Market Summary

Bitcoin Price: US$ 16,280.23 (-2.52%)
Ethereum Price: US$ 1,142.21 (-6.20%) 

Delphi Office Hours Call (November 17th, 2022) (VIDEO)

• Market Update (01:55)
• Early Stage Projects We’re Watching (14:00)
• Which Sectors Will Catch on Next Cycle? (33:43)
• NFT and Gaming Project FTX Exposure (41:50)

Binance CEO CZ begins working on Vitalik Buterin’s ‘safe CEX’ ideas

• The collapse of numerous major crypto ecosystems in 2022 revealed the urgent need for revamping the way crypto exchanges operate. Ethereum co-founder Vitalik Buterin believed in exploring beyond “fiat” methods to ensure the stability of crypto exchanges, including technologies such as Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARKs). 
• Following a discussion with angel investor Balaji Srinivasan and crypto exchanges such as Coinbase, Kraken and Binance, Buterin recommended options for the creation of cryptographic proofs of on-chain funds that can cover investor liabilities when required, also known as safe centralized exchanges (CEX).
• The best case scenario, in this instance, would be a system that does not allow crypto exchanges to withdraw a depositor’s funds without consent.
• Fellow crypto entrepreneur CZ, who has been vocal about Binance’s intent for complete transparency, acknowledged the importance of Buterin’s recommendations, stating:
• “Vitalik’s new ideas. Working on this.”
• The earliest attempt to ensure fund safety was proof of solvency, wherein crypto exchanges publish a list of users and their corresponding holdings. However, privacy concerns eventually fueled the creation of the Merkle tree technique — which dampened the privacy leakage concerns. While explaining the inner workings of the Merkle tree implementation, Buterin explained:
• “The Merkle tree technique is basically as good as a proof-of-liabilities scheme can be, if only achieving a proof of liabilities is the goal. But its privacy properties are still not ideal.”

Decentraland DAO Considers Pausing Grants As FTX Collapse Spotlights Diversification

• The Decentraland DAO – the metaverse platform’s community decision-making tool – is holding a vote on whether to temporarily pause its grants program and reassess its structure.
• The proposal, brought to a vote on Wednesday, cites concerns over the diversity of its treasury holdings as well as a lack of clear guidelines for grants. Through the program, any community member can request funding for efforts to improve the platform or implement new features.
• “The grants program has shown to be a key aspect and fantastic addition to Decentraland, however, the time might be right to pause and review its current structure, identifying valuable lessons from its shortcomings,” the proposal states.
• Specifically, the proposal notes that its DAO treasury holds funds equal to $19.3 million, with 99.1% of those assets held in MANA, Decentraland’s native cryptocurrency, and only 0.9% held in “other” tokens.

‘Grayscale Discount’ Widens to Record 43% as FTX Contagion Spreads

• Shares of the Grayscale Bitcoin Trust (GBTC), the world’s largest publicly traded crypto fund, are trading at a new record discount of 43% relative to the price of the underlying bitcoin (BTC).
• Crypto analysts are speculating as to the reason, but the added pressure comes after Genesis Global Capital, an arm of Digital Currency Group (DCG), owner of Grayscale Investments, which manages GBTC, announced this week that it would halt customer withdrawals from its lending unit – stemming from the fallout from the collapse of Sam Bankman-Fried’s FTX crypto empire. (CoinDesk is an independent subsidiary of Digital Currency Group, known as DCG.)
• Grayscale Investments reassured investors on Wednesday that the Genesis was “not a counterparty or service provider for any Grayscale product,” and that Grayscale products would “continue to operate business as usual.”
• The GBTC shares have not traded at a premium to the underlying bitcoin since March 2021, according to data from Coinglass, and the discount has widened this year along with distress in crypto markets and the U.S. Securities and Exchange Commission refusal to allow a conversion of the fund into an exchange-traded fund.

Sports Fan Tokens Rally Ahead of FIFA World Cup, Defying Crypto Market Gloom

• Through the doom and gloom of FTX-stricken crypto markets, sports fan tokens are basking in a fresh wave of hype ahead of the FIFA World Cup 2022, which starts Sunday.
• The native token of the Chiliz blockchain (CHZ), which powers the largest sports fan token creator platform Socios.com, has surged 11% in the past 24 hours.
• Fan tokens for the national soccer teams of Portugal (POR) and Argentina (ARG), both major contenders to win the Cup, “will be the cherries on top during the World Cup,” the research team of crypto exchange Huobi wrote in a report Thursday.
• POR has rallied 15% over the past 24 hours and is up 50% during the previous week, while ARG has pocketed a 10% daily and 28% weekly gain, according to FanMarketCap, a fan token price tracker.
• The total market capitalization of fan tokens grew 11% in the last 24 hours to $399 million, data by CoinGecko shows.

