Ledger, one of the top hardware wallet providers, has announced the launch of its new Ledger Stax wallet in partnership with Tony Fadell, co-creator of the iPod and iPhone. This is a significant initiative as Fadell being one of the world’s foremost tech engineer is stepping in to bring clarity and confidence to owning digital assets following the collapse of FTX.
Pre-order your Ledger Stax Wallet here!
Key Features of Ledger Stax Wallet
Fadell realized that existing hardware wallets are difficult to use for mass consumers. Therefore, he drew inspiration from his iPod design to bring a more user-friendly experience for wallet users.
Ledger Stax resembles a small smartphone and has a monochromatic E ink display which covers the front and curves around the spine. That way users can easily view complete transaction details as well as their NFT collections even when the wallet is off. This works in conjunction with integrated magnets, allowing multiple Stax devices to stack, hence its name. This is particularly useful for Ledger owners who have different portfolios since they can look at the labels displayed on the spine, like books on a shelf.
Stackable Ledger Stax wallets with displayable screen on the spine (Source: Ledger)
Users can store more than 500 cryptocurrencies or NFTs on Ledger Stax. Developers are also planning to allow users to explore Web3 applications through the Ledger Live app. Users can connect the Ledger Live app on (1) laptops via secure USB-C or (2) smartphones via bluetooth. This new user interface will enable clear and intuitive interaction for all mainstream users.
Ledger Stax also has good energy efficiency and supports wireless Qi charging. Its battery can last as long as few months with a single charge.
How to Get Ledger Stax Wallet?
Ledger Stax is now available for preorder at $279 and will begin shipping by the end of March 2023. It will also be available from select retailers such as Best Buy in the U.S. Those who purchase the wallet will also receive an Infinity Pass, which provides users with a free utility NFT.
Additionally, a Ledger Stax NFT Bundle is available to mint on [Ledger] Market for 0.22 ETH to redeem a free Ledger Stax device. It also unlocks access to exclusive NFT artwork from Ledger’s network of hand-picked artists. However, Genesis Pass holders and PREMINT Collabs have special mint-priority, and there are only 10,000 bundles available.
Key Takeaway
“Not your keys, not your crypto” — there is a great risk of losing all your crypto if you park it on a centralized exchange. Hardware wallets are great self-custodial solutions because only you have control over your funds. But the problem is it can be quite daunting to operate one, especially for beginners.
Ledger Stax will revolutionize this by bringing the familiar user experience of smartphones into hardware wallets. This is a big step towards a decentralized financial future as more people are opting for self-custodial solutions. If you are interested in other hardware wallets, feel free to check these out:
Pre-order your Ledger Stax for only $279 and get it by end of March 2023!
What is the Ledger Stax wallet?
The Ledger Stax wallet is a new hardware wallet developed in partnership with Tony Fadell, co-creator of the iPod and iPhone. It has a unique and innovative design in the style of high-end Samsung cell phones, and lets users view their NFT collections even when the wallet is off.
When will the Ledger Stax be available for sale?
Ledger Stax is now available for reorder at $279 and will begin shipping by the end of March 2023.
What features does the Ledger Stax offer?
The Ledger Stax wallet is an easy-to-carry device about the size of a credit card, which allows users to store more than 500 cryptocurrencies or NFT collections. It also features an E-Ink touchscreen for viewing NFT collections, and a battery that can last for weeks or even months with a single charge.
Are there any incentives for purchasing the Ledger Stax?
Yes, those who purchase the wallet will be eligible for various prizes, such as a “Magnet Shell” protective case and an NFT from the “The Art On Ledger Stax Collection.”
Silvergate Capital, one of the leading banks for Fintech businesses and cryptocurrency, is facing a number of risks as a result of their exposure to FTX’s collapse. As a publicly traded financial service company listed on the New York Stock Exchange (NYSE), Wall Street banks including Morgan Stanley are strongly advising investors to sell Silvergate stocks due to its affiliation with FTX. Because Silvergate positions itself as the main pipeline facilitating the flow of fiat funds and fiat onramps between large crypto exchanges, its impact on the crypto market is comparable to Genesis Trading if they went under.
Silvergate Capital Exposure to FTX is $1.1 billion
Following the collapse of FTX, Silvergate Capital disclosed details of their relationship with FTX and Alameda Research. Although Silvergate does not appear to be a creditor to FTX, they had a sizeable deposit relationship with the exchange, which accounted for nearly 10% of its $11.9 billion in deposits from digital asset customers.
Silvergate claimed its exposure is “minimal” but $1.1 billion is still a lot of money. As a result, investors have begun to fear the crypto bank is developing the same symptoms as other troubled institutions who have fallen to the contagion. Short sellers have already taken their short position on Silvergate, with the stock now down 53% over the past month.
Silvergate Capital CEO Addresses Market Concerns
In response to speculations of market uncertainty, Silvergate Capital CEO Alan Lane asserted that the company followed all relevant regulatory procedures when receiving wires directed to Alameda Research, implementing risk management policies to ensure the security of customer funds. He also noted that the bank has a strong balance sheet and ample liquidity, with cash and securities in excess of its digital asset related deposit liabilities.
If we are taking Lane’s word for it, FTX’s collapse will have little effect on Silvergate. However, the broader market downturn could cause the bank’s foundation to crack if other large depositors continue struggling. Moreover, though Lane claimed they conducted “extensive due diligence” on the FTX group, the community is pointing out its contradiction as they would have prevented it in the first place if they had really done due diligence.
Morgan Stanley Downgrades Silvergate Shares
In a Monday letter to investors, Morgan Stanley lowered its rating on Silvergate’s shares from equal weight to underweight, recommending investors to reduce their exposure to Silvergate stocks. This came across when Silvergate’s digital deposits are down 60% in Q4, citing its need to fund outflows with securities sales and costly wholesale borrowing. With clients withdrawing their deposits, the company is facing even more pressure on its net interest margins (NIM) and net interest income (NII).
Despite Silvergate facing uncertainty in the near-term, the bank has been around since 1988 with a long history of robust financial performances and regulatory experience. Their tier 1 leverage ratio, which measures a bank’s ability to withstand financial stress, was 10.7% in Q3, making them among the top 15% of American banks by this critical metric.
Its long-established regulatory compliance and healthy leverage ratio are set up to weather any financial storm. However, since the crypto industry is still largely unregulated and highly volatile, as well as the downfall of several financial heavyweights, only time will tell if Silvergate will survive this crisis.
