Market Summary

Bitcoin Price: US$ 17,601.15 (+10.54%)
Ethereum Price: US$ 1,299.28 (+17.82%) 

Delphi Office Hours Call (November 10th, 2022) (PODCAST)

• Broad Ramifications of the FTX Collapse (01:30)
• State of the Markets (11:50)
• The Risk of Forced Selling (20:56)
• The Future of Solana (25:05)
• Is There a Silver Lining for DeFi? (45:07)
• NFT Update (55:00)

Art Blocks Curated Series 1 NFTs Rise Amid Bear Market

• FTX lent customer assets to fund risky bets made by Alameda Research. FTX CEO Sam Bankman-Fried (SBF) told investors Alameda owes $10B to FTX.
• SBF apologizes and posts an ambiguous tweet thread claiming FTX’s balance sheet maintains assets that are more than its liabilities.
• Small and disorderly batches of withdrawals from FTX start going through with no official announcement from the team.
• Tether begins freezing USDT owned by FTX at the request of law enforcement agencies.
• U.S. SEC and Justice Department are investigating FTX US for potential violations of securities laws.
• During the last week, floor prices for Chromie Squiggles and Construction Token NFT collections have reached a new all-time high at 16.8 ETH and 12 ETH respectively. Other collections in Art Blocks Curated Series 1 have also seen price increases.
• In the last 30 days, Chromie Squiggles (+23%), Genesis (+106%), Construction Token (+69%), Dynamic Slices (+99%), and Elevated Deconstructions (+176%) have outperformed other NFT collections such as Fidenza, Ringers, BAYC, and Punks.
• Art Blocks remains the leader in generative art NFTs. There are now 68 Curated collections and 8 Curated series. The six NFT projects mentioned above are part of the Art Blocks Curated Series 1.
• Chromie Squiggles is arguably one of the most popular collections in Art Blocks. While some of the other collections in this series may not be as prominent, they are likely to see higher demand than other projects that are not associated with Art Blocks.

David Chaum Rolls Out Privacy-Protecting CBDC Technology

• David Chaum, creator of the Bitcoin predecessor eCash and, more recently, the elixxir cryptocurrency, believes the democratic world can have a version of CBDCs that protects privacy. He is working with the Swiss National Bank (SNB) on Project Tourbillon, designed for privacy-focused central bank money.
• The project will be developed under the auspices of the Bank of International Settlements’ (BIS) Innovation Hub, the organization announced on Thursday. The project will add to the range of CBDC pilots already in the works by the BIS Innovation Hub, like the projects Helvetia and Mariana – both involving the SNB, too.
• The technology underlying the Project Tourbillon will combine privacy preserving functions and quantum-resistant cryptography developed by Chaum, the BIS announcement says. The system will also be scalable as it will be “using an architecture that is compatible with, but not based on, distributed ledger technology,” the press release reads.
• The concept, based on Chaum’s blind signature technique, has been outlined in a joint research paper by Chaum and Thomas Moser, alternate member of the SNB governing board.

Binance Releases Wallet Addresses of $69B Crypto Reserve

• Binance released a list of its cold wallets and reserves a day after backing out of a deal to buy troubled crypto exchange FTX.
• The crypto exchange says its holds around 475,000 bitcoin (US$7.8 billion), 4.8 million ether ($5.57 billion), 17.6 billion USDT ($17.4 billion), 601 million USDC ($607 million), as well as close to 21.7 billion of its own stablecoin BUSD (worth $21.9 billion) and 58 million of its BNB tokens (worth $16 billion).
• In total, the reserves listed had a total market value of around $69 billion, based on current market prices.
• Binance also said that it will share its Merkle tree proof-of-funds in the coming weeks.
• Using Merkle trees allows exchanges to store each user account’s hash value of assets in the “leaf nodes” of the Merkle tree. The second step is to audit those assets in the leaf node of the Merkle tree and verify all the users’ holdings by a third party.

Bitcoin and ether up as U.S. inflation data below estimates at 7.7% in October

• U.S. inflation is showing signs of cooling down as crypto markets remain tumultuous. 
• Inflation in the U.S. came in at 7.7% in October. Based on FactSet data, analysts had predicted an 8% increase in October. The month-on-month increase was 0.4%. In September, inflation increased by 0.4% month-on-month from August. 
• The Fed said last week it might slow the rate of its interest rate increases going forward. However, Fed Chair Jerome Powell did note that the eventual rate reached may be higher than initial estimates. The next Fed meeting is Dec. 14. 

