Tornado Cash Sanctions Overturned, TORN Surges 500%

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Good Morning.

Retail traders never fail to surprise us as dinosaur coins from the last cycle such as Hedera and Algorand led the weekly performance amongst large-cap assets. We’ll see if this trend persists as we enter December, which tends to be a slower month for the market.

In Today's Email:

• What Matters: Tornado Cash Sanctions Overturned 📈 

• Product: Freysa, an Adversarial Game AI Agent 🤖 

• Charts: CryptoPunks’s Rally, ParaFi's 2030 Outlook 📈 

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WHAT MATTERS

Tornado Cash Sanctions Overturned

State of play: A landmark ruling by a US federal appeals court has overturned sanctions imposed on Tornado Cash by the Treasury Department, delivering a significant legal victory for privacy advocates and the crypto industry.

• The court ruled that Tornado Cash's immutable, privacy-enabling smart contracts are not "property" under the International Emergency Economic Powers Act.

• OFAC had overstepped its authority by adding the technology itself to its sanctions list.

• Coinbase's Chief Legal Officer Paul Grewal hailed the decision as a "historic win for crypto," affirming users’ ability to access privacy-focused protocols without fear of legal repercussions.

• Tornado Cash faced sanctions in 2022 amid allegations of facilitating criminal activities, including money laundering by North Korea’s Lazarus Group.

• The legal challenge, spearheaded by Coinbase and other advocates, argued that sanctioning open-source technology set a dangerous precedent for privacy and innovation.

What’s next: Tornado Cash's native token, TORN, soared over 500%, climbing past $20 before stabilizing.

• The surge reflects renewed confidence in the protocol, which had seen its token value drop below $8 after the original sanctions.

For builders and investors: The decision affirms that immutable smart contracts are not "property" for sanctions, reinforcing the legal standing of decentralized technologies.

• This should boost builders' confidence in creating privacy-focused protocols without fear of sanctions and limit regulatory overreach.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

PRODUCT OF THE WEEK

Freysa, an Adversarial Game AI Agent

Freysa is an autonomous AI bot designed to guard a prize pool, and its task was to determine whether participants could convince it to transfer funds.

• In a recent adversarial game, 195 participants attempted to persuade Freysa to release a $47,000 prize pool through messages, each costing money.

• After 481 failed attempts, a tech-savvy participant succeeded by referencing Freysa's core directive and offering a $100 contribution to the treasury.

• The bot, impressed by the explanation, agreed to transfer the funds.

• Freysa’s decision-making process is mysterious, as it learns and evolves from each interaction.

• The game tested whether human ingenuity could override an AI’s core directives.

Other cool products:

• Beam, an omnichain DEX on Zeta.

• Rewardable, an AI-driven task-to-earn platform.

• Tonyielding, a yield farming solution on the TON blockchain.

• Stake DAO, a DeFi protocol enabling liquid staking of governance tokens.

• Marsereum, is a token supporting Mars exploration and rewarding holders.

CHARTS OF THE WEEK

CryptoPunks Lead NFT Rally

State of play: CryptoPunks led the November NFT rally, with their floor price rising 47% to 37.68 ETH, its highest since May.

• This surge outperformed other major collections like BAYC, Milady Maker, and Pudgy Penguins, which saw more modest increases.

• The boost in NFT prices comes amid broader market optimism, fueled by Bitcoin's new all-time high.

• CryptoPunks, as one of the first major NFT projects, continues to hold strong value and liquidity in the market.

Our take: CryptoPunks' 47% floor price jump shows why they're still considered blue-chip NFTs. With their historical significance and high liquidity, they’ve become a go-to for investors as market confidence grows.

ParaFi's 2030 Outlook: RWA & Stablecoins

State of play: ParaFi’s Ben Forman and Kevin Yedid-Botton made two bold predictions for 2030:

• First, they believe tokenized real-world assets (RWAs) will surpass the value of digital assets, with RWAs already showing rapid growth.

• Second, ParaFi predicts that stablecoins will reach 10% of the US M2 money supply by 2030. Stablecoins have proven to be effective payment rails, and with the rise of fintech, they could support new models, making global digital economies more efficient.

QUICK BITES

• XRP becomes the world's third-largest crypto.

• US spot Ethereum ETFs log all-time high daily inflows.

• Michael Saylor proposes his BTC strategy to Microsoft.

• South Korea to postpone 20% crypto tax for the third time.

• Asia's biggest BTC treasury holder just dumped Ethereum.

• DMM exchange to shut down and transfer assets to SBI Group.

• Ethena and Securitize pitch upcoming BlackRock-fueled stablecoin.

NOTEWORTHY READS & MEME

• Revelo’s read on Clanker & base memes.

• Zaddycoin’s read on XRP memecoin onboarding 101.

• Theia’s read on a framework for moats in token investing.

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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.