Jack Kubinec

All three sons of Republican presidential nominee Donald Trump have now been caught up in ill-fated memecoin launches.



Eric Trump on Tuesday told his social media following that he had “truly fallen in love with Crypto / DeFi.” On Wednesday, Donald Trump Jr. followed suit.



Trump Jr. — who <a href="https://x.com/DonaldJTrumpJr/status/1800505969954501000">recently</a> posted about bitcoin on X as his father curried favor with the industry — posted cryptically that “[d]ecentralized finance is the future,” and that he was about to announce something “HUGE.”



Read more: <a href="https://blockworks.co/news/donald-trump-crypto-influencer-effect-on-maga">The Trump Effect brings thousands of new holders to memecoin MAGA — for now</a>



The posts left their meaning perhaps a bit too vague, as a lot of people lost money on an apparent <a href="https://blockworks.co/tag/donald-trump">Trump</a>-related memecoin Thursday. Ryan Fournier, chair of the Students For Trump organization, made the <a href="https://x.com/CryptoRugs/status/1821611007757971809">claim</a> that the Trump kids had released an official coin called Restore the Republic.&nbsp;



A couple of crypto influencers got involved posting about the token, and Solana co-founder Anatoly Yakovenko briefly <a href="https://x.com/EasyEatsBodega/status/1821603433214066800">amplified</a> the post before deleting his repost.



Read more: <a href="https://blockworks.co/news/politifi-memecoins-us-election">PolitiFi parodies are half-way to the US election — but it’s uphill from here</a>



RTR’s price quickly spiked, but when the two sons denied any involvement in the project, the token collapsed.&nbsp;



“I love <a href="https://blockworks.co/tag/meme-coins">memecoins</a>,” Donald Jr. <a href="https://x.com/tier10k/status/1821696915613835637">said</a> later in a Q&amp;A on the social media platform Locals. But the Trump brothers’ project would be a “larger type of platform” that would “take on the banking world.”



In June, Trump’s teenage son Barron became involved in an imbroglio surrounding the DJT memecoin. Multiple personalities claimed the project was legitimate, but the Trump campaign ultimately did not claim the token.&nbsp;



Read more: <a href="https://blockworks.co/news/donald-trump-djt-token-solana">Web3 Watch: The Trump token that wasn’t</a>



<h2 class="wp-block-heading">Ronin Bridge Pauses</h2>



The popular <a href="https://blockworks.co/tag/gaming">gaming</a> blockchain Ronin had its bridge <a href="https://x.com/Psycheout86/status/1820771028420739140">paused</a> this week amid reports of a potential MEV exploit.&nbsp;



Twelve million dollars was withdrawn from the bridge but will likely be returned, Ronin <a href="https://x.com/Ronin_Network/status/1820804772917588339">said</a>, as the exploiters appeared to be white hat hackers — those who break into computer systems to help find and fix vulnerabilities. The bug apparently was introduced after a Ronin Bridge upgrade this week.&nbsp;



Read more: <a href="https://blockworks.co/news/sky-mavis-ronin-network-bridge-exploited-for-over-600m">Sky Mavis’ Ronin Network Bridge exploited for over $625M</a>



Web3 watchers can be forgiven for their blood pressure spiking upon reading the words “Ronin Bridge” and “exploit” in the same sentence. The gaming bridge for the popular title Axie Infinity was hacked for $625 million in 2022, and is still among the largest crypto hacks to date.&nbsp;



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



<ul class="wp-block-list">
<li>The fully diluted valuation (FDV) of the Solana gaming sector has <a href="https://x.com/Syndica_io/status/1821650602675347457">fallen</a> 95% since mid-2022, according to research put out by Syndica.</li>
</ul>



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



<ul class="wp-block-list">
<li>Blockchain-based social platform Zora <a href="https://x.com/js_horne/status/1821215028457967757">announced</a> a secondary market for items minted on the platform alongside DeFi giant Uniswap.</li>



<li>NFT-linked company Doodles <a href="https://x.com/doodles/status/1821954760334836045">released</a> limited edition merch with Adidas.</li>



<li>Animoca Brands <a href="https://x.com/animocabrands/status/1821517925804904590">announced</a> a partnership with Lamborghini.</li>
</ul>



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



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



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



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Web3 Watch: A second Trump token fiasco

Casey Wagner

David Canellis

Katherine Ross

Michael McSweeney

<h2 class="wp-block-heading">Decision time in Mango trial&nbsp;</h2>



Closing arguments in Avraham “Avi” Eisenberg’s criminal fraud trial wrapped yesterday. The jury was given the case around 3:30 pm ET and called it a night after an hour of deliberations. They will resume this morning and a verdict is expected this afternoon.&nbsp;



Prosecutors say the 28-year-old crypto trader illegally manipulated markets when he made off with $110 million in October 2022 following a series of trades on DeFi trading platform Mango Markets. Eisenberg has been charged with commodities fraud, commodities manipulation and wire fraud.&nbsp;



“The more he pumped, the more he could steal,” government attorneys said Wednesday during their closing arguments. “It is clear as day the defendant knew” he was committing crimes, the prosecution added.&nbsp;



His defense team said this week that it’s all a big misunderstanding. Eisenberg just made some good trades. Plus, he had $13 million on the line.&nbsp;



Read more: <a href="https://blockworks.co/news/avi-eisenberg-committed-fraud">Mango Markets exploiter Avi Eisenberg committed fraud, Feds say</a>



Eisenberg was arrested in Puerto Rico in December 2022. Prosecutors say he manipulated Mango Market futures contracts and pumped the price of swaps by 1,300%. He then borrowed against the contracts and boarded a flight from Puerto Rico to Israel.&nbsp;



The defense denies none of this; they just claim that it was all legal. It’s not Eisenberg’s fault he wasn’t required to submit personal information or that Mango didn’t run a credit check. That’s just how these wild crypto markets work, they said.&nbsp;



The government says he was fleeing because he committed a crime — his internet search history in the days and before and after the trades shows he was researching “fraud” and “statute of limitations on market manipulation” — but Eisenberg’s defense team claims he was running after receiving numerous threats following his trades.&nbsp;



Plus, defense attorney Brian Klein said yesterday, Eisenberg wouldn’t have continued to search these terms if he’d actually thought he did something wrong. I’d beg to differ, but maybe the jury feels differently.&nbsp;



