David Canellis

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Kanye West. J.K. Rowling. Woody Allen. Some find it nearly impossible to separate art from artist.



Crypto markets are struggling with something similar about Solana. While there are all sorts of use cases for the chain that don’t have anything to do with highly manipulated memecoins, SOL is still getting punished for the LIBRA debacle — which all happened on Solana.



Since LIBRA insiders pumped and dumped the coin on Friday evening (supposedly to <a href="https://blockworks.co/news/libra-memecoin-sausage-gross">outsnipe the snipers</a> waiting to capitalize first), SOL has tanked by as much as 18%.



It’s rebounded slightly since but the damage is clear, especially considering BTC and ETH are mostly even over the same period. SOL now has a $83.4 billion market cap, just over half that of XRP.



Meteora is tied to both Jupiter — though it’s said that the two have been positioned independently over the past year — and LIBRA. JUP, the native token for Solana DEX aggregator Jupiter, has also shed as much as 24%.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfUhy5p_b413tBM0t9o3mP24arRq7RoOF69aRpkIrMs6t7Fu8LqA5aGJXM-U04MhEeZ5HkJMV-CNKnuJwntLu68XyoTTOEw38ZxYBYG3xpqUDSx75DuI_kPxu5i9wqopYuNI99ldA?key=NsXOV3_qihTu7KComdTDSng6" alt=""/></figure>



The chart above plots price action for six coins throughout the LIBRA launch starting almost two days earlier: TRUMP (orange), MELANIA (yellow), ETH (green), SOL (purple) and JUP (pink).



LIBRA’s market cap is otherwise shown by the blue area in the front.&nbsp;



What’s peculiar is that TRUMP, JUP and MELANIA rallied hard leading up to LIBRA’s sudden appearance, with the former reaching as high as 54% just four hours before LIBRA launched, and JUP as much as 17%.&nbsp;



Those trajectories changed one or two hours before LIBRA hit the chain and have been trending downward ever since the scandal broke out.&nbsp;



Jupiter, in a <a href="https://x.com/JupiterExchange/status/1891181433588470052">statement</a> on X, described plans to launch LIBRA as an “open secret in memecoin circles.” The team says it has conducted an internal investigation and found no evidence of insider trading.



We’ll probably never know if the pre-LIBRA pumps were coincidences. But it’s obvious that the market finds it all convenient enough to bundle them all together under one roof — the Solana memecoin complex, as Galaxy’s Thorn put it — and it’s indeed valued much lower than before, at least over the short term.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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Crypto market no longer able to separate memecoins from Solana

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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If a thriving blockchain ecosystem were a recipe, the ingredients would go something like this:



<ul class="wp-block-list">
<li>One consensus mechanism</li>



<li>Four DeFi apps*</li>



<li>A driven founder/figurehead</li>



<li>One native stablecoin (at least)</li>



<li>Two legal entities (dev studio and foundation)</li>



<li>One token bridge (minimum)</li>



<li>Three terminally online reply guys</li>
</ul>



The secret ingredient would be one or more of the following: funding rounds, mid-cap memecoins, NFT collections, active VC funds and third-party validator clients.



*Minimum required DeFi apps: DEX w/ token launchpads, lending/collateralized debt, liquid staking, oracle



So, while there are now hundreds of smart contract platforms with halfway decent market capitalizations, not all are buzzing to quite the same degree as the majors — Ethereum, Solana and BNB.



Case in point: XRPL, which has all but $63 million <a href="https://defillama.com/chain/XRPL">TVL</a> in its onchain apps. Ripple Labs is right now working hard on finishing its own recipe, more than 12 years after its launch.



Starting easy, XRPL does have the consensus mechanism, albeit without the usual staking or mining, instead relying on trusted validators. And it already has a few token bridges.



There are also two legal entities: the San Francisco-headquartered Ripple Labs and the Estonian non-profit XRP Ledger Foundation, which was recently <a href="https://xrpl.org/blog/2024/evolving-the-xrp-ledger">rebranded</a> to the Inclusive Financial Technology Foundation.



