Bessie Liu

Wallet infrastructure provider Safe has collaborated with digital asset bank Sygnum and cryptocurrency recovery group CoinCover, to introduce Safe{RecoveryHub} — a handful of social recovery options for crypto wallets.



Lost or forgotten private keys has left an estimated <a href="https://github.com/jconorgrogan/Lost-ETH">$1.92 billion worth of ether</a> in the lurch. When a user first signs up for a crypto wallet, they generate a public key — a string of random letters and numbers — with which they can receive crypto, and a private key, used to send or otherwise prove ownership of the tokens by cryptographically signing transactions.



Key management systems in Web3 have very few recovery solutions, meaning that if a user loses their private key, they will no longer be able to access their assets.&nbsp;



“Social recovery” has been the exception. The point is to provide a means to recover a missing private key through “recoverers” such as families, friends and collaborators.



Safe{RecoveryHub} users can provide recoverers access to their accounts only in the event that a recovery is taking place. They will also be able to set up more than one recoverer for added security, similar to how a crypto wallet operate as a 2/3 multisig, for example.



Lukas Schor, the co-founder of Safe told Blockworks that Safe{RecoveryHub} consists of two main components. The first is a Safe module that enables the execution of recovery transactions for the popular multisig solution.



The social recovery process, in this instance, is initiated when a user loses access to their Safe and depends on their previously selected recovery setup option.



“When the user utilizes their own, fully self-custodial setup, they can go through every step of the process through our interface or alternatively fully on-chain today and create the recovery transaction, replacing lost access keys with new keys that the user controls,” Schor said. “When the user chooses a third-party option, then there likely will be some authentication or identification process before the third party will initiate the recovery on behalf of the user.”



Once the recovery transaction is created, the user will have an option to veto the transaction. If they do not do so, then the recovery transaction will be executed and they will be able to generate new owner keys, which will allow them to access their smart accounts again.



Schor notes that the <a href="https://github.com/gnosis/zodiac-modifier-delay/tree/main">timelock module</a> used for social recovery has been built by the Gnosis Guild, and has been used and in production for multiple years now.&nbsp;



“Only the user, individual or organization, can activate [or] deactivate the module and set the parameters. Only the Safe account can cancel any recovery attempt. Only the set recoverer can initiate a recovery transaction,” Schor said.



Martin Koeppelmann, co-founder of Gnosis, told Blockworks that technology must account for human error, as simple mistakes can have catastrophic consequences.&nbsp;



Safe’s “framework for recovery options is an important step towards further adoption,” Koeppelmann said. “What is equally important is that it’s done in a way so that users don’t have to make compromises about still being in full control of their funds.”



<h2 class="wp-block-heading">Previous attempts at social recovery</h2>



Safe’s is not the first company that has attempted social recovery. Hardware wallet firm Ledger similarly <a href="https://blockworks.co/news/ledger-delays-recover-service">attempted to introduce social recovery</a> earlier this year.&nbsp;



Ledger users had the option to provide KYC information to custodians, and their private keys would be split into three different parts, stored separately on what they said are “cryptographically secure” Hardware Security Modules.



In the case of Safe, a user could choose to trust a custodian or a third party to store their keys, but they also offer the users the choice to store their keys with family members or friends.


<div class="wp-block-image">
<figure class="aligncenter"><img decoding="async" src="https://lh7-us.googleusercontent.com/Kwss-pdcLfr5pM0iBoo_Q-xfXNWQSMPR3gqwe-u1WsfoHIhjzH1WiNveu8CJtO4lX8JTjT2NLpKzemzWVc_7HEv4xs6O3c4NnXLOqi6wtgPCZH65H1fXOTdAlV3SiZn7XjfdFEwrzYFb-_C8pX2XhDI" alt=""/><figcaption class="wp-element-caption">Source: Safe</figcaption></figure></div>


Schor notes that there is no single way to solve the issue of recovery in the Web3 space, and the Safe{RecoveryHub} is just one viable solution.&nbsp;



He adds that there are larger issues around of recovery schemes, such as limitations around privacy, accessibility and availability — particularly for new users.&nbsp;



“From highly heterogeneous use cases like investing, social networking, and gaming to a highly diverse set of users ranging from everyday individuals and professionals to organizations, recovery needs to be able to cater all these different needs,” he said.&nbsp;



This sentiment is shared by Hannes Graah, the founder and builder of the Zeal wallet, who notes that self-custodial arrangements should be easier to use than a normal bank in order to achieve mainstream adoption of cryptocurrencies.



“It’s promising to see Safe’s social recovery initiative consider a wide range of trust models from trusted parties like family and friends to backup devices and not simply assume that everyone has a close circle they can rely on,” Graah said.



<h2 class="wp-block-heading">Advances around account abstraction</h2>



Social recovery is focused on key management and it should not be confused with the wider work that is being done around ERC-4337, or <a href="https://blockworks.co/tag/account-abstraction">account abstraction</a>.



The purpose of ERC-4337 is to enable a more secure and user-friendly method for managing Ethereum accounts. The model allows users to execute transactions, including smart contract interactions, directly from their wallet. This enhances security and simplifies the process, making Ethereum more accessible and safer to use.



Read More: <a href="https://blockworks.co/news/ethereum-erc4337-account-abstraction-smart-contract">Ethereum’s ERC-4337 Account Abstraction Smart Contract is Live</a>



ERC-4337 is more of a stepping stone that can enable tools such as socially recoverable multisigs.



For example, if a wallet holder dies (and therefore their account has been inactive for a set period of time), account abstraction could enable funds to be transferred to a beneficiary automatically.



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Safe social recovery eases private key management

Jack Kubinec

This week’s Web3 watch begins with a significant shift in the NFT marketplace. Ethereum, traditionally the frontrunner in NFT trading, has seen a downturn in sales volume, facing competition from two emerging players.



The Bitcoin network witnessed a surge in digital art collectible trading, primarily driven by ongoing interest in ordinal inscriptions. Ordinals allow users to mint NFT-like assets directly on the Bitcoin blockchain. The past month has seen a 500% increase in sales volume for this asset class, eclipsing Ethereum’s figures over the same timeframe.



The popularity of Bitcoin’s cheap-to-mint ordinal inscriptions has led to a significant increase in demand on the network. This trend reflects a broader shift in the digital collectibles market, where novel and cost-effective methods of <a href="https://blockworks.co/tag/nfts">NFT</a> creation and trading are gaining traction.



Read more: <a href="https://blockworks.co/news/sothebys-auctions-bitcoin-ordinals">Sotheby’s announces its first Bitcoin Ordinals sale</a>



The Solana blockchain has also stepped into the spotlight, recording higher NFT trading volumes than <a href="https://blockworks.co/tag/ethereum">Ethereum</a> on Friday. This increase in Solana’s trading volume is the culmination of a banner week for the network.&nbsp;



“Something that&#8217;s obviously interesting and different in the ordinals space versus every other popular blockchain is that your NFTs are actually stored on-chain versus in smart contracts-enabled ecosystems, [where] they&#8217;re stored on some decentralized server like IPFS,” Sarah Satoshi, the head of business development at ordinals marketplace Gamma.io, said. “I think that&#8217;s one of the factors that attracts a lot of people.” 



Liquid staking protocol Jito executed an airdrop on Thursday, <a href="https://blockworks.co/news/jito-airdrop-value">distributing $165 million worth of its native token</a> to users. The following day, Solana saw a spike in its NFT sales, processing nearly $15 million in transactions.