“None of us want to be judged on our web searches,” Klein said. “None of us.”&nbsp;



Presiding Judge Arun Subramanian, one of the newer judges at SDNY — appointed in 2023 — is tasked with overseeing the landmark case. It’s the first time ever the question of whether someone manipulated crypto markets will be posed to a US jury.&nbsp;



There’s no question that lax <a href="https://blockworks.co/tag/kyc">KYC</a> rules aided Eisenberg in his trades. He executed some under the identity of a Ukrainian woman after buying her login information, the government says.&nbsp;



Also, before you get too excited about those “commodity” charges, the Department of Justice isn’t actually claiming MNGO is a commodity; they avoided classifying the token altogether. The DOJ did say that USDC is a commodity and the “perpetuals” in question are “swaps” to justify the charges, though.&nbsp;&nbsp;



The SEC’s case against Eisenberg, which is on hold until these criminal proceedings wrap, specifically calls MNGO a “crypto asset security” given its status as an “investment contract.”&nbsp;



The semantics around classification, at this point, are the least of Eisenberg’s worries, but it is something to watch out for if the <a href="https://blockworks.co/tag/sec">SEC</a> case proceeds. (If Eisenberg is found guilty of criminal charges, the civil suits might get dropped.)&nbsp;



Keep an eye on Crypto Twitter today. The jury was instructed to resume deliberations promptly at 9 am this morning. They’ve also been told they can work through lunch.&nbsp;



Subramanian, unlike Lewis Kaplan who oversaw SBF’s criminal trial, allows cell phones in the courtroom, so news when the verdict drops will travel fast.&nbsp;&nbsp;



— Casey Wagner



<h2 class="wp-block-heading">Data Center</h2>



<ul class="wp-block-list">
<li>Mango Markets has 94,000 SOL ($12.7 million) <a href="https://defillama.com/protocol/mango-markets#information">staked</a> in the app, most of it added months after the Eisenberg incident.</li>



<li>Growth in ETH supply <a href="https://www.validatorqueue.com/">staked</a> has slowed considerably since March, sitting around 26%.</li>



<li>Ethena’s USDe <a href="https://app.ethena.fi/dashboards/solvency">supply</a> has topped out at $2.37 billion for now, after rocketing from $200 million to $2 billion in two months.</li>



<li>Farcaster daily users are <a href="https://dune.com/pixelhack/farcaster">holding</a> strong at more than 40,000, down only around 15% since record highs.</li>



<li>Mantle’s on-chain <a href="https://defillama.com/treasuries">treasury</a> (excluding own tokens) is now almost as big as the Ethereum Foundation’s: $870 million to $933 million.</li>
</ul>



<h2 class="wp-block-heading">Rocky path ahead?</h2>



As someone who started her career reporting on Wall Street, I’m particularly intrigued by the upcoming <a href="https://blockworks.co/tag/bitcoin-halving">halving</a>.&nbsp;



Not just because it’s my first time getting to cover it through a crypto lens and not looking from the outside in, but also because of the way Wall Street and institutions are now interacting with crypto, specifically bitcoin.&nbsp;



With that said, let’s talk about the publicly traded miners. <a href="https://blockworks.co/tag/mining">Mining</a> as a whole is going to be vulnerable post-halving for obvious reasons, but we’ve <a href="https://blockworks.co/news/jpmorgan-bitcoin-halving-publicly-traded-miners">previously reported that Wall Street analysts</a> think that the publicly traded group could benefit from the quadrennial event. 



However, we’re just days out, and there’s a lot of red when looking at the miners as a group. Marathon’s down nearly 17% in the past five days, Riot’s shed 18%, Hut 8’s down 8%, though CleanSpark’s only down 3%.&nbsp;



Read more: <a href="https://blockworks.co/news/bitcoins-most-promising-least-dramatic-halving">Bitcoin’s most promising, least dramatic halving is almost here</a>



In total, the aggregate market cap dropped 28% as of April 15, according to data from JPMorgan. The market cap now sits at around $14.2 billion.



For some analysts on Wall Street, the question is simple: Is this a buying opportunity? For Bernstein analysts, it’s an opportunity to buy stocks such as Riot and CleanSpark.&nbsp;



As we’ve <a href="https://blockworks.co/news/bitcoin-halving-price-implications">reported previously</a>, it’s hard to know what’s going to happen post-halving for two reasons. First, this is only the fourth such event in Bitcoin’s history, so we don’t have a lot of historical data to use. Second, this is a totally different environment for Bitcoin than we’ve seen in the past.&nbsp;



Historically, yes, bitcoin’s gone on to carve out new all-time highs in the months post-halving, and there’s no reason to think it couldn’t hit six figures by the end of the year. Immediately after the event, bitcoin could undergo pressure dropping to the mid-$50,000 or even around $40,000.&nbsp;



And stocks of the bitcoin miners — <a href="https://blockworks.co/news/mining-firms-prepare-for-bitcoin-halving">despite their preparation</a> — could also face headwinds.



— Katherine Ross



<h2 class="wp-block-heading">Putting the Fi in GameFi</h2>



The metaverse may go the way of the enterprise blockchain — a forgotten fad — but GameFi is at least getting another run.



GameFi is a catch-all term for games with some sort of crypto or blockchain integration, through which players can collect and trade NFTs tied to in-game assets, including heroes and items.&nbsp;&nbsp;



While not the first, Vietnamese studio Sky Mavis largely popularized the NFT format with Axie Infinity. The game’s smart contracts are still some of the most active in the space.&nbsp;



Read more: <a href="https://blockworks.co/news/sui-playtron-handheld-web3-gaming-device">Web3 Watch: Sui unveils handheld Web3 gaming device</a>



Business and farming simulators, card battle games and tower defense apps are also common across the major gaming ecosystems with their own layer-1s: Sky Mavis’ Ronin and Gala Games’ Gala Smart Chain, as well as Merit Circle’s Avalanche subnet BEAM.



Ronin, however, is gathering its own on-chain economy. The network seems to have largely rebounded since the <a href="https://blockworks.co/news/the-ronin-hacker-made-off-with-625m-of-crypto-but-cashing-out-isnt-so-easy">debilitating $625 million raid</a> on its token bridge in early 2022. North Korea-linked hackers stole digital assets backing bridged tokens on Ronin, undermining in-game economies — particularly Axie Infinity’s — with the incident going unnoticed for six days.



