mainnet is currently closed to end users until Full Launch Alpha, the final milestone of zkSync Era. In the meantime, Matter Labs is actively pursuing security audits and bug bounty programs to ensure the safety and reliability of the platform. With zkSync Era, developers can take advantage of the scalability and privacy of zero-knowledge proofs to build powerful and secure dApps on Ethereum.

    Matter Labs Team

    Matter Labs is a Berlin-based startup that has created zkSync, the first EVM-compatible zero knowledge rollup supporting general-purpose applications in Solidity without costly gas fees and performance barriers. The startup has raised over $400 million from two dozen VC funds, crypto incubators, and investors, including the Ethereum Foundation, Dekrypt Capital, Placeholder, Dragonfly Capital, 1kx, USV, BitDAO, OKX Blockdream Ventures, and Huobi Venture. With its innovative technology, zkSync is set to revolutionize the blockchain industry and make it easier for developers to create applications on the Ethereum blockchain.

    ZK rollups VS Optimistic rollups

    Rollups are a type of layer 2 solution designed to increase scalability on the Ethereum blockchain. They allow for low-cost verification by rolling up many transactions into one batch and sending them all to Ethereum in one action. This reduces the amount of data that needs to be processed on the main Ethereum chain, allowing for faster and cheaper transactions. Rollups also use smart contracts to lock assets on the Layer 1 blockchain, providing an extra layer of security. With rollups, users can enjoy faster and cheaper transactions without sacrificing security.

    ZK Rollups and Optimistic Rollups are two different types of Ethereum scaling solutions. ZK Rollups use zero-knowledge proofs to verify the batch of transactions and settle it as final on the Ethereum main chain, while Optimistic Rollups assume that every off-chain computation is valid unless proven otherwise. ZK Rollups have higher transaction rates and cheaper fees than Optimistic Rollups, making them a more cost-effective scaling solution. Both solutions are designed to help Ethereum scale and provide users with faster and cheaper transactions.

    zkSync Features

    zkSync is a Layer 2 scaling solution for Ethereum and ERC20 tokens that enables fast and cheap transfers. With a transfer fee of $0.02, a withdrawal fee of $1.59, and a one-time activation fee of $0.44, zkSync is a cost-effective way to scale transactions. It also supports gasless meta-transactions, smart contract interoperability, atomic swaps, limit orders, and native layer 2 NFTs. All of these features are open source and available to developers, making zkSync an ideal solution for crypto exchanges and other applications that require fast and cheap transactions.

    It allows users to send and receive transactions faster and cheaper than on the Ethereum mainnet. It uses zero-knowledge proofs to ensure that all transactions are secure and valid. However, some users have reported slow speeds when withdrawing funds back to the L1 protocol, and dApps are less common due to the high computational power needed to prove every batch. Additionally, there is an issue of EVM compatibility, which further hinders dApps. Despite these drawbacks, ZkSync is a promising scaling solution that could help Ethereum scale and become more efficient.

    Users are able to make cheap and fast transfers. It supports the majority of web3 wallets, including Metamask, Ledger, Trezor, Coinbase Wallet, Fortmatic, Portis, Keystone, KeepKey, and Torus. zkSync has brought cheaper crypto payments for millions of transfers, with over 14 million total transactions and 135 thousand verified blocks. Developers can find extensive documentation and resources to start building on the official website. The zkSync ecosystem consists of around 100 interesting projects, making it a great choice for users looking to explore the world of Ethereum scaling.

    Conclusion

    zkSync is a layer 2 blockchain protocol that enables fast, secure and low-cost transactions. It is a great choice for developers and gamers who want to build on the Ethereum blockchain. The zkSync ecosystem is dominated by DeFi, wallet, bridges, NFTs, and infrastructure projects. Argent, OKX Wallet, 1Inch Network, Balancer, Onto Wallet, Yearn.finance, Curve, ZigZag, Taker, Mute.io, and Reddio are some of the biggest projects onboard. Currently, zkSync doesn’t have a native token, but once it becomes fully decentralized, it will have a native token as a reward mechanism for ZK rollup operators and for staking. The zkSync AirDrop will also come with a native token.