There was a marked <a href="https://blockworks.co/news/solanas-nft-marketplace-tensor">increase in activity on Tensor</a>, a Solana-based NFT market, which may have been fueled by <a href="https://x.com/0xLawliette/status/1732828898252235029?s=20">speculations</a> of another potential airdrop.



On Friday, “Tensorians,” a Solana-based NFT collection, topped the sales volume charts <a href="https://www.cryptoslam.io/collections">according</a> to CryptoSlam. The collection’s sales volume rose over 100% in the past week.



<h2 class="wp-block-heading">Pudgy Penguins takes up the Webkinz model</h2>



The NFT collection Pudgy Penguins debuted an online open-world game called Pudgy World Alpha at Art Basel Miami.&nbsp;



The <a href="https://lobby.pudgyworld.com/">game</a> lets players control avatar lookalikes of the penguins, but users don’t need to own an NFT to play.&nbsp;



Pudgy World builds on the NFT collection’s partnership bringing <a href="https://blockworks.co/news/pudgy-penguins-walmart-debut">toy versions of Pudgy Penguins to Walmart stores</a>. Each toy comes with a QR code that claims a Pudgy Penguin character inside of Pudgy World.&nbsp;



Every toy corresponds to a Pudgy Penguins NFT, and holders receive licensing royalties on their corresponding toys, the project said in a press statement.&nbsp;



<h2 class="wp-block-heading">One interesting stat:</h2>



<ul>
<li>Interest in Bitcoin ordinals <a href="https://jochen-hoenicke.de/queue/#BTC,all,weight">dramatically increased</a> the blockchain’s mempool to an all-time high. Mempools collect all unconfirmed transactions waiting to be validated and added to a blockchain. When too many transactions are added, it becomes congested, leading to slower processing times and higher fees for prioritizing transactions.</li>
</ul>



<h2 class="wp-block-heading">Also of note:</h2>



<ul>
<li>Recordpool <a href="https://anotherblock.io/">released</a> the Jackson 5’s first ever studio recording as a digital collectible on Web3 music marketplace anotherblock.</li>



<li>The digital art arm of Sotheby’s is auctioning off its first set of <a href="https://blockworks.co/tag/ordinals">ordinal</a> inscriptions.</li>
</ul>



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Web3 Watch: Solana and Bitcoin top Ethereum in NFT sales

The crypto trading and lending firm VersiFi stocked its C-suite with two traditional finance hires as it prepares to launch its platform in 2024 Q1.&nbsp;



VersiFi brought on Sol Zlotchenko as chief product and technology officer and Daniel Zayfman as chief information and security officer. Both hires came from treasury management firm Hazeltree, where VersiFi founder Sameer Shalaby previously served as CEO.&nbsp;



VersiFi announced it had raised $10 million in a Series A round led by Hunting Hill Global Capital in mid-November. In the press release, the firm <a href="https://www.prnewswire.com/news-releases/versifi-raises-10m-series-a-funding-launches-new-digital-assets-trading-and-lending-business-301988272.html">said</a> former Genesis managing director Martin Garcia would lead the firm’s sales, trading and lending functions as co-CEO alongside Shalaby. Garcia left Genesis the year before it went belly-up in the wake of FTX’s meltdown.&nbsp;



Read more: <a href="https://blockworks.co/news/genesis-sues-gemini-legal-battle">Genesis attempts to recover $689M from Gemini in new lawsuit&nbsp;</a>



“We continue to ramp up — with planned key hires across other parts of the business — as we ramp up to full launch in Q1 2024. The digital asset industry has been undergoing a significant transformation (triggered by the 2022 crypto winter) to evolve toward a more robust next generation, which is attracting experienced [traditional finance] veterans that are excited about the opportunity to be part of this truly innovative technology shift,” Shalaby told Blockworks in an email.&nbsp;



<h2 class="wp-block-heading">Crypto job postings declined in November</h2>



Data compiled by CryptoJobsList shows 239 crypto and Web3 jobs were <a href="https://cryptojobslist.com/trends">posted</a> in November, down from 372 in October. At the same time, crypto job applicants jumped to 3,339 from 2,422 the month prior.&nbsp;



The platform’s founder Raman Sha told Blockworks that crypto hiring hadn’t significantly picked up either despite a recent run-up in prices and <a href="https://blockworks.co/news/3-startups-90m-raises">increasingly large funding rounds</a>. Sha said he expects hiring to pick up in mid-January as part of the normal hiring cycle in the business world, and “also towards the middle of the year, as more Web3 startups raise fresh funding.”



<h2 class="wp-block-heading">Other notable hiring news</h2>



<ul>
<li>The Federal Reserve Bank of Boston is <a href="https://blockworks.co/news/federal-reserve-cbdc-job-posting">looking to hire a software engineer to lead its research on central bank digital currencies</a> (CBDCs).&nbsp;</li>



<li>Blast, the Paradigm-backed layer-2 which <a href="https://x.com/Blast_L2/status/1733153384687923570?s=20">claims</a> to have over $800 million in total value locked <a href="https://blockworks.co/news/blast-layer2-ethereum-yield">before even launching</a>, is <a href="https://x.com/Blast_L2/status/1730362088583835913?s=20">hiring</a> a senior development operations engineer and a senior protocol engineer.</li>
</ul>



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Crypto hiring: TradFi hires join former Genesis exec at VersiFi

Developers working with the two largest cryptocurrencies capitalized on early bull market intrigue.



Recently, there has been a notable increase in funding interest towards bitcoin mining companies. However, this week&#8217;s most substantial investment influx was directed at projects developing practical applications for the cryptocurrency.



In a parallel trend, various projects focused on scaling Ethereum have also secured considerable support recently. This surge in investment comes as the network gears up for its anticipated Dencun upgrade, scheduled for next year.



<a href="https://blockworks.co/news/bitcoin-staking-protocol-babylon">Babylon raised $18 million in a Series A</a> led by Polychain and Hack VC. The company focuses on a unique protocol that allows Bitcoin to be used for staking in proof-of-stake networks. It offers a secure way for bitcoin holders to earn yields without needing third-party trust or bridging to other chains.



Read more: <a href="https://blockworks.co/news/ethereum-developers-hard-fork">Core devs rule out Dencun fork this year</a>



Elsewhere, MAP Protocol, a layer-2 chain built on <a href="https://blockworks.co/tag/bitcoin">Bitcoin</a>, announced a strategic investment from Waterdrip Capital. MAP is a Bitcoin layer-2 solution that seeks to enhance cross-chain interoperability. It enables seamless interaction between Bitcoin and other public blockchain networks, ensuring secure and efficient transactions across different platforms.



Bitcoin investment firm Swan Bitcoin <a href="https://www.prweb.com/releases/swan-bitcoin-launches-institutional-division-announces-revenue-and-financing-milestones-302008922.html">said</a> Thursday that it raised and spent $205 million in 2023 via its equity, credit and hedge funds. The company also said it plans to raise an additional $150 million as it builds out an institutional offering.&nbsp;



Read more: <a href="https://blockworks.co/news/institutional-bitcoin-blackrock-otm">Institutional custody of bitcoin could kill it, cautions Hayes</a>



On the <a href="https://blockworks.co/tag/ethereum">Ethereum</a> side, <a href="https://blockworks.co/tag/paradigm">Paradigm</a> led a $9 million seed <a href="https://x.com/_shadowxyz/status/1732049145140015142?s=20">round</a> in on-chain data platform Shadow. The engineering company streamlines on-chain data access by enabling efficient retrieval from contracts and transactions, and optimizing indexing. Its approach of moving event logs to shadow forks reduces gas costs and contract sizes, offering a cost-effective solution for blockchain data management.