In light of the FTX collapse, cryptocurrency exchanges are implementing proof-of-reserves (PoR) as a form of on-chain accounting that shows their entire holdings and customers’ assets. As centralized entities, this is a big step towards a more transparent crypto ecosystem, but some argue it might not be enough to regain investor trust. In this article, we will explain how PoR works and why it matters.
Proof-of-reserves (PoR) is a cryptographic method to verify that an exchange has enough assets to cover all customers’ deposits. In doing so, the exchange ensures customers they have sufficient liquidity on hand to process all withdrawals, should a bank run occur.
This has left the crypto community wondering what other crypto exchanges might be doing with customer assets. As a result, Binance CEO Chengpeng Zhao (CZ) urged all crypto exchanges to do PoR, albeit Kraken was one of the first exchanges to prove their reserves in February 2022.
All crypto exchanges should do merkle-tree proof-of-reserves.
Banks run on fractional reserves. Crypto exchanges should not.@Binance will start to do proof-of-reserves soon. Full transparency.
Proof-of-reserves essentially involves taking a snapshot of all balances held on the exchange which are aggregated into a Merkle tree — a data structure designed to encapsulate and encrypt data. These Merkle trees, also known as hash trees, function as a map of the exchanges’ assets and liabilities (customers’ tokens).
From there, a Merkle root is obtained, which is a cryptographic fingerprint that uniquely identifies the combination of these balances at the time when the snapshot was taken. Afterwards, digital signatures produced by the exchange are collected, which prove ownership over the on-chain addresses with publicly verifiable balances. To put it simply, the exchange discloses these addresses and provides proof that they have access to the associated private key.
Because Merkle trees are part of blockchain technology, anyone can compare and verify if these balances exceed or match the customers’ balances represented in the Merkle tree. In the case of crypto exchanges, this process is either self-attested by the exchange or carried out by an independent third-party audit. As of now, most crypto exchanges have been working with Nansen, a blockchain analytics platform, for their PoR audit.
1/ We are working with exchanges to display proof-of-reserves on @nansenportfolio for everyone to track their token holdings and transactions.
Here's the current list of exchange portfolios and we will live update this thread with more, so make sure you are following! 🧵
Although proof-of-reserves is certainly a step in the right direction, there are still several improvements that could be made to enhance transparency and trust.
Proof-of-Reserves are Pointless without Proof of Liabilities
A proof-of-reserve audit without disclosure of total liabilities, not just customers’ tokens, does not paint a full picture of an exchange’s solvency. This would include anything the exchange owes such as debts and taxes. Kraken CEO Jesse Powell expressed that Binance’s PoR is pointless without liabilities. This is also in reference to other platforms publishing their PoR without mentioning any liabilities. He also added that accounts with negative balances must also be included in the sum of total liabilities.
However, the problem is that these liabilities are NOT on-chain, which means an independent auditor has to step in. At that point, crypto exchanges will have to provide the same proof as all public and regulated companies provide — audited financial statements. (Clonazepam) Coinbase is one of the few exchanges to do this. Since they are a public company subject to U.S. regulations, they have already been proving their reserves using balance sheets audited by the SEC.
Therefore, the most reliable way to prove an exchange’s assets are more than its liabilities is via third-party auditors. In fact, CZ responded to Powell’s comments that Binance would involve third-party auditors to audit their PoR results.
Proof-of-Reserves Audits Can be Falsified
Although the cryptographic proof do not lie, it can be manipulated and framed to look healthy. There is the issue of crypto exchanges moving their funds right after the snapshot for the audit was taken. Recently, Crypto.com mistakenly transferred 280,000 ETH to a Gate.io address after it released its proof-of-reserves audit. Many speculated that exchanges were borrowing assets to show a healthy balance sheet, only to return them after the snapshot.
Moreover, a PoR audit is only as good as its verifier. There is also the issue of exchanges colluding with third-party audits to produce false results. Unless the exchange is audited by a reputable source such as the Big Four accounting firms, we will just have to take their word for it.
Proof-of-Reserves Do Not Prevent Customer Fund Misappropriation
Even then, audits and attestations may not suffice. At its core, crypto exchanges are not the same as banks — crypto is not insured by government depositary schemes. Even if all the steps are done correctly, customers can still lose their crypto if mishandled.
Merkle tree-based PoR would not prevent the misappropriation of customer funds completely. It only tracks the money, providing information. It does not provide customers with greater control over their funds. If the exchange is caught in the act, you would not be able to get your crypto back as it is likely to be tied up in litigation.
At the end of the day, proof-of-reserves is the first step towards a more transparent crypto ecosystem. In effect, it functions as a verification tool to filter out fraudulent crypto exchanges, albeit not completely.
By leveraging blockchain technology, PoR brings crypto exchanges closer to the treasuries of DeFi protocols, allowing anyone to trace funds on-chain at any time. However, there is much to improve in this aspect. But with on-demand, real-time tracking of exchange reserves, the industry is working towards a decentralized and trustless system, where customers do not need to trust the institution, only the math.
On the same day FTX, FTX US, and Alameda Research filed for bankruptcy, more than $600 million was reportedly drained from the cryptocurrency exchange. Many FTX users reported that their wallet balance showed $0. Shortly afterwards, FTX officials confirmed on Telegram that a hack was ongoing, warning all users to delete the app and avoid visiting the website due to a possible malware attack.
A sizeable portion of the stolen funds contained USDT. After FTX’s announcement, Tether immediately blacklisted $31.4 million worth of USDT linked to the transactions. According to ZachXBT, a blockchain investigator widely trusted by the DeFi community, the blacklisted USDT were made up of $3.9 million USDT on Avalanche and $27.5 million USDT on Solana.
By blacklisting the stolen USDT, hackers will not be able to move them to other accounts or exchange them for other crypto. To compensate victims of the hack, Tether will burn the blacklisted USDT and reissue equal amounts of tokens to the original owner(s).
FTX Hack Speculated to be an Inside Job
Suspicions circulated on Twitter that the “hack” was a smokescreen for FTX insiders (possibly Sam Bankman-Fried himself) to run off with the funds. The timing of it all was too much of a coincidence to suggest an external attacker taking advantage of the situation.
