“Most people see these machinations through the lens of price, but price is ephemeral. Prices fluctuate wildly in the short run because sentiment trumps fundamentals, and many projects don’t have any. But like any other startup, what matters in the long run is whether a project delivers something useful.
Not in terms of transactions per second, clean user interfaces or efficient governance, that’s what Big Banks and Big Tech are for. Crypto projects should be measured by the unique attributes of decentralization, features like trustlessness, censorship-resistance, transparency and — as a direct result — resilience. Given the many downsides of decentralization, these attributes should be priority one for every project. On a long enough timeline, they will determine price.
Those who claim that UST was the victim of an attack — which it probably was — should remember that the entire point of this technology is to achieve resilience in the face of constant attack. Projects that can’t handle attacks shouldn’t exist.
We’ve heard this story before. The short history of crypto is filled with examples of projects that raised a lot of money, sacrificed first principles to steal the limelight, then faltered. The original DAO was hacked. Tezos devolved into a governance crisis almost right away. Block.one thrashed from one pointless endeavor to another.
On the other stride of the spectrum is Bitcoin, which never raised a penny, took its time to grow, and is now worth half a trillion dollars. Similarly, Ethereum only ever raised $16m — one tenth of the amount raised recently by Tom Brady’s NFT platform — and almost all of it came from the public. Insiders never controlled more than 15% of the token supply, and being Proof of Work diluted them further. It too has been painfully slow to evolve, but is well positioned to survive a bear market. If the merge succeeds and rollups continue to evolve then it can come out more useful than ever.
Now consider the case of the latest generation of smart contract platforms like Solana, Avalanche, Polygon, BSC and Fantom. Instead of trying to develop their own communities in an organic fashion, most have focused on siphoning Ethereum’s by adopting the Ethereum Virtual Machine. That strategy makes it easier for users and developers to port over, but also diminishes what made these protocols special in the first place. Being clones, the only way they can distinguish themselves is by increasing capacity via greater centralization. Good for lower transaction fees, bad for why you need a blockchain in the first place. To make matters worse, most of these platforms have a great deal of insider ownership.
Welcome to the world of decentralization theater, the fastest way for insiders to get rich in crypto, at least on the way up. Impatient crypto investors love chasing the next hot thing, and the market tends to reward projects that abandon first principles for short term gain during bull markets. But the fundamentals — or lack thereof — often lead to a reckoning during the bear.
As I argue in my new book, the most likely outcome of the crypto revolution is a hybrid future, one where the core protocols are decentralized but the ramps and interfaces that most users rely on are not. Foundations and corporations will still have important roles to play, and there will be plenty of value creation to go around. But the one thing the market will not tolerate is inauthenticity, particularly at core. The more centralized the blockchain, the less antifragile the community.”
“Goldman Sachs has been in talks with FTX over regulatory and public listing help, and aims to expand into offering crypto derivatives by leveraging its own derivatives tools and services, reported Barron’s. The integration of Goldman Sachs derivatives services would offer ‘trading futures directly, introducing clients and acting as an on-ramp to the exchange.’
FTX is currently seeking to offer brokerage services for its derivatives offerings. This would allow the crypto exchange to handle the collateral and margin requirements internally rather than depending on futures commission merchants (FCMs).
The U.S. Commodity Futures Trading Commission (CFTC) has sought public comments on the requested amendment from the crypto exchange. The chief regulatory body also believes that FTX’s proposal warrants scrutiny as it would lead to a monopoly by large investment banks such as Goldman.”
“The United States Federal Reserve is starting the process of paring back its $9 trillion balance sheet that ballooned in recent years in a move called quantitative tightening (QT).
The Fed plans on shrinking its balance sheet by $47.5 billion per month for the next three months. In September of this year, it plans on a $95 billion reduction. It aims to see its balance sheet reduced by $7.6 trillion by the end of 2023.
Financial advisory firm deVere Group CEO Nigel Green believes market reactions to QT will be minimal because “it’s already priced in.” Green said there may be a “knee-jerk reaction from the markets” because of the unexpected speed with which QT is being rolled out, but he sees it as a little more than a wobble.”
“Chastain was charged Wednesday with wire fraud and money laundering in connection with trading on confidential information about which non-fungible tokens were about to be featured on the OpenSea homepage. The two charges each carry a maximum sentence of 20 years in prison.
The Justice Department alleged in the release that Chastain flipped “dozens of NFTs” after choosing to feature them on the website, selling them for two to five times what he initially paid.
Today’s charges demonstrate the commitment of this office to stamping out insider trading – whether it occurs on the stock market or the blockchain.
It’s the first time they’ve pursued an “insider trading” charge involving digital assets. Attorneys believe Chastain’s arrest signals the onset of a new wave of enforcement actions related to NFTs.“
“The Digital Assets Committee, which could be launched this month, will provide criteria for the listing of coins by exchanges, introduce investor protections measures and monitor unfair trading.
We need to make exchanges play their proper role, and toward that end it is crucial for watchdogs to supervise them thoroughly.”