Ten <a href="https://x.com/tenprotocol/status/1731762376641552515?s=20">announced</a> a $7.5 million raise for its encryption-focused layer-2, while another startup named Versatus <a href="https://x.com/VersatusLabs/status/1732449189051707738?s=20">said</a> it closed a $2.3 million seed round for its “stateless” Ethereum <a href="https://blockworks.co/tag/rollups">rollup</a>.



<h2 class="wp-block-heading">DeFi platform shunts VC backing in favor of ‘aligned’ investors</h2>



Lending and borrowing app Curvance closed a $3.6 million seed round this week that was noticeably thin on venture capital investment. The protocol mostly raised funds from a group of DeFi and DAO actors, including Offchain Labs and Wormhole.&nbsp;



The platform’s co-founder Chris Carapola said Curvance capped investment in the token sale at $250,000 per party and hopes to soon turn governance over to a <a href="https://blockworks.co/tag/daos">DAO</a>. By capping token sale investments, Carapola suggested Curvance was trying to prevent major voting inequality within the DAO.



Curvance drew interest from venture capital, Carapola said, but decided to primarily raise funds from actors in its ecosystem instead, taking over a year to do so.



“I would say the consistent thing that we saw was, ‘This sounds amazing. How much can we get, and can you increase the round, can we play with the [valuation], do you want to do a Series A,’ like the more conventional route. And as soon as that really became the topic, it was like, ‘you know you&#8217;re not aligned, right?’” Carapola said.&nbsp;



Curvance raised its seed round at a $56 million valuation and its private round at a $75 million valuation, Carapola said.



<h2 class="wp-block-heading">Other notable fundraises</h2>



<ul>
<li>Animoca Brands <a href="https://www.animocabrands.com/animoca-brands-raises-additional-usd11888888-in-second-tranche-of-funding-for-mocaverse">raised</a> an $11.8 million funding tranche to develop its Mocaverse “Frequent Player Program” with participation from Block1, OKX Ventures, Foresight Ventures, Polygon Ventures, Dapper Labs and others.</li>



<li>Web3 music streaming platform Sona <a href="https://x.com/sonastream/status/1732454496591089868?s=20">raised</a> $6.9 million from Polychain Capital, Haun Ventures and Rogue Capital.</li>
</ul>



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Funding Wrap: Bitcoin, Ethereum-based projects see fresh capital

Casey Wagner

Cryptos extended their rally Friday as stocks traded sideways. Analysts say the bull run for bitcoin is beginning.&nbsp;



Bitcoin was back in the green Friday after a slight dip Thursday. The largest crypto was trading around $43,700 at time of publication after briefly surpassing $44,000 yet again.&nbsp;



Ether was trading mostly flat Friday, but maintained its monthly gains of nearly 25% over the past 30 days. As 2023 comes to a close, ether is up around 95% year-to-date.&nbsp;



Equities posted mild gains, with the S&amp;P 500 and Nasdaq Composite indexes gaining around 0.2% each midway through the trading session Friday.&nbsp;



With bitcoin’s next halving slated for April 2024, coinciding with a potential policy shift from the Federal Reserve, investors may be in for the perfect storm Thomas Perfumo, head of strategy at Kraken, said.&nbsp;



Read more: <a href="https://blockworks.co/news/bitcoin-price-mirrors-2012-halving">Bitcoin flirts with breakout, price mirrors lead-up to 2012 halving</a>



“This is going to be the fourth halving and pretty much every single one has kicked off a bull cycle where the top has come in about 18 months or so after the halving event,” Perfumo said.&nbsp;



&#8220;This <a href="https://blockworks.co/tag/bitcoin-halving">halving</a> is special in the sense that you&#8217;re going to have inflation in bitcoin&#8217;s circulating supply drop below 1% for the first time in history,” he added. “That&#8217;s basically crossing that threshold that gold has historically served as this kind of bellwether-sound currency where the supply growth of gold is something that&#8217;s been north of 1%, but very steady and very low single-digits.&#8221;&nbsp;



The catalyst for the rally, which has seen both bitcoin gain more than 56% since the start of October 2023, was <a href="https://blockworks.co/news/bitcoin-ether-trading-stock-markets">optimism about a bitcoin exchange-traded fund</a> finally hitting the market in the US, Luke Nolan, research associate at CoinShares, said.&nbsp;



“People [are] frontrunning what they believe will be significant flows stemming from the potential launches of the ETFs,” Nolan said. “If the SEC approves a spot bitcoin ETF, there is a ‘stamp of approval’ for the asset class from the largest capital market regulator in the world.”&nbsp;



As traders wait anxiously for the first <a href="https://blockworks.co/tag/etfs">ETFs</a> to hit the market, Perfumo said the rally for spot bitcoin prices shouldn’t stop there.&nbsp;



Read more: <a href="https://blockworks.co/news/spot-btc-etf-applicants-status-update">Lucky 13? Where spot bitcoin ETF proposals stand ahead of judgment day</a>



&#8220;That&#8217;s positive for prices, generally speaking,” Perfumo said. “What I mean by that is one of the biggest barriers for the US specifically when it comes to investment has been the accessibility of crypto in retirement accounts. Having crypto in a securitized format via an ETF, which is a very commonly understood product nowadays, even by consumer investors, I think that&#8217;s a really powerful statement.&#8221;&nbsp;



JTO, the governance token for Solana-based staking project Jito, <a href="https://blockworks.co/news/jto-airdrop-market-reaction">made its debut via an airdrop Thursday</a>. Close to $110 million was up for grabs when the airdrop hit Thursday morning, and by Friday, JTO was trading more than 180% higher than its initial price of $1.20.&nbsp;



Solana (<a href="https://blockworks.co/price/sol">SOL</a>) apparently riding the JTO wave, posted gains Friday as well, up more than 11% over the past 24 hours at time of publication. 



“If history repeats itself, what you tend to see is the smart contract platforms pick up and then the dapps and whatnot that are subject to higher levels of volatility — because they&#8217;re smaller assets in general — tend to follow,” Perfumo said. “I can definitely see a situation where Bitcoin leads into a cycle for Ethereum, Solana and some of the other alts.”



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Macro conditions, ETF optimism collide at the right time ahead of bitcoin halving

Made some money off of Jito’s airdrop Thursday? If you’re a US taxpayer, you’d better report it to the IRS, experts say.



Jito, a staking project built on Solana, released its JTO token via an airdrop at 11 am ET Thursday. The claim window for those eligible is 18 months.&nbsp;



By 11:45 am ET Thursday, around 30% of the airdrop had been claimed. Of the top 15 wallets who had claimed the most JTO in the airdrop, only three had sold any as of Friday morning, according to a Flipside Crypto <a href="https://flipsidecrypto.xyz/marqu/jito-jto-airdrop-claim-progress-cex-supply-jito-jto-airdrop-claim-progress-cex-supply-8isZkm">dashboard</a>.&nbsp;



While holders took to X, formerly Twitter, to discuss their profits, tax experts advise airdrop recipients, at least those in the US, to be aware of their obligations.&nbsp;



Read more: <a href="https://blockworks.co/news/jito-airdrop-value">What to know about Jito’s $165M JTO airdrop</a>



“The <a href="https://blockworks.co/tag/irs">IRS</a> has been very clear in numerous documentation that digital assets received via an airdrop are to be recognized as ordinary income once received,” said Gabriel Brin, vice president of tax and accounting product at Ledgible.



