BitGo: Crypto Water Cooler — Feb 21
GM. It’s Wednesday, February 21.
Newsmakers
Inside Solana’s Amazing Comeback
Solana and its ecosystem are thriving, but it wasn’t long ago that today’s number five blockchain was reeling from collateral damage from the fall of FTX. The layer-1 blockchain, which now has TVL slightly above $2B, a market cap of nearly $50B, and 20M users worldwide, has gotten back on its feet through the strength of its community, airdrops, a phone, and high-profile partnerships.
Solana launched in 2020 and caught fire during the “DeFi summer” of 2021. Amid skyrocketing coin values and trading activity, investor interest in new, faster, cheaper blockchains surged. Solana caught the attention of a big one: Sam Bankman-Fried who came to own 10–15 percent of the ecosystem. When FTX went down, Solana’s price fell 94% from its high to under $10. TVL fell below $300M.
With its low fees and throughput of 65,000 transactions per second, the network still had a vibrant community of users that stuck with it. They were rewarded when the BONK meme coin was airdropped to Solana users on Christmas Day 2022. That gave the ecosystem a jolt, and a wave of meme coin traders migrated from Ethereum to Solana. Now, BONK has a market cap of $800M with over 600,000 holders, and the Bonk DAO is planning a meme coin launch aimed at onboarding 500,000 new users.
Meanwhile, the core Solana team launched Saga, a Web3 mobile phone with a built-in crypto wallet and a decentralized app store. The phone sold out when people realized it came preloaded with an allocation of BONK tokens. Other projects have also airdropped tokens and NFTs to Saga owners, helping to build momentum. Solana Mobile is getting ready to launch the next iteration of Saga.
Late last year, airdrops from Solana protocols Pyth and Jito helped to generate further momentum, and the Jupiter airdrop at the end of January helped to drive DeFi trading volume on Solana above Ethereum’s pre-launch. Meanwhile, the Solana Foundation forged partnerships with Visa, Shopify, and Dubai’s Multi Commodities Centre.
All of this led to a tripling in total daily active Solana wallets in 2023 compared to 3 percent growth for Ethereum. But challenges remain, chief among them being a recent outage in which the network was down for five hours, reminding users of several major outages in 2022 and 2023 and leading some to question its reliability. And, comeback aside, Solana still only accounts for 2.6 percent of all TVL on DeFi platforms versus Ethereum’s 60 percent share.
Read more →DL News
Chainalysis Report: Analyzing the Decrease in Crypto Money Laundering
Blockchain data platform Chainalysis has released some of the findings from their forthcoming 2024 Crypto Crime Report and, overall, the news is good: crypto money laundering dropped by 30 percent in 2023 from 2022 — from $31.5B to $22.2B.
The drop is steeper (29.5 percent) than the corresponding transaction volume drop (14.9 percent), indicating that some anti-money laundering efforts are paying off. But the battle is far from over. While sanctions and other measures may have defeated some criminals, the most hardened have sharpened their approaches.
The report looks at activity in two dimensions. Deposit addresses provide interim destinations that obscure the source of ill-gotten funds; these include wallets, mixers, instant exchangers and, increasingly, DeFi protocols. Off-ramping services are then used to convert crypto into fiat currencies. Centralized exchanges are the most common off ramps, but criminals also use P2P exchanges, gambling services, crypto ATMs, and OTC trading desks.
While use of illicit off-ramping services became more concentrated in 2023, with nearly 72 percent of criminal off-ramping spread over just five services, deposit address activity became more diversified. This could be an attempt to lower the risk of any one address getting flagged and frozen due to government sanctions.
Much of crypto money laundering activity remains “relatively unsophisticated,” the report found, but the Lazarus Group (allegedly sponsored by the North Korean government) and other bad actors proved resilient and adaptive. In 2023, these groups cut their use of mixers by nearly half; the seizure of the Sinbad mixer that aided North Korea was instrumental in the drop. Some of that activity has moved to YoMix, but the use of other tools such as gambling services, blockchain bridges, and DeFi protocols increased. The latter technology could prove to be a poor choice as its greater transparency makes it easier for law enforcement to trace illegal activities.
While crypto has provided money launderers with new tools, it still only accounts for about one percent of total global money laundering. Looking ahead, countries around the world are increasingly including crypto in their anti-money laundering regulations with China now chiming in; this could help to further dent money laundering activity in 2024 and beyond.
Read more →Chainalysis
Klaytn-Finschia Merger Could Create Asia’s Largest Web3 Ecosystem
Asia is home to some of the highest crypto adoption and the most vibrant digital asset ecosystems in the world. According to a Global Finance ranking, South Korea is the most technologically advanced country followed by Taiwan (fourth), Singapore (eleventh), Japan (sixteenth), Australia (twentieth), and Hong Kong (twenty-first). Hong Kong and Singapore are vying for leadership in digital assets while China is investing in blockchain technology. Web3 companies abound: India has more than one thousand followed by South Korea with nearly five hundred; Australia and Japan rank next. What the region lacks is a coordinated approach like the Middle East plan to become a Web3 hub or the EU with its unified approach to regulation.
