?? Is this the next killer blockchain? ??
Welcome to Web3 pills, the daily crypto newsletter that is here through the ups and the downs of the market.
Here are your ??’s for today:
?? APTOS BLOCKCHAIN LAUNCHES ON MAINNET
One of the main narratives of the last bull run was the “alt Layer-1” investment thesis. The basic idea was that Ethereum was a flawed blockchain, and a newer blockchain would eventually come to take its crown.
These new layer-1 blockchains such as Solana and Avalanche were touted as being more scalable and faster than Ethereum. They also received hundreds of millions of $ from Venture Capitalists, eager to deploy their capital into an Ethereum killer.
So far, the outcomes of this thesis have been mixed. While ecosystems like Solana have shown some progress, other layer-1s such as Luna, completely collapsed. Not to mention, even after billions of $ invested, Ethereum has remained king, boasting at least a 10x larger market cap than most of the alt layer-1s.
However, this isn’t stopping VCs from attempting to run the same playbook. The latest bet for many of the top firms is a blockchain called ‘Aptos’.
The Aptos team has managed to generate hype, even in the midst of a bear market, for a few reasons. For starters, it consists of many of the original members of Facebook’s (Meta) ‘Diem’ project. Diem was Facebook’s big bet on Web3, a project that they likely poured tens (if not hundreds) of millions of $ into. Unfortunately for Facebook, regulators stepped in and effectively shut it down.
Despite Diem being shut down, all of the research and development has not gone to waste, as the team and ideas were brought directly over to Aptos.
In addition to a strong team and head start from their time at Diem, the Aptos team also has gained respect for helping champion a new safe and secure programming language for Web3 called ‘Move’.
While these are some of the reasons for why Aptos is promising, it’s only fair to point out some of the concerns as well. For starters, it’s not clear that Aptos’ value props are that compelling. It’s less decentralized and secure than Bitcoin, and not clear that it’s capable of being as fast/cheap as performant blockchains like Solana.
To put it another way, developers already have a plethora of solid layer-1s to choose from, so it’s unclear how Aptos will stand out and attract new developer talent.
Perhaps even more concerning than this however, is Aptos’ tokenomics. Leading up to its mainnet launch yesterday, there was very little transparency around Apto’s tokenomics. All that was known was that big players such as FTX and A16Z had already poured in hundreds of millions of $.
Based on on-chain data, it appears that ~80% of the token supply is already staked, suggesting it is controlled by the team and investors. Also, it’s not clear if and how any retail investors have even been able to get their hands on APT yet.
This is concerning because it highlights a negative trend in crypto. Often, insiders and VCs get allocated tokens in a “seed” round, in which the tokens are sold for a much cheaper price. By the time the token is available to retail investors, many insiders have already seen a massive appreciation in the value of their holdings. Some firms have been caught “dumping” their tokens back on the market early on, allowing them to make huge profits, while retail suffers.
At this point, it is too early to make a call on Aptos. I believe every team deserves a chance to build and prove themselves. However, I would strongly caution traders from viewing this as a safe investment at this point.
??TEXAS REGULATORS INVESTIGATING FTX
One of the few players that has managed to grow stronger in the market downturn has been crypto exchange FTX. While many crypto projects were going bankrupt, FTX has been going on the offensive, by buying up projects and aggressively expanding its offerings.
领英推荐
However, it appears that not even they are immune to the speed bumps that a bear market brings.
Yesterday, it was announced that the Texas State Securities Board had begun investigating FTX’s US branch over alleged unregistered securities offerings.
At the heart of the filing, is a state regulator who claimed that he was personally offered an FTX product that offered 8% APY on a yield-bearing account, which he believes is an unregistered security.
According to a spokesperson for FTX, the company has “been in talks with Texas state regulators for a while” and the company “[has] an active application for a license which has been pending.”
Regardless of the outcome of this investigation, this might be a sign of future troubles for FTX.
A big part of the reason for FTX’s meteoric rise has been the ability of their founder Sam Bankman-Fried, aka ‘SBF’, to show skill not only in the tech realm, but also the political realm.
As regulators have cracked down on the crypto industry, SBF has taken steps to shield FTX such as headquartering the company in the Bahamas and incorporating in Antigua and Barbuda. He even has made heavy political donations, such as being the 2nd largest donor to the Biden presidential campaign in 2020.
However, things could change in a hurry for FTX if they are not careful. A swing of power in the 2024 midterm elections could suddenly place FTX on the wrong side of the aisle, and make them a prime target for regulators.
Only time will tell if SBF is able to continue to navigate the choppy of waters of Web3 as well as he has for the past few years.
TRENDING ARTICLES
[Coindesk]?EU Countries Must Be Ready to Block Crypto Mining, Commission Says :?The European Union's executive arm also wants blockchains to show energy-efficiency labels and to end crypto tax breaks.
[Blockworks]?Walmart CTO Weighs in on the Role of Crypto Disruption :?“Crypto will become an important part of how customers transact,” says Suresh Kumar, the CTO of Walmart.
[The Block]?Do Kwon says charges 'politically motivated,' refuses to reveal location :?In an interview on the Unchained podcast, he refused to confirm that he left Singapore or reveal his current whereabouts.
NFT OF THE DAY
One project that has been gaining momentum over the past few months is Arbitrum, a layer-2 scaling solution built on top of Ethereum.
Recently OpenSea began integrating Arbitrum NFTs on its site, and that motivated me to do some digging.
I saw that one of the most popular collections on Arbitrum has been a collection called ‘Smol Brains’.
According to their?Twitter account , it appears that the team is working on building a Smolverse game for the NFTs. To be honest, I didn’t really research this collection that in depth, I mainly just liked the pixelated artwork.
Since I live in Texas, here’s Smol #9940 rocking a cowboy hat.