This means anyone who receives any assets via <a href="https://blockworks.co/tag/airdrop">airdrop</a> must report it as income, based on the assets’ value when received, on their tax returns for that year, even if the assets are never converted to USD or fiat currency. The income tax rate collected on the initial airdrop will follow the holder’s typical tax bracket, based on income, Brin said.&nbsp;



But determining the exact moment a taxpayer received the airdrop can be complicated, Miles Fuller, director of government solutions at TaxBit, said.&nbsp;



“Time of receipt is not necessarily easily defined because it depends on where you might be holding,” Fuller said. “You probably get the airdrop because you have some holdings of some underlying native coin or some other engagement, and those holdings that are the basis for you getting the airdrop could be held on something that&#8217;s on a custodial exchange or in a personally controlled wallet, and that’s important.”&nbsp;



Read more: <a href="https://blockworks.co/news/irs-rising-crypto-tax-evasion-cases">Crypto tax evasion cases are on the rise: Bloomberg</a>



If the airdropped assets are sent to an account on a centralized exchange, like Coinbase or Gemini, the recipient may not immediately get access to these assets, Fuller said.&nbsp;



“In the tax world, receipt is defined as when a user is in control over the asset, really meaning that the user would be in a position to sell, dispose or rehypothecate that asset,” Fuller said. “It’s not just a matter of saying ‘the airdrop happened,’ it&#8217;s ‘when did the taxpayer get to be in control or the asset?’”&nbsp;



Read more: <a href="https://blockworks.co/news/jto-airdrop-market-reaction">Jito’s JTO soars hours into airdrop, analysts say altcoin rally has steam left&nbsp;</a>



For JTO, those who used the Jito protocol prior to Nov. 25, 2023 were eligible. Users who claimed the airdrop had assets sent to the address that signed the transaction.&nbsp;



The top two wallets that claimed the most JTO via airdrop each collected tokens worth around $480,000, according to network data. If these holders are single filers in the US currently making less than $578,126 in income for the 2023 tax year, this airdrop would bump them into a higher federal tax bracket.&nbsp;



To prevent double taxing when calculating capital gains or losses, the value of the airdrop reported when reporting the income is used as the cost basis for determining the tax rate, Fuller said.&nbsp;



Any assets received via airdrop that are later sold or traded for a profit would then be taxed based on standard capital gains taxes, Brin explained. The holding period, which would determine whether long or short term gains should be taxed, begins at the time of airdrop, he added.&nbsp;



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Claimed your JTO? Time to report it to the IRS, experts say

Ben Strack

An ETF issuer is prepping a new way for investors to get exposure to the stock price of the largest publicly traded holder of bitcoin.&nbsp;



MicroStrategy, founded by bitcoin proponent Michael Saylor, currently holds 174,530 bitcoins. The company most recently <a href="https://blockworks.co/news/microstrategy-buys-bitcoin">revealed buying 16,130 BTC</a> between Nov. 1 and Nov. 29.&nbsp;



Fund group YieldMax seeks to generate monthly income by selling and writing call options on single company stocks. The firm first <a href="https://www.sec.gov/Archives/edgar/data/1924868/000138713123007093/yieldmax-485apos_053123.htm">proposed</a> the YieldMax MSTR Option Income Strategy ETF (MSTY) earlier this year. It already has similar funds focused on Tesla, Coinbase, Amazon, Google and others.



“Because they are such volatile stocks, writing call options on TSLA and COIN generates a significant amount of yield for the ETFs,” said Sumit Roy, senior analyst for ETF.com. “The same would hold true for this new fund focused on MicroStrategy.”



Read more: <a href="https://blockworks.co/news/microstrategy-bitcoin-buying">Will MicroStrategy ever stop buying bitcoin?</a>



The proposed actively managed ETF provides “indirect exposure” to MicroStrategy’s share price via a synthetic covered call strategy, according to a Thursday <a href="https://www.streetinsider.com/SEC+Filings/Form+485APOS+Tidal+Trust+II/22503652.html">filing</a>. MSTY would limit its potential gains, seeking to capture no more than 15% of MSTR’s share price appreciation in a given month.



It does not hold <a href="https://blockworks.co/tag/microstrategy">MicroStrategy</a> shares directly.



The fund would use this strategy “regardless of whether there are periods of adverse market, economic, or other conditions,” the disclosure adds — and “will not take temporary defensive positions” at such times. It plans to launch in 2024.



YieldMax did not return a request for comment.&nbsp;



Roy noted that investors of <a href="https://blockworks.co/tag/etfs">ETFs</a> using covered call strategies trade upside price appreciation potential in the stock for guaranteed yield in the form of options premiums received. Such funds tend to outperform when the underlying stocks are flat or down, while they underperform when the share prices rise rapidly.



“Some might argue that covered call strategies don&#8217;t make sense in volatile single stocks like Tesla, <a href="https://blockworks.co/tag/coinbase">Coinbase</a> and MicroStrategy because the point of those single stocks is to potentially capture big upside in exchange for taking on big risk,” he told Blockworks. “By writing calls, you are giving up most of the upside potential while keeping most of the downside risk.”



The filing comes about a month before the US Securities and Exchange Commission is expected to rule on a spot bitcoin ETF proposed by Ark Invest and 21Shares by June 10. Industry watchers expect the regulator could also approve or deny <a href="https://blockworks.co/news/spot-btc-etf-applicants-status-update">a dozen or so other similar products</a> at that time.&nbsp;



StoneX research head Matthew Weller previously told Blockworks that a low-cost spot bitcoin ETF could cause demand for MicroStrategy stock — historically used by some as a proxy for bitcoin — to “dry up.”&nbsp;&nbsp;



But MicroStrategy’s Saylor said during the company’s earnings call in November that the approval of spot bitcoin ETFs would be “a catalytic event” set to benefit various players in the space, including MicroStrategy.



Saylor argued at the time that, while certain types of investors would gravitate toward bitcoin ETFs, MicroStrategy stock offers a way to get bitcoin exposure <a href="https://blockworks.co/news/microstrategy-q3-earnings-results">with benefits such funds won’t offer</a>.



MicroStrategy’s stock has risen roughly 25% in the last month, as of 3:30 pm ET Friday. Bitcoin’s (<a href="https://blockworks.co/price/btc">BTC</a>) price is up nearly 24% over that span.



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YieldMax preps ETF focused on MicroStrategy exposure

David Canellis

Raging crypto prices might have you gripped by fear of missing out. But no matter the frustration you’re feeling, Sam Bankman-Fried likely has it much worse.



The disgraced FTX founder has been holed up in the infamous Brooklyn Metropolitan Detention Center since he was found guilty of a mess of fraud charges last month — the same jail currently housing R. Kelly, Fetty Wap and the New York City subway attacker.



No doubt Bankman-Fried found trading crypto difficult since FTX went bust. Bail conditions meant he’d only have access to a flip phone that couldn’t connect to the internet and a laptop with limited functionality.



Before his $250 million bail was revoked in August due to suspected witness tampering, Bankman-Fried had spent nine months on house arrest at his parents’ multi-million home in Palo Alto.



Bankman-Fried also couldn’t open any credit lines, start a business or transact anything more than $1,000 (outside of settling legal fees).



Read more: <a href="https://blockworks.co/news/ftx-meltdown-timeline">FTX began to unravel one year ago today: A timeline</a>



The price of bitcoin exploded about two weeks after Bankman-Fried touched down in New York, having been extradited from the Bahamas just before Christmas.



Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) is now up about 160% since then and the total crypto market cap has swelled by nearly $900 billion.