But at least one firm is thinking regionally. In a “landmark decision,” South Korea’s Klaytn received governance approval to merge with Japan’s Finschia. The two layer-1s plan to build Asia’s largest Web3 ecosystem. The firms, which already have a presence in Singapore, Taiwan, Thailand, and Vietnam will consolidate their technologies and communities. They also have a presence in Abu Dhabi where they are hoping to establish a new foundation by Q2 2024. Their native coins — KLAY and FNSA — will be phased out with holders able to exchange them for a new coin once available.
In other regional developments, the Philippines saw its first blockchain mainnet launch: XODE. In Indonesia, crypto-friendly policies are expected to continue now that former defense minister Prabowo Subianto has likely won the presidential election (official confirmation is still pending); his vice president, Gibran Rakabuming Raka is openly pro-crypto. In Singapore, the Web3 community is asking for budgetary funds to train the workforce.
Read more →TechCrunch
News In Brief
领英推荐
Business of Crypto
Regulation and Security
DeFi and Web3
Midweek Market Pulse
Total Market Cap: $1.95T — 7 day change as of Tuesday 2/20/24 12 PM EST: +6.6%
The market built on last week’s momentum with further gains as the global crypto market cap climbed to $1.95T, a 6.6% increase from last week.
Bitcoin (BTC, +6.0%) continued its march higher. New data shows that Bitcoin order books are at their most liquid since October with market depth approaching $540M. This makes it easier to buy or sell large quantities of BTC without the order affecting prices, leading to less of a gap between prices quoted and the price at which a trade is executed.
Ethereum (ETH, +11.2%) is now up nearly 30% since the start of February. Analysts from brokerage firm Bernstein posit that Ethereum spot ETF applications will gain approval from the SEC, perhaps as early as May. They believe Ethereum has the capability to “power unique ETFs, if the staking yields are included in the ETF design.” Adding to the excitement, Vitalik Buterin spent the weekend writing about the potential of Verkle trees, a bandwidth efficient alternative to Merkle trees, and for AI to help verify code and find bugs, addressing what he sees as the Ethereum network’s “biggest technical risk.”
The AI narrative continued to drive coins like BitTensor (TAO, +7.8%) and Render (RNDR, +24.5%) higher. Among other prominent layer-1s, Solana (SOL, -2.5%) and Avalanche (AVAX, -4.2%) lagged while BNB (BNB, +8.7%), Cardano (ADA, +12.9%), and Tron (TRX, +9.9%) enjoyed solid gains.
The Last Word
Modular Blockchain
Noun
: A blockchain that specializes in a reduced number of functions, delegating selected functionality to other chains
/ Modular blockchains are one way of addressing scalability issues.
About BitGo
BitGo provides the most secure and scalable solutions for the digital asset economy, offering regulated custody, borrowing and lending, and core infrastructure to investors and builders alike.
Founded in 2013 — the early days of crypto — BitGo pioneered the multi-signature wallet and later built TSS to improve upon other companies’ MPC offerings. Between multi-sig and TSS, BitGo offers the safest technology on the market and safeguards over 600 tokens across a wide variety of blockchains.
Over the years, BitGo has expanded from offering wallets into providing a full-suite solution that lets clients hold assets safely and then put them to work.
BitGo launched BitGo Trust Company in 2018, providing fully regulated, qualified cold storage to complement BitGo Inc’s original hot wallet solution. In 2020, BitGo launched BitGo Prime, which allows its clients to trade, borrow, and lend. Moreover, BitGo also provides access to DeFi, staking, NFT wallets, and beyond, and serves as the world’s sole custodian for WBTC, or wrapped Bitcoin.
Today, BitGo is the leader in digital asset security, custody, and liquidity, providing the operational backbone for more than 1500 institutional clients in over 50 countries — a list that includes many regulated entities and the world’s top cryptocurrency exchanges and platforms. BitGo also processes approximately 20% of all global Bitcoin transactions by value.
For more information, please visit www.bitgo.com.
?2024 BitGo Inc. (collectively with its affiliates and subsidiaries, “BitGo”). All rights reserved. BitGo Trust Company, Inc., BitGo Inc., and BitGo Prime LLC are separately operated, wholly-owned subsidiaries of BitGo Holdings, Inc., a Delaware corporation headquartered in Palo Alto, CA. No legal, tax, investment, or other advice is provided by any BitGo entity. Please consult your legal/tax/investment professional for questions about your specific circumstances. Digital asset holdings involve a high degree of risk, and can fluctuate greatly on any given day. Accordingly, your digital asset holdings may be subject to large swings in value and may even become worthless. The information provided herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. BitGo is not directing this information to any person in any jurisdiction where the publication or availability of the information is prohibited, by reason of that person’s citizenship, residence or otherwise.