    ZkSync is a Layer 2 scaling solution for Ethereum that provides high throughput of up to 100,000 transactions per second. It is powered by Zinc, a native programming language, and offers smart contract interoperability with Solidity. Hacken auditors can analyze and review zkSync smart contracts for vulnerabilities, and the blockchain is secured with a security-first mindset and professional expertise of the leading smart contract auditor. zkSync also runs a self-hosted bug bounty program and may request the assistance of professional bug bounty platforms in the future.

  • The Upside to Prioritizing High Fees: Navigating Busy Networks on the Solana Blockchain

    The Upside to Prioritizing High Fees: Navigating Busy Networks on the Solana Blockchain

    The Solana blockchain is one of the layer 1 cryptocurrency ecosystems that is setting the industry standard for scalability and low latency. With its newfound ability to handle heavy transactional load during peak times, Solana could be opening up opportunities for savvy users to exploit fleeting arbitrage opportunities, or purchase desirable NFT’s before they’re gone.

    Enter ‘Priority Fees’, a technology aimed at stabilizing the network against crippling congestion and data overload, particularly during peak usage times like the 2021 blockchain overload from trading bots. By offering Priority Fees, users can pay an additional fee to boost the speed of their transactions, effectively easing the transactional pressure at any given time.

    Over the past few months, leading wallets, exchanges, and trading pools have adopted the feature, and various projects, developers and institutions have diligently monitored the average fee rate users are paying in to the network. The average transaction fee Solana users paid in a recent epoch was 0.000014641 SOL, though the maximum cost for priority fees was around $24,000.

    A key advantage of the Fee Market system implemented by Solana developers is that it eliminates the need for one-size-fits-all spikes in fees, as is the case on Ethereum, where congestion in one part of the network has an adverse effect on the entire ecosystem. Having distinct fees for distinct transactions helps keep the trading fees affordable for users who are trading non-fungible tokens or participating in an arbitrage opportunity.

    Projects such as the ‘Solana Compass’ offer an opportunity to gain insight into the current metrics of the Solana network and the incentives it offers to users, allowing them to make more informed investment decisions. Jonny Platt, CEO of Solana Compass notes that priority fees are driving more value into Solana tokens as they become increasingly scarce, and users of the blockchain are excited to see the results of the improvements made.

    Priority Fees aren’t the only means of tackling network congestion. Core developers are still attempting to address the ‘spam’ issue with capable anti-spam plumbing, however they warn that until more features that make spamming uneconomical have been built, Solana’s transaction fees won’t be enough to curb the issue.

    Despite its historical ties with the now-defunct FTX exchange, Solana has appeared to successfully bounce back from this minor setback. When compared to activity on the Ethereum network, Coinbase suggests that the SOL token is undervalued and should command a much higher market capitalization given that it is processing nearly 17 times the amount of daily transactions than Ethereum.

    Navigating Solana’s massively busy network can be daunting, but with the implementation of Priority Fees, users no longer have to worry about time-sensitive transactions being delayed or stuck in queues. The upside to this potentially expensive fee system is that it offers users a significant degree of control during high-demand times, allowing them to quickly and conveniently jump to the front of the transactional queue, allowing them to exploit the arbitrage opportunities presented by the blockchain.

  • What Happens to Crypto After They Are Seized? Crypto Forfeiture Laws Explained

    What Happens to Crypto After They Are Seized? Crypto Forfeiture Laws Explained

    As we have learned from the collapse of FTX, the crypto space is not shy of company bankruptcies and criminal activities. But what exactly happens to crypto seized by the government? As smart investors, it is helpful to know how crypto forfeiture laws work, as crypto regulations are on the rise.

    What are Forefeited Crypto Assets?

