FTX to Sell $3 Billion+ Crypto

EigenLayer $240M TVL | Binance Pendle Investments

Marco Manoppo & Karon Pangestu
August 25, 2023

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Good Morning,

FTX lawyers are charging ~$1.5M a day, or ~$550M annualized. The misaligned incentives between FTX creditors and lawyers (current management) are increasingly apparent.

To make matters worse, concerning details regarding FTX US solvency re-emerged, and over the weekend, personal details of creditors were allegedly leaked.

Maybe… just maybe, that it’s not a good idea to engage non-crypto natives when handling crypto assets?

In Today's Email:

What Matters: FTX to sell billions 📉
Founders Highlight: Jon Ma of Artemis 🏹
Deal Flows: Binance invests in Pendle 💰

Narratives: If you really need to find some market action, checkout derivatives of Friend Tech and crypto-backed stablecoin yield (sDAI, etc.)

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WHAT MATTERS

FTX Taps Galaxy to Sell Crypto

Kroll - FTX August 23 Case Update

State of play: According to court filings, FTX plans to return funds to creditors in dollars without diminishing the value through staking illiquid assets and hedging major assets as it liquidates its $3.8B crypto holdings.

FTX is also seeking to hire Galaxy Asset Management, an SEC-approved investment adviser, as an adviser in the liquidation process.
Galaxy as FTX’s investment adviser outlines the plan in the filings to sell $100M-$200M of the crypto holdings each week.
According to the restructuration portal, Kroll, the hearing is scheduled for 13 September and the Bar Date is September 29.

North Rock Digital, a Digital Assets hedge fund, reports the estimated figure on FTX’s crypto holding:

52M $SOL
16K $BTC
71K $ETH
24M $APT
507M $DOGE
44M $MATIC
$319M Stablecoin

However, the $SOL owned by FTX is locked and subject to linear vesting through 2025-2027. Thus, making it illiquid.

Why it matters: Releasing the SOL held by FTX from their lockup could result in disturbances if 52 million SOL were suddenly dumped into the market.

SOL has a circulating supply of 407.9M and a max supply of 555.64M SOL. Thus, FTX controls ~12.5% of the SOL current circulating supply.

For builders and investors: Be cautious as if this agreement gets approved, there’ll be consistent selling pressures on the crypto market for the next few months.

BUILDER-INVESTOR HIGHLIGHT

Jon Ma, CEO and Co-Founder of Artemis

@jonbma

Jon Ma is the CEO and Co-Founder of Artemis, an institutional data platform for digital assets that tracks and compares on-chain data.

Jon Ma shares weekly analysis on the state of L1s and crypto fundamentals through Artemis’ Substack.

Previous backgrounds: Jon Ma attained a Bachelor's degree in Economics, Machine Learning, and Statistics from Princeton University, followed by the successful completion of an MBA at Harvard University in 2021.

Jon worked as an analyst at Whale Rock Capital Management from 2021-2022
In 2019 he founded Public Comps, a SaaS investing platform, where he is still active as an advisor.
He founded Artemis in 2022.

The big idea: Artemis offers critical onchain metrics across blockchains. The company aims to democratize crypto investing by providing accessible research and analysis for selecting tokens to invest in.

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

EigenLayer Approaches $240M TVL

@Mega_Fund

Eigenlayer's re-staking limit of 100K ETH or $165M was quickly filled when it opened, growing the protocol’s TVL from $78M to $238M.

EigenLayer is an Ethereum re-staking protocol, EigenLayer's main function is to re-stake stETH, rETH and cbETH.
This shows a strong demand for the re-staking market and LSDfi.
In March, EigenLabs, the group behind EigenLayer, closed a $50M Series A funding round led by Blockchain Capital.

DEAL FLOWS

Binance Labs Invests in Pendle

Binance

Deal flows remained strong this week 🤝 — we saw almost no deals.

Pendle, a yield derivative protocol, enables the tokenization and trading of future yield. The amount of investment from Binance Labs was undisclosed.

The investment will be used by Pendle to expand across more blockchains.
Currently, Pendle backs a total of 25 pools that encompass 3 blockchain networks: Ethereum, Arbitrum, and BNB Chain.
Pendle also recently implement RWA pools, offering up to 60% APY from the sDAI and fUSDC pools.

Deal flows in the past week:

Drip, $3M Seed Round.
Delphinus Labs, Undisclosed $ Private Round.
Maple Finance, $5M Strategic Round.
LuminaDEX, Undisclosed Strategic Round.
Pendle Finance, Undisclosed $ Investment by Binance Labs.

QUICK BITES

Bitstamp to stop US crypto staking service.
Shopify integrates USDC via Solana pay.
FTX taps Galaxy to sell its crypto billions.
Mastercard and Visa step back from Binance card partnerships.
Polygon CLO challenges SEC’s unregistered securities designations.
Coinbase in talks with Canadian banks to promote crypto.
Ex-OpenSea PM sentenced to three months in prison.
The UK considering a ban on cold calls over crypto products.
Tornado Cash’s Storm arrested by the FBI.
FTX, BlockFi claimant data compromised in Kroll ‘cybersecurity incident’.

MEME & NOTEWORTHY READS

Ark Invest’s read on Cointime Economics.
Compound VC’s read on decentralized energy grid.
Coinbase’s read on Base commitment to decentralization.

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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.