Sam Bankman Fried Arrested

+ The NFT royalties saga and Binance's "questionable" colalterization report

and

Dec 13, 2022

{ console.log (”Hello, fren!) ;

This is the ‘News On the Block’ weekly newsletter. We are coming from the web3 realm, knocking on your inbox to make you laugh and tell you about the latest things in our world.

Crypto Twitter has been kinda silent until today’s early morning when Sam Bankman Fried got arrested by the Bahamian police. FOMC is meeting on the 14th, which will decide the interest rates’ fate. Other than that, the major coins and tokens have been too lazy to break out of their price channels. Basically a classic web3 wild west. Let's see what we have in store for today:

NFTS - Uniswap launched a marketplace, Opensea updates its stance on royalties and Starbucks is rolling out its NFT program.
Popular crypto lender Nexo leaves the US.
The SBF arrest + more details around the Alameda-FTX soap opera.

Binance released their collateralization ‘audit’ and some people are not confident about it.

Price action has been negligible during the past week. At this point, we could start thinking of the entire market as a stablecoin - it rarely changes its price (Unless it is Luna’s UST, 😂).

NFTS

Uniswap launched its new NFT marketplace

“Anotha one”, DJ Khaled will say.

This one is different, though, as it is more of an aggregator, showing listings from all the other major marketplaces.

This allows you as a user to:

Find better prices, as the Dapp quotes listings from OpenSea, X2Y2, LooksRare, Sudoswap and others.
Incur lower gas costs thanks to Uni’s new Router and Permit2 smart contracts.
Be exposed to the ERC-20 and NFT ecosystems from a single app.

Opensea transfers control of their Royalty Enforcement Tool to a multisig wallet with multiple industry collectives

If you don’t know what we are talking about here is a recap on the NFT marketplaces’ royalty saga:

The past year has introduced a trend for NFT collections to be launched without royalties for the creators on every transfer. The benefit of this is that the marketplaces and the collections attract more traders, because of the cheaper prices (a normal royalty is in the range of 5%-10%).
This undercuts the trade volume on marketplaces and collections that have royalties implemented (Opensea is an example).
Opensea does not like that (because it loses market share), but instead of complying with the trend, decides to take a bold stance and enforce royalties on projects via its Operator Filter Registry (OFR).
RET (Royalty Enforcement Tool) is a code snippet that NFT creators add in their contract that makes sure that the collection could only be traded on marketplaces that respect and implement royalties for the creators.
This is seen by some web3 chads as a move by OS to gain market share in a centralized way ( because a NFT collection won’t be available for trade on their platform if it lacks the RET inside its smart contracts ). Hence, ‘the royalty saga’.
To mitigate the acrimonious stance, Opensea will tackle the control over the OFR in a typical DAO manner, by utilizing a multisig wallet, with representatives of major competitors like Zora, Foundation, SuperRare, and Nifty Gateway.

Here is some food for thought - on the one hand, Opensea stands by the NFT creators by protecting the monetization of their efforts. On the other, the OFR move poses a centralization risk to a niche built on a technology, whose most indispensable feature is ‘decentralization’.

Starbucks rolls out NFT Royalty Program in the US

What is even cooler: called “Odyssey”, it will integrate the existing Starbucks Rewards program. Points, generated via instore purchases can be used to mint “Stamps” that give you access to merchandise as well as virtual and real-life events.

The program does not apply to people that don’t own a MacBook Pro and hate Pumpkin Latte.

Nexo, one of the biggest crypto lenders, leaves the US

This was announced on their blog earlier this week. The main reason - legislation hindrances that are becoming even bigger after ~~Carlito from WWE~~ Sam Bankman-Fried’s FTX fiasco. Although the departure is defined as ‘gradual’, as of December 6th, customers from 8 states do not have access to the company’s Earn Interest Product.

SBF

Man, this guy. Everything around him is more action-packed than a Bollywood movie.

He was arrested by the Bahamian police earlier today and is probably expecting extradition to the US where he will hopefully make friends with Michael Scoffield from Prison Break. What timing, though?! His detention means that he will not be able to testify in front of Congress.

While free, he secretly funded the crypto news website ‘The Block’

And that has been happening for over a year, with loans, amounting to over 40 million dollars. Out of them, 16 million were used to facilitate the purchase of an apartment in the Bahamas for The Block’s CEO Michael McCaffrey, who has already stepped down from his position and resigned.

state @statelayer

"One $16 million batch of funding from Alameda was used in part to finance the purchase of an apartment in the Bahamas for Block CEO Michael McCaffrey, according to sources familiar with the transactions." topkek

SBF’s actions are currently “helping” Greyscale thanks to the domino effect that FTX and Alameda created

The largest bitcoin fund, Greyscale, that allows people to be exposed to Bitcoin’s price without actually owning it is … how to put it … not ‘okay’. Their Bitcoin trust, GBTC, is currently trading at -50% of the Bitcoin price. People just don’t feel like buying that instead of OG Bitcoin, simply because the company’s financial health is not perfect - its sister firm Genesis has been halting customer withdrawals ever since FTX got detonated + the parent company Galaxy Digital is over 2$ billion in debt.

Binance’s Bitcoin funds overcollateralized by 101%, but there is a “catch”

Binance has been bragging about the report that Mazars (a big global accounting company) released for their proof-of-reserves. It asserts that the exchange’s bitcoin assets are 101% collateralized. But something feels like buying an iPhone replica from AliBaba - it all looks good only on the outside. And while there is nothing to be worried about ( at least so far ), there are some things from the report that could have been handled better:

As of 13.12.22 the article that covers the report on Binance’s official blog refers to it as an “audit” where in reality, it is an “Agreed Upon Procedure (AUP)” which is faster to execute and cover only specific procedures.
Mazars does not express an assurance conclusion and doesn’t vouch for the numbers.

+ The Agreed-Upon-Procedure covers only the exchange’s Bitcoin reserves and not other coins or tokens.

“It’s important for us to show users that the coffers are not bare, like at FTX,” said Binance’s chief strategy officer, Patrick Hillmann in an interview with the WSJ.

To be honest, if the sole intent was really what Mr. Hilmann said, it does the job. Let’s not forget that we are talking about web3 - companies that attempt to shed light on their financials should be respected. It is just that the report could have been handled better.

Ledger “stacking” to the top of the cold-wallet game again

I can spend my entire life just looking at this. Bruh, the sleekness… 3.7 inch display, aluminum, E-ink touchscreen, Bluetooth, and a top-notch security chip. All in the thickness of five credit cards. Look like something created by Apple…

Wait, say that again? Apple?

Yes, the Stax is Ledger’s latest creation in collaboration with Tony Fadell - the guy behind the design of the original iPod.

Ships March 2023. Preorders accepted. Grab yours.

This is a no-brainer.

Solidity Term of the Week

Solidity Version Pragma

Pragma is generally the first line of code within any Solidity file. Pragma is a directive that specifies the compiler version to be used for current Solidity file.

e.g. pragma solidity ^0.8.1;