A former senior FTX employee, quoted by Autism Capital, believed that it was impossible for someone outside of FTX to have so much root access so quickly, suggesting an inside job is highly likely. To corroborate this, FTX CTO Gary Wang was seen making major changes to FTX’s GitHub code, which implies that the source of the “hack” began there.
Dyma Budorin, co-founder and CEO of Hacken, also concurred that it was an inside job, albeit the “hacker” was inexperienced and sloppy.
Kraken Reveals Hacker Identity to be FTX Insider
The crypto community kept a close eye on the movement of the stolen funds, and discovered that one of the wallet addresses was linked to a Kraken exchange, where the hacker offloaded funds to a Tron wallet. This was a huge blunder for the hacker as Kraken holds know-your-customer (KYC) information of all registered accounts, allowing them to track down the wallet user.
As a result, Kraken CSO Nick Percoco announced on Twitter than they know the identity of the hacker, and are assisting law enforcement agencies with the investigation. Percoco later confirmed that the wallet indeed belongs to a verified account registered by FTX. Sam Bankman-Fried and FTX will be making a public statement regarding this issue.
Update: I’ve been told that @FTX_Official or @SBF_FTX will be making a public statement regarding the sweeping of the Tron wallet in question and them utilizing funds from their verified @krakenfx account to complete this transaction.
To follow up on the investigation, Kraken has frozen accounts associated with the FTX Group and Alameda Research. They assured that they maintain full reserves and other Kraken clients are not affected.
Binance CEO Changpeng Zhao (CZ) and FTX CEO Sam Bankman-Fried (SBF), two of the most powerful men in the crypto industry, have been going toe to toe with each other on Twitter. But this fight is much bigger than both of them, as FUDs and controversies surrounding SBF and FTX could potentially impact the crypto industry. In this article, we will break down the core timeline of the feud and explain how its outcome could affect every investor in the crypto space.
For the latest update. Check out our latest video- IT’S OVER: Binance to Acquire FTX
IT’S OVER: Binance to Acquire FTX
Alameda Research Reportedly Insolvent
The current drama surrounding CZ and SBF began when the balance sheet of Alameda Research, the sister quantitative trading firm of FTX, was leaked. According to a private document CoinDesk reviewed, out of $14.6 billion in total assets of Alameda, $3.66 billion is in FTT, FTX’s native token, and $2.16 billion in FTT collateral. Other significant assets also include $3.37 billion of crypto tokens connected to SBF in one form or another including Solana (SOL), Serum (SRM), and more.
This is a big red flag as it indicates that the majority of Alameda’s net equity is FTX’s own centrally controlled token printed out of thin air, making it completely illiquid. Let’s look at it this way: the current market cap of FTT is $2.3 billion and Alameda’s numbers show an excess of nearly 200% of the total circulating supply of FTT. This means that Alameda’s assets cannot be sold without severely impacting the market.
Many crypto experts drew parallels from Celsius Network’s collapse as Alameda is following the same model, leading to widespread rumors of Alameda going insolvent.
NEW: “IS ALAMEDA RESEARCH INSOLVENT?”
According to a recent leak, the firm’s finances rely on the same scheme that destroyed Celsius Network. Will it work out differently for SBF? 🧵👇https://t.co/gs4mQ7ul14
— DIRTY BUBBLE MEDIA: GOOD LUCK, GOOD BYE. (@MikeBurgersburg) November 4, 2022
CEO of Alameda Research Caroline Ellison asserted on Twitter that the balance sheet only reflects a few of their biggest long positions, and the company actually has over $10 billion in assets that are not included in the balance sheet. However, this does not address the issue that Alameda is holding $5 billion worth of “magic money” reported on their balance sheet.
Binance Liquidates Its Entire FTT Holdings
Shortly after the leak, CZ posted a Twitter thread announcing Binance’s full exit from its FTT holdings. But they will do so in a way that minimizes market impact, selling it on the open market at monthly intervals. CZ fired shots at SBF stating that liquidating their FTT is a post-exit risk management, learning from the Terra Luna collapse. This implicated that FTX could potentially repeat history, heading into a death spiral if a bank run were to happen.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
Shortly after, Ellison responded to CZ that Alameda was willing to buy all of Binance’s FTT holdings at $22. Several members of the crypto community believed that the response seemed desperate and was a buyback red flag. CZ eventually declined the bid, and further added that he will not support “people who lobby against other industry players behind their backs.” This is in reference to SBF allegedly supporting the DCCPA draft bill last month that could pose significant threats to DeFi.
If SBF’s alleged political stance is the match and Alameda’s balance sheet is gasoline, then CZ liquidating its entire FTT holdings is striking the match.
This series of events sparked a lot of FUD in the crypto community, resulting in staggering outflows as people were rushing to withdraw funds from FTX, with stablecoin outflows from FTX reaching $451 million according to Nansen data. Reports also show a 4-8 hour delay and increased fees in FTX withdrawals, upsetting many FTX users. At the time of writing, FTT token has dropped 39% from its weekly high.
Sam Bankman-Fried’s Response to Insolvency Rumors
SBF recently issued a response (update: Tweet deleted) assuring people that FTX and its assets are fine. He explains that FTX has enough capital to cover all client holdings and is processing all withdrawals. In response to the cause of the overall situation, SBF stated that a competitor is targeting them with false rumors, throwing shade at CZ. Ironically, at the end of SBF’s Twitter thread, he calls for collaboration with CZ for the ecosystem.
Though as calm as SBF is handling the situation, it does not address the issue that Alameda is holding $5 billion worth of FTT tokens printed out of thin air, the very same model that led to the collapse of Celsius. It is impossible to sell an illiquid asset without severely impacting the market. But at the end of the day, FTX is a highly reputable organization with a lot of resources and manpower.
Larry Cermak, Vice President of Research at The Block, believes that FTX and Alameda has the size to weather through the storm, and that FTX going insolvent is near 0%. He also mentioned however that it is clear there are liquidity issues with FTX currently. Other crypto experts also agreed but also advised investors to treat the situation with caution.
I have nothing against FTX but there is no upside to keeping funds on any exchange. More so on an exchange that has FUD.
I’m almost sure FTX will be ok but in the tiny chance that they are not, I wouldn’t want to think that I had an opportunity to withdraw and didn’t take it! https://t.co/w8n7PWhL11
CZ emerges as the clear winner in the war between SBF vs CZ. SBF indirectly admitted defeat on 9th November 2022 when he announced that he agreed to a “strategic transaction with Binance for FTX.com”. This, agreement, however, fell through as detailed in our article- Binance will NOT acquire FTX: What is next?
