Scroll’s SCR Debut & Airdrop Controversy

ACX Proposes Supply Cap | PumpFun Nears 1M SOL in Fees

Marco Manoppo & Karon Pangestu
October 23, 2024

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Good Morning.

The crypto market is slightly down but CME BTC futures OI is hitting an all-time high, signaling that the market is really trying hard to break upward from the sideways range, but we might be rushing it given the leverage-driven rally.

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In Today's Email:

What Matters: Scroll SCT Debut & Airdrop Controversy 📜
Case Study: Across Proposes Supply Cap 📃
Governance & Features: Sky Considers Reverting to MakerDAO 🔙

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WHAT MATTERS

Scroll’s $SCR Debut & Airdrop Controversy

Source: Scroll

State of play: Scroll's $SCR token had a volatile debut, initially trading at $1.40 before dropping to ~$1.10, leaving it with a $212M market cap. SCR's FDV is set at $1.1B, with SCR intended to serve as a governance token and potentially evolve into a utility token.

Scroll's announcement of its SCR token airdrop has frustrated many users due to its token distribution design.

The airdrop will distribute 7% of SCR’s total supply, with 5.5% going to over 570,000 wallets, including contributors and on-chain participants.
Meanwhile, 40M tokens will be allocated based on "marks" earned by participants.
Users have criticized the large allocation given to Binance Launchpool (5.5% of the supply) allowing Binance and BNB whales to grab tokens early.
Critics also noted that the top 10 wallets hold more than 10% of the marks, raising concerns about decentralization.
Additionally, 23% of the supply is allocated to the Scroll team, which users argue undermines the fairness of the distribution aimed at rewarding loyal users.
Scroll co-founder Sandy Peng clarified that team members and co-founders would not receive airdrop tokens, aiming to address growing concerns.
Nevertheless, the token has garnered more than 200,000 holders and recorded $189M in trading volume, with Binance showing robust liquidity.

What’s next: Scroll needs to manage community sentiment and potential centralization concerns while developing SCR’s governance and utility functions.

Why it matters: With SCR serving as a governance token, perceptions of unfair token distribution could undermine user engagement and the decentralization of the protocol.

Our take: Scroll missed its most ideal TGE window, which is a critical mistake for a crypto project.

For builders and investors: TGE timing is very important. See below.

TGE timing is so much more for crypto project important these days
I think what this cycle taught us is that altcoins liquidity are no longer the same as 2017 or 2021 peak
it remains to be seen if 2025 will be the same thing, but without a shiny new toy for retail to play with… x.com/i/web/status/1…
— Marco Manoppo (@ManoppoMarco)
8:00 PM • Oct 21, 2024

CASE STUDY

Across Proposes $ACX Supply Cap

Source: Snapshot

Across Protocol has proposed capping the ACX token supply at 1B after LayerZero Labs CEO Bryan Pellegrino raised concerns about the token contract.

Pellegrino flagged a function allowing the owner to burn tokens from any wallet.
He also
criticized the potential for infinite token minting in Across and UMA Protocol contracts.
Initially dismissing the claims as fear-mongering, Across co-founder Hart Lambur later acknowledged the design.
The proposal is backed by 99.5% of the community in a temperature check vote.
ACX is down 4% following the controversy.

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INSIGHTS

PumpFun Nears 1M SOL in Fees

Source: Dune - @jhackworth

Solana token issuer PumpFun has accumulated nearly 1M $SOL in lifetime fees, driven by strong demand for token creation services.

Since its launched in March, 2.5M+ tokens have been launched using PumpFun.
7,500 tokens were issued in the last 24 hours alone.
Pump’s Active addresses surged to 85,000, including 37,000 new wallets.
Pump's creators have profited significantly, selling over $78M worth of SOL.
The platform, which charges less than $2 to issue tokens, has generated $147M in revenue, making it one of the most profitable crypto startups.

FEATURES & GOVERNANCE UPDATE

Sky Considers Reverting to MakerDAO Brand

Success of the USDS Launch and the opportunity to recenter the Maker brand
It’s been 8 weeks since Sky was introduced as the best protocol for saving and growing your crypto and about a month since the new brand and functionalities went live.
In that short time we’ve seen a lot… x.com/i/web/status/1…
— Rune (@RuneKek)
3:19 PM • Oct 21, 2024

Stablecoin-focused DeFi protocol Sky, formerly MakerDAO, is contemplating further brand changes after receiving community feedback on its recent rebrand. Sky founder Rune Christensen presented three options for the community:

Keep Sky as the core brand, revert to the Maker identity, or reintroduce Maker with slight adjustments.
Community members have raised concerns over the utility of the new SKY token, preferring to hold MKR.
Sky will hold a community call on Friday to discuss the proposals, with a vote set for October 28.

Other notable feature updates:

World Chain is live on mainnet.
CrossFi has launched its mainnet.
Hyperlane has introduced Superlane.
Osmosis has introduced Osmosis Pay.
Caldera has announced the launch of ApeChain.
World Liberty Finance has commenced its token sale.
Unichain is now live on the Uniswap interface in testnet mode.
deBridge announced the upcoming launch of the DBR token on LFG.
DeepBook Protocol has launched DeepBook V3 and the DEEP token.

QUICK BITES

Sky considers changes to brand identity.
CME BTC futures set a new ATH open interest.
Komainu plans to acquire crypto custodian Propine.
Magic Eden adds support for BeraChain and ApeChain.
Transak disclosed a data breach affecting 57,000+ users.
BIS highlights risks in TradFi's move towards tokenization.
Japan's DPP leader pledges a 20% tax cap on crypto gains.
Tether is 'doubling down' on communication and transparency.
Rep. French Hill remains hopeful for crypto legislation before EOY.
Bitcoin mining difficulty hits new ATH amid record network hash rate.
Legal & General mulls tokenization of its $1.5T asset management arm.
Across proposes capping token supply after L0 flags contract concerns.

NOTEWORTHY READS & MEME

0xBread’s read on parallelization.
Vitalik’s read on the possible future of ETH, part 4.
Pantera Capital’s read on crypto’s role in the AI revolution.

Born to be a builder. Forced to be a KOL
— 0xWenMoon 💙🧡 (@0xWenMoon)
7:05 AM • Oct 23, 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.