Bankman-Fried faces perhaps more than 100 years in jail. But while he waits for his sentencing next March, he could very well be wondering: What if his risky bets actually paid off?&nbsp;



<h2 class="wp-block-heading">What if FTX survived to see Bitcoin retake $44,000?</h2>



Just one day before <a href="https://blockworks.co/news/whats-next-for-ftx-and-its-customers-after-bankruptcy-filing">FTX filed for bankruptcy protection</a> and about a week after a $5 billion bank run, Bankman-Fried mapped out the crypto exchange’s balance sheets in a table that was later <a href="https://www.ft.com/content/0c2a55b6-d34c-4685-8a8d-3c9628f1f185">shared</a> by the Financial Times.



The sheet, reportedly dated Nov. 10, 2022, shows FTX assets worth almost $9.6 billion, with about two-thirds ($6.4 billion) able to be easily backtested.



<ul>
<li>Crypto made up $4.9 billion with an additional $631 million in stablecoins.</li>



<li>Serum (SRM) made up around half of FTX’s crypto. The token is tied to the decentralized exchange on Solana, which Bankman-Fried founded.</li>



<li>Cash and stocks worth $827 million made up about 9% of the total sheet.</li>
</ul>



Turns out, FTX would be close to 40% up on its measurable portfolio, which would be now worth $9 billion — potentially up to $2.6 billion ahead. That’s despite a near 90% crash in serum (<a href="https://blockworks.co/price/srm">SRM</a>), by far FTX’s biggest holding as it entered bankruptcy, per the sheet.&nbsp;



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16069640/embed#?secret=8ArvQD3hpK" data-secret="8ArvQD3hpK" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Goodbye serum, hello solana</figcaption></figure>



<a href="https://blockworks.co/tag/sam-bankman-fried">Bankman-Fried</a>’s sheet doesn’t list token prices, only US dollar values, which makes it difficult to calculate the exact number of tokens on FTX’s balance sheet. There’s no guarantee the spreadsheet is complete or even totally correct (the firm’s GBTC holdings were later found to be much higher, for example).&nbsp;



It’s also not feasible to properly value some of more illiquid assets, such as FTX’s $1.5 billion venture capital portfolio and his half-billion stake in AI startup Anthropic.&nbsp;



Read more: <a href="https://blockworks.co/news/sbf-trial-sentencing-predictions">How long could Bankman-Fried go to jail following trial?&nbsp;</a>



Still, enough details lineup with bankruptcy filings that we can roughly gauge the general health of FTX’s treasury then and now.



If we take prices around those days and compare them to now, it’s clear that solana (<a href="https://blockworks.co/price/sol">SOL</a>) would have made all the difference (and presumably has benefitted the bankruptcy estate extremely well).&nbsp;&nbsp;



Thanks to a stellar 400% recovery, from $14 to beyond $70 today, FTX’s $982 million SOL stake could be worth over $5 billion. 



The bulk of FTX and Alameda&#8217;s SOL is still <a href="https://solanacompass.com/tokenomics#locked">locked</a>, pending a release schedule over the next few years. But the irony is that those gains have come, in part, due to Solana shaking the funk of its association with Bankman-Fried, who was one of the ecosystem’s biggest and loudest backers.



<h2 class="wp-block-heading">Now FTX just has to sell it</h2>



Aptos, the layer-1 blockchain repurposed from Meta’s failed project Diem, would’ve also helped with $312 million after its APT token more than doubled. FTX’s position would have climbed from $375 million to $690 million as a result.



Another $100 million came from gains in Robinhood stock (in real life, the latter was bought back by the online brokerage in September).



Worst performers would’ve been ascendex (<a href="https://blockworks.co/price/asd">ASD</a>) — down 42% to lose $14 million — and oxygen (<a href="https://blockworks.co/price/oxy">OXY</a>), on which he’d lose $45 million.&nbsp;



Another $69 million was sunk with the collapse of Fantom algorithmic stablecoin USD Balance, which lost its dollar peg in June. Not to mention the $2 billion in bitcoin and ether (<a href="https://blockworks.co/price/eth">ETH</a>) liabilities, those have surely ballooned due to their own price rallies.



After Bankman-Fried stepped down, FTX was taken over by storied bankruptcy guru John J. Ray III, who handled Enron after its own sprawling fraud scandal. The plan for FTX is to refund 90% of recovered assets to creditors out of $8.7 billion owed in total.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16070214/embed#?secret=6LkpZhURDg" data-secret="6LkpZhURDg" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">The ‘Bankman-Fried’ line shows the performance of his Nov. 10 balance sheet, minus his venture capital portfolio and private equity stakes</figcaption></figure>



Despite his attempts to maintain innocence, <a href="https://blockworks.co/news/sam-bankman-fried-found-guilty">Bankman-Fried’s jury found him guilty on all seven criminal fraud counts</a>.



He was legally (and morally) responsible for siphoning billions from FTX user accounts to prop up his failing hedge fund, Alameda Research, so it’s more than likely the crypto on Bankman-Fried’s balance sheet technically belonged to its users.



<a href="https://blockworks.co/tag/ftx">FTX</a> has now been cleared to sell billions of dollars in crypto alongside large sums in crypto stocks like Grayscale’s bitcoin and ether trusts.



So, while Bankman-Fried sits in jail and perhaps thinks about whether his dumb bets would’ve paid off (which it sorta seems they would have), all we can do is hope John J. Ray and the FTX estate don’t fumble the bag.



Updated Dec. 10, 2023 at 6:03 am ET: Added context.



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Bankman-Fried’s crypto portfolio would be up billions this year — thanks to Solana

Katherine Ross

Lucky 13? Where spot bitcoin ETF proposals stand ahead of judgment day

Macauley Peterson

Starknet, a zk-proof-based Ethereum layer-2, is taking a significant step towards decentralizing its network and fostering community engagement.



The Starknet Foundation outlined its plan to distribute over 1.8 billion STRK tokens through various initiatives aimed at driving adoption and growth on its blockchain platform.



The token, which is not currently transferable or tradable, was first <a href="https://www.starknet.io/en/posts/governance/starknet-token-is-deployed-on-ethereum">deployed</a> on Ethereum in November 2022, and ever since speculation has been rife that the network would eventually conduct an aggressive program of community incentives and a retroactive airdrop targeting active Starknet users.



An X <a href="https://x.com/StarknetFndn/status/1733101666357100992?s=20">thread</a> on Friday from the Starknet Foundation brought the contours of this eventual distribution into clearer relief.



At the heart of the initiative is a “provisions committee,” entrusted with the responsibility of allocating 900 million STRK tokens. This committee&#8217;s goal is to ensure a “fair, decentralized and transparent distribution of STRK over multiple programs and phases,” according to the Foundation.



Its objective is to distribute ownership of the network’s native token and to reward past and future contributions.



How exactly this will be done remains to be seen, and a <a href="https://blockworks.co/tag/starkware">Starkware</a> spokesperson declined to comment further.



The Starknet Foundation, incorporated in the Cayman Islands, is independent of Starkware&nbsp; Industries, which is headquartered in Netanya, Israel, but its seven person board <a href="https://starkware.co/resource/introducing-the-starknet-foundation/">includes</a> both Starkware co-founders Eli Ben-Sasson and Uri Kolodny.



The company was valued at $8 billion <a href="https://blockworks.co/news/ethereum-layer-2-developer-starkware-valued-at-8b-following-100m-raise">following its 2022 Series D</a> fundraise.



In addition to rewarding contributions, the Starknet Foundation aims to reward users for their transactions on the Starknet network, such as offering rebates for transaction fees.



Starknet fees are denominated in ether, and the network posts <a href="https://app.blockworksresearch.com/glossary#zero-knowledge-proof-zkp">zero-knowledge proofs</a> of execution of transaction batches to Ethereum mainnet — a security and scaling mechanism.