The SBF vs CZ war finally ended with CZ coming out victorious on 11th November 2022, when SBF announced he had filed FTX, FTX US, and Alameda for voluntary Chapter 11 bankruptcy in the US.
Now with FTX exchange out of the picture, CZ’s Binance exchange comes out top. Binance now has the highest 24-hour trading volume and page visits out of all the centralized cryptocurrency exchanges according to CoinGecko.
Top cryptocurrency exchanges ranking (Source: CoinGecko)
Binance CEO Changpeng Zhao (CZ) decided that Binance will not go through with the deal to acquire FTX, one day after he announced that he intended to acquire FTX. This shocking turn of events could create a ripple effect throughout the crypto market, affecting all investors and businesses. In case you are out of the loop, our previous article “SBF vs CZ War” covers the core timeline of what has been happening that led to this event. You can also check out our latest video — FTX Collapsing: Biggest Disaster in Crypto? for more insight.
Why Did Binance Back Out of the Acquisition Deal?
Binance announced on Twitter that they will not go through with the deal to acquire FTX as a result of “corporate due diligence” and “mishandled customer funds” in FTX’s books pending investigations by U.S. regulatory agencies.
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
After this revelation, FTX users were rushing to cash out fearing the exchange might be going insolvent. This led to a liquidity crunch, forcing FTX to halt all crypto withdrawals. We are talking about at least $8 billion of user funds stuck on the exchange which possibly cannot be saved, according to Wall Street Journal.
This is the most likely scenario, ascertained and corroborated by many crypto experts. jonwu.eth on Twitter gives a perfect summary of how everything went down. Funnily enough, FTX CEO Sam Bankman-Fried (SBF) deleted his Tweet which he assured clients that their assets are fully protected. But as of now, these speculations are not officially confirmed. This is where U.S. regulators (SEC, DOJ) are stepping in to investigate FTX for potential securities-law violations, according to Wall Street Journal.
How This Will Affect All Investors
Binance acknowledged that the collapse of FTX will severely impact all retail investors, but will continue to build towards a stronger decentralized ecosystem. This is reiterated by CZ in his internal message sent to all Binance teams globally.
It is not just user funds that are stuck on FTX, but other crypto projects’ as well. According to CoinDesk, many crypto businesses and ventures have exposure to FTX in one way or another, whether via storing funds, providing liquidity or borrowing and lending. This affects all ecosystems throughout the crypto industry as wild price swings trigger a domino effect of forced liquidations across the market, similar to Three Arrows Capital or Voyager Digital after the Terra Luna collapse.
It is the first time Bitcoin (BTC) has fallen below $16,000 since November 2020, a 77% decrease from its all-time high last year. Since BTC has broken past its first support level of $19,000, it would take time for its range to be established after capitulation event. As BTC is the first and largest cryptocurrency by market cap, it practically dictates the price actions of all altcoins including Ethereum (ETH). We can expect the market to be highly volatile in the coming weeks.
On 8th November 2022, Binance CEO Changpeng Zhao (CZ) announced on Twitter that Binance intends to fully acquire FTX to help cover their liquidity crunch after FTX CEO Sam Bankman-Fried (SBF) reached out to Binance for help. In case you are out of the loop, our previous article “SBF vs CZ War” covers the core timeline of what has been happening that led to this acquisition.
In this article, we will break down the acquisition events as it unfolds and explain how this will affect every investor in the crypto space. You can also check out our latest video — FTX Collapsing: Biggest Disaster in Crypto? for more insight.
According to a report by Reuters, SBF sent an internal message on Tuesday morning to company employees stating that around $6 billion had been withdrawn out of FTX. Given the situation, FTX had no choice but to halt all crypto withdrawals due to lack of liquidity, which confirmed insolvency rumors about FTX.
Since the liquidity of FTX and Alameda Research are mostly held in illiquid FTT (FTX native token) instead of liquid cash, there was no way for FTX users to cash out their funds. Moreover, no strategic investors and partners of FTX were able to help cover their billions of dollars in debt. As a last resort, SBF turned to none other than CZ who has more than enough resources and manpower to rescue him.
Binance to Acquire FTX
Hours after the withdrawal suspension, CZ announced on Twitter that Binance signed a non-binding Letter of Intent (LOI), intending to fully acquire FTX and help cover the liquidity crunch to protect users. For the time being, Binance is conducting a full Demand Draft (DD) in which they are assessing the situation about the acquisition.
This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire https://t.co/BGtFlCmLXB and help cover the liquidity crunch. We will be conducting a full DD in the coming days.
However, keep in mind that the LOI is non-binding, which means Binance has the discretion to pull out from the deal at any time. But if it goes through, FTX will be officially owned by Binance, possibly marking it the biggest moment in crypto history.
On the withdrawal end, Binance has helped FTX on clearing out withdrawal backlogs. According to a Tweet by SBF, this will clear out liquidity crunches and all assets will be covered 1:1. However, some users are still experiencing withdrawal delays as shown by the comments under the Tweet.
What will Happen to FTX Users after Binance Acquisition?
Although this may seem like a big move for Binance, the outcome created a ripple effect that could potentially affect every investor in the crypto space. Good or not, only time will tell.
Binance May Damage the Long-Term Interests of Crypto
As we have learned from FTX’s downfall as well as Terra Luna’s collapse, one thing is for certain in the crypto space: nothing is certain. No one saw it coming. The same could be said about Binance as well. (https://www.blazeair.com/) That is not to say that Binance is next, but the possibility is never zero.
After all, despite Binance being a highly reputable crypto exchange and CZ’s passion and commitment to building a truly decentralized ecosystem, it is a centralized business at the end of the day. With FTX out of the equation, Binance will be the undisputed powerhouse in the crypto industry, which goes against the idea of decentralization, the core pillar of crypto. If Binance falls, the crypto market goes back to the dark ages. Gracey Chen, Managing Director of Bitget, said on Twitter that Binance’s acquisition of FTX harms decentralization and could damage the long-term interests of the industry.
Nevertheless, CZ assures the public that the business model of Binance is aligned with decentralization and puts user security first. He asserted that Binance has never used BNB as collateral for loans and has never taken on debt. He also added that all crypto exchanges should incorporate merkle-tree proof-of-reserves, since fractional reserves only work for banks and not crypto exchanges. This reflects CZ’s proactiveness in building a more secure and decentralized ecosystem.
