LIF3 (OLD)

Ben Strack

Crypto miner Riot Platforms has bought another 66,000+ machines as part of a deal with MicroBT that could ultimately help the company eclipse 100 exahash per second (EH/s) in mining capacity.&nbsp;



The buy of MicroBT M66S model machines for $290.5 million is the largest hash rate purchase in Riot’s history, Riot CEO Jason Les said in a statement Monday. It amounts to approximately 18 EH/s of mining capacity.



The Colorado-based miner, which <a href="https://blockworks.co/news/riot-platforms-texas-mining">operates mainly in Texas</a>, had 11.7 EH/s of deployed hash rate as of Oct. 31.



Its latest buy comes after Riot made a deal in June with the China-based bitcoin miner manufacturer in June to buy 33,280 machines — the initial order in what the company called a “long-term purchase agreement.”



Read more: <a href="https://blockworks.co/news/riot-microbt-bitcoin-us">Riot inks MicroBT deal to build bitcoin miners in US — not China</a>



The company had secured the option to buy an additional 66,560 machines before the end of 2024. It chose to do so Monday, and also updated the agreement to include the option to purchase up to 265,000 more MicroBT miners on the same terms as the new order.



Such future purchases would add 75 EH/s to the company’s self-mining capacity, pushing it above 100 EH/s.



<a href="https://blockworks.co/tag/riot-blockchain">Riot</a> bought the 66,560 machines at a cost of $16 per terahash, the company said.



“The price of these future purchase options will not exceed our current order as announced today, giving Riot the ability to more effectively plan future capital requirements and providing protection from potentially higher market prices for miners in the future,” Les said in a statement.&nbsp;



The crypto mining sector is expected to come under financial stress next year, with <a href="https://blockworks.co/news/anniversary-of-2016-btc-halving">the next bitcoin halving</a> — when per-block mining rewards will fall from 6.25 bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) to 3.125 BTC — slated for April.&nbsp;



Industry players have made moves of late.



<a href="https://blockworks.co/news/hut8-merger-usbtc-closing-soon">Hut 8 and US Bitcoin Corp finalized their merger</a> last week in a deal executives say <a href="https://blockworks.co/news/hut8-mining-q2-earnings-revenue">helps diversify the business</a>. Another Riot competitor, Marathon Digital, <a href="https://blockworks.co/news/marathon-mining-bitcoin-halving">continues to expand geographically</a> and diversify its mining methods.



Like Riot, Bitfarms last week made a big purchase, buying nearly 36,000 Bitmain T21 miners as part of “a transformative fleet upgrade plan.”



“To be a large scale miner you need to be bold and think two steps ahead of your peers who are also your competitors,” Dan Weiskopf, a co-portfolio manager of the Amplify Transformational Data Sharing ETF (<a href="https://blockworks.co/tag/blok">BLOK</a>), previously told Blockworks.&nbsp;



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Riot plots aggressive hashrate growth via latest MicroBT deal

Casey Wagner

While the US stock market opened mostly in the red Monday, crypto-tied equities appeared to prove the exception Monday morning.



Some publicly listed firms posted double-digit rallies to round out the last month of the year. Galaxy Digital, Marathon Digital Holdings and Riot Platforms each gained more than 10% in the first twenty minutes of Monday’s trading session.&nbsp;



Coinbase and MicroStrategy weren’t far behind, posting around 8% and 9% rallies, respectively. Indeed, Coinbase, Marathon and Riot are poised to clock gains of more than 300% over the year.&nbsp;



Cryptocurrencies were also in the green. Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) rallied more than 4% Monday morning over the past 24 hours, putting the largest cryptocurrency on track to post more than 150% gains over 2023. Ether (<a href="https://blockworks.co/price/eth">ETH</a>), which was up around 1.4% Monday, has rallied more than 85% year-to-date.&nbsp;



Read more: <a href="https://blockworks.co/news/microstrategy-buys-bitcoin">MicroStrategy bought nearly $600M bitcoin in less than 1 month</a>



&#8220;Crypto trades while stocks are closed, so then they have to slingshot to maintain relative value,” said Roshun Patel, partner at Hack VC.



The ongoing optimism around a <a href="https://blockworks.co/bitcoin-etf">spot bitcoin exchange-traded fund</a> remains a key market-driving narrative, Patel added, which is serving as a tailwind for both cryptocurrencies themselves and related stocks.&nbsp;



“Coinbase in particular benefits a lot from anyone getting an <a href="https://blockworks.co/tag/etfs">ETF</a> approved as they will serve as the go-to custodian. I think stock market traders have a hard time underwriting BTC much higher so their forward expectations of earnings for stocks, especially miners, are dampened to expected reality,&#8221; Patel said.&nbsp;



Read more: <a href="https://blockworks.co/news/pando-joins-spot-bitcoin-etf-hopefuls">Spot bitcoin ETF market sees new applicant ahead of SEC ruling</a>



Bitcoin, <a href="https://blockworks.co/news/bitcoin-price-bull-market-compare">which briefly hit $42,000 Monday</a> before hovering around $41,600 later in the morning, is obviously riding the ETF wave, analysts agree, and the rally is positioning other cryptos in a favorable spot.&nbsp;



Bitcoin “is still the ‘gateway’ into the crypto market for many mainstream and large investors, as can be seen in its climbing market dominance,” Noelle Acheson, author of the Crypto is Macro Now newsletter said.&nbsp;



Broader markets, by contrast, slipped early in the trading day. The <a href="https://blockworks.co/tag/s&amp;p-500">S&amp;P 500</a>, Nasdaq Composite and Dow Jones Industrial Average indexes each opened in the red. The Russell 2000, representing small-caps, outperformed, gaining close to 3% at the open.&nbsp;



For traders considering other strategies to close out 2023, small caps may be a good place to look, analysts said.&nbsp;



A run for US small-caps, which continued Monday after the Russell 2000 posted a 3% rally on Friday, may not be the most shocking narrative, but it could foreshadow what is to come for the rest of the year.&nbsp;



“Friday’s Russell rally, while not especially unusual, does signal the possibility of a classic “dash for trash” rally in small caps this month,” Nicolas Colas, founder of DataTrek Research, wrote in a note Monday.&nbsp;



“This slice of the US equity market has lagged large caps in 2023, largely due to its spotty profitability and worries that high interest rates would crimp the ability of smaller companies to raise affordable incremental capital,” Colas added. “Now that rates seem to be heading lower, it makes sense that small caps could continue to play catch up.”



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Crypto stocks are riding the spot bitcoin ETF wave

Katherine Ross

El Salvador’s bitcoin investment is in the black, according to president Nayib Bukele.&nbsp;



Bukele alleged on X that El Salvador could not only recoup its initial bitcoin investment but also potentially earn millions if the country decides to sell.



According to <a href="https://nayibtracker.com/">Nayibtracker.com</a>, which tracks the country’s bitcoin purchases based on Bukele’s tweets, El Salvador would walk away with roughly $4 million in profit as of publication.



The price of bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) sits around $41,000 at time of publication after hitting $42,000 Monday morning. After a rough 2022 following the collapse of FTX and multiple bankruptcies, bitcoin’s price is now <a href="https://blockworks.co/news/bitcoin-price-bull-market-compare">sitting at levels not seen since before Terra collapsed</a>.



Bukele, in his X post, used a screenshot from the site to showcase his country’s investment.&nbsp;



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



“We have no intention of selling; that has never been our objective. We are fully aware that the price will continue to fluctuate in the future, this doesn’t affect our long-term strategy,” Bukele said.



The last recorded buy on the website was back in November 2022 when Bukele claimed that the country would buy one bitcoin a day. Bukele said that the purchases would be part of a dollar cost averaging strategy.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We are buying one <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a> every day starting tomorrow.&mdash; Nayib Bukele (@nayibbukele) <a href="https://twitter.com/nayibbukele/status/1593113857261965312?ref_src=twsrc%5Etfw">November 17, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



However, it’s unclear if Bukele proceeded with that strategy.



