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BLOCKFI BACKERS: Cryptocurrency investment firm Morgan Creek Digital is attempting to raise $250 million from investors to purchase a majority stake in BlockFi, a crypto lending company that Morgan Creek has invested in. This plan was hatched in response to crypto exchange FTX's announcement that it would extend a $250 million credit line to BlockFi and possibly acquire the company - BlockFi, like many distressed crypto companies during the ongoing market rout, introduced customer deposit withdrawal changes and layoffs.
- FTX's buyout offer would privilege protecting customer deposits over investors, who might only make back cents on the dollar.
- Earlier this month, BlockFi was reportedly raising fresh capital at a lowered, $1 billion valuation though it's unclear if it closed this financing.
BANK YOURSELF: Goldman Sachs is looking to raise $2 billion from investors to buy distressed assets at steep discounts if the crypto lender Celsius goes bankrupt. The Wall Street giant – once called capitalism's great vampire squid – appears to be gauging interest and soliciting commitments from Web3 crypto funds and distressed asset funds. - According to people familiar with the matter, Citigroup and Akin Gump have recommended Celsius file for bankruptcy.
- Celsius abruptly announced on June 12 that it would stop withdrawals from its platform, citing "extreme market conditions." The disclosure exacerbated those conditions, briefly sending bitcoin's price below $20,000.
CULT OF PERSONALITY: A community dedicated to FTT, the native token of cryptocurrency exchange FTX, has raised $7 million (250,000 FTT) to kickstart an ecosystem fund. The fund will contribute to community-led projects across DeFi and said its members are "Bankman-Fried Fans/Followers/Friends." - The FTT DAO is independent of FTX, though FTX CEO Sam Bankman-Fried said he's "aware" of it.
COINBASE CUT: Goldman Sachs cut Coinbase's rating to "sell" from "neutral" and slashed its price target to $45 from $70. The downgrade was due to the continued fall in crypto prices and the ensuing fall in industry activity levels. - The company faces a difficult choice between shareholder dilution and effective employee compensation, the report said.
- Separately, Morgan Stanley said Ethereum's move to proof-of-stake (PoS) will decrease demand for GPUs but may not solve Ethereum's scaling problems.
STOLEN FUNDS? The Twitter account "@otteroooo" has claimed that crypto lender Nexo embezzled funds from a charity. Nexo says that the account user is intentionally using the name of someone unrelated to Nexo and filed a cease and desist order. - Meanwhile, XCarnival, an Ethereum-based protocol that acts as a lending aggregator for NFTs, has recovered 50% of the $3.8 million lost in an exploit. It persuaded a hacker to return $1.9 million following a smart-contract attack.
- Xinyi Luo |
Strong Fundamentals, Higher Insurance In today's market conditions, uncertainty can be overwhelming. That's why having a strong fundamental layer as a base for our business model has always been essential for Nexo. Strict over-collateralized lending, a real-time audit, prudent risk management, global licensing, and fully-automated processes, are the pillars that ensure the robustness of our products and the safety of your funds at all times. As a security-first platform, we recently increased our total insurance on custodial assets to $775 million. These additional protections come through our years-long collaborations with BitGo, Ledger Vault, Bakkt, and other industry-renowned custodians via the most prestigious underwriters, including Lloyd's of London, and Marsh & Arch.
Nexo's fundamentals are in place to keep your funds safe and to provide you with confidence that regardless of market conditions you can rely on your assets. We urge you to read more about these features and our sustainable practices on our Security page.