    The term “frozen, seized or forfeited” in the legal field refers to the state of an asset, including cryptocurrencies. When law enforcement seizes these assets, they are frozen at a specific address. If the government claims ownership of the seized cryptocurrencies, they are considered forfeited.

    The process of “crypto asset realization and legal forfeiture” enables the government to confiscate digital assets for law enforcement purposes by identifying, separating and seizing virtual currencies. With numerous reports of seized assets as well as warnings from leading regulators about digital assets, it is becoming increasingly evident that regulation of cryptocurrency is necessary, but currently in a state of uncertainty.

    How Crypto Exchanges Approach Suspicious Transactions

    Most crypto exchanges have compliance tools to monitor transactions and meet regulatory requirements. Suspicious activity may be detected based on the structure of the transactions, movement of value, or if the source or destination of funds is illegal.

    When a user engages in suspicious activity, the exchange will first request an explanation from the user, and temporarily limit their ability to transfer funds. Since crypto exchanges are centralized entities, they have the power to freeze the user’s funds or ban the user from the platform if they do not meet legal requirements.

    The actions taken will depend on the level of risk posed by the transaction, the user’s response, the user’s previous behavior, and the exchange’s regulatory obligations. Using KYC/AML procedures in place, the exchange will then file a report to law enforcement agencies or financial authorities — in the case of U.S., that would be the Financial Crimes Enforecement Network (FinCEN).

    What Happens to Crypto Seized in Criminal Investigations?

    Once a strong case has been built against a suspect, financial authorities and law enforcement agencies may work with the crypto exchange holding the suspect’s digital assets to either transfer them to a government-controlled wallet or freeze them indefinitely. Sometimes, the assets stay in the suspect’s personal wallet and they may surrender the funds in exchange for a reduced sentence.

    The seized cryptocurrencies are usually kept in this manner until a court decision is made. If the defendant is found not guilty, the assets are returned, but if they are convicted, the forfeiture of the assets is part of their sentence. If a conviction occurs, another process is initiated to determine any third-party ownership of the assets that the government aims to seize.

    Once all ownership interests have been addressed, the remaining funds are sold for fiat currency and distributed among the agencies involved in the case. The funds are usually used for compensating identified victims or going to government treasuries. This process altogether may lead to a dump on the market, depending on the size of the assets being sold.

  • Genesis Trading Insolvency Could Trigger a Bitcoin Collapse

    Genesis Trading Insolvency Could Trigger a Bitcoin Collapse

    What’s Happening with Genesis Trading?

    Genesis Trading is one of the world’s largest crypto trading desks for professional investors, primarily offering Bitcoin over-the-counter (OTC) trades and lending services. Recently, Genesis has temporarily suspended redemptions and new loan originations due to abnormal withdrawal requests in the aftermath of the collapse of FTX.

    Genesis stated that the withdrawal requests have exceeded its current liquidity, which raised concerns about the firm going insolvent. Because Genesis is directly affiliated with some of the largest crypto institutions, its fall could start another domino effect that is even more devastating than the FTX contagion.

    In case you are out of the loop, we have covered the entire timeline of the FTX contagion in chronological order listed down below:

    Fallback of Genesis Trading from Three Arrows Capital

    The lack of liquidity Genesis is undergoing is not only because of FTX. It is largely attributed to the fall of Three Arrows Capital (3AC) in the aftermath of the Terra Luna collapse.

    Genesis was the biggest creditor to 3AC, lending $2.4 billion. After 3AC went bankrupt, Genesis filed a $1.2 billion claim against them. When 3AC failed to provide the required collateral, the parent company of Genesis, Digital Currency Group (DCG), stepped in and assumed the $1.2 billion claim, leaving Genesis with no outstanding liabilities to 3AC.

    By Q3 2022, their market activity drastically fell, with loan originations falling from $50 billion in Q4 2021 to a mere $8.4 billion. Despite the situation, institutional investors still believe they were crypto’s safest counter-party.