El Salvador’s bitcoin holdings are worth around $131 million, according to the tracker.&nbsp;



Bukele and El Salvador first started adding to its <a href="https://blockworks.co/tag/bitcoin">bitcoin</a> position back in September 2021 with a purchase of 200 bitcoin. At the same time, he made <a href="https://blockworks.co/news/el-salvador-to-become-first-nation-with-bitcoin-as-legal-tender">bitcoin legal tender in the country</a>.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">El Salvador has just bought it’s first 200 coins. Our brokers will be buying a lot more as the deadline approaches.<a href="https://twitter.com/hashtag/BitcoinDay?src=hash&amp;ref_src=twsrc%5Etfw">#BitcoinDay</a> <a href="https://twitter.com/hashtag/BTC?src=hash&amp;ref_src=twsrc%5Etfw">#BTC</a>🇸🇻&mdash; Nayib Bukele (@nayibbukele) <a href="https://twitter.com/nayibbukele/status/1434968475928248331?ref_src=twsrc%5Etfw">September 6, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Since then, Bukele has faced widespread criticism for his country’s holdings. Even US politicians on Capitol Hill are pushing<a href="https://blockworks.co/news/us-house-bill-seeks-to-study-el-salvadors-careless-gamble-on-bitcoin"> for an analysis into the risks posed</a> by the country’s bitcoin adoption.



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El Salvador’s bitcoin bet is in the green: Bukele

Bessie Liu

Osmosis, the largest decentralized exchange by trading volume in the Cosmos ecosystem, will merge with Umee’s cross-chain lending UX Chain.



As part of this merger, the UX Chain will transition its code so that it will be compatible with the Osmosis Blockchain and cater to existing liquidity, TVL, and functionality.&nbsp;



This move will enable Osmosis to inherit Umee’s lending features, including spot margin trading, shorting, liquidations, stablecoin pools, interchain flash loans and MEV markets.&nbsp;



Osmosis currently has a TVL of <a href="https://defillama.com/chain/Osmosis">$140 million </a>and a seven-day trading volume of <a href="https://defillama.com/chain/Osmosis">$103 million</a>. Following this merger, its TVL will be combined with TVL on the UX chain, which currently is estimated to be around <a href="https://defillama.com/chain/UX">$17.4 million</a>, according to DeFiLama.&nbsp;



Brent Xu, CEO of Umee, told Blockworks that this initial merger would focus on the weaving of the two different product code bases. Later, a ‘call to action’ proposal will be posted, asking community members to determine the next steps in tokenomics management.&nbsp;



The UX Chain’s UX token could be used to apply <a href="https://blockworks.co/news/mesh-security-cosmos">mesh security</a>, shared security mechanics involving <a href="https://blockworks.co/news/vitalik-buterin-plasma-hype">plasma</a>, or new tokenomic designs developed in the interim, Xu noted.&nbsp;



“In crypto communities, builders should take a product-first mindset and eventually use that as a platform to improve the tokenomics,” Xu told Blockworks. “This is similar to mergers in tradfi where first the deal is announced to the public, and subsequently, the process begins where company governance must decide on all details and specifics of the deal toward final execution and closing.”



<h2 class="wp-block-heading">Mergers in Cosmos</h2>



The Osmosis and Umee merger is not the only unification talk revealed in the Cosmos ecosystem over the past few months.&nbsp;



Earlier at Cosmoverse in Istanbul, liquid staking zone Stride Labs <a href="https://www.google.com/search?q=blockworks+stride&amp;oq=blockworks+stride&amp;gs_lcrp=EgZjaHJvbWUyBggAEEUYOTIHCAEQABiABDIICAIQABgWGB4yEAgDEC4YChgWGB4YrwEYxwEyCAgEEAAYFhgeMggIBRAAGBYYHjIGCAYQRRg8MgYIBxBFGDzSAQgzNjYxajBqNKgCALACAA&amp;sourceid=chrome&amp;ie=UTF-8">floated the idea</a> of becoming part of the Cosmos Hub, a blockchain responsible for connecting thousands of networks within the Cosmos ecosystem.&nbsp;&nbsp;



This proposal ultimately <a href="https://blockworks.co/news/stride-atom-token-conversion">fell through</a> as ecosystem participants were unsure of the role the Cosmos Hub would play in the merger. Participants also noted that ATOM, the native token of the Cosmos Hub, should remain <a href="https://forum.cosmos.network/t/convert-entire-strd-supply-to-atom/11650/143">neutral</a> and not play favorites.&nbsp;&nbsp;



It is important to note, however, that the merger between Osmosis and UX is different from the Stride and Cosmos Hub merger proposal.&nbsp;



This particular merger can be seen as more strategic — as both blockchains share similar objectives to improve trading experiences for their users. Xu notes that there are likely going to be more such alignments within the Cosmos ecosystem in the future.&nbsp;



“It&#8217;s a difficult environment for one team to ship everything, so protocols are better to find synergies than to build in silos,” he said. “This is the ethos of open-source technology. Two chains can merge their technologies to unlock the most powerful applications for the benefit of users, leveraging the benefits of composability.”



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Cosmos chain Osmosis to hook up with Umee’s borrow/lend protocol

Taylor Barr

Advanced semiconductors are at the heart of virtually all modern technology, from consumer electronics to advanced military systems.&nbsp;



Dependence on foreign — in many cases adversarial — semiconductor supply chains poses a significant risk. Onshoring the semiconductor industry is not just a matter of economic policy, but a strategic imperative for national security.&nbsp;&nbsp;



In the midst of the many rapid AI and cloud computing advancements, bitcoin mining plays a complementary (albeit less visible role) as an important driver for domestic chip demand. The burgeoning mining sector&#8217;s need for high-powered, efficient computing chips underscores and amplifies the call for onshoring chip manufacturing.&nbsp;



Look no further than the <a href="https://www.nist.gov/news-events/news/2023/09/biden-harris-administration-announces-final-national-security-guardrails#:~:text=%E2%80%9CCHIPS%20for%20America%20is%20fundamentally,and%20enhance%20our%20collective%20security.%E2%80%9D">CHIPS Act</a> for an example of how critical domestic chip manufacturing is to US national security. The legislation provides north of $52 billion to incentivize American chip manufacturing and targets America&#8217;s declining global share in semiconductor production, which has <a href="https://www.cfr.org/blog/us-investment-semiconductor-manufacturing-building-talent-pipeline#:~:text=Currently%2C%20the%20United%20States%20manufactures,and%20hardware%20education%20to%20stagnate.">plummeted</a> to just 12% from 37% three decades ago.&nbsp;&nbsp;



The unique demands of bitcoin mining for specialized chips not only align with but also enhance the technological strides made in AI and cloud computing. As bitcoin mining becomes further intertwined with our financial system, the demand for specialized chips does too.&nbsp;



By pushing the boundaries of chip efficiency and performance, bitcoin mining inadvertently fuels innovations that benefit the entire spectrum of data technologies.&nbsp;



<h2 class="wp-block-heading">A domestic pioneer</h2>



Enter Auradine: the Silicon Valley-based start-up shows how bitcoin mining can be a catalyst for advanced semiconductor manufacturing. By producing highly efficient ASICs domestically, they exemplify the potential for this sector to drive technological innovation and engineering prowess on American soil.&nbsp;



As Intel left the ASIC chip manufacturing market earlier this year, Auradine is one of the only major player left. And while one of the first to pioneer these innovative practices, Auradine&#8217;s success in producing high-efficiency ASICs domestically shows that onshoring semiconductor manufacturing is not just a concept, but a feasible reality.&nbsp;



Their achievements pave the way for other US companies to consider similar strategies, reinforcing the potential for a robust domestic chip production industry.



<h2 class="wp-block-heading">A call to policymakers&nbsp;</h2>



The strategic national security significance of bitcoin mining calls for a concerted policy effort. If they don’t already, US policymakers must recognize the sector&#8217;s vital role in national security and foster an environment where these pioneering efforts are viable.