Increased Scrutiny and Regulations on Crypto Exchanges
First and foremost, I care about clients being made whole. Investors knew what they were getting in to. The deal is sure to draw significant scrutiny. There are a lot of allegations flying around and M&A might pressure a govt move, or look like a convenient 2-for-1 opportunity. https://t.co/gctVy4NMEc
Although strict regulations could stabilize the market and protect user funds, it also limits digital freedom for retail investors as the whole point of crypto is trustless transactions without central authorities. It is basically a dilemma: too much involvement from the government defeats the purpose of the crypto space, too little breeds unregulated securities and malicious actors.
Technical analysis made easy with bullish chart patterns packed into a cheat sheet, so that you can make better trades at Bitcoin or other cryptos!
Is Technical Analysis Useful?
Crypto, as a new asset class, is volatile in nature. Its price fluctuates because it is heavily influenced by supply and demand, and it reflects how the public feels about the asset. This is known as market sentiment — bullish when prices are rising, bearish when prices are falling.
The market is constantly changing. In many cases, it does not matter how you feel about it, it only matters how the market is going to feel about it.
Market sentiment is a critical indicator to predict price movements and make investment decisions. An easy way to gauge market sentiment is by looking at chart patterns. They tend to repeat themselves, and once you are able to recognize them, it becomes easier to strategize your entries and exits.
However, it is important to note that they are NOT a guarantee that the market will move in that predicted direction. It should only serve as a frame of reference for you to feel how the market moves.
Bullish Chart Patterns
These are some of the most common bullish chart patterns you will see in the market. This cheat sheet will help you identify real-time candlestick patterns whenever you’re on Binance, or other crypto exchanges, so that you can time your entries better.
Ascending Triangle (Bullish)
Ascending Triangle (Bullish)
An ascending triangle is a bullish pattern which signifies the continuation of an uptrend, hence “ascending” triangle. It can be drawn onto the chart by (1) placing a horizontal line along the swing highs, which is the resistance, and then (2) drawing an ascending trend line along the swing lows, which is the support.
Ascending triangles often have more than two identical peak highs which allow for the resistance line to be horizontal.
The pattern completes itself when the trend breaks through the resistance, continuing the uptrend. This signifies that the asset has a high buying pressure, and buyers are most likely opting for a long position.
Falling Wedges (Bullish)
Falling Wedges (Bullish)
A falling wedge occurs when the trend line is sandwiched between two downwardly sloping lines, getting narrower as the resistance line gets closer to the support line. In this case, the line of resistance is steeper than the support.
It may seem like a downward trend but it isn’t. In fact, it is a reversal pattern. A falling wedge is usually indicative that an asset’s price will drop before it rises and breaks through the level of resistance, as shown in the second picture above.
A falling wedge usually signals the end of the consolidation phase that facilitated a pull back lower. The consolidation phase happens when buyers regroup and attract new buying interest. It can be explained as the “calm before the storm.”
Double Bottom (Bullish)
Double Bottom (Bullish)
A double bottom indicates a period of selling in which the price drops below the level of support. It will then rise to the level of resistance, before dropping again. It resembles a W shape, hence “double bottom.” Jokingly, the W stands for “win”!
Finally, the trend will reverse and begin an uptrend as the market becomes more bullish. It may seem like a bearish trend, but it is in fact a bullish reversal pattern. This signifies the end of a downtrend and a shift towards an uptrend.
It is important to note that most traders would jump the gun by entering a position before the pattern is activated. A double bottom is active only once the buyers break the neck line and secure a close above it. This is why it is important to wait for a close above the neck line before entering the market.
Rounding Bottom (Bullish)
Rounding Bottom (Bullish)
A rounding bottom is both a bullish continuation and a reversal. During an uptrend, the price will drop slightly before rising once more. This would be a bullish continuation.
Afterwards, the bullish reversal occurs when the price is in a downward trend and a rounding bottom forms before the trend reverses and continue upwards.
Bull Flag and Pennant (Bullish)
Bull Flag and Pennant (Bullish)
A bull flag signals that the overall uptrend is likely to continue, followed by a consolidation. It resembles a flag fluttering upwards in the wind.
Usually, there will be a significant increase during the early stages of the trend, before entering into a series of smaller upward or downward movements. This would be the pennant.
Pennants can be either bullish or bearish, and they can represent a continuation or a reversal. The picture above is an example of a bullish continuation.
While a pennant may seem similar to a wedge pattern, as mentioned in the previous section, wedges are much more narrower than pennants. Moreover, wedges differ from pennants because wedges are always ascending or descending, whereas pennants remain horizontal.
Summary
These are some of the most common bullish patterns you will see in the market. This cheat sheet will help you better time your entries when the market sentiment is bullish. However, it is important to note that crypto is volatile in general.
These chart patterns are NOT a guarantee that the market will move in that predicted direction. It should only serve as a frame of reference for you to feel how the market moves.
Celsius Network was one of the largest gateways to crypto with $864 million worth of venture capital raised. They also had over $3 billion worth of funds held in custody for 1.4 million customers. Offering attractive yields, simple to use UI, and promises of security and transparency, it was truly the perfect crypto on-ramp for less experienced crypto users. They abstracted away the complexities of DeFi (Decentralized Finance), and offered only pure and straightforward DeFi yields.
However, their questionable asset management practices have recently come to light. Celsius Network’s risk management strategy heavily relied on continued bullish crypto narratives pushing prices upwards. Which left them unprepared for significant drawdowns. They also engaged in “degenerate trading” strategies which put them at risk of liquidation and potential bankruptcy.
Some believe Celsius will be another big platform to collapse during this bear market, potentially pushing crypto prices even lower than before. And likely resulting in a further liquidation cascade that could destroy protocols, VCs, investment funds, and others.
For another perspective on the situation on Celsius Network and how events may unfold, check out Michael’s analysis:
https://www.youtube.com/watch?v=xGbCX-AdiY4
Celsius Network – Then And Now
What is Celsius Network?
Celsius Network ($CEL) is a one-stop shop fintech app that offers the ease-of-use benefits of CeFi (Centralized Finance) with the best DeFi offerings. They are a centralized DeFi platform allowing users to deposit funds into custodial wallets on the platform. They also offered a range of DeFi services. These included token swaps, high yields on stablecoins and cryptocurrencies and crypto-backed lending and borrowing.
