The rise and fall of Friend Tech

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Seemingly, altcoins are breathing again with FET and SUI leading the way. Whilst majors didn’t move that much (exception made for BNB, always pumping out of the blue), the sentiment is slightly improving with stablecoins on a steady uprise for weeks and positive DeFi metrics across the board.

Notably, macro is pricing in a 25bps cut (the first in years!) by the U.S. Federal Reserve in September. However, the Yen carry trade scare hasn’t gone away with USDJPY reaching August, 5 lows amidst risks of unwinding rising (in layman’s terms: sell-off of risky assets denominated in USD to cover debt positions denominated in JPY).

The latest presidential debate in the U.S. saw no mention of ‘crypto’, or digital assets. However, it’s safe to assume we’ll see speculation ramp up leading to the election’s results. Is it going to be a ‘sell the news’?

The rise and fall of Friend Tech

Friend.tech was the hottest thing in crypto between Q2 and Q3 2023, data don’t lie. Paradigm invested in them, and everyone was calling it the next consumer app deemed to be worth billions of $.

So, what went wrong? Lots of stuff. Friend.tech is, in essence, a way to paywall your favorite crypto characters. The first version of the app would allow you to buy their key in order to access their room, where ‘alpha’ would be shared. The concept sort of worked: you had creators looking to monetize their audience, and said audience willing to pay for informations that weren’t as diluted as on 𝕏. Meanwhile, FT made bank on the huge fees it charged: $133M at the top. Later on, together with the launch of the FRIEND token, the app introduces Clubs allowing for a more collaborative experience rather than a 1-to-many chat.

Notably, the team behind the project had an opaque background, and showed multiple times the inability to deliver a functional user experience. Traction was there (plenty of forks!), yet, the app was clunky, slow, and barely functional at times.

So there it goes — TVL is down to $3M (- 93.6%), FRIEND is down 96.5% since its all-time high and the owners recently renounced the underlying contracts as a “we’re done” gesture.

Many clapped the team for not allocating any FRIEND to them — but that is not the point. Every transaction incurs a 10% tax equally shared between FT and the creator. All in all, this allowed the creators of the protocol to walk off with ~ $50M whilst not selling a single token. In fact, token emissions (i.e. tokens printed out of thin air) would enlarge the project’s ETH treasury due to high taxes.

Repeat after me, tokens are not mandatory (and often lead to bad outcomes, and less focus on the product).

Someone managed to snag a CryptoPunk at a 98.3% discount, paying a mere 10 ETH — 𝕏/niftynaut

Coinbase’s cbBTC goes live

There we go, the long-awaited wrapped Bitcoin by Coinbase is finally here. To be offered on Ethereum and Base only at the beginning, cbBTC already boasts a $420M market cap ranking #4 among Bitcoin wrapped offerings.

Major DeFi protocols are set to integrate it, including Aave, Sky Protocol, Compound, and others.

To offer a seamless experience, withdrawing BTC from your Coinbase account to Ethereum or Base will let you receive cbBTC directly at a 1:1 rate (and the same goes for deposits!). At launch, it’ll be available in the U.S. (NYC excluded), UK, EEA states, SG, AUS, and Brazil.

However, the opaque magnate Justin Sun is quite bearish on it. Citing lacks of transparency and their ability to freeze funds.

Looking to work in crypto? Check out Degen Crypto Jobs.

Why the crypto industry remains mostly anonymous

Compared to other industries, in the cryptocurrency sector many choose the anon path. Use an NFT as a profile picture, never reveal your identity (as in name, face, voice..), and keep it lowkey.

Part of the culture? Sure it is. Yet, with self-custody (i.e. you’re not reliant on a bank to safeguard your assets stored on a ledger, but rather on you storing the private keys in a secure place) many risks arise, primarily losing the credentials to access them and bad actors forcing you to hand them out.

That’s the unfortunate case of Nick Drakon, founder of the crypto research company Revelo Intel. Allegedly, he was forced to transfer funds out of his Binance account at gunpoint. While the exact figures is unknown, we’re speaking of several millions including those belonging to Revelo Venture investors.

As a news outlet we shall be unbiased, so it’s important for us to mention concerns arisen by those investors on whether the theft really happened or it’s a mere strategy to exit scam.

It’s certainly not our duty to determine if that’s the case, however, it’s clear that Drakon allegedly made mistakes such as delaying payments to projects they invested in, and most importantly keeping other people’s funds on a Binance account. Not long ago, someone was also kidnapped and murdered in Ukraine for a mere $170K in BTC.

As always - be vigilant. Join our chat to discuss what the best practices are.