Read more from our opinion section: <a href="https://blockworks.co/news/crypto-wall-street-adoption">Yes, crypto is ready for Wall Street</a>



With the strategic value of bitcoin mining becoming increasingly clear, the onus is on US lawmakers to support legislation that fortifies the industry’s status as a key player in the nation&#8217;s strategic assets.&nbsp;



One example is Congressman Pete Sessions&#8217;<a href="https://digitalchamber.org/congressional-resolution-paves-the-way-for-proof-of-work-mining-in-the-u-s/"> Congressional Resolution</a>, which endorses proof-of-work, the consensus mechanism that is the backbone of Bitcoin. Doing so would be a first step in recognizing and tapping into the integral role of domestic bitcoin mining for national security.



Bitcoin mining has emerged as a pivotal player in bolstering US national security. Auradine&#8217;s pioneering role in reshoring chip manufacturing, driven by the demands of Bitcoin, is a clear indicator of its potential.&nbsp;



The time is now for policymakers to take notice and act. Supporting this sector is crucial, transcending economic benefits and directly impacting our national defense and technological leadership on the global stage.



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<div class="wp-block-post-author-biography">Taylor Barr is a Policy Associate for the Chamber of Digital Commerce, the world’s largest blockchain trade organization. Before joining the Chamber, Taylor helped craft policy for U.S. Senator Steve Daines.</div>


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Want to bolster American national security? Support bitcoin mining.

David Canellis

Bitcoin has pressed on with its price rally, and if you believe traditional market math, another bull run has long been confirmed.



The price of <a href="https://blockworks.co/price/btc">BTC</a> briefly cleared $42,000 Monday morning — up nearly one-fifth over the past month and by 150% over the year to date, about on par with Meta but trailing Nvidia.



Bitcoin is now at levels not seen since about a month <a href="https://blockworks.co/news/one-year-since-terra">before Terra collapsed</a> in May 2022, pulling crypto into its <a href="https://blockworks.co/news/longest-bitcoin-bear-market-survival">longest bear market in history</a> by at least one metric.



Potential approval for spot bitcoin ETFs from banks like BlackRock and Fidelity may have pushed bitcoin higher. The DOJ <a href="https://blockworks.co/news/us-binance-changpeng-zhao-personality">finalizing its case</a> against Binance and co-founder Changpeng Zhao also appear to have helped, with markets no longer wondering about the worst case scenario.



While not an exact science, standard definitions say that bull markets are confirmed when an asset climbs 20% from recent lows, and bear markets demand a 20% drop from prior highs.&nbsp;



The S&amp;P 500, for example, <a href="https://apnews.com/article/bull-stock-market-wall-street-cde5d042da6aa887e7d5ba64b62815ff">confirmed</a> in June that it had been in a bull market since lows of October 2022.



<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/16000023/embed#?secret=Ka9v9A6wGy" data-secret="Ka9v9A6wGy" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">The log view better compares bull market returns</figcaption></figure>



Because crypto is typically more volatile than stocks or real estate — sometimes swinging 20% either way in a matter of days — it’s probably more realistic to confirm bull and bear markets over a longer period of time.



So, let’s say a crypto bear market starts when a token stays 20% below its most recent high for two months or more. And a bull market begins when it climbs that much above its latest lows and stays there for one month or more.



<ul>
<li>That would mean bitcoin has been in a bull market, its fifth ever, for the past 296 days.</li>



<li>On January 12, 2023, Bitcoin first traded 20% above lows set just before FTX declared bankruptcy last November.</li>



<li>Bitcoin held onto those gains for one month to start the bull market on February 12, 2023.</li>
</ul>



Napkin math like this is fun, but it should be stressed that bitcoin, like all other cryptocurrencies, is an incredibly young asset.&nbsp;



With only around 13 years of price history, it’s somewhat silly to expect any real insight from studying its past performance, whether it’s about bull markets or the <a href="https://blockworks.co/news/bitcoin-price-mirrors-2012-halving">impact of halvings</a>.



Still, plotting out bitcoin’s bull run so far against its previous major rallies shows some correlation: its returns match the previous two runs almost exactly: 170% compared to 165% in 2020 and 140% in late 2015.



Those rallies topped out years later up thousands of percent, although this time might pale in comparison as bull run returns have diminished every cycle.&nbsp;



Bull markets also don’t go in a straight line, with price corrections between 30% and 50% common across cycles even in multi-month uptrends.



In any case, the last two bull markets lasted more than two and a half years each — so it could be early days if the bull is truly back.



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How this Bitcoin bull market tracks to other major price rallies

Jack Kubinec

Soccer star Cristiano Ronaldo faces a class action lawsuit in Florida for his allegedly “deceptive and unlawful” promotion of Binance, which recently settled with the US Department of Justice.



But Ronaldo appears unbothered, <a href="https://x.com/Cristiano/status/1729477584977600615?s=20">posting</a> on X this week that he’s “cooking something up” with the exchange.



Ronaldo’s continued involvement highlights a larger trend: Binance’s long list of sports partnerships seem to remain intact despite the <a href="https://blockworks.co/news/doj-indictment-binance-changpeng-zhao">Department of Justice’s</a> actions against the centralized exchange and its former CEO, Changpeng Zhao.&nbsp;



Binance has had several sports partners, particularly in soccer, including as Argentina’s fan token provider during its World Cup run. Binance <a href="https://x.com/BinanceArg/status/1680971083904700416?s=20">ended</a> its partnership with Argentinian soccer this summer.



Pet Berisha, author of the “Sporting Crypto” newsletter, told Blockworks that Binance’s deals are likely safe because, unlike with FTX, the exchange remains solvent and can still meet its payment obligations.&nbsp;



Because of the demographic overlap between sports fans and crypto users, Berisha said he expects crypto projects to continue their sports advertising spending, though he expects Binance “will refrain from spending until the noise dies down here and they&#8217;ve built up a cash reserve.”



<h2 class="wp-block-heading">‘Okay Bears’ go live at ZARA</h2>



The Solana NFT collection Okay Bears has a set of shirts with its branding <a href="https://twitter.com/okaybears/status/1730244524440498399">available</a> in 1,149 ZARA stores worldwide.&nbsp;



The shirts are only <a href="https://www.zara.com/us/en/okay-bears--shirt-p03366661.html?v1=322619604">listed</a> in kids’ sizes on ZARA’s website. Okay Bears and ZARA did not return requests for comment about the specifics of the partnership.&nbsp;



The partnership follows on Pudgy Penguins’ move to <a href="https://blockworks.co/news/pudgy-penguins-walmart-debut">bring toy versions of its NFTs to 2,000 Walmart stores</a> in September.&nbsp;



Solana NFT volumes <a href="https://twitter.com/punk9059/status/1730424383217573898">hit</a> their highest point in over a year on Wednesday, according to @punk9059 on X.



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



<ul>
<li>OpenSea, the embattled NFT marketplace, <a href="https://twitter.com/datarade/status/1729416261149340002?s=20">earned</a> less than $2 million in fees in October, down from a high of $387 million in January 2022, <a href="https://twitter.com/punk9059/status/1730424383217573898">according</a> to a Dune dashboard.&nbsp;</li>
</ul>



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



<ul>
<li>Magic Eden is rolling out a <a href="https://www.prnewswire.com/news-releases/magic-eden-tests-nft-focused-cross-chain-wallet-in-beta-301998035.html?tc=eml_cleartime">wallet</a> to pair with its cross-chain NFT platform. The wallet works with Bitcoin, Solana, Ethereum, and Polygon.</li>



<li>On-chain collectible platform Zora introduced <a href="https://x.com/ourZORA/status/1729571950953918661?s=20">Notes</a>, where users can mint bits of text, and is now <a href="https://x.com/ourZORA/status/1729908093902033062?s=20">allowing</a> users to get started on the platform with just an email address rather than a crypto wallet.</li>
</ul>



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Web3 Watch: Binance seems likely to retain its sports partnerships despite DOJ actions

Bitcoin mining firms are deepening their financial war chests as speculation arises around potential spot bitcoin ETF decisions early next year.