Ripple Labs CEO Brad Garlinghouse obviously ticks the box for driven founder-slash-figurehead.



As for the reply guys, David Schwartz, Ripple Labs’ long-serving CTO, has built a following on solid <a href="https://x.com/JoelKatz/with_replies">reply</a> guy energy (check).



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcjHp4yM7YokZsMXlYr7xqLGcxzwWDssl8W-bNLlnUo36AzSf-FdkUXxBaK46uiE-Gx6KuuraefqfKPb5Gk0ZGZaNk7ZUg_dq2WQro1mR39myFjtvfWE4mzHVdJ6jwox5aF11FNuA?key=3EbJpl66pmtt39sBTheYnS8N" alt=""/><figcaption class="wp-element-caption">Every major blockchain could do with a David Schwartz</figcaption></figure>



And anyone who has ever tweeted anything remotely critique-adjacent has likely been visited by the XRP Army — which together truly harnesses the power of much more than just two reply guys (check check).



That leaves the four DeFi apps and a native stablecoin.&nbsp;



XRPL currently has <a href="https://dappradar.com/rankings/protocol/xrpl">four</a> DeFi apps with 100 unique active wallets interacting with them daily right now — but three of them are DEXs and one is an NFT marketplace. As of last month, it does have a <a href="https://xrpl.org/docs/concepts/decentralized-storage/price-oracles">native</a> oracle, which should help to attract builders.



And conveniently, XRPL is the exception to the rule (with no direct staking XRP as part of consensus), so it can do without the liquid staking app in any case.



The only ingredients then left are a bustling lending protocol and a native stablecoin.



Luckily, a stablecoin is very much on the way: Ripple USD (RLUSD), which the New York State Department of Financial Services just <a href="https://x.com/bgarlinghouse/status/1866571228464460215">approved</a> for offering.



It’ll be structured similarly to Circle’s USDT and Tether’s USDT, backed by cash and equivalents (mostly short-dated US Treasurys).



With XRPL so close to acquiring all the necessary ingredients to really pop, it’s no surprise then that DeFi veteran Robert Leshner is now <a href="https://www.dlnews.com/articles/defi/robert-leshner-is-looking-to-back-defi-projects-on-ripple/">open</a> to backing projects building out the Ripple ecosystem via his fund (VC bonus point get!).



The pièce de résistance for XRPL would then be a roster of its own mid-cap memecoins, as is traditional fare.&nbsp;



Like it or not, those are <a href="https://dexscreener.com/xrpl?rankBy=trendingScoreH24&amp;order=desc">cooking</a> too, although the biggest of which is an XRP Army-themed coin with a $45 million market cap (still too small).&nbsp;



The bright side: Only $15 million in tokens were <a href="https://dexscreener.com/xrpl?rankBy=trendingScoreH24&amp;order=desc">traded</a> on XRPL in the past day. Should RLUSD find decent traction, watch that number only go up from here to fully round out the recipe.&nbsp;



Bellisimo!



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Ripple could still nail this magic blockchain recipe

Jack Kubinec

Jeff Albus

Hiya!



Markets may be down slightly, but that’s not the main thing bumming me out today. Last night, I took a train all the way up to Queens just to see the Mets blow a 9th-inning lead. What even is a “Phillie?”



Anyways, let’s talk Solana.



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<h2 class="wp-block-heading">Pandora’s Box of L2s</h2>



Solana’s lack of layer-2s has long been a point of pride for some Solana supporters.&nbsp;



Rather than relying on a fragmented and expanding network of blockchains to scale à la Ethereum, why not just move to a blockchain fast and cheap enough to keep everyone in the same building?