Celsius had a straightforward dashboard, free inter-account crypto transfers and a variety of DeFi features. Hence, Celsius managed to offer a truly incredible product to over a million customers, attracting industry respect and venture capital. So what went wrong?
The Demise of Celsius Network?
Celsius’ demise can be summed up in three parts. Firstly, its problems really started to surface during the LUNA collapse, then followed by a slow unravelling of Celsius’ overleveraged. Finally, poorly planned out WBTC and ETH/stETH positions led them to a complete lockdown of their platform.
LUNA/UST Giga Yields
Luna, through its Anchor protocol, promised a “risk-free” 20% interest on their USD-pegged stablecoin, UST. This was a highly popular product right up until its collapse. However, Celsius was also taking advantage of these high yields, which allowed them to offer high yields to customers while taking some profit.
Although this was denied by Celsisus’ founder, on-chain investigations by firms such as The Block Research, Hoptrail, and Nansen revealed that Celsius was staking up to $535 million worth of UST on Anchor protocol. Reportedly, prior to the full depeg of UST, Celsius managed to withdraw their funds with minimal damage. This left the Terra ecosystem with half a billion-dollar hole in their pockets. It seems that Celsius managed to get out of that situation mostly unscathed. However, this should’ve served as a red flag that indicated what kind of risk Celsius is willing to take on.
WBTC as DAI collateral
This one’s also pretty straightforward. Celsius used customer’s WBTC (wrapped BTC on Ethereum) as collateral to borrow DAI on the Maker protocol. This is so they could stake the DAI stablecoin for very favorable yields. Everything had been going great until BTC prices rapidly tumbled after the UST collapse. As prices tumbled, it was cheaper to keep adding collateral instead of paying off their DAI debt, losing some capital and the DAI yields. This did this likely in hope for a trend reversal or possibly a short-lived BTC relief rally. However, customers’ funds were subsidising this collateral.
stETH & locked ETH
Celsius offered their customers an attractive <8% yield on ETH while the best ETH staking deal one could get was by staking their ETH on the Ethereum PoS Beacon chain, which offers ~4.2% yield at best. So how could they possibly deliver such an incredible deal for their customers?
The solution was staked ETH (stETH) which is a liquid ETH derivative offered by Lido Finance. stETH is a fully collateralized representation of ETH staked on the Ethereum PoS Beacon chain. After the Merge, when users can withdraw staked ETH, 1 stETH will be redeemable for 1 ETH. This allows anyone to earn a yield on ETH offered by the Beacon chain without running the staking infrastructure. But, stETH’s dollar value is not pegged to ETH’s dollar-value. Also, stETH cannot be redeemed for ETH.
So Celsius was doing three things with their customer’s ETH to generate the exorbitant yields:
Lending out ETH and earning interest on DeFi protocols (27% of their total ETH);
Swapping them for stETH to generate ETH staking yields and at the same time lending out stETH to provide liquidity and earn interest on Curve Finance, a decentralized crypto exchange. (44%); and
Staking ETH on Beacon chain, rendering it illiquid for at least a year or whenever The Merge happens and the ETH gets unlocked. (27%).
The current issue Celsius is facing is the fact that while swapping an equivalent amount of ETH for stETH, stETH currently is not trading for the same dollar value as its ETH equivalent. This is due to several reasons. As a result, they’re currently in possession of roughly $0.94 for every $1 worth of ETH owed to their customers. On paper. In reality, it’s much worse than that. Celsius holds ~445k stETH, currently valued at $540 million and cannot all be swapped for ETH on the Curve Finance pool due to lack of liquidity.
So, Celsius was lending 27% of their ETH on DeFi, and swapped 44% of their ETH for stETH. However this stETH is now worth less than ETH. stETH also cannot even be fully exchanged for ETH. As a result, most of Celsius’ ETH is illiquid.
Celsius Liquidity Crisis
The situation is getting direr by the day for Celsius. Whilst BTC and ETH prices were tumbling, their ETH liquidity was drying up. Hence they had to top up their WBTC collateral several times from 22k all the way down to 14k to avoid margin calls.
To do this, they’ve put all withdrawals, swaps, and transfers between accounts on hold since 12th June 2022. Thereby completely locking users out of their assets. This was to prevent a bank run, which would’ve completely drained Celsius of their holdings.
Celsius files for Chapter 11 bankruptcy
On 13th July 2022, Celsius Network filed for bankruptcy in the Southern District Court of New York. In its announcement that Celsius had filed for Chapter 11 protection. The filing of Chapter 11 bankruptcy protection means that Celsius can continue operating its business and restructure its obligations.
The Company also states it has US$167m cash on hand to support operations during the restructuring processes. It hopes that through the process, it would stabilize its business to maximize value for all its stakeholders.
Will Celsius users get their cryptocurrencies back?
Celsius’ Directors justified its earlier decision to pause trading and withdrawals to “… stabilise its business and protect its customers”. This is to prevent customers who did not quickly withdraw their funds from being left waiting for Celsius to come up with the liquidity.
In an interview with Cointelegraph, Danny Talwar, Head of Tax at Koinly expressed concerns that Celsius may be like Mt.Gox. Mt. Gox collapsed in 2014 and users still have not seen any of their funds returned.
Celsius has not made any announcement as to whether or not they will reopen the platform to allow withdrawals. In their blog post on 14th July 2022, Celsius stated that:
“Most account activity will be paused until further notice. Withdrawals, Swap, and transfers between accounts will remain paused, and rewards will stop accruing as of the date of the filing. Celsius is not requesting authority to allow customer withdrawals at this time.”
Looking forward, Celsius “…intend[s] to put forward a plan that restores activity across the platform, returns value to customers, and provides choices.”
Celsius lawyers: Users gave up legal rights to their cryptocurrencies
Celsius Network’s lawyers stated that users with Celsius’ Earn and Borrow accounts gave up the rights to their crypto under its terms of service.
According to a tweet from Kadhim Shubber, a Financial Times reporter, Celsius Network’s lawyers stated the recovery plan would involve HODLing. They believe customers would be interested in hodl-ing throughout this bear market. Then they would realise their recovery when the market recovers.
Celsius to run out of money in October/November 2022?