Twitter co-founder and longtime bitcoin bull Jack Dorsey led a $6.2 million seed <a href="https://www.prnewswire.com/news-releases/jack-dorsey-leads-seed-round-in-support-of-oceans-mission-to-decentralize-bitcoin-mining-globally---announces-launch-at-future-of-bitcoin-mining-conference-301999073.html">round</a> in Mummolin, the company supporting the launch of a decentralized bitcoin mining pool called OCEAN.&nbsp;



Meanwhile, the Canadian mining company Bitfarms <a href="https://investor.bitfarms.com/news-events/press-releases/detail/220/bitfarms-announces-closing-of-c60-million-private">closed</a> a private $60 million share sale with US institutional investors.&nbsp;



OCEAN is a non-custodial mining pool, meaning miners can lend computing power with ASIC interfaces and receive rewards directly from the bitcoin network without the company taking custody of the mined bitcoins.&nbsp;



“It went back to the principle of protecting bitcoin,” Dorsey <a href="https://www.youtube.com/watch?v=_PH5sKrkzZY">said</a> at a live event this week promoting OCEAN. “We need the people to have more independent, sovereign options [to mine bitcoin].”



It is Dorsey’s second round of 2023, joining his seed investment in bitcoin “voucher” provider Azteco in May.&nbsp;



Read more: <a href="https://blockworks.co/news/dorsey-funding-bitcoin-voucher-service">Twitter co-founder Dorsey leads $6M investment in bitcoin voucher service</a>



Bitfarms operates mining facilities in Quebec, the US state of Washington, Argentina, and Paraguay. The day before the private placement closed, the company <a href="https://investor.bitfarms.com/news-events/press-releases/detail/219/bitfarms-initiates-transformative-fleet-upgrade-that">announced</a> the purchase of 35,888 T21 bitcoin miners and said the high-energy miners come at the most attractive price point the company has seen since 2020.&nbsp;



November was a busy month for bitcoin miners on the funding side. Abu Dhabi-based Phoenix Group <a href="https://www.globenewswire.com/en/news-release/2023/11/21/2783783/0/en/Phoenix-Group-s-IPO-Sees-Unprecedented-180x-Oversubscription-from-Retail-Investors-Signifying-Strong-Market-Confidence.html">raised</a> $370 million via an initial public offering ahead of its listing on the emirate’s ADX stock exchange. Northern Data Group <a href="https://ir.northerndata.de/news/corporate-news/northern-data-group-secures-eur-575-million-debt-financing-facility/">secured</a> a $623 million debt financing facility from Tether Group, the company behind USDT, partly to scale its bitcoin mining operations.&nbsp;



<h2 class="wp-block-heading">Warner Music Group invests in Web3 fan engagement platform</h2>



Warner Music Group joined a group of investors including CMT Digital, Winklevoss Capital, and the NEAR Foundation to raise $3.5 million for a startup blockchain fan engagement platform named MITH, as Axios <a href="https://www.axios.com/pro/media-deals/2023/11/30/mith-fan-platform-jack-harlow">reported</a>.



MITH allows creators to make tiered membership platforms for fans. MITH members can store collections and rewards on their profiles. The rapper Jack Harlow’s “Private Garden” membership <a href="https://www.privategarden.us/memberships">platform</a> launched earlier this month on the Polygon blockchain, according to Axios.&nbsp;



MITH’s raise is the latest funding round for a platform using Web3 monetization tools to connect celebrities with their fans. Modhaus, a platform for K-pop fan engagement, <a href="https://blockworks.co/news/3-startups-90m-raises">raised</a> $8 million in November.&nbsp;



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



<ul>
<li><a href="https://blockworks.co/news/cross-chain-protocol-investor-funding">The cross-chain protocol Wormhole raised $225 million</a> at a $2.5 billion valuation. Tier-1 investors in the round <a href="https://cryptorank.io/funding-rounds">were</a> Coinbase Ventures, Multicoin Capital and Arrington XRP Capital, per CryptoRank.&nbsp;</li>



<li>Coinchange <a href="https://x.com/coinchangeio/status/1729828234366222707?s=20">raised</a> $10 million for its platform that simplifies DeFi yield and compliance for financial businesses. </li>



<li>Decentralized physical infrastructure (DePIN) provider Grove <a href="https://medium.com/decentralized-infrastructure/grove-announces-7-9m-fundraise-to-fuel-decentralized-infrastructure-growth-0671362fae45">raised</a> $7.9 million with participation from Placeholder VC, Avon Ventures, and Druid Capital. DePIN refers to computing infrastructure, like wireless networks or file storage, that isn’t controlled by a centralized entity.</li>
</ul>



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Funding Wrap: Bitcoin miners bag cash ahead of ETF decisions

Crypto asset manager Grayscale hired John Hoffman to be its managing director and head of distribution and partnerships.&nbsp;



Hoffman spent the past several years at Invesco, where he most recently headed up the firm’s ETFs and Indexed Strategies division in the Americas.&nbsp;



Hoffman joins the firm as some speculate that resolution in Grayscale’s yearslong attempt to offer a spot bitcoin ETF <a href="https://blockworks.co/news/pinning-down-bitcoin-etf-approval-dates">could come soon after the new year</a>.&nbsp;



Grayscale is one of several firms promising to offer a spot bitcoin ETF pending regulatory approval but is uniquely positioned in that its Grayscale Bitcoin Trust <a href="https://blockworks.co/news/ark-invest-21shares-gain-edge-bitcoin-etfs">already holds $23 million assets</a> under management.



Read more: <a href="https://blockworks.co/news/grayscale-bitcoin-positive-catalyst">Grayscale sees positive catalysts on the horizon for bitcoin</a>



The traditional finance hire is par for the course at crypto-focused Grayscale. CEO Michael Sonnenshein was an analyst at J.P. Morgan before joining the firm a decade ago, and David LaValle, global head of ETFs, has Nasdaq and indexing firm Alerian on his resume.



In a Grayscale Q&amp;A <a href="https://www.grayscale.com/blog/people-and-culture/5-questions-with-john-hoffman">announcing</a> his joining the company, Hoffman said he first bought bitcoin via Coinbase in 2013 but has been “emotionally invested in its innovation for much longer.”



<h2 class="wp-block-heading">New faces in the C-suite</h2>



Argo Blockchain and Bastion both tapped senior executives this week.



The crypto mining firm Argo named Thomas Chippas CEO. Chippas’ lengthy resume includes stints as CEO at CBOE Digital and Citadel Technology and managing director at Citigroup and Barclays.&nbsp;



Caroline Friedman left her post as chief of staff at a16z Crypto to <a href="https://www.prnewswire.com/news-releases/caroline-friedman-appointed-as-chief-operating-officer-at-bastion-302000506.html">become</a> chief operating officer of Bastion. Friedman joins the startup founded by fellow Andreessen alums and focused on <a href="https://blockworks.co/news/bastion-startup-lightspeed-web3-onboarding-businesses">easing the onboarding of businesses</a> into crypto custody and trading.



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



<ul>
<li>Applications for crypto jobs are “only mildly picking up this year” especially compared to the increase in applications as the market took off in 2021, Raman Sha from Crypto Jobs List said.</li>



<li>Former Coinbase chief compliance officer Mike Lempres <a href="https://www.moonpay.com/newsroom/mike-lempres-joins-moonpay">joined</a> the board of directors at MoonPay.</li>



<li>Ben Caselin became chief marketing officer of South African crypto trading platform VALR. Caselin was most recently chief strategy officer at MaskEX.</li>
</ul>



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Crypto hiring: Grayscale brings on new managing director ahead of ETF decision

Hatu Sheikh

Over the past few years in Web3, DAOs have gained such popularity that most of the largest and most successful projects operate as a DAO.



Maker was one of the first, but Uniswap, Decentraland, Aave, Ape Coin and many other stalwarts of the space have chosen to decentralize their ownership and governance.