Read more: <a href="https://blockworks.co/news/layer-2-secured-by-ethereum">So your layer-2 is ‘secured by Ethereum’ — what does that mean?</a>



The Starknet Foundation is also exploring ways to incentivize activity in the decentralized finance (DeFi) sector, working with an initial allocation of 50 million STRK tokens. A <a href="https://www.starknet.io/en/posts/757155c6-ce07-49f1-af21-907b7e0b1cb1/defi-committee-launch-advancing-starknets-defi-progress">six-member</a> “DeFi Committee,” currently concluding its research phase, will soon start implementing strategies to enhance liquidity, trading volume and overall growth of DeFi protocols on Starknet.



Read more: <a href="https://blockworks.co/news/starkware-appchain-defi-cefi">Starkware’s new appchain attracts DeFi derivatives dex with CeFi liquidity</a>



Starknet teased that further details on its incentive mechanism aimed at developers and decentralized applications (dapps) on the Starknet network would be forthcoming next week.



Since the token currently has no secondary market, it’s challenging to ascribe a value to the planned distribution, but layer-2 peers Polygon, Optimism and Arbitrum currently boast fully-diluted markets caps of between $8 billion and $11 billion.



The total supply of STRK tokens is 10 billion, of which 5 billion were allocated to the Starknet Foundation.



The airdrop is <a href="https://blockworks.co/news/airdrop-farming-ethereum-layer-2-activity">one of many anticipated</a> in 2024 related to Ethereum <a href="https://blockworks.co/tag/layer-2-2">layer-2</a> networks, such as <a href="https://twitter.com/LayerZero_Labs/status/1732862812710449466">LayerZero</a> and <a href="https://blockworks.co/news/polygon-and-matter-labs-compete-on-zkevm-rollups">zkSync</a>.



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Starknet Foundation teases STRK token airdrop

Former Binance CEO Changpeng Zhao will remain in the US until his sentencing date, a judge ruled Thursday.



Judge Richard Jones sided with the government’s motion to prevent Zhao from returning to the United Arab Emirates — where he resides with his partner and children. Originally, Magistrate Judge Brian Tsuchida leaned towards letting Zhao return to the UAE until his sentencing hearing.&nbsp;



However, Judge Jones put a <a href="https://blockworks.co/news/binance-changpeng-zhao-us">temporary hold on the decision</a> until the government could file its motion. The government, in its filing, argued that while they don’t believe that Zhao needs to be detained while he awaits sentencing, the US does not have an extradition treaty with the UAE.&nbsp;



“The government contends that the absence of an extradition treaty with the UAE, combined with the defendant’s significant assets and strong connections to the UAE, would allow him to evade his obligation to return to the United States for sentencing,” the filing said.&nbsp;



Read more: <a href="https://blockworks.co/news/binance-changpeng-zhao-deal-unpacked">Here are the details of Binance and Changpeng Zhao’s plea deal</a>



The government is also under the belief that the UAE offered Zhao citizenship and wouldn’t be inclined to extradite Zhao.



Zhao’s legal team argued that he self-surrendered to the government and took “full responsibility for past actions” with his plea agreement. He also has no prior criminal history.



The bail package, which was originally set by Judge Tsuchida and would have allowed <a href="https://blockworks.co/tag/changpeng-zhao">Zhao</a> to leave the country, is hefty but not enough to prevent Zhao from leaving and not returning, Judge Jones ruled.



Zhao’s sentencing is set for Feb. 23.



The former CEO, who has a very active presence on X, has been giving little updates on what’s next for him. Earlier this week, he <a href="https://twitter.com/cz_binance/status/1732260036834099258">posted</a> “learning again, by meeting founders.”



When <a href="https://blockworks.co/news/changpeng-zhao-binance-steps-down#:~:text=Binance%20CEO%20Changpeng%20Zhao%20reportedly,dollar%20settlement%20with%20US%20regulators.">Zhao announced his resignation</a> as part of his plea deal, he <a href="https://twitter.com/cz_binance/status/1727063503125766367">posted</a> that he would be taking a break and then would “probably do some passive investing, being a minority token/shareholder in startups in areas of blockchain/Web3/DeFi, AI and biotech.”



“I am happy that I will finally have more time to spend looking at DeFi,” he added.



The government announced plea agreements with both Zhao and Binance at the end of November. As part of the agreement, Zhao is banned from operating or managing the exchange for a period of three years. He pleaded guilty to violating the Bank Secrecy Act.&nbsp;



<a href="https://blockworks.co/news/doj-indictment-binance-changpeng-zhao">Binance paid a $4.3 billion settlement</a> to the US, and pleaded guilty to operating as an unlicensed money transmitting business.



In addition to the plea agreements, <a href="https://blockworks.co/tag/binance">Binance</a> and Zhao still face a lawsuit from the US Securities and Exchange Commission, which claims that the exchange and its former executive <a href="https://blockworks.co/news/binance-sec-no-evidence-of-commingling">commingled funds as well as offering</a> and selling unregistered securities.&nbsp;



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It’s official: Former Binance CEO must stay in US until sentencing

Jito, the Solana-based liquid staking protocol, opened an airdrop for users to claim 90 million of its JTO governance tokens starting Thursday morning — an amount worth around $165 million at the time of publication.&nbsp;



Jito sent tokens based on how much of its JitoSOL liquid staking token the addresses held and lent to DeFi protocols, alongside rewards for validators and MEV searchers. According to the protocol’s developers, the JTO tokens will be used to govern the DAO and treasury for the staking platform.&nbsp;



Jito lets users stake their Solana (<a href="https://blockworks.co/price/sol">SOL</a>) in exchange for the protocol’s JitoSOL token, which can then be traded or used as collateral — similar to how Lido’s staked ether (<a href="https://blockworks.co/price/steth">stETH</a>) product works.&nbsp;



Jito and a protocol named Marinade are essentially tied as Solana’s largest liquid staking providers, with around $425 million each in total value locked (TVL) <a href="https://defillama.com/protocols/liquid%20staking/Solana">according</a> to DeFiLlama. For context, Lido boasts a TVL of $21.45 billion.&nbsp;



Read more: <a href="https://blockworks.co/news/jto-airdrop-market-reaction">Jito’s JTO soars hours into airdrop, analysts say altcoin rally has steam left&nbsp;</a>



Thanks to the airdrop, Jito’s DAO now has a governance token — and $490 million Jito (<a href="https://blockworks.co/price/jto">JTO</a>) in its <a href="https://gov.jito.network/dao/Jito">treasury</a>.&nbsp;



Based on Jito’s “<a href="https://www.jito.network/blog/introducing-jito-points-powering-the-jito-ecosystem/">points</a>” system for allocating the airdrop, Dan Smith from Blockworks research <a href="https://twitter.com/smyyguy/status/1732814474673795533">wrote</a> on X that moving $40 of JitoSOL around could have netted users nearly $10,000 in JTO.&nbsp;



On the whole, the Jito team followed on a well-trodden path of upstart protocols airdropping governance tokens to their users.&nbsp;



Other examples include the blue-chip DeFi protocol Uniswap’s airdrop of 150 million of its UNI governance token to users in September 2020, worth over $900 million at today’s <a href="https://blockworks.co/price/uni">prices</a>. A large majority of the UNI airdrop recipients ultimately sold their tokens, but the wealth effect may have still fueled Uniswap development. Syncracy Capital’s Ryan Watkins <a href="https://twitter.com/RyanWatkins_/status/1306432490656145408">likened</a> the UNI airdrop to a stimulus check at the time. 