Celsius was initially expected to run out of money in October 2022 according to their Weekly Cash Flow Forecast filed with the Court. However, an updated Forecast filed on 6th September 2022 shows that the Company will still have US$42 million in cash left by the end of November 2022.
Celsius weekly cash flow forecast
Profiting off the Celsius collapse? What is #CelShortSqueeze?
Twitter hashtag #CelShortSqueeze has been trending even before Celsius Network filed for Chapter 11 bankruptcy protection. #CelShortSqueeze appears to have been set up as a grassroots movement by $CEL token supporters or traders liquidated by $CEL backed loans.
The #CelShortSqueeze movement is an attempt by Celsius supporters to make it harder to short the $CEL token. This is by encouraging others to buy $CEL on exchanges such as FTX or Uniswap, and send the tokens to private wallets. The purpose of this is to take the $CEL tokens out of circulation of centralized exchanges. Hence spot short traders intending to borrow $CEL from exchanges are forced to use decentralized exchanges. This is because on decentralized exchanges, users can set the sell prices.
The #CelShortSqueeze movement seems to be effective in propping up $CEL token prices at or over 80 cents. This is despite the news of Celsius filing for bankruptcy protection. Whilst prices initially dipped to 48 cents right after news of the bankruptcy came out, #CelShortSqueeze supporters helped bring back prices to 80 cents and over.
In a win for #CelShortSqueeze supporters, prices of $CEL pumped to $1.42 on 29th July 2022, the highest in almost 1 month.
The #CelShortSqueeze movement shows what retail investors can be capable of when they band together through the power of social media. There is a lot of uncertainty right now as to what will happen to the $CEL token as Celsius Network is figuring out how to restructure and rescue the company. The restructuring process can take years and it is unknown when Celsius will re-open withdrawals to customers. So Celsius holders are certainly hoping that the #CelShortSqueeze movement does not lose steam until then.
Celsius seeks to open withdrawals for some customers
On 1st September 2022, Celsius filed a Court motion to open certain accounts for customers to withdraw their funds. However, Celsius’ motion only applies to Custody and Withold Accounts and for assets with a value of US$7,575 or less. Celsius’ Custody and Withold Accounts are basically storage wallets and users still retain legal ownership of their cryptocurrencies. In contrast, Celsius’ Earn and Borrow Accounts offer borrowing and annual crypto earnings services. If the Court grants this motion, around US$50 million (out of the US$225 million held in the accounts) will be released to customers.
Whilst some have reacted positively to this news, there are others who point out that this is hardly fair to affected Celsius users. Commentators have pointed out that in any event, under US law, Celsius is unable to avoid transferring sums under this amount if creditors so request.
Celsius co-founder declares shares “worthless“
Daniel Leon, one of the co-founders of Celsius is seeking a Court declaration that his equity in the Company is “worthless”. Leon is a substantial shareholder of the Company and holds 32,600 common shares. Shareholders make these declarations during bankruptcy proceedings when they do not think they will receive any further distribution for their holdings. The result of this declaration is that the shares can be used as a tax write-off.
Celsius will be revived as Kelvin- a crypto custody service?
According to an announcement at a Celsius employee meeting on 8th September 2022, CEO Alex Mashinsky and Head of Innovation and Chief Compliance Officer Oren Blonstein plan to revive Celsius. The plan is to launch a project called Kelvin, which will store users’ cryptocurrencies and charge fees for specific transactions.
This is a departure from Celsius’ existing business model, where Celsius does not charge any fees for transactions, withdrawals, origination, or early termination.
Latest: Celsius leaks customers’ personal data-where is the info now?
On 5th October 2022, Celsius filed publicly available court documents revealing personal data on thousands of its customers. The court documents filed by Celsius revealed, among others, customers’ names, and transaction information such as transaction amounts, times, types, and descriptions. According to Henry de Valence, Founder of Penumbra Labs, the information leaked by Celsius is sufficient to “dox all the on-chain activity” of any Celsius user by matching the dates and amounts to the blockchain transaction data.
However, this saga is far from over, as the customers’ data has recently been made publicly available on a website called Celsiusnetworth.com. The website lets people search the names of Celsius users, along with their cryptocurrency holdings on Celsius. It also included a leaderboard that listed which customers suffered the greatest losses.
Celsius executives and founders withdrew nearly US$35 million before withdrawals were frozen
As a result of Celsius’ court filings, it has been revealed that its executives had already withdrawn funds totaling nearly US$35 million in the weeks before withdrawals on the platform were frozen. Filings revealed that ex-CEO and co-founder Alex Mashinsky withdrew around US$10 million from the Celsius platform in May 2022. Meanwhile, co-founder and former chief strategy officer Daniel Leon withdrew around US$7 million, and current chief technology officer Nuke Goldstein around US$550,000.
Celsius paused its withdrawals weeks later in June 2022 before filing for Chapter 11 bankruptcy in July.
A spokesperson for Alex Mashinsky states that the US$10 million withdrawal was planned even before Celsius intended to pause withdrawals, as the funds were used to pay taxes. Also, Mashinsky’s family still had US$44 million worth of cryptocurrencies frozen on the Celsius platform.
Conclusion
What becomes of Celsius going forward is unclear. However, what is clear is that time and time again we get to witness the extreme importance of the age-old rules of crypto – be wary if something seems too good to be true, and never put in more than what you can afford to lose.
It is easy to become swept up in the hype, so doing your own research is incredibly important. Thinking critically and understanding the fundamentals can help you avoid a lot of heartache in the future.
The newly launched Ethereum Merge has rendered mining obsolete. So what will happen to all Ethereum mining pools and its miners as well as the millions of dollars worth of hardware in the ecosystem?
What is Ethereum Mining?
Before Ethereum’s Merge on 15th September 2022, the blockchain used proof-of-work, the same consensus protocol as Bitcoin, to validate and record transactions. But unlike Bitcoin which solely uses application-specific integrated circuit (ASIC) miners, you could use graphics processing unit (GPU) of gaming computers to mine ETH. As a result, it was generally easier to mine ETH than Bitcoin since GPUs are more accessible and widely applicable than ASICs.