However, until very recently, the existence — and even awareness — of DAOs was mostly limited to the Web3 space. But as the market starts to heat up for what many are predicting is the next macro cycle, DAOs with real-world use cases are beginning to gain traction.&nbsp;



<h2 class="wp-block-heading">DeSci — the future of research funding?&nbsp;</h2>



One of the biggest areas of opportunity for DAOs is in funding for scientific research — an opportunity <a href="https://blockworks.co/news/daos-nature-biotechnology-editorial-benefits-science">recently highlighted</a> in the esteemed scientific journal Nature.&nbsp;



Scientific research right now has three big DAO projects: the “flagship” VitaDAO, which focuses on longevity; ValleyDAO, which funds synthetic biology and climate change research; and AthenaDAO, which explores the significantly under-funded field of women’s health.&nbsp;



However, using blockchain to support research, or “DeSci,” was already gaining momentum before the Nature article. PhD researcher and artist Sasha Shilina <a href="https://medium.com/paradigm-research/decentralized-science-desci-web3-mediated-future-of-science-2547f9a88c40#:~:text=DeSci%3A%20A%20new%20paradigm%20for,access%20and%20contribute%20to%20research.">published a series</a> of pieces in early 2023 highlighting the many opportunities for leveraging blockchain and DAOs in scientific collaboration, including facilitating peer reviews and democratizing ownership of intellectual property.&nbsp;



Read more from our opinion section: <a href="https://blockworks.co/news/decentralize-science-research-data">We need to decentralize science</a>



Existing tools and models conceived to serve the scientific community are often developed by or funded by large commercial entities. Blockchain and DAOs offer the potential to transform the status quo and give scientists more autonomy over their research.&nbsp;



<h2 class="wp-block-heading">Making a real-world difference</h2>



The practice of using DAOs to fundraise for charities and campaigns first gained prominence in 2022, when UkraineDAO <a href="https://thedefiant.io/ukrainedao-power-web3">was established</a> following the Russian invasion in February of that year.&nbsp;



However, the practice has now become almost routine during any type of crisis so that people can donate funds in a rapid and targeted way. Charity DAO set up a <a href="https://medium.com/@Maxity.io/charity-dao-launches-a-charity-nft-collection-on-okx-web3-to-support-turkey-earthquake-victims-46e540471fca">fund for the earthquake</a> in Turkey and Syria in February 2023, while <a href="https://www.forbes.com/sites/waynerash/2023/05/26/temdao-uses-blockchain-for-cultural-preservation/?sh=638fdc9c4868">TemDAO</a> was conceived specifically to protect and support world heritage projects.&nbsp;



Research and donations are two areas where there has been significant interest in DAOs, but we’re also seeing many examples of decentralized organizations being used for other creative use cases. For example, CityDAO is <a href="https://www.wsj.com/video/series/in-depth-features/cattle-cowboys-and-crypto-wyoming-real-estate-opens-to-crypto-investors/6105D478-A4A4-4F34-8FDE-470B11EFCFA8">developing a real-world concept</a> for decentralized ownership and governance of an area of real estate in Wyoming. It claims to be the first DAO to have bought land as a registered legal limited company, and citizens are token holders who vote on proposals regarding the land.



Another example is a DAO-owned sports team proposed by the sailing series <a href="https://www.forbes.com/sites/jennywang/2023/08/31/sailgp-and-near-unlock-blockchain-powered-fan-ownership/?sh=57636391164f">launched</a> by Oracle’s co-founders, SailGP. The initiative, which began last year, allows wealthy investors to own a share of a sailing team. In the entertainment sector, Creative Vision is a DAO that <a href="https://finance.yahoo.com/news/introducing-creative-vision-groundbreaking-dao-173000980.html?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAAL2QiY8qgIsG-zap80WHWht4UzMih_BFmChCI2Bd4iF37pDYZ_vANMpUN3sdcjbIJdAiMcKJ6hnN_avCPfC7cQqNXoKvtrWoypGKh-J-EvDKLvqr2JrQxjYXcOvxUtuJFyewbS1cJ5HoCsVV8KbMNVcIHuCzeS6dg7YcBUpNF5Hc">aims to raise financing</a> for horror movies while offering fans digital assets that tie into the on-screen offering.&nbsp;



DAO ownership gives superfans an opportunity to become more creatively involved with their passion, explore new ways of developing it within Web3, and create new sources of revenue for the endeavor.&nbsp;



<h2 class="wp-block-heading">DAOs are due a renaissance</h2>



The trend for DAO adoption could prove to be interesting at all levels as the coming years play out. Some analysts <a href="https://blockworks.co/news/tradfi-firms-in-crypto-waters">believe</a> that the sector is taking a hard shift towards traditional finance and enterprise adoption, leaving questions about whether the once-thriving Web3 startup sector can survive. DAO ownership could be one potential solution, providing access to decentralized capital, talent and creativity, and helping to keep liquidity flowing.&nbsp;



On the other side, corporations and enterprises adopting blockchain in any collaborative sense, such as through consortia, could also make use of DAOs as a tool for facilitating governance, automating the allocation of shared funds and raising investment.&nbsp;



Each segment of the blockchain sphere has a renaissance moment, as we saw with the rise of DeFi in 2020 and the craze for NFTs the following year.&nbsp;



I predict that within a year or two, DAOs will have emerged as the next mainstream success to result from blockchain innovation.&nbsp;



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


<div class="wp-block-post-author-biography">Hatu Sheikh is the co-founder and CMO of DAO Maker, the largest on-chain funding platform with 1.5M+ users. The platform&#8217;s contracts have distributed over $600M, with a cumulative return of around 10x. Hatu has a strong background in marketing and strategy and has played a pivotal role in driving the success of various blockchain-based projects and tokens, crafting effective marketing strategies, and forging powerful synergies within the industry.</div>


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DAOs are the future of Web3

A federal judge thinks attorneys from the US Securities and Exchange Commission lied to receive a temporary restraining order, and he’s ordered them to explain why.&nbsp;



In an order to show cause filed in Ohio Thursday, judge Robert Shelby has demanded the SEC make a case for why its lawyers shouldn’t be sanctioned by the court after conflicting stories led him to believe the agency presented false and misleading evidence in order to freeze Digital Licensing and DEBT Box’s assets in July 2023.&nbsp;



After accusing Digital Licensing, which operates under the name DEBT Box, of offering an unregistered security and defrauding investors of “at least $49 million,” the SEC’s legal team claimed the defendants were attempting to move assets and investor funds overseas. 



The SEC cited bank statements and account closures as evidence the funds were moved internationally in its attempt to get a temporary restraining order, or TRO. It intended to use this to freeze the company’s assets, among other things.



“Just as we were on break I was reminded by investigative staff with respect to the investigation which remains ongoing that even in the last 48 hours defendants have closed additional bank accounts, and I believe the number, I don’t have it in front of me, was around 33 bank accounts have been closed,” Welsh told the court in July during the TRO hearing.&nbsp;



These comments, Shelby wrote, were understood at the time to mean that defendants had closed 33 bank accounts in 48 hours. This, coupled with the accusations that DEBT Box and its team had tried to block the SEC from viewing its social media sites, was enough to grant the ten-day TRO. It was subsequently renewed “several times,” the judge wrote.&nbsp;



Two groups of defendants and relief defendants moved to dissolve the TRO in September. Each group claimed the SEC had misled the court in their initial application.&nbsp;



The SEC then “tacitly acknowledged” that no bank accounts were closed in July 2023 and the accounts that were closed were shut down by the banks, not the defendants, Shelby wrote. The TRO was dissolved in October 2023.&nbsp;



At the hearing to dissolve, Welsh told the court that the SEC did not actually know why the bank accounts had been closed and the commission had no evidence that any money had been moved overseas since January 2023. As for his apparent comments about 33 bank accounts closing within 2 days, neither Welsh nor the SEC addressed this specifically, Shelby said. 



“The court was further troubled by Welsh’s apparent misrepresentation because another attorney from the Commission was on-screen at the ex parte TRO hearing, and there were two investigative staff off-screen,” Shelby wrote. “Yet nobody clarified or corrected Welsh’s statement.”&nbsp;



Industry members say Thursday’s development is part of a “troubling pattern” displayed by the SEC recently.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">A troubling pattern emerges: &#8211; Court finds the SEC demonstrated “hypocrisy” by making inconsistent arguments to the Court and not acting out of a “faithful allegiance to the law.” SEC v Ripple, 7/12/22 &#8211; Court agrees that the SEC defaulted on its duty to respond in good faith to…&mdash; Stuart Alderoty (@s_alderoty) <a href="https://twitter.com/s_alderoty/status/1730649158367973799?ref_src=twsrc%5Etfw">December 1, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



“The good news for the crypto community is that this sort of conduct is exceptionally bad, even by SEC standards, and I’m going to suspect the fact that the SEC is being sanctioned for misrepresentations might be of interest to people like [Binance, Kraken and co-founder Jesse Powell],” Austin Campbell, founder and managing partner of Zero Knowledge Consulting, added.&nbsp;



The SEC has received the order “and will respond to the Court as directed,” a spokesperson from the SEC told Blockworks.&nbsp;



Members of the defense team declined to comment.