Sky Mavis later moved to <a href="https://www.techinasia.com/sky-mavis-scales-150m-funding-reimbursing-users">make</a> users whole. At the time of the heist, monthly active addresses on Ronin had already fallen to 2.9 million from a peak of 5.9 million in peak bull market, in November 2021. Active addresses would drop another 65% over the next three months, and by last October, Ronin was seeing only 100,000 monthly active addresses.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/QzWqueflqFP4i-P8VCDPRzYo7cVSKn5EQ4aAFbFv9Q-371QjGApmK6n9Q39AR7d5gjCMhxvpvl0eOjUg4Esw5QQ5qeO04hFvGRav3Q75SrYMl70SGnpoa76jtYkdTfNCn4TqaxqvdDPTfQBe38nOu8c" alt=""/></figure>



Now, there&#8217;s 3.2 million, <a href="https://tokenterminal.com/terminal/projects/ronin">per</a> Token Terminal, and while it’s difficult to say how many represent unique individuals, it’s hard to argue with that growth. The number of transactions on the network hit 51.4 million last month, its highest point since the top of the last bull market.&nbsp;



Axie-related smart contracts are still driving much of the activity, but there are now five other games interacting with Ronin, including Pixels, and eventually a card battle game set in the popular Ragnarok universe. There’s also an NFT marketplace (Mavis Market) native to the network, and a budding decentralized exchange (Katana) is seeing anywhere from $60 million <a href="https://katana-analytics.roninchain.com/home">volume</a> to $4 million per day this year.



You wouldn’t think so, but Ronin is currently the ninth on monthly active user leaderboards, only just behind Uniswap and Base and ahead of TON, Optimism and Aptos.&nbsp;



— David Canellis



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



<ul class="wp-block-list">
<li>WorldCoin plans to <a href="https://blockworks.co/news/worldcoin-teases-world-chain-layer-2">launch its own layer-2</a>, dubbed World Chain, this summer.&nbsp;</li>



<li>Ivy League college students are dropping out to launch their crypto careers, Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-04-17/how-to-get-a-job-in-crypto-bitcoin-price-spike-draws-young-startup-founders?utm_content=business&amp;utm_medium=social&amp;cmpid=socialflow-twitter-business&amp;utm_campaign=socialflow-organic&amp;utm_source=twitter">reports</a>.</li>



<li>This halving could be the least dramatic one yet, according to <a href="https://blockworks.co/news/bitcoins-most-promising-least-dramatic-halving">on-chain activity</a>.</li>



<li>TSMC expects a Q2 sales bump thanks to major demand for AI chips, Reuters <a href="https://www.reuters.com/technology/tsmc-set-report-5-rise-first-quarter-profit-strong-ai-chip-demand-2024-04-18/">reports</a>.&nbsp;</li>



<li>Binance received a full crypto license from Dubai after former CEO Changpeng Zhao forfeited voting control, Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-04-18/binance-close-to-getting-dubai-vasp-license-after-cz-deal-bnb?utm_campaign=socialflow-organic&amp;utm_source=twitter&amp;utm_medium=social&amp;utm_content=crypto">reports</a>.</li>
</ul>



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



What does crypto sound like?



If Hans Zimmer’s <a href="https://www.youtube.com/watch?v=WNRGQMdd9gU">new</a> “theme” for Tron is any indication, it’s a three-minute soundtrack clip from a forgettable Michael Bay movie. Or some vaguely sci-fi video game intro screen. Here’s my review: meh.&nbsp;



It’s not Zimmer’s best work by any means —&nbsp;that obviously is the Interstellar score —&nbsp;but the song, announced yesterday by Tron’s Justin Sun, certainly achieves the goal of creating an association between crypto and an independently noteworthy source.&nbsp;



In this case, an Oscar-winning composer. Or at least his studio, which, <a href="https://www.vanityfair.com/hollywood/2022/02/the-ugly-truth-of-how-movie-scores-are-made">according</a> to Vanity Fair, employs dozens of so-called “Zimlings” to operate a compositional megafactory.&nbsp;



You gotta wonder how much TRX was shoveled into the great crypto furnace to pay for this one. One assumes Zimmer’s music-writing empire was fed dollars instead of crypto, but who knows?&nbsp;



Either way, I wouldn’t put this one in your Spotify inspiration playlist.



— Michael McSweeney



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



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



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



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Empire Newsletter: Decision time in Mango Markets trial

Challenger blockchains Sui, Sei and Ronin are having a moment.&nbsp;



Their native cryptocurrencies have tripled in price over the past three months, outperforming all other layer-1 assets in the top-100 by market cap.



Market leaders bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>), ether (<a href="https://blockworks.co/price/eth">ETH</a>) and binance coin (<a href="https://blockworks.co/price/bnb">BNB</a>) meanwhile gained about 30% in that time. Solana (<a href="https://blockworks.co/price/sol">SOL</a>) and avalanche (<a href="https://blockworks.co/price/avax">AVAX</a>) nearly doubled.



<a href="https://blockworks.co/price/sui">SUI</a>, <a href="https://blockworks.co/price/sei">SEI</a> and <a href="https://blockworks.co/price/ron">RON</a> are far smaller cryptocurrencies with less liquid markets (all three combined are not even one-third of AVAX’s market cap), so increased volatility is to be expected.



Still, the data suggests those networks have garnered increased usage over the past few months, at least in the case of Sui and Ronin.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16788805/embed#?secret=SQj9RZfEkg" data-secret="SQj9RZfEkg" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">The market has gravitated towards newbie layer-1s</figcaption></figure>



Sui is a delegated proof-of-stake network built by former Facebook/Meta engineers, pitched as a high-performance blockchain that can execute transactions in parallel in hopes of faster throughput.



Sui’s total value locked (<a href="https://blockworks.co/tag/tvl">TVL</a>) has exploded from $90 million to $560 million in three months.&nbsp;



Read more: <a href="https://blockworks.co/news/bitcoin-price-ratios">Sui, Bittensor, Celestia top small pack with rising bitcoin price ratios</a>



SUI’s rally explains only a small part of that surge — there were 73 million SUI staked in its DeFi protocols at the end of October, now there’s more than 320 million.



Peer-to-peer lending platform Scallop, liquidity protocol Navi and decentralized exchange Cetus make up most of the network’s TVL right now.