There were two main ways to mine ETH – pool mining or solo mining:
Pool Mining (working together)
Work with others to mine and share rewards
Get paid per share, on a hourly or daily basis
Less random / dependent on luck
Pools take some fees (0.5-8% depending on pool)
Solo Mining
You mine the entire block reward (differs based on mining difficulty changes) – no pool fees
Random chance and probability – you can go days or months without rewards
Not viable if hashrate is low – single GPU might take years to mine a block
Ethereum mining pools were the go-to options for most miners as solo mining took a very long time to earn rewards. However, this work drew criticism for its impact on the environment and its excessive electricity consumption. It is a highly energy-intensive process as miners around the world pool together large amounts of resources and power to mine ETH. But all of that has changed with the arrival of the Merge on 15th September 2022.
How does the Merge affect Ethereum Mining?
On 15th September 2022, Ethereum switched its consensus protocol to proof-of-stake as part of an update known as the “Merge” that links Beacon Chain and the Ethereum Mainnet. The Beacon Chain is what allows users to stake ETH, which has been operational since the end of 2020. Many people have staked their ETH to support the transition as well as earn rewards on their stake. Here’s the kicker, after the Merge begins, mining difficulty will soar due to the “difficulty bomb”. It is a kind of self-destruct mechanism meant to make proof-of-work calculations almost impossible, incentivizing the move to an environmentally-friendly proof-of-stake model.
What will happen to Ethereum Mining Pools and Miners?
There is a divide in the Ethereum mining community between the organizations that have helped coordinate the resources of individual miners (mining pools) and the individual miners themselves.
Good for Ethereum Mining Pools
For mining pools, the transition does not affect them at all. Since these organizations never did the actual work of generating computing power themselves, they are not affected by the sunk cost of the eventual obsolete mining rigs. Instead, these pooling companies have human capital and infrastructure necessary to organize the pooling of resources, source new clients, and overall manage and maintain the operation and its security.
For this reason, leading Ethereum mining pools like Ethermine or f2pool can simply transition to staking pools. They do not rely on the actual mining itself. It is not a matter of product, only business model. These companies operate on a fee structure, charging individuals for participating in their pools, and it will be unaffected by the move from mining to staking. They only require business development, customer service, and communication with core developers, softwares, and client teams.
Bad for Individual Ethereum Miners
However, for the miners who make up these pools and other independent Ethereum miners, the transition could mean the end for them. People who have benefited from mining ETH, either by managing large mining farms or by contributing moderate amounts of GPU power to mining pools, may be left stranded. They have invested large amounts of money in expensive GPUs or specialized mining rigs that are useless in staking. Some will not even be able to recoup their initial investment as they hoped to profit from mining.
Although validating via proof-of-stake only requires a home PC with stable internet connection, it would require a minimum contribution of 32 ETH, which is a sum far greater than most people’s savings. Essentially, in order to fully cover the hole of lost mining revenues via staking, individual miners would have to establish and operate their own staking pools, which would be a considerably more difficult task than maintaining their own mining rigs.
Potential Solutions for Ethereum Miners
There is really no good option for ETH miners. They can still salvage their GPUs by selling them in the market as gaming computers are still popular products, but it is safe to say that there is certainly no demand for ASICs in the market. They could use them to mine other cryptocurrencies that are compatible with their processors such as Ethereum Classic, Ravencoin or Ergo, but they are also much less in demand than Ethereum. The profit margins are substantially lower.
However, there are certain staking pools that encourage bringing current miners into the fold. According to Bitfly, EtherMine’s parent company, their goal is to “onboard current miners from proof-of-work to proof-of-stake.” They also noted that most deposits to EtherMine’s new staking platform have come from existing miners. But whatever the case is, there is still no easy answer as to how Ethereum miners will ever again come close to generating the revenue produced by mining ETH.
A hard fork is a major change to the blockchain’s protocol that results in the splitting of the blockchain, creating a seperate blockchain that inherits all of its history with the original, but is on its own towards a new direction.
Hours after Ethereum’s successful merge on 15th September 2022, a group known as ETHW Core launched a proof-of-work hard fork of Ethereum known as ETHPoW or ETHW. The hard fork’s purpose is to preserve PoW and keep ETH mining alive beyond the Merge.
The Problems with ETHW
Although ETHW could be a safe haven for ETH miners, there is not a lot of optimism about its success. In fact, there are a lot of underlying issues that the core team has yet to address.
ETHW Post-Launch Network Error
ETHW is getting off to a bad start. Shortly after the ETHW mainnet debut, users began experiencing issues accessing the network. It became clear that the problem was that ETHW had chosen a chain ID already in use by a Bitcoin Cash testnet. If ETHW fails to change its network’s chain ID from the Ethereum mainnet, users could be susceptible to a replay attack — an exploit in which the attacker intercepts and then replicates a valid data transmission going through a network. Given the transparent nature of blockchains, this means that hackers can duplicate your transactions, allowing them to withdraw your funds.
No Backing for Forked Stablecoins
The two leading stablecoins USD Coin (USDC) and Tether (USDT) have officially confirmed to exclusively support Ethereum 2.0. This results in a smooth transition that is essential for the long-term growth of the decentralized finance (DeFi) ecosystem and its platforms.
However, that leaves ETHW high and dry as lack of stablecoin support means insufficient liquidity. This is because 1:1 backing will only exist for the officially recognized blockchains, thus USDC and USDT balances cannot be duplicated onto a new blockchain. This is further amplified by the fact that ETHW announced they would temporarily freeze tokens in certain liquidity pools to “protect user funds.” This did not go well with many as this move is done without their consent and the community did not vote on such change.
No Oracle Support
Apart from facilitating transactions, decentralized applications (DApps) also interact with external data which requires off-chain computing. This is where blockchain oracle technology like Chainlink comes into play. They enhance smart contracts by connecting them with real-world data, events and transactions.
On August 8, Chainlink has also officially confirmed to stay with Ethereum 2.0. This means that any DApps on ETHW can be negatively affected since oracle solutions are essential in retrieving and sharing data without jeopardizing the security of the blockchain.
Lack of Support from Leading DApps and Projects
On 16th August 2022, Aave, a leading decentralized lending protocol on Ethereum, proposed a governance vote to commit to using Ethereum 2.0, giving power to shut down any Aave deployments on any alternative Ethrereum forks. On their blog post, Aave advised developers and DApp teams on the Ethereum network to halt smart contract operations on forked Ethereum blockchains until they become stable.
The lack of support from projects means that any tokens or NFTs on the forked Ethereum chain will less likely be accepted in marketplaces or DeFi applications. In turn this would affect investors who are looking to profit from trading these assets.