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Have a few minutes? Help CoinDesk gain insights into the working world of crypto by filling out our easy, anonymous Crypto Work Survey by June 24. The results will be reported in an upcoming CoinDesk feature. |
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- One of the most prominent crypto hedge funds just defaulted on a $670 million loan (CNBC)
- Bybit to offer futures contracts settled in the USDC stablecoin (The Block)
- Australian Crypto Firm Banxa to Cut Staff by 30% Citing 'Another Crypto Winter' (Decrypt)
- More Hedge Funds Are Betting Against Tether as Crypto Melts Down (Wall Street Journal)
- Crypto is crashing but the tech behind it could save luxury brands billions (CNN)
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Even with worsening market conditions, crypto remains a hotspot for employment. CoinDesk's "Future of Work Week" takes a look at the jobs market, offers advice on landing a role, and explores how crypto itself could change how we work, including through decentralized autonomous organizations (DAOs). Stay tuned for features, profiles and op-eds throughout the week. The Crypto Jobs Boom It may be a bear market, but there are still plenty of jobs to be had at crypto companies. Chase Chapman on DAOs and Professional Polyamory "There's a lot of value in talent that doesn't want to be held down by one organization," says a member of the core team and DAO of Orca Protocol. |
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Putting the news into perspective |
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The One Word That Defines Ethereum's Goals University College Dublin Professor Paul Dylan-Ennis writes about the world computer's politics in a guest essay. In bear markets, blockchain cultures are starkly confronted with what they are. The recent crash revealed decentralized finance (DeFi) markets as a labyrinth of complex financial instruments with contagion properties. DeFi did not lead to an open, permissionless alternative to the inherited financial system, but instead an accelerationist mirror image of it. Casino capitalism through a MetaMask extension. People naturally pegged the responsibility to irresponsibly overleveraged hedge funds and lending platforms. The problem is centralized finance, or CeFi, cosplaying as DeFi, they said, and there are no issues with DeFi proper. However, the idea that "this time will be different" and that financial actors would all act sensibly once DeFi "wins" is the deluded logic of the addict. The reality is it will happen again because the political endgame in Ethereum, home of DeFi, remains ambiguous. Ethereum has a technical endgame – an open, transparent world computer – but nobody knows what Ethereum is for. The point, the rationale, why we are here. A big question mark. Compare the situation to Bitcoin where the political endgame can be summarized in one word: hyperbitcoinization. Bitcoin's goal is to transition from a fiat monetary system to a Bitcoin standard. What is the equivalent one-word term in Ethereum? To find it, it is important to understand the contemporary Ethereum political landscape. The spectrum contains the following: - Cypherpunk: Ethereum is rooted in an earlier tradition of privacy and tech advocacy, which thought coders should use encryption and computing to build neutral infrastructure others can imbue with meaning. Ethereum's politics is its apolitical stance, a position sometimes called algorithmic authority, and the only focus is to create open source tools that requires little human mediation. Associated with the Ethereum "core" developers.
- Experimental liberalism: Ethereum's combination of experimental governance (e.g., soulbound tokens) and market-making (e.g. Quadratic Voting) can generate new liberal democratic political innovations. This position is associated with the network's founder Vitalik Buterin and Microsoft's Glen Weyl.
- Solarpunk: The social coordination enabled by decentralized autonomous organizations (DAOs) can create positive externalities on wider society, with a warm ambient humanism embedded in its aesthetics. Gitcoin's Kevin Owocki and Scott Moore and DoinGud's Manu Alzuru are examples here.
- Lunarpunk: The privacy enhancements afforded by zero-knowledge proof variations on Ethereum-native technologies (DAOs, DeFi, NFTs) are necessary to protect crypto culture against contemporary surveillance capitalism, typically taking an agorist, or left libertartian stance politically. This philosophical movement is associated with DarkFi's Rachel-Rose O'Leary and Amir Taaki.
- Degens: Ethereum is a platform for the construction of financial instruments with highly speculative characteristics and the only goal of its users is to accumulate wealth, possibly even in amoral ways. Essentially a form of market nihilism.
Is there some common thread running through these positions that would correspond to Bitcoin's compact hyperbitcoinization? Let's exclude the market nihilists since their view is short term and with no real interest in what Ethereum is long term. Across the spectrum, Ethereum's goal is to transition from a deteriorating inherited financial system built on unsustainable practices. But also from the internal variations on these practices found in degen culture and their enablers, venture capital firms and hedge funds. My contention is these diffuse points on the Ethereum political spectrum could be rolled into one overarching answer to the question, "What is Ethereum for, anyway?" Without an answer to the question, suspicions invariably arise that the answer is: to pump ether, to generate yield, to flip NFTs, etc. This does not mean we need to collapse the diversity of views under one, cohesive meta position, but only that it would be helpful to have an answer that we could all roughly agree on, rough consensus and running code. Seeking consensus across the spectrum, the political endgame of Ethereum can be summarized in one word: hyper-regenization. - Regenerative economics rather than illusory limitless growth: Ethereum offers retroactive and proactive public goods funding through the Quadratic Funding (QF) mechanism. It contains the potential to expand the cypherpunk mechanism of neutral public goods beyond Ethereum and Web3, into the traditional political world, as the solarpunks suggests with their focus on positive externalities. Ethereum could then become a minarchist alternative to state provisioning built along liberal and humanist principles.
- Regenerative citizenship rather than soulless individualistic speculation: Ethereum could reward good citizenship through retroactive airdrops, such as participation in Gitcoin rounds, governance voting, testnets and community channels. The activities of the citizens of experimental liberalism could be captured in soulbound tokens that grow over time, and we could ensure the privacy-oriented mindset of the lunarpunks enables citizens to "selectively reveal" themselves (or not reveal themselves at all). Secure social or community recovery methods will need to be established for this to flourish.
- Regenerative decentralization rather than centralization atrophy: Ethereum is an information commons or common knowledge pool. Transparency allows us to recognize, albeit not without its challenges, when centralized clusters are emerging. Recent efforts to re-decentralize client diversity and current efforts to re-decentralize staking reveal the cultural instincts to disrupt centralization atrophy are intact. This will require a "night watchman" mentality on the part of the cypherpunk developer culture.
What is Ethereum for? To bring about ever more hyper-regenization. – Paul Dylan-Ennis |
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FTX, Morgan Creek Vie for BlockFi