Happens on-chain

• Ethereum Foundation to release financial report, holds roughly $650M reserves — The Block
• Vega passes governance vote to shut down its L1 blockchain — The Block
• Binance-backed Bitcoin DeFi protocol Zest launches yield-bearing BTCz token — Cointelegraph
• Sonic Labs (formerly Fantom) launches incentivised testnet — 𝕏/0xSonicLabs
• Aave Labs proposed to introduce Maker’s novel stablecoin USDS and sUSDS on Aave V3 — 𝕏/aave
• EtherFi to launch ‘Cash’ VISA Card on Scroll — CoinDesk

Traditional rails

• The SEC is likely to ramp up crypto enforcement actions in September as fiscal year comes to an end — DLnews
• Former Alameda CEO Caroline Ellison’s attorneys claim jail time is unnecessary — The Block
• There’s been no mention of Crypto during the Trump vs Harris presidential debate — The Block
• Supposedly, Trump’s WLFI project plans to raise $540M at $1.8B valuation — DLnews
• WisdomTree Ethereum Trust withdraws S-1 ETF application — 𝕏/Cointelegraph
• VanEck closes down Ether Futures ETFs citing a focus of efforts on the Spot one — 𝕏/vaneck_us
• UK introduces bill to classify crypto & NFTs legal status as ‘personal property’ — gov.uk
• Sony partners with Startale Labs to develop Yen stablecoin — 𝕏/neurolauncher
• Singapore passed legislation to ban use of cryptocurrencies in casinos — bitcoinist.com
• Ride-hailing platform in South-East Asia TADA enables bookings through Telegram mini-app — The Block
• eToro settles with SEC for $1.5M and agrees to significantly reduce crypto offerings — The Block
• CFTC has no authority to interfere with election contracts, judge says — CoinDesk
• Telegram quietly removes bit about private messages being private from its FAQs — 𝕏/tier10k
• Binance CEO Richard Teng says CZ is banned ’for life’ from managing the company — milkroad.com
• Japan’s largest electricity company to use renewable energy to mine BTC — 𝕏/WatcherGuru
• Russia to legalize crypto mining November onwards — iz.ru

Tech go up

• BitGo to launch native WBTC on BNB Chain and Avalanche using LayerZero tech — Blockworks
• Chaos Labs launches ‘Edge’ oracle, securing $30B in assets — 𝕏/chaos_labs
• Paypal and Venmo integrate Ethereum Name Service for crypto payments — The Block
• Binance has integrated token unlocks data into its platform — Decrypt
• Rabby enables gas fees payment on any network using USDT/USDC — 𝕏/Rabby_io
• EigenLayer introduces novel security model ahead of it’s ‘Slashing’ protocol feature release — eigenlayer.xyz
• Lombard partnered with EtherFi to restake LBTC into eBTC offering dual yield and 7x layers of points — ether.fi
• Celestia releases roadmap to scale to 1GB blocks on modular network — The Block
• Osmosis launches cross-chain token portal ‘Polaris’ in effort to fix fragmentation — CoinDesk
• Polygon Labs and Fabric Cryptography unveil custom ZK chips to fast-track AggLayer development — The Block

VCs go brrr

• Adam Neumann’s climate company is issuing refunds after raising $70M and failing to launch crypto token — Forbes
• Celestia Foundation rumored to have recently closed a $100M sale at $3 — 𝕏/lurkaroundfind
• Tether invests $100M in agriculture venture — Cointelegraph
• Cash-flow-based lending protocol Huma Finance raised $38M round led by Distributed Global — crypto-fundraising.info
• Solana creator platform DRiP raised $8M Seed Round — The Block
• PuffPaw raised $6M Seed to build ‘Vape2Earn’ project on Berachain — 𝕏/puffpaw_xyz
• Nansen acquires staking firm StakeWithUs — The Block

Upcoming events

• September, 18-19: Token2049 in Singapore
• September, 20-21: Solana Breakpoint in Singapore
• September, 26: Hamster Kombat to airdrop 60% of HMSTR supply — The Block
• September, 29: Chengpeng Zhao released from prison
• September, 30: Supposed deadline to make $EIGEN transferable
• December, 5-6: Emergence conference in Prague

• Security first. Aave offers a 13.85% APY for supplying their stablecoin GHO on Arbitrum, or 10.14% APY for pyUSD on Ethereum, or 19.42% APR if you stake it on Ethereum (in this case, you risk slashing, hence the higher yield).
• The USDY chakra pool on Mantra is currently paying out an astounding 601.24% APR. On top of that, you’ll get 5.35% in USDY yield. Note that here your deposit is locked until Mantra launches its mainnet, and rewards are bound to be diluted over time as more people join the pool.
• Good ol’ Avalanche: secure a 16.17% APR providing liquidity for the USDT/USDC pair on TraderJoe
• Aptos aficionado? Cellana Finance offers a 16.16% APR on zUSDC/zUSDC LPs

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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.