    Gemini’s Exposure to Genesis Trading

    Gemini, one of the top crypto exchanges regulated in the U.S., announced that there would be withdrawal delays with its Earn product, in which Genesis is a lending partner. If you do not know how Genesis ties into Gemini Earn, here’s how it basically works:

    After the lenders give their crypto to Gemini, it will be given to Genesis for them to lend out to a fund. The borrowing party will pay fees for this, which will be shared between Gemini and the lenders. The problem now is that Genesis is having liquidity issues, thus they are unable to give Gemini back their crypto. This means that lenders on Gemini Earn cannot get their crypto back.

    Although Gemini assures this does not impact any other products and services, Gemini customers are rushing to get their funds out fearing the exchange is next to go down as the FTX contagion spreads. Over the past 24 hours at the time of writing, Gemini has seen $570 million in withdrawals and ETH withdrawals reached an all-time high on the exchange.

    Genesis Trading’s Impact on the Crypto Market

    It is not just Gemini but also many other CeFi platforms and major hedge funds use Genesis for their yield product. Moreover, many crypto whales opt to give their funds directly to Genesis to earn yields as well as custodial services. If Genesis is unable to give them back their crypto, many lenders worldwide could potentially lose their asset.

    Genesis is also a sister company of Grayscale, the world’s largest Bitcoin fund (GBTC) and one of the largest Bitcoin holders worth $11 billion at the time of writing. If Grayscale is affected by this, there is a possibility that Grayscale will dissolve GBTC to pay back lenders. This impact of this could be huge.

    However, Grayscale assured users that Genesis is not a counterparty or service provider for any Grayscale product, which means they will not be affected by Genesis suspending withdrawals. But in light of recent situations where FTX and Alameda claimed that they are two independent entities, sceptics are demanding a full audit to prove customer funds are safe.

    Genesis Trading Lays Off 30% of Workforce

    On 5th January 2023, Genesis Trading announced a large-scale layoff in order to reduce cost. According to sources close to the matter quoted by Coindesk, 30% of its workforce were cut, which especially affected the sales and business development departments. In addition to Genesis previously slashing 20% of its workforce in August, the company now has around 145 employees.

    The layoff follows shortly after Genesis Interim CEO Derar Islim sent a letter to clients on January 4, addressing the fact that the firm needs more time to sort out its financial issues. However, time is not something Genesis can afford as it faces increasing pressure from creditors.

    Genesis currently owes $900 million to Gemini, and is due to come up with a solution by 8th January 2023. Gemini co-founder Cameron Winklevoss believes that DCG is to blame and should be held responsible for its subsidiary company’s situation. In an open letter to DCG CEO Barry Silbert, Winklevoss accused him of “bad faith stall tactics” and claimed that a $1.675 billion loan from Genesis to DCG is the reason why Genesis is facing liquidity issues.

    Genesis Trading Considers Bankruptcy

    According to Wall Street Journal, Genesis hired investment bank Moelis & Company to review Chapter 11 bankruptcy filings. A Genesis spokesperson explained that it is to “preserve customer assets and drive the business forward.”

    As of 19th January 2023, Genesis is laying the groundwork for a bankruptcy filing, according to Bloomberg. Reports indicated that Genesis is in confidential negotiations with various creditor groups in an attempt to raise cash. However, if Genesis fails to raise capital, it is highly likely they will file for bankruptcy.

    Digital Currency Group (DCG) Under Severe Pressure Amid Genesis Crisis

    On 17th January 2023, DCG halted dividend payments to preserve cash. According to a letter to DCG shareholders reported by Bloomberg, DCG is focusing on strengthening their balance sheet by reducing operating expenses and preserving liquidity. As the parent company of Genesis, this move is most likely the result of the financial crisis Genesis is facing.