But since fast things can always be faster, and cheap things cheaper, the layer-2 bug appears to be coming for Solana.&nbsp;



Zeta Markets announced a $5 million raise Tuesday, partially to build a DeFi layer-2 on Solana. Electric Capital led the round, which added to the $8.5 million Zeta Markets raised in a 2021 seed round led by Jump Capital.&nbsp;



Zeta Markets currently runs a regular derivatives DEX — the fifth-largest on Solana, <a href="https://defillama.com/protocols/Derivatives/Solana">according</a> to DefiLlama. By adding a layer-2 to the mix, it wants to make its DEX as fast as a CEX.



Zeta Markets founder Tristan Frizza told me that he’s always been a “monolithic chain maxi,” but when you’re letting traders take big leverage on derivatives, market makers want to see some really low latency.



“Solana does what, 400 millisecond block times? But these guys are used to like 10 milliseconds on Binance,” Frizza said.



Off-chain centralized exchanges can basically figure out the price of assets faster than decentralized exchanges, which are slowed down by the underlying blockchain’s throughput. In some cases, savvy arbitrageurs can exploit the momentary differences in price — <a href="https://blockworks.co/news/bell-curve-lvr-defi-liquidity-providers-unfair">to the detriment</a> of DEX liquidity providers.&nbsp;



So, there are justifiable reasons beyond snake oil sales for why Solana would want to build layer-2s. Still, it bears notice that Solana co-founder Anatoly Yakovenko — who invested in this Zeta Markets round — <a href="https://blockworks.co/news/lightspeed-yakovenko-layer-2-scaling">appeared on Lightspeed</a> in August asserting that having too many layer-2s can create massive composability and user experience problems. Other notable Solana ecosystem angel investors also took part in Zeta’s round.



Perhaps this signals that Solana’s thought leaders are softening toward rollups.&nbsp;



Zeta’s layer-2 is set to launch in the first quarter 2025, The Block <a href="https://www.theblock.co/post/294284/solana-dex-zeta-markets-token-funding-round">reported</a>. By then, I wouldn’t be surprised to see other Solana projects following suit.



— Jack Kubinec



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<h2 class="wp-block-heading">Zero In</h2>



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1600" height="963" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png" alt="" class="wp-image-85890" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=434 434w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=364 364w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Solana&#8217;s fee generation looks to be rapidly closing the gap with Uniswap. Over the past year, Uniswap&#8217;s fees stand at $751.193 million, while Solana&#8217;s reach $185.173 million; that&#8217;s about $14.446 million and $3.562 million per week, respectively.&nbsp;



However, Solana&#8217;s fees have risen sharply over the past week to $10.078 million, nearly matching Uniswap&#8217;s $12.260 million. Interest in the Solana network continues to increase, thanks at least in part to Solana&#8217;s high network uptime, low transaction fees, and ever-increasing user adoption in the DeFi and NFT segments.&nbsp;



If this trend continues, Solana could soon surpass Uniswap in fee generation. This rise suggests growing network usage and transaction volume, which — while positive for Solana&#8217;s ecosystem — could also mean higher costs for users​.



— Jeffrey Albus



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<h2 class="wp-block-heading">The Pulse</h2>



If you&#8217;ve ever spent time exploring Solanaland, you&#8217;ve probably come across the term OPOS — Only Possible on Solana. And while this may sound exaggerated to the uninitiated, it is true that certain innovations are indeed only achievable within the Solana ecosystem. Well, for the most part&#8230; kind of&#8230; at least for now.



The idea isn&#8217;t so much that other blockchains can&#8217;t do what Solana is capable of, full stop. It&#8217;s more that there are a lot of things that other chains just can&#8217;t do quite so well.&nbsp;



For instance, Solana&#8217;s state compression technology drastically reduces the cost of storing data on-chain. That makes large-scale transactions far more feasible, and is why projects like Drip Haus are able to affordably distribute millions of NFTs to users across the ecosystem. Other blockchains, which famously struggle with scalability and high fees, would have a tough time developing similar projects.