The JTO drop is drawing similar <a href="https://x.com/MikeIppolito_/status/1732819015695794413?s=20">comparisons</a> as potential fuel for a recent resurgence in activity on Solana. The token recovered from its <a href="https://blockworks.co/news/solana-community-remains-bullish-despite-ftx-fallout">association with FTX</a> to more than quadruple in price over the past year. <a href="https://blockworks.co/news/solanas-nft-marketplace-tensor">Solana’s NFT market</a> has seen positive signs, and Solana decentralized exchanges churned $7.3 billion in <a href="https://defillama.com/dexs/chains/solana">volume</a> in November, by far their busiest month ever. 



Wallet owners have 18 months in which to claim the JTO airdrop. This would allow users to defer their claims —&nbsp;<a href="https://blockworks.co/newsletter/issue/33615213">and any accompanying tax implications</a> — into 2024, Ryan West from Blockworks Research wrote about the airdrop.&nbsp;



Despite the long claim window, 54 million out of 90 million of the newly available tokens, or 60%, were <a href="https://flipsidecrypto.xyz/marqu/jito-jto-airdrop-claim-progress-cex-supply-jito-jto-airdrop-claim-progress-cex-supply-8isZkm">claimed</a> within four hours of the airdrop, according to a Flipside Crypto dashboard.&nbsp;



JTO whales appeared to stay put in the wake of the airdrop — the same dashboard shows only three of the 20 largest recipients sold their tokens. 



Another Solana DeFi protocol named <a href="https://blockworks.co/news/solana-jupiter-token-airdrop">Jupiter announced a token last month</a>, saying 40% of the supply would be airdropped to the community.



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What to know about Jito’s $165M JTO airdrop

Investing app Robinhood has expanded its crypto trading offering to the European Union, though analysts note it is entering a crowded market.&nbsp;



The platform supports 25 cryptocurrency assets. Customers receive a monthly bitcoin rebate, based on a percentage of their total trading volume, as announced by the company on Thursday.



Owen Lau, executive director at Oppenheimer &amp; Co., called the EU “a competitive market” — noting existing players serving the region include Bybit, OKX, Kraken, Coinbase, eToro, Crypto.com and Binance.&nbsp;&nbsp;



But after the collapse of crypto exchange FTX last year and <a href="https://blockworks.co/news/binance-settlement-message-to-crypto-industry">Binance’s settlement with the US Department of Justice</a>, some customers may look to move funds to a more reputable platform, he added.&nbsp;&nbsp;&nbsp;&nbsp;



Robinhood noted in its Monday blog <a href="https://newsroom.aboutrobinhood.com/robinhood-launches-crypto-trading-in-the-eu/">post </a>that it has chosen to take “a more conservative approach” than competitors when it comes to supporting digital assets.



“[As] a public company listed in the US, it may give them an advantage to take some share in the EU,” Lau said. “But it is unclear how much return on investments they can generate from this expansion.”



Robinhood CEO Vlad Tenev said during the company’s earnings call last month that crypto benefits from “a relatively clear regulatory framework” in the EU.



Read more: <a href="https://blockworks.co/news/ireland-crypto-vasps-coinbase">Why crypto companies are flocking to Ireland ahead of MiCA</a>



Launching in Europe “will expand the addressable market of customers that we serve by hundreds of millions,” Tenev added at the time.&nbsp;



The launch comes after Robinhood’s transaction-based revenues on cryptocurrencies <a href="https://blockworks.co/news/robinhood-earnings-q3-2023">declined to $23 million during the third quarter</a> — a 55% quarter-over-quarter drop.&nbsp;



It wasn’t the only company to see such a slowdown. In Q3, <a href="https://blockworks.co/news/coinbase-q3-earnings-analysis">Coinbase’s total transaction revenue</a> fell 12% from the prior three-month period. Analysts pointed to weakness in cryptocurrency markets and low volatility as reasons for such declines.



Robinhood has reported more recent momentum on the digital asset front amid a crypto rally in recent weeks. Its November crypto notional trading volumes were roughly 75% above their October levels, according to a Monday <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0001783879/3ee2f926-14be-4eb7-b14f-5a7e773073d8.pdf">filing</a>.&nbsp;



Morningstar analyst Michael Miller noted <a href="https://blockworks.co/tag/robinhood">Robinhood’s</a> launch of EU crypto trading is part of a broader expansion. The company last week rolled out brokerage services for customers in the United Kingdom.



“I would see the two moves as being tied together,” Miller indeed. “That said, it’s hard to tell how successful this will be for the company since it is entering a crowded market as a relative newcomer.”



Miller added that crypto trading revenue made up roughly 7% of Robinhood’s net revenue in the first nine months of this year.&nbsp;



“So being able to expand its cryptocurrency business to the EU would be helpful,” the analyst said. “But I don’t know if the impact would be that dramatic unless it significantly outperformed its US operations.”



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Robinhood looks to jumpstart crypto trading revenue via EU expansion

After an explosive week for bitcoin, traders turned their attention to JTO, Solana-based Jito’s new governance token, which gained as much as 75% upon its launch Thursday.&nbsp;



Jito, a staking project built on Solana, released its JTO token at 11 am ET Thursday. By 11:45 am ET, around 30% of the airdrop had been claimed, and none of the top 14 claiming addresses by size had sold.



Eligible recipients have 18 months to collect their assets, making the claim window unusually large for an airdropped token. Typical windows tend to give users 30 to 90 days to make their claims.&nbsp;



<a href="https://blockworks.co/price/jto">JTO’s</a> market capitalization at time of publication was around $211 million.&nbsp;



Read more: <a href="https://blockworks.co/news/bitcoin-rallied-whats-next">Bitcoin has rallied. But where is the price going next?</a>



Decentralized exchange Aevo practically crashed after a surge of futures market activity around the time of the airdrop. Coinbase and Binance also announced plans to list the token.&nbsp;



JTO’s launch comes as <a href="https://blockworks.co/news/bitcoin-ether-altcoins-etf">altcoins continue to soar this year</a>. Solana’s native token (<a href="https://blockworks.co/price/sol">SOL</a>) is up more than 550% year-to-date. Polygon (<a href="https://blockworks.co/price/matic">MATIC</a>) and Chainlink (<a href="https://blockworks.co/price/link">LINK</a>), which both posted rallies last month, still each maintained around a 16% gain over the month Thursday.&nbsp;



Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) pulled back Thursday to around $43,100, after surpassing $44,000 earlier in the week. Ether (<a href="https://blockworks.co/price/eth">ETH</a>) on the other hand extended its rally Thursday, gaining an additional 4.2% over the past 24 hours.&nbsp;



<a href="https://blockworks.co/tag/altcoins">Altcoin</a> market share of total crypto trade volume surged to 67% last week, its highest level since March 2022, analysts from crypto research firm Kaiko found.



“Daily altcoin trade volume spiked above $20 billion in early November for the first time since April 2023,” Kaiko analysts added. “While altcoin volumes continue to be driven by offshore markets, Binance’s influence has shrunk, with its market share of global altcoin volume dropping to 46% last week, down from 60% in September 2022.”



It’s not just crypto-native traders taking an interest in altcoins, either. Exchange-traded products (<a href="https://blockworks.co/tag/etps">ETPs</a>) holding Solana increased 99% in assets under management last month, according to research from crypto investment firm Fineqia.



Read more: <a href="https://blockworks.co/news/solanas-nft-marketplace-tensor">Solana’s NFT marketplace booms, with Tensor in top spot</a>



“This follows the 172% growth recorded in October,” Fineqia analysts added. “In the last two months, ETPs holding SOL as underlying [assets] increased by 443%, representing 77% of the altcoins index assets under management growth.”



