📊 Bitcoin's at peak, Genesis isn't.
Genesis after FTX. What's next for crypto?
GM 🔆
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Here’s what we have in our bag today:
Quick Numbers and News
Genesis files for bankruptcy
Web3 jobs for you
Estimated reading time: 03:42 mins
Weekly Wrap: Numbers & News 🗞
Quick Web3 updates curated for you:
Masa Finance launches credit score system soulbound Web3 identity protocol to determine a Web3 user’s creditworthiness.
Azuki is partnering with Bilibili International to explore web3 innovations in anime & media content.
First National Geographic NFT Launch meets massive backlash, technical issues.
The latest NFT project by Bored Ape Yacht Club's parent company Yuga Labs grants holders access to a skill-based game called Dookey Dash.
New FTX chief says Crypto Exchange Could Restart
This section is sponsored by Our Joy after seeing Bitcoin peak! 😭
18 August 2022 was a dark day; lost hopes, deep sighs and terrified eyes.
We’re talking about seeing BTC fall to $16,000 after the whole FTX collapse. It was the last day we saw our friends smile, until today, when Bitcoin peaked for higher than $22,000.
Let’s take this moment to thank the crypto gods and take this peak as a reiteration of faith in crypto. 🙏
Genesis files for bankruptcy. What’s happening?
In a previous issue, we talked about being in a crypto contagion, a financial domino effect that takes other companies with it after the first one falls. FTX & 3AC are still dragging others down with them, the latest victim? Genesis.
Digital Currency Group’s (DCG’s) lending subsidiary, Genesis, filed for Chapter 11 bankruptcy protection.
Quick quiz! What’s common between the fall of FTX, 3AC and Genesis?
Genesis’ filing listed more than 100,000 creditors in sum and said it owed its 50 biggest creditors $3.4 billion!
But, the company also has more than $150 million in cash on hand, which it describes as "ample liquidity" to fund operations during the restructuring process.
Okay, alright, interesting...
But calm your frown. This is where the eyebrow raisers begin.
Roots of the contagion
3AC, Voyager, BlockFi, FTX and Celsius were masters, masters of turning shock into rage. People saw them crumble in shock, realised everything was connected and boom, instant anger!
💡 And to answer what’s common between all of these companies supposedly optimizing how to operate in finance, is
Incestuous lending
Little risk management
Opaque reporting policies
DCG seems to be caught in the case of companies borrowing with very little to no collateral from one counterparty to pay another, some even utilizing their own “currency” as collateral. And the collateral was accepted by the creditors.
For instance, crypto sleuths have started asking why Genesis held a loan from Decentraland when a separate DCG subsidiary, Grayscale, holds 18 million of the project’s tokens (valued at $11.74 million).
Faith in ecosystem is shaken
What’s hard won easily lost? (sorry, we’re in a mood for riddles today)
Trust.
The market frenzy in 2020 and 2021 created the foundation for unsavory behavior and bad business practices to scale. And when it seems most of the big players were involved at some level, it’s hard to trust the ecosystem.
But we need to remember, we are here for the underlying fundamentals of Web3 and the crypto industry. The markets will be better again but we need to make room for better practices, like earning trust and reputation through actions, you know.
We need to encourage companies that are transparent and reward them with our trust. New year resolution anyone? ✋
Did you like this week’s issue & think your frens would like it too? Show us some love on Twitter, it’ll make our day & we might send you our REKT tote bag as thanks! 👀👇
Your Next Steps in Web3 ✅
👩💻 Work in Web3
Data Engineer 🛠 Zapper
Backend Engineer 👩💻 CoinDCX
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