    Moreover, CoinDesk, whose parent company is DCG, is hiring advisors at investment bank Lazard to explore options for a potential sale, including a partial or full sale of the company. According to Wall Street Journal, CoinDesk has actually been privately seeking a deal for months, and has received numerous offers. Whether this is related to the Genesis and DCG crisis, no parties have responded to requests for comment.

    CONFIRMED: Genesis Trading Filed for Chapter 11 Bankruptcy Protection

    According to latest news by CNBC, Genesis Trading filed for Chapter 11 bankruptcy protection late Thursday night in Manhattan federal court. Over 100,000 creditors were listed in the company’s bankruptcy filing, with aggregate liabilities ranging from a whopping $1.2 billion to $11 billion.

    In its filing, Genesis stated that it anticipates that after the restructuring process, there will be funds available to pay off unsecured creditors – a group that can be completely eliminated in bankruptcy cases if the circumstances are particularly dire. They also noted the bankruptcy only affects its lending business, and that its derivatives and spot trading business will continue unhindered.

  • Coinbase Data Privacy: How to Opt Out of Financial Data Sharing

    Coinbase Data Privacy: How to Opt Out of Financial Data Sharing

    Coinbase Data Sharing Policy Takes Effect on 22nd January 2023

    On 23rd December 2022, Coinbase publicly announced that they would be sharing and selling customer data for marketing purposes as well as other business related purposes. According to their notice, this includes both active and former customers:

    “If you are a new customer, we can begin sharing your information 30 days from the date we sent this notice. When you are no longer our customer, we continue to share your information as described in this notice. However, you can contact us at any time to limit our sharing.”

    Reddit User Claims Coinbase Ignores Opt Out Requests for Data Sharing

    This is in accordance with U.S. financial law allowing users to opt out of financial and personal data sharing for marketing purposes under the Gramm-Leach-Bliley Act (GLBA). However, according to Reddit user u/durg0n, they had repeatedly request to opt out of data sharing with Coinbase over the past month, but Coinbase did not respond to their request.

    Despite the Reddit user filing a complaint with the Consumer Financial Protection Bureau (CFPB) and even closing their account in protest, Coinbase still did not agree to limit data sharing with marketers and affiliates.

    How to Opt Out of Coinbase Data Sharing?

    Based on feedback from other Reddit users, Coinbase customers can try the following methods to opt out of Coinbase’s data sharing.

    • If you have a current/active account, there is an opt-out setting on the website/app people are reporting success with:
      • Website: Settings > Privacy > Share my Personal Info
      • App: The 9 dots in the corner > Profile and Settings > Privacy > Share my Personal Info
      • Note — You should double-check it is properly set as it seems to be defaulting to sharing enabled, even in Europe.
      • Not all locations appear to have the opt-out setting available (ex: Argentina). If you live in such a country, try contacting Coinbase Support to opt-out manually.
    • If you have a closed/former account, the only option is to contact Coinbase support. Reddit user u/durg0n has tried this method, but mentions it is still worth a try.
    • If you have an old open account, you may be forced to agree to the new Terms of Service (ToS) in order to access the privacy settings. Please note that the newer ToS’s include other forms of data sharing and arbitration. Accepting it may open you up to data being used in other ways and limit your legal rights. According to Reddit comments, it is probably better to deal with Coinbase Support and send in a written request. But you could accept the new TOS and use the website to opt-out if you don’t care about the TOS.
    • If you have already ‘deleted’ your data, you should write in and opt-out anyway. Coinbase retains some ‘deleted’ data of former customers (ostensibly required for regulatory purposes), and this may be subject to the data sale. u/durg0n suggests writing in to Coinbase Support that you wish to limit data sharing to be safe, and carefully read the reply to see if they actually did it or not.
  • Meme Coins 2023: How Smart People Get Rich Investing in Them

    Meme Coins 2023: How Smart People Get Rich Investing in Them

    2023 started off with the explosive rise of Bonk ($BONK), a Solana-based meme coin. In the process, some people made a lot of money, and some did not even have to invest a dime as they were eligible for $BONK airdrops as Solana users. It is important to remember that meme coins are purely speculative and extremely volatile, but smart traders are able to recognize patterns and trends, allowing them to capitalize on these opportunities.

