CEX Layer 2 Season: OKX’s X1
FTX $13.9B Worst Case | dYdX Chain Trading

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Good Morning. Bitcoin spot ETF approval could happen this week. If it doesn’t happen until November 17th, a new comment period will start. With that said, the rumored XRP BlackRock ETF was a fake filing. Be careful out there.
In Today's Email:
What Matters: OKX layer 2 network 🚀
Case Study: Good crypto founders 👩💻
Governance & Features: dYdX chain trading 💱
Narratives: With dYdX chain trading goes live and Celestia’s strong price action, its worth taking a deeper look at the ATOM/TIA ecosystem.

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WHAT MATTERS
OKX Launches Layer 2 Network
📣 Hot Off The Press 📣
We're thrilled to introduce #X1, our new Ethereum L2 network built on Polygon's CDK.
Our landmark collab. with @0xPolygonLabs empowers next gen. devs. with increased security, scalability & low transaction costs to BUIDL the future of Web3.
🧵👇
— OKX (@okx)
5:01 PM • Nov 14, 2023
State of play: OKX launched a testnet for "X1," an Ethereum L2 network developed with Polygon CDK, utilizing zero-knowledge proofs to validate deposits and withdrawals between layers.
OKX’s native token, OKB, will be used as X1’s native token to pay for gas fees.
Jason Lau, OKX's Chief Innovation Officer, stated that X1 will help to onboard new crypto users.
OKX will also become a core contributor to Polygon CDK and will invest substantial engineering resources to enhance the technology stack.
The use of ZK proofs will make X1 highly secure and scalable while also reducing transaction costs.
OKX is the sixth-largest crypto exchange by volume, boasting over $1.8B in daily trades.
Why it matters: More centralized exchanges will be launching a layer 2 network following Coinbase’s move and Binance’s success with BNB Chain.
The benefits of owning your own chain are so significant it deserves a standalone article. Simply put, it is business vertical integration.
For builders and investors: Make sure you’re building or investing an actual product with a moat, and not just a feature that can be copied by large centralized players.

CASE STUDY
Key Qualities of a Good Crypto Founder
Credit to Qiao Wang for the original piece.
State of play: Qiao Wang from AllianceDAO shared his thoughts on the key qualities of a good crypto founder based on his experience of 3 years accelerating 200 crypto startups.
Here are some key takeaways:
Having great insights — whether about users or contrarian views is one of the key differentiators that separate the good crypto founders from the bad ones.
Elite backgrounds are common among crypto founders, but among the top 1%, this trend doesn't apply; many successful crypto companies are led by founders without elite backgrounds.
Perseverance is key for success across industries, but it's especially crucial in crypto, given its unique challenges: frequent boom-bust cycles and regulatory scrutiny.
The last but most important quality is integrity.
What’s next: Crypto founders have many ways to become bad actors, such as backroom token deals and ludicrously high salaries. Integrity remains the most important factor in a truly global and decentralized asset.
Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 100 smart crypto investors' wallet addresses 👇

INSIGHTS
FTX Bankruptcy Claims Value
Saurabh Deshpande from Decentralised shared the best and worst-case scenarios regarding how much money can be recouped from the FTX bankruptcy.
Here are the key takeaways:
Real estate is valued at $199M.
The value of BTC and ETH during asset recovery is $1.1B.
Venture investment valued at $3.87B with Anthropic being the most valuable at $2.7B.
Brokerage investments are with companies like Grayscale, Bitwise, and Blackrock valued at $529M.
The total claims that can be considered by the court are $23.2B in total ($12.3B non-customer + $10.9B customer claims), this excludes the IRS claim that will be considered after other claims are fulfilled.
Category A digital assets (liquid, with minor FTX ownership) are valued at $5.7B, and Category B assets (almost illiquid or largely controlled by FTX) at $12.6M, based on conservative estimates.
Total cash asset is $3.6B, including $2.56B existing cash plus $752B from venture exits and $365M from digital asset sales.
The best case for token investments is $381M, with the worst case at 50% of that. Pre-ICO tokens are conservatively valued at zero.
Saurabh also estimates the best case for “avoidance,” which is a process where a trustee can cancel certain transactions the debtor made before filing for bankruptcy, is $8.3B at best and $588M at worst.
Why it matters: It’s time for the industry to move past the FTX saga.
The capital that will be recovered will also play a significant part in the future of crypto market funding and liquidity as most belong to crypto-native entities.

FEATURES & GOVERNANCE UPDATE
dYdX Chain Trading Goes Live
The Cosmos-based Layer 1 dYdX Chain has entered its beta mainnet.
The launch, following a community vote with over 99% support, transitioned trading from post-only to active on all markets.
Users can now trade in over 33 perpetual markets with up to 20x leverage.
During this stage, no trading rewards are distributed, but validators and stakers will earn trading fees.
The progression of the dYdX Chain from active to full trading with rewards will be decided by a governance vote once the protocol is stable with minimal bugs or issues.
Circle, Noble, and dYdX have partnered to facilitate USDC transfers to the dYdX Chain. Circle’s CCTP will launch on the mainnet on Nov. 28, simplifying USDC movements to the dYdX Chain.
Why it matters: dYdX's move to become an appchain is a landmark moment in blockchain ecosystem development. This trend will only continue, with the likes of Maker already considering launching its own blockchain.
Other notable feature updates:
Frame testnet goes live.
Sushi launches Smart Pools.
Lulo Finance launches Flexlend.
Notional V3 goes live on Arbitrum.
Rysk launches Put/Call debit spreads.
Ether.fi launches eETH on the mainnet.
Vertex launches Take Profit and Stop Loss orders.
Binance launches Web3 Wallet featuring MPC tech.
Jupiter launches an LP-to-trader perpetual exchange.
Flashbots cofounder launches a Telegram bot, Alfred.
CowSwap launches Programmatic Orders and Programmatic Order Framework.

QUICK BITES
Ryan Wyatt moves to Optimism.
Blockchain(.)com raises $110M Series E.
Coinbase’s Global Expansion Lead departs.
Crypto(.)com wins a Digital Asset License in Dubai.
Cboe plans to launch margined BTC and ETH futures.
Standard Chartered launches a tokenization platform.
JPMorgan & Apollo tokenized funds in proof of concept.
Crypto custodian Hex Trust obtains a full license in Dubai.
South Korea’s Bithumb eyes IPO in the second half of 2025.
OKX plans to launch a layer 2 network built on Polygon’s tech.
Disney & Dapper Labs launch Star Wars, Pixar 'digital pin' platform.
Crypto industry protests against Treasury’s proposed tax reporting.

NOTEWORTHY READS & MEME
The year is 2030. I just received an airdrop on the newest ZK rollup, but I can't figure out which of the 14 bridges I need to use to get my money. Luckily, a16z just funded their 9th interoperability protocol to solve this problem. Unfortunately the founders took secondaries on… twitter.com/i/web/status/1…
— Autism Capital 🧩 (@AutismCapital)
6:19 PM • Nov 14, 2023

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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.