All while some more established blockchains — BNB Chain, Avalanche and Polygon PoS — have seen their TVL shrink, even as crypto broadly staged powerful comebacks over the past year.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16790056/embed#?secret=Y5Uoe2OGnO" data-secret="Y5Uoe2OGnO" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">BNB Chain’s total BNB locked has trended downward since 2021</figcaption></figure>



Ronin, on the other hand, is the <a href="https://blockworks.co/tag/evm">EVM</a> blockchain for gaming communities, built by Axie Infinite creator Sky Mavis.&nbsp;



It’s perhaps most well-known due to the unfortunate hacking of its token bridge in 2022, when more than $650 million in crypto kept in the bridge&#8217;s smart contract was <a href="https://blockworks.co/news/sky-mavis-reopening-ronin-bridge-with-enhanced-security">stolen by North Korea-linked attackers</a>.



There were around 21,000 daily active users on Ronin three months ago. Now, that figure is up to 615,000 — led by Web3 decentralized identity service CARV and games Pixel and Apeiron.&nbsp;



The daily active users metric is notoriously squirrely in crypto. It represents the number of unique addresses which make at least one transaction per day, and can be gamed with bots and other sybil tricks.&nbsp;



It’s unclear if active user metrics have been artificially boosted for any of the networks mentioned in this piece, but best to read into them with a grain of salt.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16792769/embed#?secret=Rr4Buc2YQC" data-secret="Rr4Buc2YQC" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Bitcoin and Ethereum’s daily active addresses has mostly stayed flat over the past five years</figcaption></figure>



Sei, much like the similarly-named Sui, <a href="https://blockworks.co/news/sei-blockchain-v2-developer-network">is a network pushing parallelized processing</a>. San Francisco-based Sei Labs pitches it as the fastest layer-1 for trading, specifically tailored for decentralized exchanges and the like.



Uptake appears to be slow so far, with only $14.5 million SEI locked in its DeFi platforms right now.



And while that number has more than tripled in the past three months, most of that was due to SEI’s price appreciation — 450% in three months. The actual number of SEI tokens locked has dropped by more than a third since November.&nbsp;



On-chain volume on Sei has also dropped below $1 million per day, according to DeFiLlama, down from a $3.7 million peak in January.



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



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



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



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Sui price triples in 3 months, signals changing of the guard in DeFi

Ben Strack

<div id="highlights-block_62542bbc93124" class="highlights">
 <ul>
 <li>Mixing services pool together crypto transactions to obfuscate the fund sources and improve privacy</li>
 <li>Recent crypto seizures by authorities in Florida and Germany involved alleged criminal use of mixers</li>
 </ul>
 
</div>



Crypto services designed to improve transaction privacy continue to be used in illegal activities, but using so-called mixers for nefarious purposes is becoming increasingly risky.&nbsp;



A cryptocurrency mixing service is used to privately transfer cryptoassets between wallets by comingling funds in a pool of assets belonging to many participants.



The hacker who last month <a href="https://cms.blockworks.co/sky-mavis-ronin-network-bridge-exploited-for-over-600m/" target="_blank" rel="noreferrer noopener">exploited the Ronin Network</a> for roughly $625 million recently transferred thousands of ether to Tornado Cash, a privacy tool for Ethereum. More than 165,000 ETH remains <a href="https://etherscan.io/address/0x098b716b8aaf21512996dc57eb0615e2383e2f96" target="_blank" rel="noreferrer noopener">in the attacker’s wallet</a>.



Tornado Cash, a decentralized protocol for private transactions on Ethereum, breaks the on-chain link between source and destination addresses, according to its website. The protocol uses a smart contract accepting ETH deposits that can be withdrawn by a different address. The longer the funds remain in the pool before being withdrawn, the greater the privacy protections.



“While Tornado Cash can be used for illegal activities, like money laundering or tax fraud, many believe that it is a crucial tool for maintaining financial anonymity,” NetSPI Chief Technology Officer Travis Hoyt told Blockworks.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Due to the nature of mixers like Tornado Cash obscuring transactions, consumers that lack a full understanding of crypto’s security infrastructure may be susceptible to risks such as inadvertent money laundering.”&nbsp;</blockquote>



Also last week, federal prosecutors in Florida seized roughly $34 million worth of crypto and German authorities confiscated about $25 million worth of bitcoin. The alleged criminals in both cases used mixing services to mask transactions.



But obscuring sources of funds through mixers is an increasingly risky option for bad actors, especially when trying to move the large quantities needed to evade sanctions, launder stolen funds or cash out the proceeds of a darknet marketplace, according to Gurvais Grigg, Chainalysis’s global public sector chief technology officer.



“Mixers require the participation of many users inputting comparable amounts of cryptocurrency in order to provide the desired obfuscation, and the liquidity often can&#8217;t support this,” he told Blockworks.&nbsp;



Mriganka Pattnaik, co-founder and CEO at Merkle Science, <a href="https://cms.blockworks.co/how-the-crypto-industry-is-being-stunted/" target="_blank" rel="noreferrer noopener">agreed</a> that mixers, tumblers or privacy coins do not have sufficient liquidity for individuals to move hundreds of millions of dollars in untraceable ways. He noted that cash is still the preferred monetary medium for smart criminals.



<a href="https://cms.blockworks.co/chainalysis-report-illicit-addresses-received-14b-in-2021/" target="_blank" rel="noreferrer noopener">A Chainalysis report</a> published in February found that while illicit crypto transactions reached an all-time high of $14 billion last year, criminal activity’s share of cryptocurrency transaction volume has never been lower.



Grigg noted that Chainalysis’s recently publicized demixing capabilities may further disincentivize mixer usage for illicit purposes. Forbes <a href="https://www.forbes.com/sites/laurashin/2022/02/22/exclusive-austrian-programmer-and-ex-crypto-ceo-likely-stole-11-billion-of-ether/?sh=79e0e367f589" target="_blank" rel="noreferrer noopener">reported</a> in February that Chainalysis has a “previously secret forensics tool” that was able to demix transactions tied to The DAO hack of 2016 and track their output to four exchanges.



A Chainalysis spokesperson declined to share further details about the blockchain data platform’s demixing efficacy.