Projects like Hivemapper and Helium also benefit from Solana&#8217;s high throughput and low costs in support of their decentralized mapping and community-powered 5G services. This is yet another area where transaction speeds and costs hinder the practical implementation of such large-scale decentralized applications for most other chains.



But while Solana holds the advantage in these areas for now, there is little reason to believe it will stay that way forever. Competing networks are assuredly taking notes on what is and isn&#8217;t working across Web3, and may soon develop similar or even superior capabilities. So the question is: Will Solana be able to keep up with these challenges over the long term? Anything is possible.



— Jeffrey Albus



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<h2 class="wp-block-heading">One Good DM</h2>



An excerpt of our chat with Sam Lehman, principal at Symbolic Capital:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="550" height="628" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png" alt="" class="wp-image-85886" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=550 550w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=263 263w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=225 225w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=229 229w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=192 192w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=70 70w" sizes="auto, (max-width: 550px) 100vw, 550px" /></figure>



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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Lightspeed Newsletter: Solana caught the layer-2 bug

Bessie Liu

Antonio Villaraigosa, the former mayor of Los Angeles, has been hired as a policy adviser for Coinbase.



Villaraigosa, who served as the mayor of LA between 2005 and 2013, will join the cryptocurrency exchange’s global advisory council.



Faryar Shirzad, the chief policy officer at Coinbase, <a href="https://twitter.com/faryarshirzad/status/1785680450410750328">wrote in a post on X </a>that Villaraigosa will advise the leadership team at Coinbase to advance “economic freedom around the world.”&nbsp;



“When 18% of America is underbanked, including 25% of Black &amp; Hispanic households, it means the traditional financial system doesn&#8217;t work for everyone. It&#8217;s time to update the system,” Shirzad wrote.



According to the LA Times, Villaraigosa will not lobby on behalf of the global exchange but will only advise the company on developing a fair and robust regulatory framework so that it can provide services for US-based customers, noting that crypto participants “need regulatory protection.”



<h2 class="wp-block-heading">Paradigm special counsel leaves&nbsp;</h2>



Rodrigo Seira, the special counsel of the crypto-focused venture capital firm Paradigm, has resigned and returned to Cooley LLP, a law firm where he previously worked.



Seira served at Paradigm for two and a half years and helped spearhead the company’s policy lab. He was also a founding member of blockchain and crypto-focused law firm DLX Law.



<h2 class="wp-block-heading">Former Citibank executive joins BitGo</h2>



Brett Reeves, a former Citibank executive who has been in the banking industry for over two decades, will join BitGo, a scalable wallet solution, to expand EMEA Sales.



Reeves most recently held the position of head of business development at Bequant, a digital asset prime broker. He previously held roles at Citibank, Nomura and Standard Chartered Bank in Singapore.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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Hiring roundup: Former LA mayor joins Coinbase

Katherine Ross

“It is time” for <a href="https://blockworks.co/tag/blockfi">BlockFi</a> creditors to know what BlockFi was and who former CEO “Zac Prince truly is,” BlockFi’s Official Committee of Unsecured Creditors said in a new court filing.&nbsp;



The UCC is pushing for the court to either appoint a Chapter 11 trustee, terminate the exclusivity periods for the debtors or convert the cases to Chapter 7 proceedings.&nbsp;



Voyager, Celsius and even FTX customers understand the majority of what happened to the respective companies through the collapses. However, the UCC argues, BlockFi customers do not yet have a clear understanding of <a href="https://blockworks.co/news/blockfi-bankruptcy-exit-plan">what happened which is “facilitating case mischief.”</a>



$16 million per month is being burned on BlockFi’s cases, according to the filing.



A Chapter 11 trustee is necessary, the UCC says, because “the Investigative Report reveals, in great detail, that BlockFi (Mr. Prince in particular) perpetrated a fraud on customers.”



Read More: <a href="https://blockworks.co/news/how-blockfi-went-from-tech-unicorn-to-crypto-burnout">How BlockFi Went From Tech Unicorn to Crypto Burnout</a>



BlockFi’s debtors also “broke their own promises to customers by liquidating nearly $240 million in customers’ crypto.”



