↕️Weekly Recap: ETFs Launch and Investors Sell

Happy weekend Defiers!

Most digital assets are down over the past seven days despite early-week bullishness surrounding the launch of more than half a dozen Ether futures ETFs in the United States. ETH last changed hands for $1,635 after tagging a high of $1,735 on Oct. 2.

The bearish price action came despite UBS Asset Management, the $3.1T asset manager, launching the pilot for a tokenized Variable Capital Company fund on Ethereum. The VCC fund is based in Singapore and is part of an initiative led by the Monetary Authority of Singapore.

Uniswap v3 is now live on ZkSync Era, the surging Layer 2 network, via the Oku front-end interface. Oku was developed with support from the Uniswap Foundation in the form of a $1.6M grant.

Contango launched DeFi-native perpetuals leveraging the leading web3 lending protocol, Aave v3. Contango plans to launch similar products leveraging the MakerDAO, Compound, and Spark lending protocols in the future.

The emerging SocialFI sector suffered a tumultuous week, with SIM-swapping hackers increasingly targeting Friend Tech users. Manifold Trading estimates $20M worth of keys or 40% of the protocol’s TVL is presently vulnerable to the exploit.

The rise of Stars Arena, an Avalanche-based competitor to Friend Tech, came to a quick halt after a smart contract exploit and DDoS attack led to a $3M loss and left its TVL at zero.

THORSwap, the THORChain-based decentralized exchange, suspended trading after blockchain sleuths sizable flows of stolen funds moving through its contracts. One researcher estimated more than half of the ETH swapped to BTC via the protocol was of illicit origin.

Yuga Labs, the leading NFT studio, is undergoing a major restructuring following the prolonged NFT downtrend and ongoing legal battles. Yuga will eliminate several positions and focus on developing its metaverse project, Otherside.

The International Monetary Fund published a report warning that unregulated digital assets could foster the rise of an “alternative financial system.” Despite the IMF’s cautionary tone, conclusions were welcomed by the crypto community.

And in this week’s podcast, Spencer Bogart, a partner at Blockchain Capital, to learn more about the firm’s investment theses and history.

Enjoy!

Video

You Are NOT Ready For The Bull

After a tumultuous 2022, we’re in the last quarter of 2023, and with that comes crypto-Twitter's favorite month, often memed as “Uptober”. It remains to be seen if October will actually be a green month for crypto, but between the upcoming Bitcoin halving and multiple spot BTC ETFs set to be approved, we may have another “perfect storm” for crypto on the horizon.

The cyclical nature of Bitcoin is not new information and is something we have been tracking at The Defiant for years. Nothing is ever guaranteed in these markets, but the list of reasons to be optimistic about Web3 and DeFi continues to grow. So let’s recap some of what has occurred since our film, “You Are Not Ready For the Bear,” because you are definitely not ready for the bull.

Podcast

How Blockchain Capital Invests and Spencer Bogart on the Future of Crypto and DeFi

Tegan Kline went one-on-one with Spencer Bogart, one of the partners at Blockchain Capital, a leading web3 venture capital firm. Bogart has played a pivotal role in shaping the landscape of decentralized technologies and digital assets over the last decade, with many of his firm’s investments emerging as major projects within the space.

The podcast covers Blockchain Capital’s impact in the blockchain sector, their $580M for two new funds, their investment thesis for the controversial digital ID project, WorldCoin, and much more!

Saturday

Avalanche-Based App Stars Arena Loses $3M in Smart Contract Exploit Stars Arena, Avalanche’s SocialFi upstart, lost $3M of user funds and its entire total value locked in an exploit two weeks after launching. Stars Arena said it was hit by a smart contract exploit and DDoS attack.

Friday

Uniswap v3 Deployed on ZkSync Era Via Oku Oku, a Uniswap Foundation-backed interface for the Uniswap decentralized exchange, is now live on the surging Layer 2, ZkSync Era. Oku offers advanced features including order books, charting, and other analytics for Uniswap v3 users.
THORSwap Suspends Trading After Illicit Fund Flows Identified THORSwap, the THORChain-based DEX, has paused trading services researchers identified illicit funds moving through the exchange. In an Oct. 6 tweet, THORChain said it consulted advisors, legal counsel, and law enforcement before deciding to enter “maintenance mode.”
BAYC Creator Yuga Labs Announces Major Restructuring Yuga Labs, the team behind the Bored Ape Yacht Club (BAYC) and CryptoPunks NFT collections, announced it's undergoing a restructuring process and strategic refocus. The new direction will result in several role eliminations and prioritization of the Otherside metaverse project.