Cardano Is Launching New Privacy Blockchain and Token

• Input Output Global (IOG), the firm behind the Cardano blockchain, is releasing a new privacy-focused blockchain called Midnight and a token called dust to accompany the new network.
• Midnight, which is underpinned by zero-knowledge-proof technology, is one of many side chains now being deployed around Cardano, and will go beyond previous privacy-coin projects by delivering zero-knowledge-proof smart contracts, IOG CEO Charles Hoskinson said during an event at Edinburgh University in Scotland on Friday.
• The system will walk the line between preserving privacy and allowing regulators and auditors a backdoor into the system when permission is granted, he said.
• “Midnight has evolved privacy-coin technology where everything was anonymous by default, which is what Zcash and Monero did with Snarks and ring signatures,” Hoskinson said in an interview with CoinDesk, referring to two other privacy coins and their encryption methods.
• “This is a completely new way of writing and running private smart contracts and private computation. So you can have a private DEX (decentralized exchange) or go mine an anonymous data set or these types of things.”

Tether says it’s moving 1 billion USDT from Solana to Ethereum

• Tether, the issuer of the USDT stablecoin, said it was conducting a chain swap to move 1 billion USDT from Solana to Ethereum.
• The chain swap will reduce the total amount of circulating USDT on Solana, but the company said on Twitter that overall supply of the stablecoin will not change.
• Earlier this week, Binance suspended deposits of USDC and USDT from Solana but quickly resumed them shortly after. This announcement came after a rival exchange, OKX, delisted both USDC and USDT on Solana, and also stopped accepting deposits or withdrawals.

Bitstamp Follows Other Exchanges in Canceling Orders for FTX and Celsius Tokens

• Bitstamp is set to disable new orders and cancel existing orders for all FTT and CEL trading pairs, it announced on Friday.
• FTT is the proprietary exchange token of FTX, which offered customers small discounts on trades for holding FTT before the firm’s high-profile slide into bankruptcy last week. CEL offered users of the now defunct crypto lender Celsius a small increase in rewards on the platform before the lender shut down withdrawals in June.
• The move comes after many other exchanges in the crypto world have already started prohibiting users from trading FTT: Binance removed the FTT/BTC, FTT/BNB, FTT/ETH and FTT/USDT trading pairs from its platform earlier this week, while BitMex delisted perpetual swap contracts linked to FTT (FTT/USD and FTT/USDT) at the end of last week. 

FTX Asks Other Exchanges to Help Secure and Return Lost Funds

• FTX called on its fellow crypto exchanges for help on Sunday, pointing out that funds siphoned from the befallen exchange are being transferred to other entities through intermediate wallets.
• The now-bankrupt company, led by new FTX Group CEO John J. Ray III, asked its peers to “take all measures” necessary to secure the funds so that they could be returned back to the estate overseeing the bankruptcy of FTX.
• FTX did not outright state that the funds had been stolen but rather transferred from FTX Global “without authorization.” The company also did not specify which wallet addresses the funds were linked to or the exchanges where they were being transferred.

FTX-acquired Liquid pauses trading five days after suspending withdrawals

• Crypto exchange Liquid stopped trading on its platform only five days after suspending fiat and crypto withdrawals on the platform. 
• “We have been instructed by S&C (law firm Sullivan & Cromwell) who act for FTX Trading, to pause all forms of trading on our exchange because of the operation of the Chapter 11 process in the Delaware Courts,” the exchange said in a Twitter statement on Sunday. 
• On Nov. 15, the company suspended fiat and crypto withdrawals to comply with FTX’s filing for Chapter 11 bankruptcy protection. 
•  FTX Trading acquired Liquid Group and all of its operating subsidiaries in March. No purchase price was disclosed, but the now-failed crypto exchange had offered Liquid a $120 million loan beforehand after it lost $90 million to a hack. 

FTX Exploiter Converts Millions in Ether to Alameda-Linked Ren Bitcoin Tokens

• Whoever was behind the $600 million exploit of crypto exchange FTX started exchanging millions of dollars worth of ether to Ren Bitcoin (renBTC), a token that represents bitcoin on other blockchains, early on Sunday.
• Funds stolen from FTX were steadily converted to ether over the past week, making the exploiter one of the largest holders of the token, as CoinDesk previously reported.
• The use of renBTC may surprise some in the crypto space: In 2021, Alameda Research – the Sam Bankman-Fried-owned trading arm at the center of a multibillion-dollar scandal – said Ren’s development team was “joining” Alameda and would work on expanding Ren’s usage to several blockchains.
• At 7:27 UTC Sunday, the hacker moved over 5,000 ether to a new wallet, blockchain data shows. An additional 35,000 ether was then moved to that wallet over three separate transactions.
• On-chain analysis of the new wallet shows the exploiter subsequently started to convert ether to renBTC using the decentralized exchange aggregator 1inch. The first of such transactions saw 4,000 ether being converted to wrapped bitcoin (wBTC), another bitcoin representative token, and then to renBTC.