However, the Court could also open up the plan exclusivity. The UCC claims that BlockFi took too long to propose a plan — with the cases lasting seven months, with <a href="https://blockworks.co/news/blockfi-reorganization-plan-approval">two plans “dead on arrival.”</a>



The UCC also claims that the debtors “resorted to their illegal and utterly cockamamie solicitation (smear) campaign a month ago” which “spread lies” to the customer base — spanning over 600,000 investors — and skirted the UCC.



And, finally, the court could convert the case to a Chapter 7 case. 



A Chapter 7 would allow for the liquidation of a “debtor’s nonexempt property and the distribution of the proceeds to creditors,” <a href="https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics">according</a> to the US courts. 



UCC says that mediations have now failed, and both the debtors and the UCC are “at a complete standstill” and the debtors “shill” for the insiders — which would include Prince.



This is not the first time that the <a href="https://blockworks.co/news/blockfi-halts-plan-to-return-crypto">debtors and creditors have had public disagreements</a>. In February, debtors accused the creditors of being “divorced from reality” and the creditors accused the debtors of throwing a “temper tantrum.”



Last week, the <a href="https://blockworks.co/news/sec-foregoes-blockfi-penalty">SEC announced that it would</a> “forego” the $30 million penalty from BlockFi until investors have been repaid. The bankrupt lender <a href="https://blockworks.co/news/blockfi-customer-withdrawals-summer">plans to open up customer withdrawals</a> sometime this summer. 



BlockFi <a href="https://blockworks.co/news/blockfi-files-for-bankruptcy">filed for bankruptcy in November of last year</a> after FTX collapsed.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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BlockFi’s UCC claims former CEO Zac Prince ‘personally profited’ from company

Michael Bodley

In its latest foray into the cryptocurrency industry, asset management giant Franklin Templeton is exploring the world of blockchain private equity.



An SEC filing on Tuesday registered the Franklin Templeton Blockchain Fund II with the US financial regulator — one key indicator that the firm is looking to raise institutional capital for the new commingled vehicle.&nbsp;



Franklin Templeton representatives designated the vehicle as a private equity fund with the SEC. This is a separate categorization from a liquid cryptocurrency hedge fund setup, for instance. The private equity fund also differs from a blockchain-focused venture capital vehicle, which <a href="https://blockworks.co/news/franklin-templeton-prepping-blockchain-fund">the asset manager previously established</a> in the fourth quarter of 2021.



A spokesperson for Franklin Templeton declined to comment on Wednesday, citing private placement regulations.&nbsp;



This is the latest move into institutional crypto products by the firm’s institutional investment arm. Its <a href="https://blockworks.co/news/franklin-templeton-preps-first-institutional-crypto-accounts">crypto separately managed account (SMA) push</a> started taking shape in the fourth quarter of 2022.&nbsp;



Franklin Templeton, which oversees some $1.4 trillion in assets under management, has also gotten involved in other crypto-related products, including <a href="https://blockworks.co/news/stellar-foundation-head-bullish-stablecoin-law">its money-market fund that taps the Stellar blockchain’s tech stack</a>. More recently, the asset manager moved to tokenize one of its funds on Polygon, The Defiant <a href="https://thedefiant.io/templeton-money-fund-polygon">reported</a>. 



Specific strategy details and fundraising aspirations of the private equity-focused Franklin Templeton Blockchain Fund II remain under wraps. However, the SEC filing indicates that the vehicle imposes a $100,000 minimum on its investors.&nbsp;



Interest in industry private equity plays more broadly appears to be holding strong on the heels of <a href="https://blockworks.co/news/10t-tapiero-launching-crypto-firm">a number of substantial new raises earlier this year</a>.&nbsp;



Generally speaking, limited partners in private equity investments often exceed minimum investment amounts in their contributions. However, the six-figure minimum investment for Franklin Templeton Blockchain Fund II is relatively modest compared to traditional asset classes in conventional private equity.