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A federal judge says SEC lawyers lied to freeze a crypto company’s assets

The Ethereum network’s greenhouse gas emissions have dropped by an estimated 99.97% since its shift to proof-of-stake, despite a big rise in node count.



That’s according to new research by the Cambridge Centre for Alternative Finance. The organization has upped its crypto research effort after in April launching the Cambridge Blockchain Network Sustainability Index (CBNSI) — a measure that detailed Ethereum’s electricity consumption pre- and post-Merge.&nbsp;



The Ethereum network currently is responsible for 2.8 kilotonnes of carbon dioxide equivalent (KtCO2e) on an annualized basis, the CCAF said in a Friday report.&nbsp;



“To contextualize, this would equate to the emissions from five round-trip airplane flights from London to New York, the annual energy consumption-related emissions of 450 UK households, or the annual carbon sequestration capacity of 270 acres of forest,” the <a href="https://www.jbs.cam.ac.uk/2023/ethereums-climate-impact-a-contemporary-and-historical-perspective/#:~:text=This%20novel%20update%20released%20by,impact%20of%20The%20Merge%20from">report</a> states. &nbsp;



Ethereum switched to a proof-of-stake consensus model in September 2022. The Ethereum Foundation had <a href="https://ethereum.org/en/energy-consumption/">estimated</a> the Merge would reduce the blockchain’s power consumption by 99.95%.&nbsp;



Read more: <a href="https://blockworks.co/news/ethereum-switches-to-proof-of-stake-after-7-years-of-work#">Ethereum switches to proof-of-stake after 7 years of work</a>



But electricity usage is only one piece of an environmental impact assessment, according to the Friday report.&nbsp;



Additional data was required to convert electricity consumption to greenhouse gas emissions. The CCAF used off-chain data from the peer-to-peer communication of Ethereum nodes to gather both electricity usage and the geolocational distribution of nodes.



The number of Ethereum validators has grown 57% since April 1, reaching 880,822. Ethereum nodes have grown to 14,072, reflecting a 23.2% increase over that span.



The network’s annual electricity consumption increased by 21.2% in those eight months, from 6.19 GWh to 7.50 GWh — roughly the annual electricity use of 2,000 English households, the Cambridge data shows.&nbsp;



As for where the nodes are, Europe and North America are home to 43.3% and 40.5% of them, respectively, following the Merge.&nbsp;



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="2100" height="868" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/12/Cambridge-research-CHART-1.jpg?w=1024&amp;h=1024" alt="" class="wp-image-74836" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/12/Cambridge-research-CHART-1.jpg?w=2100 2100w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/Cambridge-research-CHART-1.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/Cambridge-research-CHART-1.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/Cambridge-research-CHART-1.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/Cambridge-research-CHART-1.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/Cambridge-research-CHART-1.jpg?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/Cambridge-research-CHART-1.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/Cambridge-research-CHART-1.jpg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/Cambridge-research-CHART-1.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/Cambridge-research-CHART-1.jpg?w=80 80w" sizes="(max-width: 2100px) 100vw, 2100px" /><figcaption class="wp-element-caption">Source: Cambridge Centre for Alternative Finance (CCAF)</figcaption></figure>



The CCAF estimates pre-Merge greenhouse gas emissions were about 10.3 MCO2e. The latest post-Merge figure of 2.8 KtCO2e reflects a 99.97% drop despite a substantial increase in the number of Ethereum nodes, the report notes.&nbsp;&nbsp;



The network is now powered by nearly 48% sustainable energy — including 32% renewables and 16% nuclear — the CCAF estimates, with the remaining 52% coming from natural gas, coal-fired power, and oil.&nbsp;



The CCAF said it next looks to enhance its Cambridge Bitcoin Electricity Consumption Index (CBECI). Despite Ethereum’s shift to proof-of-stake, bitcoin’s proof-of-work consensus model is a cornerstone of its identity, the report acknowledges — making a similar transition “not as straightforward as it might appear at first glance.”



The research institute adds: “The narrative of Ethereum and Bitcoin’s different paths is not just a tale of technological advancements but also reflects different ideologies and priorities of their communities, highlighting the multifaceted complexity inherent in the evolution of leading blockchain networks.”



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Ethereum validator and node growth leads to emissions decline: Report

Macauley Peterson

Yeeting ETH into the void is nothing new for Ethereans.



By the time the Beacon Chain officially launched on Dec. 1, 2020, the staking contract — referred to as “ETH 2.0” back then — had already seen around 880,000 ETH in deposits.



So perhaps it’s no surprise that <a href="https://blockworks.co/news/blast-tvl-ethereum">multisig-with-a-plan project</a> Blast now sports $650 million in staked ether and stablecoins under its control.



Blast’s explicit promise is that deposited tokens will earn an on-chain yield, plus rewards of unknown value. Ether staking yield comes via Lido’s <a href="https://blockworks.co/price/steth">stETH</a> tokens, while stablecoins are converted to <a href="https://blockworks.co/price/dai">dai</a> deposited in Maker, or <a href="https://blockworks.co/news/maker-endgame-sub-dao-governance-gnosis-dai">savings dai</a> (sDAI).



On Thursday it <a href="https://twitter.com/0xSEM/status/1730291178229186586?s=20">emerged</a> that the Blast deposit interface set its slippage tolerance to an inordinately high 10%, resulting in one user losing about $100,000 in value. The Blast team <a href="https://x.com/Blast_L2/status/1730294341447331973?s=20">says</a> they’ve fixed it.



But, <a href="https://blockworks.co/news/sandwich-attack-mev-ethereum">sandwich attack</a> surprises aside, most depositors at least know that all assets will be locked until the proposed <a href="https://blockworks.co/news/ethereum-optimistic-rollups">optimistic rollup</a> launches in February.



Depositors to the Beacon Chain, too, knew that their ether would be locked up for at least a couple of years — though it wasn’t clear when exactly <a href="https://blockworks.co/tag/ethereum-merge">The Merge</a> and subsequent enabling of <a href="https://blockworks.co/tag/shanghai-upgrade">staking withdrawals</a> would happen when many aped in.



Ultimately it took until April 2023, by which time about 18 million ETH (about $33 billion at the time) were deposited.



In the interim, there was a rapid <a href="https://dune.com/hildobby/eth2-staking">growth</a> in liquid staking, with <a href="https://blockworks.co/tag/lido">Lido</a> becoming the dominant player in early 2022, and already nearing a third of all staked ether by May 2022. It has remained between 29% and 33% ever since, keeping the project at the <a href="https://blockworks.co/news/lido-centralization-debate-ethereum">center of a debate</a> about centralizing market forces on Ethereum.



The total percentage staked through Lido currently <a href="https://dune.com/hildobby/eth2-staking">stands</a> at 32.28%, and Blast — which uses Lido exclusively — isn’t helping.



How much of a problem that is, depends on who you ask.



Some will analogize the concentration of ether stake to the preponderance of the Go Ethereum (Geth) execution client for Ethereum node operators. A great deal of social coordination was needed to bring down the market share of <a href="https://blockworks.co/news/ethereum-devs-finality-issue">Prysm on the consensus layer</a>, which reduces risks to the network as a whole. Geth is <a href="https://clientdiversity.org/#distribution">currently</a> at 84%.



Client diversity is widely seen as one of Ethereum’s strengths, a hallmark of its resilience through decentralization, which is unmatched in crypto. Indeed, decentralization and resilience are often seen as synonymous.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We learned a BIG lesson during consensus client diversity: The usual activity is for the ~10% of home stakers to bust their asses trying to change the distribution, but the REAL value is in getting large providers to switch. Don&#39;t focus on home stakers, focus on large entities.&mdash; superphiz.eth 🦇🔊🛡️ (@superphiz) <a href="https://twitter.com/superphiz/status/1730566752285638709?ref_src=twsrc%5Etfw">December 1, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



That’s why <a href="https://twitter.com/evan_van_ness/status/1727753087941542109?s=20">some</a> are concerned about the Blast-fueled tick up in Lido’s stake share.