The Next Wave of Crypto Adoption: Regulation, Security and User Experience (WEBINAR)

• What will it take to drive the next generation of crypto adopters?Despite the crypto industry’s maturation, newcomers remain skeptical of and hesitant to explore this new financial realm. Common misconceptions and lack of conviction persist . However, there are regulatory, security and user experience developments that could change this:This webinar will explore:
  • Specific regulation will help legitimize the crypto industry
  • DeFi and the AML/KYC conundrum
  • Security and protection of the end user
  • Improving user experience: recent development and why proper UX/UI design in crypto will go a long way

Solana’s SOL Surges After Blockchain’s Foundation Delays Plan to Unstake Tokens

• A record 31 million of the Solana blockhain’s SOL tokens were unstaked Thursday from the blockchain’s security mechanism, a day after crypto analysts warned that some investors might be seeking to redeem their holdings as the price of the digital assets tanked.
• But the price of SOL surged in digital-asset markets after the Solana Foundation, which supports development on the blockchain, said it would postpone a plan to unstake some 28.5 million tokens.
• A total of 63 million SOL was previously ready to be unstaked at the conclusion of the Solana blockchain’s “epoch 370” staking lockup period, according to a statement from the Solana Foundation on Thursday.
• The foundation had tweeted late Wednesday that about 28.5 million SOL tokens scheduled to be unstaked had been re-staked due to a policy change of cloud service provider Hetzner on Nov. 2.
• Those tokens are owned by the Solana Foundation’s treasury and had been staked as part of a delegation program, according to the tweet.
• “While 28.5M SOL was in the process of being unstaked during this epoch, the plan to unstake has now been postponed, and all 28.5M SOL have now been re-staked,” according to the tweet thread.

European G20 leaders call for urgent regulation of ‘crypto conglomerates’

• Central bankers and financial regulators making up the Financial Stability Board’s European arm discussed the urgent need to regulate crypto given “recent developments,” and endorsed their October report on stablecoins.
• Europe’s financial leaders agreed on the urgent need to regulate “so-called crypto conglomerates and exchanges that vertically integrate multiple functions,” according to a press release. The statement does not directly cite the implosion of FTX, but comes in the context of the exchange’s failure.
• The group of European G20 members making up FSB Europe, along with leadership for the European Commission and European Banking Authority, which joined the regular meeting in Lisbon, also expressed intentions to tighten regulation over digital assets.  
• FSB members further touted the central banker group’s October reports on stablecoins and regulating digital currencies. 

Crypto Lender BlockFi Pauses Withdrawals in Wake of FTX Collapse

• Crypto Lender BlockFi said it could not conduct business as normal and would be limiting activity in the wake of FTX’s collapse.
• The company said in a tweet that the “lack of clarity” around FTX’s current situation meant it would pause client withdrawals. It also told clients not to deposit to its wallet or interest accounts.

El Salvador President Denies Storing Bitcoin on FTX: Binance CEO

• El Salvador’s president—who once admitted buying Bitcoin on his phone while naked—today assured his constituents that the country’s crypto holdings were safe and not on the collapsing exchange FTX, according to Binance CEO Changpeng Zhao. 
• In a Thursday tweet, the CEO of the world’s biggest crypto exchange said he spoke to President Nayib Bukele, who denied that the country used FTX to store its Bitcoin. 

Grayscale’s Bitcoin Fund GBTC Hits Record-Low 40% Discount

• As the price of the world’s largest cryptocurrency on Wednesday fell below $16,000 for the first since November 2020, the Grayscale Bitcoin Trust (GBTC) hit a record-low discount of 40.73% compared to the market value of the underlying asset, according to data from CoinGlass.

Alameda will stop crypto trading: SBF

• Sam Bankman-Fried says on Twitter: “First, one way or another, Alameda Research is winding down trading.”

FTX-Backed Crypto Unicorn LayerZero Bought Out Stake

• LayerZero CEO Bryan Pellegrino answered the question on Thursday, tweeting out a memo that was sent out to the startup’s investors. LayerZero structured an agreement and bought out FTX, FTX Ventures and sister firm Alameda Research from all equity positions, token warrants and all other agreements between the parties.

Tether Freezes $46M of USDT Held by FTX Following Law-Enforcement Request

• Stablecoin issuer Tether has frozen $46 million of USDT held on the Tron blockchain by failing crypto exchange FTX following a request from law enforcement.

CoinShares Confirms $30.3 Million Exposure to FTX

• CoinShares said in a statement Thursday that it has 190 Bitcoin and 1,000 Ethereum locked up in FTX, worth about $4.3 million in total. The firm said it requested to pull those funds from the exchange before FTX announced it was halting withdrawals, but that those transactions are still pending.
• CoinShares also has an additional $25.9 million of USD and USDC stuck on FTX, as well as about $110,000 worth of other assets, according to the release.

Aptos and Google Cloud unveil partnership, plan for accelerator program

• Crypto startup Aptos has entered into a partnership with Google Cloud.
• The news comes as Google deepens its footprint in the web3 world with a number of crypto projects.

FTX US Warns Users That Trading Could Be Halted ‘In a Few Days’

• FTX US alerted users Thursday to a potential halt to trading functionality “in a few days.”
• FTX is embroiled in a liquidity crunch and attempting to raise money to keep the company out of bankruptcy.

FTX Assets Frozen by Bahamian Regulator

FTX US employees attempt to sell assets in CEO’s absence: Bloomberg

After Rattling Confidence in FTX, Binance Still Holds 5% of FTT Supply