Bored Ape has a plan

Good morning! Welcome to The Daily Moon. Onetime billionaire and now-on-the-run founder of Terra, Do Kwon was on Twitch discussing the Binance-FTX deal with “pharma bro” Martin Shkreli on Tuesday. Shkreli assured Kwon that prison wasn’t all bad, just in case the latter ended up behind bars. It’ll all be fine.

The markets plummeted over the FTX contagion risk. Bitcoin sunk to ~$16,200 and Ethereum was at $1,130 levels. Nasdaq closed lower after the midterm election results. Back home, Sensex and Nifty fell due to weak global markets. 

Ethereum Has A BTD Moment

The Merge euphoria was short-lived. Ethereum slid below $1,300. The sentiment, however, has shifted to “buy the dip”. Is it time to buy? Caution: This also means that investors will want to book profits and move elsewhere. 

What’s up, ETH?Santiment analysis shows an altcoin preference over the past four weeks. Investors have used the volatile market conditions to buy more Ethereum. The buzz around Scourge was a big reason for the BTD call. There’s hope that post-Merge Ethereum will become more valuable. 

FYI Scourge is an update to make Ethereum more credible. Here, new block creation will be delegated to different entities to increase network security. 

The Shanghai pullThe next major update on Ethereum will be Shanghai. There’s new information that one particular proposal, WARM Coinbase, will cut gas fees. Coinbase is the name of the software used by builders (block builders) to receive new tokens on the network. Here’s how it will be tweaked: 

• Every new transaction needs to interact with Coinbase multiple times. 

• The first interaction costs more because Coinbase needs to “warm up”. Costs fall from thereon. 

• With the update, Coinbase will stay warm so there’s no excess fee at the start. 

• So far, traders had to pay gas fees whether the transaction succeeded or failed. After WARM Coinbase, they won’t have to pay for failed transactions.  

But.. but.. Does that also mean a dump?Ethereum saw something similar in September. Many bought the dip and sold it off. But this time, there’s more ETH outside the exchanges than within. This is an indication that at least some want to HODL. 

Messiah Needs A Saviour

The crypto messiah needs a white knight. Sort of. Sam Bankman-Fried donned the white knight hat to support bankrupt crypto firms. On Tuesday, Binance’s Changpeng Zhao  stepped up to “save” SBF and his businesses. But just a day later, CZ dropped the plan. 

We didn’t expect thatUntil about two days ago, the two were embroiled in a Twitter spat over insolvency fears at SBF’s Alameda. This is what happened: 

1. Binance sold $2 billion worth of FTX's FTT token.

2. Investors made a bank run on FTX.  

3. FTT token fell ~80% on default rumours.

CZ's acquisition deal calmed the market but things turned chaotic when he walked away from it.

We don't know how FTX and Alameda will raise liquidity. But one thing is clear. SBF is no longer a billionaire. His net worth has crashed to ~$990 million. 

Fun fact: Binance bought FTX shares in 2019 simply because CZ saw “a bit of themselves in the FTX team”. That friendship soured with time.

What’s next?FTT is still down over 70%. No one knows what’s coming next. Will SBF find a buyer? Is there enough capital to run the businesses? And what happens to SBF’s other investments? 

Meanwhile, Circle and Tether confirmed that their stablecoins are safe.

The Scary Midterms

The US voted for the 2022 midterm elections on Tuesday, and the cryptocurrency world is looking keenly at the results. Yes, we know we’ve told you things before, but hear us out. 

Ok, say your pieceThe Democrats have been critical, in general, of cryptocurrency. Under President Joe Biden, there hasn't been much to cheer about. Remember the Executive Order on ensuring the responsible development of digital assets? It basically asked for greater oversight of the industry. Then there was the framework report in September. A bunch of crypto companies also saw strict regulatory action. Tornado Cash was sanctioned, Commodity Futures Trading Commission sued Ooki DAO, and there is more than enough on the SEC wanting to treat tokens as securities. 

Market movesMarkets have historically rallied after midterms, but this year may be different. And we’re way past denying that crypto markets are unaffected by traditional markets.  So a new Congress, or the indication of it, might be a shot in the arm for crypto?

BAYC Vs OpenSea

We love a good Twitter fight. After OpenSea’s attempt at fixing creator royalties, the OG NFT creators have stepped in. The founders of Bored Ape Yacht Club have proposed a potential, alternative model.

What they’re saying

1. NFTs are about empowering creators

2. Free wallet-to-wallet transfers are essential

3. “Allow lists” can be coded into an NFT collection’s smart contract 

They’ve acknowledged this model has tradeoffs. But it did seem to find less opposition than OpenSea. Beeple seemed happy too. 

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