But for others, it’s a feature, not a bug. Blur and Blast investor <a href="https://debank.com/profile/0xaa7577a7A27aa7FcF6d0eC481B87Df3aD0F6a88E">Izebel.eth</a> stated the “3 line pitch” for Blast is that “[Ethereum] would be better if everyone used stETH…so we use the bridge as a forcing function.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">3 line pitch: eth would be better if everyone used steth &amp; rebasing stables natively but its an impossible coordination problem so we use the bridge as a forcing function&mdash; jez (blast era) (@izebel_eth) <a href="https://twitter.com/izebel_eth/status/1726783944836751800?ref_src=twsrc%5Etfw">November 21, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Of course, the “bridge” is not really a bridge, while it can only be <a href="https://blockworks.co/news/blast-layer2-ethereum-yield">crossed one way</a>. And forcing people into a harmful position isn’t doing them any favors.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">lmao @ ppl saying &quot;why didn&#39;t L2s research a mechanism like blast before?&quot; we did it sucks&mdash; pseudo 📜🇺🇦 (@pseudotheos) <a href="https://twitter.com/pseudotheos/status/1727679237455306878?ref_src=twsrc%5Etfw">November 23, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



It’s generally good advice to be wary of promises from <a href="https://twitter.com/naniXBT/status/1727427129824969037?s=20">backers</a> that something can “reshape the fabric of society.” That’s not just “ambitious” — it’s hubris.



None of the more academic discussions ultimately matter, though, when you have gamification as your <a href="https://x.com/Brentsketit/status/1727097507895988650?s=20">selling</a> point. And, maybe there are <a href="https://x.com/Fiskantes/status/1730522904918462602?s=20">bigger fish</a> to fry.



In any case, Lido has more TVL — <a href="https://defillama.com/protocol/lido">approaching</a> $20 billion — than any other DeFi protocol by a country mile. And Blast is bigger than <a href="https://blockworks.co/tag/base">Base</a> — in third place behind Arbitrum and Optimism <a href="https://l2beat.com/scaling/summary#active">according to</a> L2Beat — while now <a href="https://twitter.com/Blast_L2/status/1730362088583835913">hiring</a> software engineers, much to the <a href="https://x.com/MeltedMindz/status/1730628148893806762?s=20">amusement</a> of crypto Twitter.



Plenty of folks in this industry idolize the free market; so if that’s your modus operandi, then the market has spoken, for now.



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Blast from the past: 3 years on from the launch of ETH staking

Crypto is full of divisive figures, but Binance CEO Changpeng Zhao is right up there.&nbsp;



He’s <a href="https://fortune.com/crypto/2019/11/27/crypto-needs-journalists-more-than-it-wants-to-admit/">threatened</a> to sue journalists, airdropped crypto to earthquake victims in <a href="https://www.ft.com/content/62aa9940-89ae-4f7d-9e62-380a11de8a68">lieu</a> of food or aid, and even once <a href="https://www.coindesk.com/markets/2019/05/08/binance-considered-pushing-for-bitcoin-rollback-following-40-million-hack/">suggested</a> rolling back the Bitcoin blockchain to undo a $40 million hack on his exchange.&nbsp;



Or should I say, was right up there. The <a href="https://blockworks.co/news/doj-indictment-binance-changpeng-zhao">US muzzled Zhao</a> with money laundering and sanctions violations last week.&nbsp;



But like a monk shedding himself of worldly possessions before attaining enlightenment, crypto as an “industry” could probably do without quite as many cults of personality.&nbsp;



And what better way than to remove one of the largest personalities than with a court order?



The Department of Justice’s <a href="https://blockworks.co/news/binance-changpeng-zhao-deal-unpacked">case against Binance and CZ</a> in particular is ironclad. Last week’s plea deal forced Zhao to resign as Binance CEO —&nbsp;a position he has with an iron grip held since founding the company in 2017— and he now could face up to 18 months in prison. <a href="https://blockworks.co/news/binance-changpeng-zhao-us">CZ also has to stay in the US</a>, rather than return to his home in Dubai until his sentencing hearing early next year.



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>



Part of the deal was that Zhao and Binance agreed to never even hint that they weren’t responsible for their crimes — a shame, as that would’ve played incredibly well on X, a platform that CZ cares so much about he even invested in it with Elon Musk.



A much tamer successor in traditional finance veteran, Richard Teng, has <a href="https://blockworks.co/news/changpeng-zhao-announces-resignation-binance">taken over as Binance CEO</a>. Teng has never threatened to sue journalists on a social media platform.



That’s not to say that Teng isn’t qualified to run a crypto exchange. Even before Binance Singapore, Teng spent 13 years at the nation’s central bank and another six as head honcho at Abu Dhabi’s financial center.&nbsp;



Binance has more hoops ahead of it than a Border Collie at Crufts, and Teng is exactly the kind of agility instructor required to navigate that mess. But Zhao had represented a very particular breed of crypto entrepreneur, one that drives critics up the wall.&nbsp;



Big Tech has characters like Mark Zuckerberg, Jeff Bezos and Elon Musk: They relentlessly believe that what they and their companies do makes the world a better place. The spin makes them easy targets, as their salesmanship resembles out-of-touch naivete.&nbsp;



Meta isn’t exploiting our brain chemistry to undermine social discourse — it&#8217;s a bastion of free speech that brings us all together.&nbsp;



Amazon fulfillment centers aren’t soulless symptoms of late-stage capitalism — they’re fun <a href="https://www.theguardian.com/technology/2015/aug/17/jeff-bezos-amazon-working-practices">places</a> full of people “helping invent the future.”&nbsp;



And Elon Musk’s Neuralink isn’t a grisly horror show ripped from the Twilight Zone — it’s a <a href="https://fortune.com/2023/11/30/elon-musk-neuralink-paradise-never-caused-death-monkeyall-terminal-conditions/">paradise</a> for terminally-ill monkeys complete with playground equipment and TVs.



Zhao was just as painfully stubborn about <a href="https://blockworks.co/tag/binance'">Binance</a>. The platform isn’t an opportunistic hotbed of low quality cryptocurrencies with illiquid markets prone to manipulation — it’s a charitable smorgasbord of blockchain innovation totally free of shitcoins (and securities).



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We don&#39;t list shitcoins even if they pay 400 or 4,000 BTC. ETH/NEO/XRP/EOS/XMR/LTC/more listed with no fee. Question is not “how much does Binance charge to list?” but “is my coin good enough?” It’s not the fee, it&#39;s your project! Focus on your own project!&mdash; CZ 🔶 BNB (@cz_binance) <a href="https://twitter.com/cz_binance/status/1028190371719786496?ref_src=twsrc%5Etfw">August 11, 2018</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Toeing the company line seemed easy for Zhao. Like most entrepreneur influencers, much of his online persona revolves around the toxic positivity typical of founders and venture capitalists, alongside dog whistles for crypto diehards: Dips are when diamond hands are tested, and when in doubt, zoom out on the chart. And then there’s the whole “4” <a href="https://twitter.com/cz_binance/status/1610018096122851328">thing</a>.&nbsp;



Where spiritual gurus would light some sage or chant a mantra to cleanse their chakras of negative energy, Zhao zealots would shoo away bad vibes with a very special brand of shitposting. Just the number “4,” representing the fourth of Zhao’s 2023 resolutions: “Ignore FUD (fear uncertainty and doubt), fake news, attacks, etc.”&nbsp;



(Education, compliance and product and service were the first three).