<h3 class="wp-block-heading">The latest seizures</h3>



Still, alleged criminals are using the mixing services.&nbsp;



A Florida man allegedly used an online alias and made more than 100,000 sales of illicit items and hacked online account information — such as for HBO, Netflix and Uber — on several dark web marketplaces, according to a Monday <a href="https://www.justice.gov/usao-sdfl/pr/united-states-forfeits-millions-cryptocurrency-used-launder-illicit-dark-web-proceeds" target="_blank" rel="noreferrer noopener">statement</a>.



He used “tumblers” — mixing services that pool together multiple cryptocurrency transactions — and illegal dark web money transmitter services to launder one cryptocurrency for another.&nbsp;



The tumbler distributes the cryptocurrency to a designated cryptocurrency wallet at random times and in random increments to obscure the original source of funds, officials said. Law enforcement agents seized various cryptocurrency wallets associated with the illegal dark web conduct.



The seizure came a day before German authorities revealed Tuesday that the country’s Federal Criminal Police Office (BKA) and its Central Office for Combating Internet Crime (ZIT) took down servers of Hydra Market, the world’s largest darknet marketplace. The agencies confiscated about $25 million worth of bitcoin after an investigation that began in August.



Focused on trading illegal narcotics, the Russian-language darknet platform had been accessible through the Tor network since at least 2015. Roughly 17 million customers and 19,000 seller accounts were registered on the marketplace.



According to ZIT and BKA estimates, Hydra Market’s sales amounted to at least 1.2 billion euros in 2020. The “Bitcoin Bank Mixer,” a service for obfuscating digital transactions provided by the platform, made crypto investigations extremely difficult for law enforcement authorities, officials said.



In another case, <a href="https://blog.crypto.com/crypto-com-security-report-next-steps/" target="_blank" rel="noreferrer noopener">funds stolen from Crypto.com</a> in January were reportedly being moved through Tornado Cash, according to <a href="https://twitter.com/peckshield/status/1483246262371557378/photo/1" target="_blank" rel="noreferrer noopener">on-chain data spotted</a> at the time by blockchain security and data analytics company PeckShield.



Tornado Cash co-founder Roman Semenov <a href="https://www.coindesk.com/tech/2022/01/25/tornado-cash-co-founder-says-the-mixer-protocol-is-unstoppable/" target="_blank" rel="noreferrer noopener">told CoinDesk</a> that month that the service was designed to be “unstoppable,” noting that the team has little control over what its users do with the protocol. That means that once non-upgradeable software is deployed on an immutable blockchain like Ethereum, it will operate as long as Ethereum — and by extension the internet — does. The popular <a href="https://cms.blockworks.co/?s=uniswap" target="_blank" rel="noreferrer noopener">Uniswap</a> decentralized exchange is another such example.



A Tornado Cash spokesperson did not return a request for comment.



The ethos behind mixers is to harbor more financial freedom and privacy, bringing cash-like anonymity to otherwise public transaction ledgers, by deliberately making transactions hard to regulate, Hoyt said. Such technology can be used lawfully or unlawfully; the only way to avoid risk completely is to not engage at all.&nbsp;



“While there are a plethora of general resources about crypto available, the industry must prioritize education on the inherent security risks and how to best mitigate these risks,” Hoyt said. “Aside from consumers actively choosing to not utilize mixers, this is the best way to ensure ethical crypto traders remain protected.”



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



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



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



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

The Purpose and Perils of Crypto Privacy Tools

Morgan Chittum

<div id="highlights-block_624d9f40b7d24" class="highlights">
 <ul>
 <li>Hackers breached the Ronin Network for over $625 million on March 29</li>
 <li>On Wednesday, Binance said that it has fully resumed withdrawals and deposits on the Ronin Network</li>
 </ul>
 
</div>



A week after one of the largest cryptocurrency hacks to date — a <a href="https://cms.blockworks.co/sky-mavis-ronin-network-bridge-exploited-for-over-600m/" target="_blank" rel="noreferrer noopener">$625 million breach</a> on the Ronin Network bridge — Sky Mavis, the company that built it, <a href="https://twitter.com/trungfinity/status/1511416163313414147" target="_blank" rel="noreferrer noopener">acknowledged</a> that its haste to grow the platform’s user base may have caused it to cut corners on security.



The Ronin Network is an Ethereum-linked sidechain used for blockchain game Axie Infinity. The bridge connecting it to the Ethereum mainnet was exploited, and an attacker drained 25.5 million USDC and 173,600 ETH on March 29, totaling about $625 million.



“While racing for mainstream adoption, we made some trade-offs that ended up leaving us vulnerable to this sort of attack,” Axie Infinity said in a <a href="https://axie.substack.com/p/funding?s=r" target="_blank" rel="noreferrer noopener">blogpost</a>. “It’s a lesson that we’ve learned the hard way.”



Sky Mavis announced a $150 million raise, led by Binance, to reimburse affected users. Other contributors to the round include Paradigm, Animoca Brands, Dialectic, Accel and Andreesen Horowitz.



“Sky Mavis is committed to reimbursing all of our users&#8217; lost funds and implementing rigorous internal security measures to prevent future attacks,” Trung Nguyen, chief executive of Sky Mavis, said in the Wednesday <a href="https://axie.substack.com/p/funding?s=r" target="_blank" rel="noreferrer noopener">statement</a>.



On Wednesday, Binance said that it has fully resumed withdrawals and deposits on the Ronin Network after suspending them last week.



“In order for the global ecosystem to continue thriving and maturing, it is imperative that we work together, especially when it comes to security, which is our strong suit,” Changpeng “CZ” Zhao, chief executive of Binance, said in a statement.



Of the stolen ether, more than 170,000 ETH remains <a href="https://etherscan.io/address/0x098b716b8aaf21512996dc57eb0615e2383e2f96" target="_blank" rel="noreferrer noopener">in the attacker’s wallet</a>, and thousands of ETH have been transferred to Tornado Cash, a privacy tool for Ethereum.



“Sky Mavis’ Ronin chain currently consists of 9 validator nodes. In order to recognize a Deposit event or a Withdrawal event, five out of the nine validator signatures are needed,” per the breach’s <a href="https://roninblockchain.substack.com/p/community-alert-ronin-validators?s=w" target="_blank" rel="noreferrer noopener">announcement</a>. “The attacker managed to get control over Sky Mavis’s four Ronin Validators and a third-party validator run by Axie DAO.”



The Ronin Network bridge will reopen, Sky Mavis said, once it has undergone significant audits and security upgrades, which can take several weeks.