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Jito’s JTO soars hours into airdrop, analysts say altcoin rally has steam left 

Much has been said of Solana’s recovery since the whole Sam Bankman-Fried thing. But one of the network’s primary rivals, Avalanche, is also having a bit of a moment.



Blink and you might have missed it: Avalanche (<a href="https://blockworks.co/price/avax">AVAX</a>) has flipped bitcoin cash (<a href="https://blockworks.co/price/bch">BCH</a>), polygon (<a href="https://blockworks.co/price/matic">MATIC</a>), polkadot (<a href="https://blockworks.co/price/dot">DOT</a>), tron (<a href="https://blockworks.co/price/trx">TRX</a>) and chainlink (<a href="https://blockworks.co/price/link">LINK</a>) over the past two weeks.



At $9.8 billion, AVAX is now a top-10 cryptocurrency by market cap (if you don’t count Lido Staked ETH), its highest rank all year.&nbsp;



In US dollar terms, AVAX has jumped 150% year to date — almost all of it over the past month. Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) has returned slightly more, with <a href="https://blockworks.co/news/bitcoin-price-bull-market-compare">BTC’s rallies largely credited with</a> turning crypto into a sea of green after a dark, lengthy bear market.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16049872/embed#?secret=vYlNRrwxMF" data-secret="vYlNRrwxMF" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Hit play to see Avalanche flip its way into the top 10</figcaption></figure>



Avalanche’s outsized gains are more apparent when tracking its price against bitcoin. Of the top 30 or so cryptocurrencies, AVAX’s bitcoin ratio is the second-best performer over the past three months, having risen 60%, trailing Solana’s, which nearly doubled.



That means a hypothetical crypto trader who sold BTC for AVAX three months ago could now get 60% more bitcoin back on that play — all while BTC itself has rallied 70% against the US dollar.



As of earlier today, ether’s bitcoin ratio had meanwhile slipped by about one-fifth — half as bad as Binance’s BNB. Anyone who sold bitcoin for ether (<a href="https://blockworks.co/price/btc">ETH</a>) at the start of September would get almost 20% less BTC if closing those positions today. 



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<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16050430/embed#?secret=RDr3YwMZAH" data-secret="RDr3YwMZAH" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Notice how SOL and LINK’s bitcoin ratios pumped first, with AVAX following a few weeks later?</figcaption></figure>



Much like Solana, Ethereum, Tron and Polygon, Avalanche is a <a href="https://blockworks.co/news/the-investors-guide-to-avalanche-avax">layer-1 blockchain</a> that supports stablecoins, DeFi applications, memecoins and even <a href="https://blockworks.co/news/avalanche-ordinals-asc20-transaction-record">Ordinals-like inscriptions</a>.&nbsp;



Still, why are markets favoring Avalanche?&nbsp;



Vivek Raman, head of proof of stake at boutique digital asset unit BitOoda, pointed out that all the “alternative layer-1” networks outside of Ethereum are having tremendous runs.



“Solana is up more than seven times from its cycle lows after dropping 95% from its 2021 peak,” Raman said.



“Avalanche is the next major layer-1 that is having a mean reversion bounce and is therefore outperforming right now,” Raman continued. “The major two crypto assets — ETH and BTC — were down much less than altcoins, and this Avalanche move is simply part of a catchup move.”



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16056295/embed#?secret=1ex1tN93HP" data-secret="1ex1tN93HP" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Avalanche is still down more than 80% from all-time high set in November 2021</figcaption></figure>



Avalanche’s tech stack was also used for a recent Project Guardian pilot, led by JPMorgan Onyx, which explored the potential benefits of tokenized investment portfolios.&nbsp;



The actual Avalanche mainnet wasn’t used, though, with the banks <a href="https://blockworks.co/news/avalanche-ordinals-asc20-transaction-record">playing around with a fresh permissioned (private) version</a> of the blockchain.&nbsp;



Still, Raman reasoned that JPMorgan’s tests&nbsp; “could be a fundamental driver for the [Avalanche] ecosystem.”



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Avalanche flips MATIC, TRX and LINK to become a top-10 crypto

Ark Invest has sold nearly $59 million of Coinbase from various funds this week.



The sum comes after three days of sales with Ark selling roughly $1.4 million in Coinbase stock on Monday. And on Tuesday and Wednesday, Ark sold around $33 and $24 million respectively.&nbsp;



Looking at the sales in stock, Ark sold a little over 10,000 shares on Monday, 230,000 shares from various funds on Tuesday and 180,000 shares on Wednesday according to <a href="https://ark-funds.com/funds/arkf/?utm_campaign=idt_arkf&amp;utm_medium=email&amp;_hsmi=285522351&amp;_hsenc=p2ANqtz-_FiRfM5aN1jyFtuVwLoRRMvKmJFERKbtB8FkmDbMenYMyzrHyMyIFUMAd5ldZ9Ptr9sl7FFdwjAaW52bRJ41UjfBl4-w&amp;utm_content=idt_1262023&amp;utm_source=IDT">filings</a>.



But when looking at the funds and the overall portfolio weights, Ark could be selling to balance the fund. The asset manager has Coinbase in three funds — the ARK Fintech Innovation ETF (ARKF), ARK Next Generation Internet ETF (ARKW) and the ARK Innovation ETF (ARKK).&nbsp;



As of Dec. 7, Ark holds 6.7 million shares of Coinbase in ARKK, over 949,000 shares in ARKF and 1.3 million shares in ARKW.



Coinbase dominates as the top holding in each of those funds, according to their <a href="https://ark-funds.com/funds/arkk/?utm_campaign=idt_arkk&amp;utm_medium=email&amp;_hsmi=285522351&amp;_hsenc=p2ANqtz--QBks9AkyYmMMOO52D2aStKlHjN5Jiyap2kHeKgpYJh27djTULECN8iv-G5BpgSeyTIYlPFpZQymaJnDoJWPbKwlzjsA&amp;utm_content=idt_1262023&amp;utm_source=IDT">pages</a>.&nbsp;



<a href="https://blockworks.co/tag/ark-invest">Ark</a> unloaded Coinbase throughout the last week as well, selling roughly $15 million of stock as the stock benefited from the recent bitcoin rally.&nbsp;



Read more: <a href="https://blockworks.co/news/cathie-wood-spot-btc-etf">Spot bitcoin ETF would be ‘final seal of approval’ for institutions: Cathie Wood</a>



The stock has been climbing towards its 52-week high of $147 throughout the week, though it’s currently hovering around $135 at time of publication. It closed at $134 on Wednesday. Year-to-date, the stock is up roughly 284%.



Ark’s last purchase of <a href="https://blockworks.co/tag/coinbase">Coinbase</a> shares happened back in June after the US Securities and Exchange Commission filed a lawsuit against the crypto exchange, which sent its shares lower.



Outside of Coinbase, Ark has also been actively selling its shares of Grayscale bitcoin trust (<a href="https://blockworks.co/tag/gbtc">GBTC</a>). It’s sold roughly 267,700 shares of GBTC since Tuesday, for a combined total of $9.4 million. Shares of the trust are held by the ARK Next Generation Internet ETF, which has over 4 million shares according to recent data.&nbsp;



GBTC also benefited from the price surge in bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) which is currently trading at $43,000 at the time of publishing. GBTC is trading around $34.



Bloomberg Intelligence analysts Eric Balchunas and James Seyffart have previously said that there’s a possibility that Ark <a href="https://blockworks.co/news/ark-invest-21shares-gain-edge-bitcoin-etfs">chooses to offload its shares of GBTC</a> to port the assets over the ARKB, if the SEC gives its spot bitcoin ETF application the green light.



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