Manta’s $900M Issues & Allegations

HashKey $1.2B+ Valuation | 22,500 Crypto Developers

Marco Manoppo & Karon Pangestu
January 19, 2024

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Good Morning.

The crypto markets are inching down below $1.7T total market cap. Traders are expecting a bounce near the $34-36k level for BTC. Meanwhile, Manta airdrop is facing backlash and Ethereum restaking hype continues.

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In Today's Email:

What Matters: Manta $900M problem 👾
Founders Highlight: Nikita of Interfaced 👨‍🔬
Deal Flows: HashKey $1B+ valuation 🦄

We are now publishing airdrop alphas on our telegram!

Narratives: Still on ETH restaking farm.

WHAT MATTERS

$900M TVL Manta Faced Issues & Allegations

DDoS Attack Update on @MantaNetwork
Hey everyone, we are experiencing a calculated DDoS attack on the network. This happened at 9:30AM UTC, exactly the same time as our TGE event. Since that time, we have seen over 135m requests hit the RPC nodes, which indicates that this is a… twitter.com/i/web/status/1…
— 🤓Kenny.manta 🦇🔊 (🔱,🔱) (@superanonymousk)
1:06 PM • Jan 18, 2024

State of play: Kenny Li (@superanonymousk), the co-founder of p0x labs, the development team of Manta Network, tweeted that Manta experienced a DDoS attack exactly at the same time as its TGE event.

Manta has seen over 135M requests hit the RPC nodes.
Li claims that the incident has since been resolved but cautioned that "communication between apps and the blockchain is severely limited".
The attack is causing a slow, limited or completely inaccessible experience when interacting with the chain's apps.
At the same time, $MANTA tokens began trading on multiple exchanges, including Binance, Bithumb and KuCoin.
$MANTA saw almost $1B in volume within the first few hours of its launch and is priced at $2.15 at the time of writing.

@Cbb0fe reported that Manta’s former CTO left a few months ago and pointed out that this is the reason why the attack was not handled properly which caused the Manta airdrop page to crash.

Our investigation shows that the last time Manta / p0x labs had a CTO was in May 2023, the position was filled by Brandon Gomes.
Shumo Chu, the co-founder of p0x labs who has a PhD in Computer Science also left Manta in October 2023.
The co-founders remaining at Manta are Kenny Li and Victor Ji, both of whom are business school graduates.

However, a Korean Telegram group called 변창호 코인사관학교 (Byeon Chang-ho Coin Military Academy) suspected that the Manta team is benefiting from this incident, this was also reported by Definalist.

2M $MANTA (75% of Bithumb’s total circulation) were deposited on Bithumb, and on-chain analysis revealed that most of these were deposited by Su Min Kwon, Manta’s Korea BD.
Su Min Kwon recently joined Manta in September 2023 and was part of TZ APAC from 2021-2023 and Sandbox in 2023.
An additional distribution of 1.1M MANTA was made to Su Min Kwon's wallet, but it hasn't been deposited to Bithumb yet.
Within 5 minutes of listing, MANTA price at Bithumb soared to $230
and Kwon dumped 2M Manta. Kwon then swapped all of the money to Ethereum and transferred 2,094.7 ETH (~$5M) to her personal wallet.
The Telegram group states that under South Korean law, recipients of coin compensation must declare taxes, warning of potential probes and severe penalties if allegations are confirmed.

Why it Matters: $900M of ETH liquidity is locked in Manta — they’re waiting to get out and the outcome will certainly impact the market.

For builders and investors: Be careful when participating in any airdrop incentive programs — if done right, it can be a great user acquisition tool, but Manta clearly did it poorly.

IN PARTNERSHIP WITH

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BUILDER-INVESTOR HIGHLIGHT

Nikita Kudryavtsev of Interface Labs

Nikita Kudryavtsev

Nikita Kudryavtsev is the co-founder of Interface Labs, a mobile-first, highly readable block explorer enhanced with social features.

Previous backgrounds: Interface Labs was founded in early 2022. Before Interface Labs, Nikita founded two startups and worked as a developer for four years.

He studied software engineering at Codeworks.

The big idea: Ethereum offers limitless possibilities, but navigating its extensive information can be overwhelming. That is the reason why Nikita created Interface, a companion to explore Ethereum.

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 👇

INSIGHTS

Electric Capital’s 2023 Developer Report

Electric Capital - @0xSushiKev

Electric Capital recently released a “Developer Report,” an analysis of 485M code commits in 818k open-source repositories.

Here are quick summaries of the summary by @0xSushiKev:

~22.5K open-source developers are actively contributing to crypto, less than 0.1% of the estimated global total of 27.7M.
During the bear market, some developers left but experienced developers who remained contributed 75% of the code.
Despite ~52% of new developers leaving due to limited jobs in the recent bear market, nearly twice as many joined compared to the last, showing positive growth.
Most multi-chain developers (87%) don't yet work on non-EVM chains.
50% of DeFi developers work on either DEXs or stablecoins.
North America's developer share is declining, partly due to uncertainty and also due to significant growth in Asia, Europe, and Africa.

DEAL FLOWS

HashKey Raises $100M at $1.2B+ Valuation

HashKey on X

Deal flows soared this week, we saw $200M+ in deals 📈

HashKey Group, the operator of Hong Kong's two licensed crypto exchanges, raised nearly $100M, reaching a unicorn status with a valuation of over $1.2B.

HashKey said that existing and new investors contributed to the funding but refrained from identifying them.
Reportedly, OKX Ventures is one of the lead investors in this round.
The funding will be used to build a Web3 ecosystem and licensed products in Hong Kong.

Deal flows in the past week:

Wield, $1M Pre-Seed Round
Rome Protocol, Undisclosed $ Pre-Seed Round
Renzo, $3.2M Seed Round
0xScope, $5M Series A
DIMO, $11.5M Series A
HashKey, $100M Series A
Kiln, $17M Series A+
Flowdesk, $50M Series B
AOFVerse, $3M Private Round
SkyArk Chronicles, $15M Private Round
Canza Finance, $3.2M Strategic Round
BeWater, Undisclosed $ Strategic Round
Linkko, Undisclosed $ Strategic Round
MAP Protocol, Undisclosed $ Strategic Round
WOO X, $9M Unknown Round

QUICK BITES

Frax Layer 2 to debut in February.
Trump said he won’t allow CBDC if elected.
Tether becomes the 11th-largest BTC holder.
Jamie Dimon bashes Bitcoin again: 'a pet rock.'
Hong Kong VSFF aims for spot Bitcoin ETF in Q1.
SEC delays decision on Fidelity's spot Ethereum ETF.
US Judge questions SEC limits during Coinbase hearing.
Bitcoin surpasses silver, becomes 2nd largest commodity ETF.
Ethereum devs implement Dencun Upgrade on Goerli Testnet.
China forms metaverse working group with Huawi, Tencent, etc.
Chainalysis reports that crypto crime was down by 29% in 2023.
Treasury call for action from US policymakers to regulate crypto.
South Korea President urges regulator to reconsider spot Bitcoin ETF.

NOTEWORTHY READS

Patrick Mayr’s read on the DeSci value chain.
Foobar’s read on batch transactions for EOAs.
Decentralised’s read on the solana ecosystem.

Satashi
(Photograph by @jpmorgan)
— BoldLeonidas 🧙‍♂️ (@boldleonidas)
3:48 AM • Jan 18, 2024

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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.