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/gTKZakhxNqh68PWJxTWFlMRVwh1hqAQeq3g-XyrJVfWWEWlHq5s9gGwciMlnlGtLERbClslD3B0E6BA3FlbmJ-H8NxScJzOHul4M0tCSaegL0R2edfQYFbGjMbOzdzUyqr5j8WSzbGktLPARNB7PtLI" alt=""/><figcaption class="wp-element-caption">Six years at Binance vs. <a href="https://twitter.com/_RichardTeng/status/1730557791822086607">first week</a> as Binance CEO&nbsp;</figcaption></figure>



Teng’s incredibly formal demeanor as compared to Zhao is so noticeable that he was asked about it on a recent Twitter Spaces, his first as CEO.



“Yes and no. I do think that certain things do require certain seriousness in terms of level of communication, because you’re talking about serious matters, especially on matters relating to protection of users, for example, security of users when you talk to the regulators,” Teng said.



He continued: “So I adopt a slightly different mode of communication for different channels. And they&#8217;ll be very informal channels of communication as well. So I think, keep [those posts coming].”



So, Teng will very likely be far less interesting to follow, or cheer for, or even hate-follow from afar. It hasn’t been long, and it’s doubtful he’ll attract a cult following like Zhao. But that’s okay.



Maybe crypto needs less cartoonish ringmasters and more sensible suits who show real discomfort for <a href="https://ofac.treasury.gov/system/files/2023-11/20231121_binance.pdf">servicing</a> the worst of the worst for the sake of profits.



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<div class="wp-block-post-author-biography">David is an Editor based in The Netherlands focused on data-driven journalism. Previously, he wrote for TheNextWeb&#8217;s crypto vertical before launching Protos in 2021. He&#8217;s a reformed hardline Bitcoiner passionate about permissionless and decentralized networks. Contact David at david@blockworks.co</div>


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The US watered down crypto when it ousted Binance’s Zhao — and that’s okay

A light at the end of the tunnel?



Grayscale said Friday that there’s a number of positive catalysts for bitcoin on the horizon from potential spot bitcoin ETF approvals, the halving and even the upcoming presidential election.



In a note summarizing November’s price action, the research team said that it wasn’t just bitcoin that saw a positive November. The team stated that “crypto recovery broadened to a wider array of market segments.”



So far, bitcoin has rebounded a whopping 130% in 2023 after a rough 2022.



“Grayscale Research sees gradually improving crypto fundamentals and a relatively tight supply picture in major tokens (due to Bitcoin’s current ownership structure, for example). This may be consistent with rising crypto valuations in the year ahead, especially if the Federal Reserve has finished tightening and the US economy can avoid [a recession.]”



Read more: <a href="https://blockworks.co/news/bitcoin-price-november-december">Bitcoin price went up in November — will it go up in December?</a>



The macro environment has been focused on whether or not the Federal Reserve and Chair Jerome Powell will be able ensure a soft landing for the US economy, which would ultimately avoid a recession. A hard landing, on the other hand, would most likely force the US into a recession.&nbsp;



Researchers are concerned about the negative impact that a hard landing could have on crypto recovery.&nbsp;



“That being said, the central scenario for financial markets and the economy are likely to be positive for Bitcoin and other crypto assets, in our view. Bitcoin’s supply is relatively ‘tight’ ahead of potential investor inflows into <a href="https://blockworks.co/news/ark-invest-21shares-gain-edge-bitcoin-etfs">spot ETF products</a> in the US. For example, according to Glassnode data, the share of Bitcoin’s supply held by short-term speculators reached a record low,” the <a href="https://www.grayscale.com/research/market-commentary/november-2023-bitcoins-bull-run-continues?ite=1160&amp;ito=1346&amp;itq=9cca29f4-a54c-49e8-aad3-c209da32e82c&amp;itx%5Bidio%5D=1240465">note</a> said.



Additionally, the presidential election next year is “expected” to bring some attention to “excessive government borrowing,” and other issues — such as the Fed’s independence — which would impact the US dollar.&nbsp;



If this plays out, then Grayscale “expects that this combination would be positive for demand for physical and digital gold, and may be consistent with rising Bitcoin valuations.”



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>



TheBlock’s research director Lars Hoffmann <a href="https://twitter.com/lars0x/status/1730594981369233655">found</a> that adjusted on-chain volume increased by nearly 30%, with ethereum increasing 43% and bitcoin up 21%.&nbsp;



Bitcoin’s hash rate hit an all-time high in November, which Grayscale believes is due to miners upgrading ahead of the 2024 halving. Open interest for bitcoin futures listed by CME also hit a high, “possibly pointing to rising institutional activity in the market.”



Grayscale estimates that global crypto ETP net inflows hit $2.2 billion for the year, with November inflows totalling $1.3 billion.



Stablecoins are also getting a boost from a more positive outlook.&nbsp;



“​​Over the last month, aggregate stablecoin market capitalization increased by $4bn and the amount of gas used on stablecoin transactions moved higher,” Grayscale wrote.&nbsp;



Hoffmann, in a <a href="https://twitter.com/lars0x/status/1730594988788973602">post</a> on X, said the issued supply of stablecoins increased by 3.7%. USDT and USDC were the frontrunners, with nearly 75% and nearly 19% of market share respectively.&nbsp;



JPMorgan, in a note on Thursday, found that the spot bitcoin ETF hype has led to “tentative signs of revival” in both the DeFi and NFT spaces, with NFT volumes spiking and a “gentle” recovery in DeFi activity.&nbsp;



JPM credits the resurgence in DeFi, in part, to liquid staking initiatives spearheaded by Lido; a trend that started prior to the widespread attention on spot bitcoin ETFs.



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Grayscale sees positive catalysts on the horizon for bitcoin

Tiger Global reportedly marked down stakes in Bored Ape Yacht Club and OpenSea by 69% and 94% respectively, according to Bloomberg.&nbsp;



Tiger Global manages around $50 billion. It recorded an 18% paper loss in its largest fund at the end of September, the <a href="https://www.bloomberg.com/news/articles/2023-11-30/tiger-global-s-biggest-venture-fund-has-18-loss-after-markdowns">report</a> states.&nbsp;



Both OpenSea and BAYC parent company Yuga Labs cut jobs as part of restructuring earlier this fall. Yuga’s cuts impacted US teams, leaving over 120 employees at the company. Yuga, in March 2022, was <a href="https://blockworks.co/news/bored-ape-yacht-club-creator-secures-whopping-450m-seed">valued at $4 billion</a>.&nbsp;&nbsp;



OpenSea cut around <a href="https://blockworks.co/news/layoffs-opensea-nfts-lido">50% of its workforce</a>, a spokesperson confirmed to Blockworks at the time. The cuts came after a round of layoffs last year which saw the NFT marketplace slash 20% of its workforce.&nbsp;



OpenSea CEO Devin Finzer said that the platform would be “shifting to a smaller team with a direct connection to users.” At its peak in 2022, <a href="https://blockworks.co/news/layoffs-opensea-nfts-lido#:~:text=The%20company%20was%20valued%20at,to%20rival%20NFT%20platform%20Blur.">OpenSea was valued at $13 billion</a>.&nbsp;



Both companies have been impacted by the slump in the NFT market, which <a href="https://blockworks.co/news/layoffs-opensea-nfts-lido#:~:text=The%20company%20was%20valued%20at,to%20rival%20NFT%20platform%20Blur.">has not bounced back</a> following its 2022 peak.&nbsp;



A JPMorgan report from Nov. 30 found that there has been a “positive impact” on both the NFT and DeFi spaces following the speculation around potential spot bitcoin ETF approvals.&nbsp;



However, as analyst Nikolaos Panigirtzoglou notes, “While we do not doubt this recent revival in DeFi/NFT activity is a positive sign, we believe it is too early to be getting excited about it.”



Panigirtzoglou also attributed the launch of marketplaces such as Blur — a <a href="https://blockworks.co/news/blur-nft-volume-opensea">direct competitor to OpenSea</a> — as part of the pick up in interest.&nbsp;



Tiger Global isn’t the only one marking down its stake in the NFT marketplace either. As <a href="https://www.theinformation.com/articles/coatue-cuts-value-of-opensea-stake-by-90-as-funds-returns-sag">reported</a> by The Information, Coatue cut the value of its stake by roughly 90% at the beginning of November. The marketplace’s value sits a little over $1 billion.&nbsp;



Tiger Global did not immediately return a request for comment.



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