That said, cryptocurrency market capitalizations and related private investment opportunities point to opportunities to deploy relatively small sums of capital for potentially outsized returns, industry participants say.&nbsp;



Franklin Templeton’s fund, according to the filing, is not intended to remain open for longer than a 12 month period.&nbsp;



It comes as crypto markets, on the whole, have continued to mark a 2023 upswing.



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Blockchain Private Equity Fund Franklin Templeton’s Latest Crypto Ambition

Sebastian Sinclair

Bitcoin sprung to life Wednesday, pushing the majority of holders into profit — and propelling traders into the green across derivative and spot cryptocurrency plays.



Digital assets’ direction has been pivoting with regulation in the works, digital asset services firm Bit0oda told Blockworks. It&#8217;s not the only factor at play. 



“On the long-term path toward realizing crypto’s long-term potential, the crypto ecosystem could see regulatory volatility through 2023,” the firm said in a statement.&nbsp;



Not to mention that earnings season has slowed with the February Federal Reserve meeting fading into the rearview mirror. And then there’s the matter of trader chatter kicking up around Hong Kong’s move to bring crypto service providers into the same regulatory fold as traditional financial players.  



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true">On June 1st, 2023, Hong Kong will officially make crypto purchase &amp; sell, trading, fully legal for all of its citizens Expect a huge influx of big money from the East Asian currency based stablecoin coming out of HK will be a certainty as well&mdash; Crypto熊猫 (@NoodleofBinance) <a href="https://twitter.com/NoodleofBinance/status/1625941125487017989?ref_src=twsrc%5Etfw">February 15, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Bullish sentiment related to Hong Kong and spreading appears to be based on publicly available information from December. Hong Kong regulators have <a href="https://www.coindesk.com/policy/2023/01/11/hong-kong-to-propose-approved-set-of-crypto-tokens-for-retail-trading-reuters/" target="_blank" rel="noreferrer noopener">rolled</a> out a <a href="https://www.coindesk.com/consensus-magazine/2023/01/25/asia-crypto-regulation/" target="_blank" rel="noreferrer noopener">number</a> of other crypto initiatives — including a<a href="https://blockworks.co/news/hong-kong-contemplates-ban-on-algorithmic-stablecoins"> proposal to ban algorithmic stablecoins</a>. That centered on the government’s legislative <a href="https://www.info.gov.hk/gia/general/202301/09/P2023010900250.htm" target="_blank" rel="noreferrer noopener">framework</a>, slated to take effect June 1, which seeks to allow certain crypto service providers under the same <a href="https://www.cr.gov.hk/en/publications/docs/es32022262516-e.pdf" target="_blank" rel="noreferrer noopener">regulatory</a> umbrella as banks.&nbsp;&nbsp;



It comes as US-based Interactive Brokers has <a href="https://www.coindesk.com/business/2023/02/15/interactive-brokers-rolls-out-btc-eth-trading-to-professional-investors-in-hong-kong/" target="_blank" rel="noreferrer noopener">moved</a> to team up with crypto exchange OSL Digital Securities in a joint Hong Kong crypto push.&nbsp; Regional bitcoin flows from North America to Eastern Asia rose to $7.7 million over a seven-day average, indicating some traders had begun to move assets from region to region, Chanalysis <a href="https://markets.chainalysis.com/?range=30&amp;asset=BTC#demand-exchange-flows" target="_blank" rel="noreferrer noopener">data</a> show.



The industry’s total market cap spiked 6.8% on Wednesday alone, according to <a href="https://www.coingecko.com/en/global-charts" target="_blank" rel="noreferrer noopener">CoinGecko</a> data — from around $1.07 billion to $1.15 billion on the day.



