Market Summary

Bitcoin Price: US$ 16,824.67 (-0.42%)
Ethereum Price: US$ 1,213.78 (-0.26%) 

Coinbase Share Price Hits an All-Time Low

• Coinbase share price has reached an all-time low of $35 as the centralized exchange trades at a valuation of $7.93B on Nasdaq. Currently, this is 1.6x the cash and cash equivalents reported by the company in its latest quarterly filing.
• Since the company’s listing in April 2021, the stock has closely tracked the total crypto market capitalization. Over the past two months, the stock has taken a further hit as it trades down -45% while the total crypto market is down just -12%.
• Exchanges are highly cyclical businesses that suffer during bear markets when asset prices are sliding and there isn’t too much activity. In its latest quarterly filing, Coinbase’s total revenue was down -55% from $1.3B to $590M.
• Moreover, the drama around the fall of FTX may have spooked many investors. Even as the episode benefits Coinbase by eliminating one of its largest competitors, it also reveals that exchanges still operate in a gray area of regulatory uncertainty.
• The company’s business model depends on charging transaction fees to retail users. In its latest quarterly filing, retail users accounted for 16% of the trading volume and 94% of the transaction revenue.
• Many market participants have also pointed to the use of stock options as the reason behind a falling share price. Nevertheless, the exchange has continued to hit all-time lows, currently trading at a market cap below Dogecoin and Cardano.

Polygon’s zkEVM launched its second testnet, the last step before mainnet goes live

• Ethereum scaling platform Polygon launched its second public testnet, moving the platform to its final stage before mainnet launch.
• The testnet will trial a new upgrade called recursion, which it claims could result in exponentially scaling Ethereum. Polygon did not disclose a designated timeline for the mainnet launch.
• Polygon claims it is the first zkEVM, a new scaling technology using zero-knowledge proofs, to reach public testnet with open-source code for its proving system, a critical component of running the zkEVM. While Polygon claims it is open source, it has received criticism from other zkEVM platforms for its use of the term in the past.

Bitcoin mining report: Stocks tumble as Core Scientific files for bankruptcy

• Most Bitcoin mining stocks tracked by The Block declined on Wednesday, as Core Scientific filed for Chapter 11 bankruptcy protection.
• Bitcoin was up and trading a bit under $16,800 by market close, according to data from TradingView.

Uniswap DAO Community Members Vote in Favor of New Governance Process

• Uniswap community members chose Wednesday to reform the voting process on the popular decentralized finance (DeFi) protocol in an effort to make it easier to change the way the system is governed.
• The initial proposal, which opened to a vote last week, saw nearly 100% in favor of altering the governance structure within the ecosystem.
• The biggest changes will see Uniswap reduce the number of off-chain “snapshot votes” that precede on-chain votes to one. Final governance votes – the on-chain votes that approve or reject a proposal – will remain the same.
• While both kinds of votes require participants to contribute UNI, the native token of Uniswap, on-chain votes add data to the Ethereum blockchain, whereas off-chain votes poll community members on their initial stance towards a proposal.

DeFi Protocol Ankr Says Ex-Employee Caused $5M Exploit

• A former employee of decentralized finance (DeFi) protocol Ankr maliciously caused a $5 million exploit earlier this month, according to a statement published on Ankr’s website.
• The ex-employee inserted a malicious code package to conduct a supply chain attack, which allowed a user to mint 6 quadrillion aBNBc tokens, the company said. The attacker then converted those minted tokens for Binance Coin (BNB) before sending the ill-gotten gains to crypto mixer Tornado Cash. They eventually managed to swap the BNB tokens for 5 million USDC.
• “We are in the process of working with law enforcement to prosecute the former team member and bring them to justice,” Ankr said in the statement.
• Following the exploit, Ankr reimbursed impacted aBNBc or aBNBb token holders by airdropping ankrBNB and also airdropped BNB to all affected DeFi liquidity providers.

Waves Blockchain Founder Asks Exchanges to Delist WAVES Token Derivative Trading

• Sasha Ivanov, the founder of decentralized blockchain Waves, has asked crypto exchanges to deactivate futures markets tied to Waves’ native WAVES token.
• “Waves does not need waves futures markets.” Ivanov wrote on Twitter. “They are a breeding ground for FUD and making money off short positions, profitable because of it. I kindly ask all centralized exchanges to disable Waves futures markets.”
• The WAVES (WAVES) token has plunged by more than 40% over the past two weeks. It’s lower by 4.5% on Wednesday morning to $1.51 and now off nearly 98% from an all-time high set in April 2022.
• The coin’s slump has been attributed to the volatility of USDN, an algorithmic stablecoin that is designed to be pegged 1:1 with the U.S. dollar. The stablecoin is backed by the WAVES token and has de-pegged on multiple occasions this year.
• On Tuesday of this week, Ivanov said that he will launch a new stablecoin while revealing a plan to stabilize USDN, which currently trades at just 49 U.S. cents.
• This most recent depeg came after an “investment warning” from South Korea’s Digital Asset Exchange Association, which includes Bithumb, Upbit, Coinone, Korbit and Gopax.

Crypto market maker Auros misses $7.5 million Maple Finance loan repayment

• Crypto market making firm Auros failed to make a repayment on a $7.5 million stablecoin loan from uncollateralized lending platform Maple Finance, according to security and analytics firm PeckShield. Auros borrowed these assets from Maple Finance delegate M11.
• Auros filed for bankruptcy protection in the British Virgin Islands last month after losing access to about $20 million of funds it held on the collapsed crypto exchange FTX. A spokesman for Auros declined to comment on its Maple loans. 
• Previously, Auros also missed repayments after it borrowed 8,400 wrapped ether (WETH) worth $10.8 million, according to The Block Research.

Australian Crypto Exchange Swyftx, Share Trading Platform Superhero Abandon Merger Plan

• Australian crypto exchange Swyftx and share trading and superannuation platform Superhero canceled their planned merger, saying the decision was reached after the government turned up the regulatory heat on the crypto industry.
• The plan was announced in June, and was touted as a “historic merger” that would create a A$1.5 billion (US$10 billion) “digital and traditional finance powerhouse” and bring over 800,000 customers under one roof.
• The cancelation comes after the Australian Securities and Investments Commission (ASIC) sued three crypto-related entities – BlockEarner, BPS Financial, the company behind the qoin digital token, and financial product comparison website Finder.com. The government, meantime, is taking steps toward tightening crypto rules next year by inviting comments and feedback for a consultation paper.
• “The volatility in the market as well as the current regulatory environment has made it increasingly difficult to achieve the initial vision that inspired the merger earlier this year,” Superhero CEO John Winter said. “Superhero will return to being independently owned by myself and my co-founder Wayne Baskin.”