Thursday

Lido’s stETH Token Accounts For 7% Of Circulating Ether A new report from Glassnode is the latest example of web3 researchers sounding the alarm on the rising dominance of Lido over the supply of staked Ethereum. The report said 7% of Ether’s supply has been converted to stETH, with the trend showing no signs of slowing down.
Friend.tech Rival Stars Arena Boosts AVAX Price Amid Calls That They "Will Prevail" The Avalanche blockchain is getting a boost from Stars Arena, a new social media platform built on the network. Transactions on the Avalanche network spiked to 585,000 on Oct. 2, up from 254,000 the previous day.

Wednesday

friend.tech Users Fall Prey To SIM Swap Attacks Friend Tech users have been targeted by a series of SIM swap attacks that started over the weekend, raising concerns over the safety of user funds and the need for improved security measures. Several users reported their mobile phones were compromised, allowing the attackers to steal digital assets from them.
NFT Publishing Platform Mirror Revamps Front-End Mirror, an NFT-based publishing platform, has rolled out search and discovery features alongside a new homepage. Mirror said the new features will help users find content that is interesting to them, and enable creators to build communities around their work.
Contango Launches Decentralized Perpetuals Leveraging Aave Contango, a team leveraging web3 money markets to launch derivatives products, announced the launch of futures contracts built on top of Aave, the leading DeFi lending protocol, on Oct. 4. The new product, dubbed Contango Perps or cPerps, utilizes recursive or “looped” lending positions via Aave flash loans to create leverage positions.

Tuesday

IMF Says Unregulated Crypto Could Lead to an "Alternative Financial System" The International Monetary Fund last week warned that crypto could create a new financial system, to which the crypto industry responds: Exactly. "Crypto asset technologies, if not well regulated and supervised, could create de facto a new and alternative financial system," the IMF wrote.
ETH Retraces After Futures ETF Launches Fall Flat Volatility is taking hold of the Ether markets as institutional asset managers pile up plans for exchange-traded funds investing in ETH. Despite more than half a dozen future ETFs going live on Oct. 2, the launch manifested as a sell-on-the-news event.
Orbiter Finance Users Report Missing Transactions Amid Possible Hack Orbiter Finance, a cross-chain bridging protocol, is facing allegations of missing transactions and suspicious activity. The project's Twitter and Discord accounts are inactive and deleted respectively, with some users warning that bridging transfers are not being credited to their accounts.

Monday

Manifold Trading Admits Friendtech Key Launch Was Inside Job Manifold Trading, a crypto trading firm, has admitted that an insider used nonpublic information to profit from a hyped launch on the friendtech social trading app. The employee snipped $33,000 worth of Friend Tech keys in a matter of just minutes.
Velocity Pass Unveils Mint Details Of Upcoming Snowfro Drop Velocity Pass, a collaboration between crypto exchange ByBit and Red Bull Racin, has released the mint details for its highly anticipated drop featuring Art Blocks founder Erick Calderon (Snowfro). Half of the 2,000 NFTs will be reserved for Velocity Pass holders to freely mint.
Michael Lewis's New Book on Sam Bankman-Fried Faces Waves of Criticism Michael Lewis's latest book on Sam Bankman-Fried, the disgraced CEO of FTX and Alameda Capital, has been subject to intense criticism after Lewis said in an interview on 60 Minutes that FTX was a "great real business."
Synthetix Launches Trading Competition for its Perps V3 Testnet on the Base Network Synthetix's Perps V3 Testnet Trading Competition has kicked off and will be running from Oct. 2 until Oct. 23. The contest will reward the top ten participants with SNX and KWENTA tokens.
UBS Launches Pilot for an Ethereum-Based Money Market Fund UBS Asset Management, the Swiss asset manager with $3.1T of AUM, announced on Monday, the launch of a live pilot of a tokenized VCC fund in Singapore.
Millions Of Compressed NFTs Are Being Minted Weekly On Solana Solana users are leveraging the Bubblegum NFT compression tool to mint more than 3M tokens weekly.