<h3 class="wp-block-heading">Options, options</h3>



There’s also been a significant increase in aggregate open interest following the release of the US CPI data this week, according to Toby Chapple, head of trading at Zerocap of Australia.&nbsp;



<a href="https://blockworks.co/price/btc">BTC’s</a> open interest alone has risen by over $1 billion from $7.5 billion to $8.5 billion.



<figure class="wp-block-image"><img decoding="async" src="https://lh6.googleusercontent.com/dAxLzdazapXQrznSh-8GNpMvQDAw4MhquI5SXC44PqhCXaAdbZE1Nw2lzBZxwOEtmBQxTD6etSIl-ulENT1Lqi9TWGeMN5cRfZ_Lbj8vGS_RFWWrYHUNRflJ-Bl-q5_sZxOjgvjInHXl89Hp4OT3mNA" alt=""/></figure>



“The most telling market dynamic is the inverted put-call skew in the options market,” Chapple told Blockworks. “The seven-day calls option implied volatility vs put option is showing a very large swing to call buying, implying that the market has swung very hard to a bullish stance by market participants.”



According to data from <a href="https://markets.chainalysis.com/?range=30&amp;asset=BTC#demand-exchange-flows" target="_blank" rel="noreferrer noopener">Chainalysis</a>, BTC&#8217;s total flows recorded its highest one-day increase in over 70 days, surging from 85,800 BTC to around 139,400 BTC.&nbsp;



Data from crypto intelligence firm <a href="https://app.intotheblock.com/coin/DOGE/deep-dive?group=all&amp;chart=all" target="_blank" rel="noreferrer noopener">IntoTheBlock</a> show, of roughly 29.2 million wallet addresses holding the asset, around 66% are in the money. Just 22% of those addresses are posting losses.



A majority bought in at an average of $18,800 — good for an increase of around 30% to bitcoin’s current floor.&nbsp;



Trade volume across all assets rose to $120 billion — the highest point in more than six days — data provided by <a href="https://sigdev.thetie.io/coins" target="_blank" rel="noreferrer noopener">TheTie</a> show.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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As Traders Eye Hong Kong’s Crypto Moves, Bitcoin Breaks Above $24K

John Gilbert

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<h2 class="wp-block-heading">Introducing Reserve</h2>



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/JOy0wCVhnwM" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen=""></iframe>



<h2 class="wp-block-heading">Series Table of Contents</h2>



Part 1:&nbsp;<a href="https://blockworks.co/news/how-broken-monetary-policy-fuels-instability">What’s broken</a> Why unstable money isn’t safe for the world and how to understand monetary policy Part 2:&nbsp;<a href="https://blockworks.co/news/the-investors-guide-to-stablecoins">What are people doing today about it?</a> A dive deep into the types of monetary policy alternatives that stablecoins offer Part 3:&nbsp;<a href="https://blockworks.co/news/what-is-an-inflation-hedge-finding-stability-in-todays-market">What is the right way forward?</a> A guide to the various inflation hedging tactics and how they can be used in stablecoins Part 4:&nbsp;<a href="https://blockworks.co/news/what-it-takes-to-tokenize-the-world">What will the future look like?</a> A look at how tokenization will change the stablecoin ecosystem About our sponsor:&nbsp;<a href="https://blockworks.co/news/about-our-sponsor-reserve">Reserve</a> A video explaining the Reserve Protocol



<h2 class="wp-block-heading">The protocol and services</h2>
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The <a href="https://reserve.org/">Reserve protocol</a> is a self-service, permissionless factory where anyone can build, deploy and govern their own asset-backed stablecoins (RTokens), which can be integrated within DeFi and real world commerce.



Their long-term goal is to create non-inflationary currencies that remains stable both month-to-month as well as century-to-century. In addition to their protocol, Reserve also launched a pay app called the <a href="https://reserve.org/en/app/about_app/">Reserve App</a>. It is a user-friendly way for ordinary people to buy RTokens with their local currencies and use them in locally. More than $300m a month is transacted on the platform, mainly real people and companies using Reserve to escape inflation.

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