Creating the Google of Web3
Using AI + ChatGPT to Analyze Blockchains
Happy Monday, folks 👋🏻 GM. In the past few weeks, we have been debuting this newsletter to select friends and peers in the crypto space. Starting today, we're opening it to the public!
Let's do a quick recap 👇
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It covers the most relevant topics, three times a week, bringing web3 founders and investors up to speed with what's happening in crypto.
With that out of the way, we hope that you'll be following our journey to become the best newsletters for web3 builders and investors. Thank you for your support!
In Today's Email:
Over the Weekend: DCG assets in shambles 🤯
Products: Ora Labs 🔍
Charts: US exchanges post FTX & Blur's increasing volume 📈
DCG Assets in Shambles
It has been a few weeks since the public knew that Genesis has an issue. Potentially a $2 billion+ one. The company has been MIA, but there are movements in the market signaling where things might go 🚦
State of play: Genesis, one of the largest crypto lenders and prime brokerage firms has been under a lot of trouble. It owes billions to its creditors, and it hasn't been able to pay it back. Genesis is owned by Digital Currency Group. The trouble at Genesis will have a direct impact on DCG.
Over the weekend, the value of DCG associated assets are declining.
Allegedly, Genesis' creditors have begun trading small batches in the secondary market. Some transactions have settled at 35c on the dollar.
It has been 30 days since Genesis paid interest, prompting Gemini Earn, one of Genesis' creditors, to begin advocating for a recovery plan.
What's next: If Genesis is forced into bankruptcy, it will also impact DCG. While DCG is a juggernaut, its prized Grayscale business has also been struggling. The three largest Grayscale products by AUM have reached their all-time high discounts. BTC at (-49%), ETH at (-53%), and ETC at (-71%).
Additionally, the book of 3AC, one of the primary borrowers that caused Genesis' current trouble is not looking good. It only has $37M in cash with more than $500M stuck in venture deals that have either imploded (BlockFi) or marked down significantly by the open market.
Our take: There will be more trouble ahead. No matter how this plays out, it will only cause more selling pressure in the market. There's also no clarity on how venture deals will be treated (clawback?) in a bankruptcy filing spanning multiple jurisdictions. All-in-all, until the dust settled, stay cautious.
For builders: Be very careful with your treasury capital. Risks can't be eliminated, only transferred. Any form of yield will always incur risks. Even if Gemini Earn was supposed to be one of the safest yield products in the market, the contagion of 3AC's downfall eventually found its way to the US. Always diversify your source of yield, no matter how safe it looks.
For investors: Gemini is arguably one of the most regulated US-based centralized exchanges out there, as it's a trust that requires 1:1 backing. However, Gemini Earn was done in partnership with Genesis. It's imperative to read between the fine lines, before dishing out significant capital to a strategy. Crypto needs more due diligence.
PRODUCTS OF THE WEEK
Ora Labs: The Google of Web3
Blockchain is hard. Looking under the hood and studying on-chain data is a profession on its own. This is because different blockchains work differently. There isn't an easy way to search the chain, just like how Google made it easier for us to search the web. That has been the case... until now.
What is Ora: Ora is a search engine for web3 data. It enables users to search the blockchain with simple natural language. With Ora, users don't need to understand how to code or even understand how the blockchain works, to look at what's underneath.
Simply put, Ora aims to make searching the blockchain as easy as Googling. In the future, Ora aims to have multiple features such as utilizing AI to analyze the blockchain, enabling users to "talk" to protocols via chatting, verifying transactions, and many more.
1️⃣ Using AI to analyze blockchains
In the future, everyone will be able to ask any on-chain related data questions and get an answer.
Just ask in plain text and the AI model converts the question into SQL, runs that code on indexed data and surfaces the result back to you.
— ora ▩ (@oralabs_)
Dec 6, 2022
Other cool products:
Spaceport, tools for creators and brands to monetize IPs in web3.
Finterest, a cross-chain lending platform without bridging.
NF3, a swaps & options platform for NFTs.
Outdefine, a decentralized talent-hiring platform.
Decent, no-code tools for creators to build web3 project.
Anima, a protocol for dynamic and ownable AR.
Dogami, a pet metaverse game.
Virtualnessio, a mobile-first platform for creators to utilize blockchain.
Forum3, a web3 loyalty platform.
Frontrunner, a decentralized sports betting market.
CHARTS OF THE WEEK
US-Regulated Exchanges Market Share
Prior to the collapse of FTX Group, the market share of both FTX and FTX US in comparison to other US-regulated exchanges was hovering around 40-50%. Since the collapse, other US-regulated exchanges have been garnering market share. The most notable growth is experienced by Coinbase and Kraken, which combined market share now reached 75%.
Our take: Investors are worried. The crypto contagion is still ongoing, and there are good reasons to be worried about the practices of offshore centralized exchanges. The safest way for institutional or high-net-worth investors is to keep their crypto on US-regulated exchanges, or Coinbase, the only publicly-traded crypto exchange in the world.
To watch: BitMEX, Bybit, and decentralized derivatives exchanges. FTX was the go-to place for crypto derivatives traders. Now that it's gone, traders are forced to go to Binance for liquidity. However, too much concentration is never a good thing. BitMEX, the old god of crypto derivatives, has a chance to make a comeback. Bybit is continuing its growth, while decentralized derivatives exchanges will have a chance to sway on-chain traders.
Insurance Under 1% TVL
Blur, an NFT aggregator and marketplace, has reached an all-time high trading volume market share of 36%. Its success can be attributed to excellent crypto-native incentivization tactics, including multiple well-coordinated airdrops, and zero marketplace fees.
State of Play: Blur is one of the more recent high-profile NFT marketplaces. Backed by notable investors, the platform has since been able to take market share away from incumbents such as OpenSea. It's likely that Blur will overtake OpenSea's market dominance as it conducts its third upcoming airdrop.
Our take: If done right, a good product experience can still make a dent in a relatively saturated market such as NFT marketplaces. Blur's relentless focus on its core audience, crypto-native NFT traders, combined with its smart airdrop strategies, propelled the platform to new heights.
Gemini Earn update.
OneCoin Co-Founder pleads guilty.
Digital Currency Group portfolio assets slumped.
SBF expected to accept extradition.
mgnr (quant trading firm) deleted tweets and moved $51.6M USDC
Former BitMEX CEO sues for wrongful termination.
REN protocol likely to shut down.
US probes SBF's political donations.
Yuga Labs advances in lawsuit against artist.
Bitvavo can't access $280M Euros held by Genesis.
Silvergate receives a class-action lawsuit tied to FTX's collapse.
Alex Mashinsky's Celsius transaction history.
MEME & NOTEWORTHY READS
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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.