    What are Meme Coins?

    Meme coins are cryptocurrencies that are created for the purpose of entertainment and humor. They are often based on popular internet memes. Dogecoin is the most famous example, a dog-themed token based on the viral Doge meme in 2013.

    What started as a joke quickly became a driving force in the crypto market. Thanks to Dogecoin’s success in 2021, the meme coin market rapidly expanded, and is now valued over $17 billion in total market capitalization.

    Why are Meme Coins So Popular?

    Investing in meme coins present a low-entry barrier. Since meme coins are typically valued at pennies per token, investors can acquire large amounts of tokens for a relatively small price. As a result, investors can gain significant profits if these tokens spike up in price. Many investors view meme coins as a way to make a quick profit, as they are often volatile and can be traded for a profit.

    In contrast to actual blockchain projects such as Ethereum or Aptos, meme coins have no utilities at all. They are less about technology and solutions, and more about fun and community engagement. Additionally, meme coins are often seen as a way to show support for a particular meme or cause, which can be a powerful motivator for investors. Instead of complex blockchain terminologies, meme coin communities focus on building on their biggest facility — humor. Because of this, meme coins are a good at exposing newcomers to the crypto space.

    The Psychology Behind Investing in Meme Coins

    The originator of the term “meme” is Richard Dawkins. In his book “The Selfish Gene”, he explains that when a cultural meme becomes viral and is attached to an exchangeable value, it can theoretically become an actual currency. With blockchain technology, memes can literally become cryptocurrencies.

    As such, they have become increasingly popular in the cryptocurrency space due to their ability to post rapid gains and reach incredible market capitalization and popularity levels in a very short period. This phenomenon can be attributed to two main factors: Social Media Hype and Fear of Missing Out (FOMO).

    Social Media Hype

    We are currently living in the Internet age, where our average attention span is short. As such, memes could prove to be a powerful marketing tool because they are simple, entertaining, and engaging. When used properly, memes are a low-effort marketing strategy that can drive organic engagement.

    Generating hype via social media channels has been a successful strategy for many meme coin projects. By creating shills and utilizing prominent influencers and mainstream celebrities, projects can generate excitement and attract potential investors, even if there is limited information available about the project. This growth, although organic, is based on “unverified beliefs” and inflated utility. Meme coins have been particularly successful in leveraging this strategy, leading to a surge in their token prices.

    Fear of Missing Out (FOMO)

    The volatile nature of the crypto market is often driven by ambitious investors who jump into new projects with the hope of making a profit or not missing out on the project’s potential success. This fear of missing out on further profits has been a major factor in the success of meme coins.

    The price growth that follows the hype marketing is further augmented by FOMO and widespread hype. This trend has enabled meme coins to gain hundreds of thousands of followers, mainly due to their meme culture, before they adopted a reasonable utility. Additionally, as meme coins generally appeal to less experienced retail investors, they tend to jump on the bandwagon in hopes of making profit and being part of a large community.

    The Risk of Investing in Meme Coins

    While meme coins can be a great way to make a quick profit, they also come with a certain amount of risk. As with any investment, there is always the potential for losses. Additionally, because meme coins have no utilities, they are purely speculative assets. Therefore, they are often highly volatile, meaning that prices can change quickly and without warning. As such, it is important to do your research and understand the risks before investing in meme coins.

    Key Takeaway

    At its core, meme coins are purely speculative, and investing in them is somewhat of a gamble. However, smart traders are able to identify trends before they break out. Because meme coins typically rely on hype, they monitor activities on the niche market via social media channels or word-of-mouth. Because these tokens are usually valued at pennies per token, they are able to secure a position before any price surge or drop. But from that point on, it is really just a bet.