Among the security improvements, Sky Mavis will increase the validator group to 21 validators within the next three months, which will be split among various stakeholders including partners, community members and long-term allies.



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



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



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



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Axie Infinity Developers ‘Made Some Trade-offs’ That Enabled $625M Ronin Breach

<div id="highlights-block_6244bc1609abe" class="highlights">
 <ul>
 <li>Blockchain transparency makes it hard to pull off large-scale cryptocurrency theft, according to blockchain data firm Chainalysis</li>
 <li>Axie Infinity co-founder Aleksander Leonard Larson tweeted Wednesday that several new validators would be added to the Ronin network</li>
 </ul>
 
</div>



For the hacker who recently <a href="https://cms.blockworks.co/sky-mavis-ronin-network-bridge-exploited-for-over-600m/" target="_blank" rel="noreferrer noopener">exploited the Ronin Network</a> for roughly $625 million, cashing out the funds will likely be a challenge. 



The Ethereum-linked sidechain used for blockchain game Axie Infinity was attacked last week, when the person or group responsible made off with 173,600 ether and 25.5 million USDC.



The exploiter used hacked private keys to forge withdrawals on March 23, according to <a href="https://roninblockchain.substack.com/p/community-alert-ronin-validators?s=w" target="_blank" rel="noreferrer noopener">a Tuesday statement</a>. The breach was discovered nearly a week later when a user was unable to withdraw 5,000 ETH.



The hackers have tried to sell about 6,500 stolen ETH, transferring the tokens to three different exchanges, according to William Quigley, co-founder of stablecoin Tether and non-fungible token (NFT) blockchain platform WAX. All of the stolen USDC has been transferred out to various wallets and DeFi protocols, Etherscan data shows.



Most of the funds remain in the <a href="https://etherscan.io/address/0x098b716b8aaf21512996dc57eb0615e2383e2f96" target="_blank" rel="noreferrer noopener">hacker’s wallet</a>, according to the network. Aleksander Leonard Larson, co-founder and chief operating officer of Axie Infinity, tweeted Wednesday that Axie is committed to ensuring all of the drained funds are recovered or reimbursed.



“Been an intense 36 hours,” <a href="https://twitter.com/Psycheout86/status/1509134627319033863" target="_blank" rel="noreferrer noopener">Larson tweeted</a>. “Our internal network is currently going through a deep forensics review to ensure there is no lingering threat.”



Selling the remaining 176,000 or so ETH will be difficult, Quigley told Blockworks, adding that the address has been blacklisted to exchanges.



“Sky Mavis has also retained Chainalysis to ensure that any of the stolen ETH moved from this Ethereum address will be tracked,” he said. “It doesn&#8217;t seem like the hacker will have much luck cashing out.”



Kim Grauer, Chainalysis’ director of research, said the <a href="https://cms.blockworks.co/hackers-steal-over-600m-biggest-in-defi-history/" target="_blank" rel="noreferrer noopener">Poly Network hack in August</a> and subsequent <a href="https://cms.blockworks.co/poly-network-hacker-returns-600-million-offered-500000-bug-bounty/" target="_blank" rel="noreferrer noopener">return of funds</a> illustrated the rising difficulty of pulling off a large-scale cryptocurrency theft.



While criminally obtained fiat currency can be moved through “shady bank accounts” — and authorities rely on subpoenas and the cooperation of financial institutions to trace its path — Grauer said anyone can view transactions executed on public blockchains.



“With the inherent transparency of blockchains and the eyes of an entire industry on them, it&#8217;s difficult for any cryptocurrency hacker to escape with a large cache of stolen funds,” Grauer said. “In most cases, the best they could hope for would be to evade capture as the funds sit frozen in a blacklisted private wallet.”



<h3 class="wp-block-heading">How did it happen and what’s next?</h3>



Illicit crypto transactions <a href="https://cms.blockworks.co/chainalysis-report-illicit-addresses-received-14b-in-2021/" target="_blank" rel="noreferrer noopener">reached $14 billion</a> last year, according to a February Chainalysis report. Though that marks an all-time high, illicit activity in terms of total crypto transaction volume has never been lower, as the market capitalization of digital assets grew in 2021.



The latest hack was an outlier, Quigley said, in that it occurred in part because a single entity, Sky Mavis, controlled four of the Ronin’s chain’s nine validator nodes. The hacker gained control of a fifth node — good for a majority — run by Axie DAO.



Larson called the hack “a social engineering attack combined with a human error” in a Wednesday tweet, adding that Ronin plans to add additional validators to boost decentralization.&nbsp;



The fact that several days passed before the public became aware is rare and “surprising,” Quigley said.



“Most people did not appear to know that Axie Infinity ran its own layer-2 blockchain on top of Ethereum,” he said. “People playing Axie Infinity or providing liquidity to Ronin&#8217;s decentralized exchange, Katana, might have been more circumspect about depositing hundreds of millions of dollars on the Ronin Bridge if they knew Axie Infinity managed the passwords to five of the nine Ronin validator nodes.”



Layer-2 chains are inherently more vulnerable because the attack vectors double when you operate atop another chain, Quigley said. Exploits can be operational — when the parties running a system don’t have robust security practices — or code-related.



“Large complex systems, like fully featured layer-2 based blockchain games with hooks into other third-party platforms, is a vastly more challenging system to audit,” he said, noting the operational nature of the Ronin hack.



As more value flows through cross-chain bridges, they’re becoming increasingly attractive targets for hackers, according to Grauer. Though the Ronin case involved hacked private keys, many DeFi (decentralized finance) hacks are attributed to code vulnerabilities.&nbsp;



“While not foolproof, a valuable first step towards addressing issues like this could be for extremely rigorous code audits to become the gold standard, both for those building protocols and for the investors evaluating them,” Grauer said. “Over time, the strongest, safest smart contracts can serve as templates for developers to build from.”



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



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



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



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

The Ronin Hacker Made Off With $625M of Crypto, but Cashing Out Isn’t So Easy

<div id="highlights-block_62432ab13c83b" class="highlights">
 <ul>
 <li>Exploiters used hacked private keys to forge fake withdrawals on March 23</li>
 <li>“We are working with law enforcement officials, forensic cryptographers, and our investors to make sure that all funds are recovered or reimbursed,” Ronin Network said in a statement</li>
 </ul>
 
</div>



Ronin Network, an Ethereum-linked sidechain used for blockchain game Axie Infinity, was breached. Hackers exploited the network for roughly $625 million, or <a href="https://etherscan.io/address/0x098b716b8aaf21512996dc57eb0615e2383e2f96" target="_blank" rel="noreferrer noopener">173,600 ether</a> and 25.5 million USDC, according to a Tuesday <a href="https://roninblockchain.substack.com/p/community-alert-ronin-validators?s=w" target="_blank" rel="noreferrer noopener">statement</a>.



