Poof! It’s gone

Good morning! Welcome to The Daily Moon. Kim Kardashian can breathe easy. A US court scrapped a class action lawsuit against her and a few other celebrities over crypto promotion on social media. DYOR. Not just us, even the court said it.

The markets were cautious. Bitcoin inched closer to ~$16,900 and Ethereum was at $1,240 levels. Nasdaq rose in early trade. Back home, Sensex and Nifty had marginal gains.

Your NFTs Are Missing

So there’s the final nail in the coffin. Weeks after FTX went bankrupt, the NFTs hosted on it vanished. So not only is the money stuck, NFTs have disappeared too.

This is confusingLet’s step back a little and understand the difference between web2 and web3. Web2 is the internet we use today, which is owned by large technology companies such as Google and AWS. This is also called the centralised internet. Web3, on the other hand, is a decentralised internet, which is owned by a community and interconnected via blockchains.

Coming back to FTX, what it did was it hosted the NFTs using web2 application tools instead of the web3 version. So when FTX filed for bankruptcy, the NFTs were redirected to a restructuring website. The links are broken. The NFT still exists, but it looks something like this:

OMG, now what?So even if you own the NFTs and want to sell them off, the images look blank. Because it wasn’t hosted properly, the digital art is as good as lost. This means that the Coachella Keys NFTs auctioned with FTX for $1.5 million are also inaccessible.

Once the code’s broken, it’s broken. But, apparently, this is pretty common in the crypto world. A Twitter user called init said that web3 companies heavily depend on centralised services such as Amazon and Google. Right.

Anyway, our heart goes out to the poor soul who bought this.

Solana Needs To Find Its Sol Again

Solana’s developers are in rebuilding mode. DeFi projects housed on Solana are starting over with OpenBook, the ecosystem’s core backend and liquidity provider.

What happened to Serum?Serum, a DeFi protocol, was the OG backbone for Solana DeFi apps. When SBF went bankrupt, developers found out that Serum’s private keys were stored on FTX, and it was all blacklisted. But the DeFi pool needed an alternative. So the community hard-forked Serum to create OpenBook. Think of OpenBook as a revival scheme for a dead project.

How’s it going?Projects have been redeployed on OpenBook, but Solana continues to suffer. DeFi volume on Solana has crashed ~70% to $290.5 million in the past one month. However, the community has rallied behind the Solana ecosystem. Helius Labs, for instance, is offering free subscriptions for DeFi developers.

ECB Wants “Greener” Crypto

Europe’s banking regulator doesn’t like Bitcoin. Well, it hasn’t said it in that many words. But an ECB official has proposed a ban on crypto tokens with “an excessive ecological footprint”.

What?ECB wants the environment to be protected at all costs. PoW crypto happens to be inversely proportional to this idea. For the rest, it has suggested taxation. That’s in line with the EU's priority to tackle climate change and provide energy security.

It’s done?Not at all, this is just a proposal. European lawmakers have previously approved a crypto assets bill, which increases compliance requirements for service providers. This policy is expected to be operational by 2024. We don’t know whether the proposed ban will be added to the existing bill.

Did You Say Winter…

Funding for crypto startups has slowed down. But it’s still better than the past year. Startups in the sector raised capital worth $19.9 billion in VC investments as of September end, a 41% increase from the previous year.

But it’s lukewarmCrypto startups raised $21.2 billion in funding in 2021. This year’s figure may well exceed these numbers. However, the winter slowed down the rate of investments more recently. In the third quarter, for instance, there was a ~38% drop in funding at $4 billion.

A mix of issues starting from the Terra de-peg to the bankruptcies of 3AC and Celsius caused scepticism among investors. FTX’s collapse gives another reason to stay cautious.

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