FTX to pay back $12.7B to creditors

Welcome to Stay on-chain! Enjoy today’s edition, and make sure to join our Telegram group 👾

This week, markets were rough to navigate. During times like these, it’s better to sit tight and wait unless you know perfectly what you’re doing. In fact, BTC lost as much as 25% compared to the last edition, but has now retraced the leg down almost entirely.

At the macroeconomic level, we had three main catalysts:

• The USDJPY carry trade busting as the Bank Of Japan hiked rates
• Weakness in the U.S. labor market, pushing for earlier cuts
• War threats in the Middle East, with Iran and Isreal in the spotlight

Focusing our lens on crypto, here’s a few things we can mention:

• Jump Crypto dumping its ETH holdings relentlessly, to the tune of half a billion
• Trump's odds decreasing versus Harris's, signaling a lower chance of pro-crypto policy in the next presidency

Take all these with a grain of salt. More often than not, we as humans need to find reasons for said price action — but there’s no real causality between the two.

As the F&G reaches levels we haven’t seen since the FTX downfall two years ago, ETH seems to keep losing track to BTC and SOL, despite the ETF. To be fair, there’s a fair chance Ether is going to have its own hated rally in the forthcoming months — meanwhile, we keep monitoring ETF numbers to see if there’ll be a reversion with meaningful inflows.

What’s the latest in U.S. politics & Crypto?

• The Trump family seems back at it: Donald Trump Jr., the former president's son, is promoting a soon-to-be crypto project which is allegedly going to be about Real Estate — here’s Steven’s analysis on it. This is not their first stint in crypto, as Donald himself released multiple NFT collections in the past years

• Cabal, or Trump’s behind it? Shilled hard by the so-called cabal, the RTR coin (Restore The Republic) created rumors on 𝕏 as people speculate on whether it’s really endorsed by the Trump family or not. To date, the only evidence it’s real is this post from the chair of ‘Trump Students’.

• On more serious matters, as we lead up to elections many bits are coming out in regards to the Harris entourage. Most importantly, Tim Walz will be running as her Vice President and has seemingly a neutral leaning to an anti-crypto stance. Furthermore, David Plouffe joined the Harris team — he was part of the Obama team and seems to be pro-crypto considering his past with advisory roles at both Binance and Alchemy Pay.

  

End of an era, FTX to pay back creditors

The defunct exchange, once run by Sam Bankman-Fried who is now serving a 25-year prison sentence in the U.S., is set to close the circle and pay back its creditors.

FTX went bankrupt in November 2022. And along with it, $8B customer funds. Couple years later, the present CEO and a huge squadron of incredibly well-paid lawyers sold out everything they could to make creditors whole.

Creditors are going to receive even more than what they lost on the platform, with amounts roughly ranging from 115% to 150% of the original amount.

The reason is pretty simple, FTX lawyers conveniently picked November 11, 2022, as the date to value creditors’ claims. This means that if you lost 1 SOL on the platform, it’s been valued ~ $16 despite it being worth ten times that nowadays. Besides, SBF was a crazy genius. Many of his plays ended up being worthless, others netted $884M as the Anthropic stake FTX acquired in 2021.

In total, $12.7B is going to be paid back in cash — presenting a unique liquidity event. The question is: what % of that cash is going to flow back into crypto?

While timelines aren’t clear, it’s likely the repayment is going to be executed in Q4 this year.

Happens on-chain

• Jupiter proposes 30% supply cut for $JUP to bolster confidence — vote.jup.ag
• Jump keeps selling ETH, now sitting on ~ $500M in stablecoins — 𝕏/lookonchain
• Ethena integrated Solana, and added SOL as a backing asset for USDe — 𝕏/ethena_labs
• The Starknet team is relentlessly sending STRK tokens from their multi-sig to CEXes — 𝕏/majinsayan
• Kujira token drops 40% as team’s on-chain leveraged position is liquidated — The Block
• ByBit to cease support for the ByBit ZkSync Lite network — Bybit
• Binance listed TON spot markets — binance.com
• Fantom officially rebrands to Sonic Labs — 𝕏/0xSonicLabs

Traditional rails

• Judge orders Ripple to pay $125M in civil penalties, ending SEC’s lawsuit and concluding XRP isn’t a security — CoinDesk
• Russia has legalized cryptocurrency mining in Russia — tass.com
• Montenegro to extradite Do Kwon to South Korea, rejecting U.S. request — CoinDesk
• Saylor aims to potentially acquire an additional $2B in BTC issuing debt through his company Microstrategy — 𝕏/WClementeIII
• Saylor says he personally owns $1B in BTC — Bloomberg
• Coinbase released Q2 earnings, totaling $1.4B in revenue — 𝕏/coinbase
• Bybit to completely close down shop in France — bybit.com
• Morgan Stanley’s financial advisors to start proposing Bitcoin ETFs to clients — CNBC
• Genesis completes bankruptcy, begins distributing $4B in crypto & cash to creditors with 64% recovery rate — The Block
• Starknet Foundation’s CEO Diego Oliva steps down — starknet.io
• Sen. Warren and other democrats are pressing CFTC to ban prediction markets for political events — 𝕏/tyler
• Franklin Templeton launches its tokenized money market fund FOBXX on Arbitrum — CoinDesk

Tech go up

• Ubisoft game Captain Laserhawk to be deployed on Arbitrum — 𝕏/arbitrum
• USDC can now be used as gas token for Arbitrum Orbit Chains — blog.arbitrum.io
• NEAR pushes ‘Signatures’ on mainnet allowing to sign transactions on other blockchains — CoinDesk

VCs go brrr

• Decentralized internet service provider Andrena raised $18M Series A led by Dragonfly — crypto-fundraising.info
• ex-Google and ex-Coinbase founders raised $5M for Linkedin’s open-source competitor Icebreaker in round led by CoinFund — Fortune
• Binance Labs invested in Solayer, Solana restaking protocol — binance.com

Airdrops

• Liquidswap airdrop on Aptos went live — liquidswap.com
• Aigisos airdrop for DYM stakers went live — Medium
• RWA-focused project Mantra to airdrop 50M OM tokens to community members and NFT holders — 𝕏/MANTRA_chain
• Infinex put up a lottery to win 2 Patron NFTs and 6000 OP tokens — Coinvise
• If you were active in Puff’s chapters, you may be eligible to mint an NFT here — methlab.xyz
• Zircuit launches mainnet and rolls out ZRC airdrop claim — The Block
• Renzo’s Season 2 claim checker is live — 𝕏/RenzoProtocol

Upcoming events

• August, 9: Bybit to list MOTHER with up to 12.5x leverage — bybit.com
• September, 4: MATIC plans to migrate to POL
• September, 18-19: Token2049 in Singapore
• September, 20-21: Solana Breakpoint in Singapore
• September, 29: Chengpeng Zhao released from prison
• December, 5-6: Emergence conference in Prague

• Aptos aficionado? Say no more. By LPing wUSDC/zUSDC on Cellana, you can earn a 20.4% APR paid in CELL tokens.
• Radiant lands on Base, bringing stellar yields. Earn up to 190% APY on USDC, or 180% on cbETH
• Liked JLP? You might like FLP by Flash.trade even more then, considering its 262% APY. But, are you degen enough to try it?
• Miss the good old Polygon days? Quickswap pays you a 125% APR to LP tBTC/ETH

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Disclosure: Authors may own crypto assets named in this newsletter. Stay on-chain is meant for informational and educational purposes only. It is not meant to serve as investment advice. Please consult your investment, tax, or legal advisor before making investment decisions.