Exploiters, per the network’s post, used hacked private keys to forge withdrawals on March 23. The breach, however, wasn’t discovered until Tuesday, when a user was unable to withdraw 5,000 ETH.



Ethereum and USDC deposits on Ronin have been drained from its bridge contract. Users, as of now, are unable to withdraw or deposit funds. The Ronin Bridge and Katana DEX, as a result, have been halted.



“Sky Mavis’ Ronin chain currently consists of 9 validator nodes. In order to recognize a Deposit event or a Withdrawal event, five out of the nine validator signatures are needed,” the blogpost said. “The attacker managed to get control over Sky Mavis’s four Ronin Validators and a third-party validator run by Axie DAO.”



<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">There has been a security breach on the Ronin Network.<a href="https://t.co/ktAp9w5qpP">https://t.co/ktAp9w5qpP</a>&mdash; Ronin (@Ronin_Network) <a href="https://twitter.com/Ronin_Network/status/1508828719711879168?ref_src=twsrc%5Etfw">March 29, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
</div></figure>



Sky Mavis, the creator of Axie Infinity, said it is “committed to ensuring that all of the drained funds are recovered or reimbursed.”



“We are working with law enforcement officials, forensic cryptographers, and our investors to make sure that all funds are recovered or reimbursed,” the network said in a tweet.&nbsp;



Most of the stolen ETH remains in the attacker’s wallet, but 6,250 ETH (about $21 million) has been transferred out, including hundreds of ETH sent to the FTX Exchange.



All $25.5 million in USDC has been transferred out to various wallets and DeFi protocols, according to <a href="https://etherscan.io/address/0x098b716b8aaf21512996dc57eb0615e2383e2f96" target="_blank" rel="noreferrer noopener">Etherscan</a>.



RON, the native token of the Ronin Network, is down 23% on the news, according to <a href="https://coinmarketcap.com/currencies/ronin/" target="_blank" rel="noreferrer noopener">CoinMarketCap</a>.



This is a developing story and may be updated as new information becomes available.



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



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



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



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Sky Mavis’ Ronin Network Bridge Exploited for Over $625M

Sam Martin

<div id="highlights-block_9395deceadc1e6f2393411af7d750ead" class="highlights">
 <ul>
 <li>Bitcoin’s weekly outflows reached a five-month high with nearly $3 billion worth of BTC leaving centralized exchanges</li>
 <li>The inflation outlook for December remains unclear as shipping and energy costs begin to rollover.</li>
 </ul>
 
</div>



BTC rallied to near $50,000 after the 6.8% CPI print before erasing the gains and trading below $47,500.



Real yields on the US 10-year are at their lowest level since the 1940s.



The inflation outlook for December remains unclear as shipping and energy costs begin to roll over.



Bitcoin’s weekly outflows reached a&nbsp;five-month high&nbsp;with nearly $3 billion worth of BTC leaving centralized exchanges.



Axie Infinity teases future aspects of gameplay and provides an overall update of the largest blockchain-based game.



<h3 class="wp-block-heading">Latest in Macro:</h3>



<ul class="wp-block-list">
<li>S&amp;P 500: 4,712, +0.95%</li>



<li>NASDAQ: 15,5630, +0.73%</li>



<li>Gold: $1,782, +0.36%</li>



<li>WTI Crude Oil: $71.95, +1.42%</li>



<li>10-Year Treasury: 1.482%, -0.005%</li>
</ul>



<h3 class="wp-block-heading">Latest in Crypto:</h3>



<ul class="wp-block-list">
<li><a href="https://blockworks.co/price/btc">BTC</a>: $48,348, +0.97%</li>



<li><a href="https://blockworks.co/price/eth">ETH</a>: $4,043, -2.61%</li>



<li>ETH/BTC: 0.0836, -3.31%</li>



<li>BTC.D: 41.19%, +1.54%</li>
</ul>



<h3 class="wp-block-heading">6.8% CPI print</h3>



After a <a href="https://cms.blockworks.co/bonds-sell-off-on-6-2-cpi-print-bitcoin-liquidations-spur-correction-markets-wrap/" target="_blank" rel="noreferrer noopener">6.2% Consumer Price Index (CPI)</a> print for the month of October, November&#8217;s numbers showed a 6.8% year-over-year inflation rate. This is the highest inflation rate since June of 1982, <a href="https://twitter.com/JackFarley96/status/1469300999860989955?s=20" target="_blank" rel="noreferrer noopener">according</a> to Jack Farley.



Moreover, the 10-year real yield is also officially at its lowest level since the 1940s, <a href="https://twitter.com/TaviCosta/status/1469312450445123584?s=20" target="_blank" rel="noreferrer noopener">per</a> Crescat Capital portfolio manager, Otavio Costa. Real yields are calculated by subtracting the prevailing inflation rate from the nominal Treasury yield, thus providing investors with the real rate of return of bond yields.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="791" height="578" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png" alt="" class="wp-image-12432" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=791 791w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=352 352w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=357 357w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=80 80w" sizes="auto, (max-width: 791px) 100vw, 791px" /></figure>



Container shipping rates have begun to roll over, which should help ease CPI prints going forward.



&#8220;If the Fed errs, the bond market and its deflationary signals will say, &#8216;Told you so!&#8217; Long yields are very low considering low jobless rates and inflation, and inflation expectations are falling. Note the 5-yr-5-yr forward TIPS break-even spread and container shipping rates,&#8221; <a href="https://twitter.com/TimmerFidelity/status/1469336106764316685?s=20" target="_blank" rel="noreferrer noopener">wrote</a> Jurrien Timmer, Director of Global Macro at Fidelity.



US President Joe Biden also signaled ahead of today&#8217;s CPI number that, &#8220;the information being released tomorrow on energy in November does not reflect today&#8217;s reality, and it does not reflect the expected price decreases in the weeks and months ahead, such as in the auto market,&#8221; according to a <a href="https://www.reuters.com/business/biden-says-inflation-data-due-friday-will-not-reflect-recent-drop-some-prices-2021-12-09/" target="_blank" rel="noreferrer noopener">Reuters report</a>.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="553" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg" alt="" class="wp-image-12433" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=1193 1193w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: Fidelity</figcaption></figure>



<h3 class="wp-block-heading">BTC fake-out</h3>



Similar to last month when <a href="https://cms.blockworks.co/bonds-sell-off-on-6-2-cpi-print-bitcoin-liquidations-spur-correction-markets-wrap/" target="_blank" rel="noreferrer noopener">BTC rallied to an ATH</a> following the CPI print for the month of October only to quickly erase the gains shortly thereafter, the same thing happened today. BTC rallied close to $50,000 before dropping below $47,500 moments later, according to data from <a href="https://coinmarketcap.com/currencies/bitcoin/" target="_blank" rel="noreferrer noopener">CoinMarketCap</a>.



&#8220;Bitcoin is below the short-term holder cost basis, which currently sits at $53K. Until this is reclaimed, not bullish. Not saying I am a &#8216;giga bear&#8217;, just cautious until the market shows me otherwise. Happy to flip bullish if reclaimed. Bearish confirmation would be a failed underside retest of the band,&#8221; reads a <a href="https://www.blockwareintelligence.com/p/blockware-intelligence-newsletter-35b?r=fg8t4&amp;utm_campaign=post&amp;utm_medium=web" target="_blank" rel="noreferrer noopener">Blockware Intelligence Newsletter.</a>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/on-chain-cost-1024x576-1.jpg" alt="" class="wp-image-12434"/><figcaption class="wp-element-caption">Source: Blockware Intelligence</figcaption></figure></div>


Some other bitcoin highlights from an <a href="https://medium.com/intotheblock/macro-conditions-dominating-cryptos-outlook-f323bdec3043" target="_blank" rel="noreferrer noopener">Intotheblock report</a> include:



<ul class="wp-block-list">
<li>Bitcoin recorded a modest increase in the fees generated by its blockchain as network activity picked up during the crash</li>



<li>BTC&#8217;s weekly outflows reached a&nbsp;five-month high&nbsp;with nearly $3 billion worth of BTC leaving centralized exchanges</li>



<li>Bitcoin’s underperformance comes at a time when both the dollar (DXY) and the volatility index (VIX) are at their highest in months</li>



<li>Year-to-date, bitcoin has significantly outperformed traditional markets, potentially leading to profit-taking activity amid uncertain conditions</li>



<li>Bitcoin&nbsp;<a href="https://app.intotheblock.com/coin/BTC/deep-dive?group=derivatives&amp;subgroup=perpetual&amp;chart=all&amp;utm_source=hs_email&amp;utm_medium=email&amp;_hsenc=p2ANqtz--3HthPON7RdkqvpuHQkAo5sKcLDqom_ZNmPoINz_cKzhRZDdo6RhGdAF5Y5S0AsAjgyfRx" target="_blank" rel="noreferrer noopener">perpetual swaps’ funding rate</a>&nbsp;remain near zero, pointing to neutral expectations in the near-term</li>
</ul>



<h3 class="wp-block-heading">Axie Infinity December update</h3>



An <a href="https://axie.substack.com/p/dec2021" target="_blank" rel="noreferrer noopener">Axie Infinity development update</a> that was released last night shows that the popular play-to-earn game is approaching 3 million community members and significant progress in the battles, land and origins game development.



For comparison, there are roughly 4.1 million unique addresses in DeFi, <a href="https://dune.xyz/rchen8/defi-users-over-time" target="_blank" rel="noreferrer noopener">according to data</a> from Dune Analytics.



The report continues by comparing Ronin usage, the Ethereum sidechain that Axie Infinity is built upon, to activity on the Ethereum base layer. &#8220;Today, Ronin’s transaction volume has grown to roughly 4x the number of daily transactions of the Ethereum chain, and that growth has pushed us all to prepare for significant scale in 2022!&#8221; according to the report.



<figure class="wp-block-image size-large"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/ronin-activity-1024x879-1.jpg" alt="" class="wp-image-12436"/><figcaption class="wp-element-caption">Source: Nansen </figcaption></figure>



Land gameplay is <a href="https://axie.substack.com/p/dec2021" target="_blank" rel="noreferrer noopener">still under development</a> and set to roll out in the first half of 2022. The team continues to work on resource production, gathering, and crafting mechanics and even teased what some of the in-game art will look like:



<figure class="wp-block-image size-large"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/axie-art-1024x491-1.jpg" alt="" class="wp-image-12438"/><figcaption class="wp-element-caption">Source: Axie Infinity Development Update </figcaption></figure>



The <a href="https://axie.substack.com/p/dec2021" target="_blank" rel="noreferrer noopener">update continues</a> by adding, &#8220;We also continue to make significant progress with our next generation battles experience, where we provide opportunities for players to experience a full, brand new storyline, non-blockchain “starter” Axies, the ability to attach power-ups to Axies, and much more.&#8221;



Sky Mavis, the <a href="https://cms.blockworks.co/axie-infinity-developer-scores-152m-in-series-b-funding-nearing-3b-valuation/" target="_blank" rel="noreferrer noopener">developers</a> behind Axie Infinity, are also working on graphical special effects for the game and leaked some of what they have been working on:



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="Origin VFX Leek!" width="1024" height="576" src="https://www.youtube.com/embed/wrbEyQZGipc?start=11&#038;feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>
</div></figure>



<h3 class="wp-block-heading">Non-Fungible Tokens (NFTs)</h3>



Trading data from <a href="https://opensea.io/rankings" target="_blank" rel="noreferrer noopener">OpenSea</a> and <a href="https://solanalysis.com" target="_blank" rel="noreferrer noopener">Solanalysis</a> of some of the top Solana and Ethereum projects can be found below:


<div class="wp-block-image">
<figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="1024" height="332" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png" alt="" class="wp-image-12450" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=2048 2048w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Top Ethereum Projects</figcaption></figure></div>

<div class="wp-block-image">
<figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="1024" height="283" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png" alt="" class="wp-image-12451" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=80 80w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Top Solana Projects </figcaption></figure></div>


If you made it this far, thanks for reading! I am looking forward to catching up on Monday.



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



Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.



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