Weekly Report | SBF Found Guilty on All 7 Charges; HashKey Exchange Has Launched an App for Retail Investors

Organizer: Cookies, ChainCatcher

"What Important Events Happened This Week (10.30-11.5)"

1. SBF Found Guilty on All 7 Charges, Facing Up to 115 Years in Prison
A U.S. jury found FTX founder SBF guilty of all seven charges brought against him by the U.S. government. The charges include wire fraud and conspiracy to commit wire fraud against FTX customers, wire fraud and conspiracy to commit wire fraud against lenders of Alameda Research, conspiracy to commit securities fraud against FTX investors, conspiracy to commit commodities fraud against FTX customers, and conspiracy to commit money laundering.

SBF faces a maximum sentence of 115 years in prison for defrauding FTX customers of approximately $8 billion. Additionally, in a trial scheduled for March 2024, SBF faces five more charges, including fraud against FTX customers in derivatives trading, securities fraud against FTX investors, and three conspiracy charges: bank fraud, operating an unlicensed money transfer business, and violating bribery regulations under the Foreign Corrupt Practices Act.

According to Reuters, U.S. District Judge Lewis Kaplan has set SBF's sentencing for March 28, 2024. SBF's defense attorneys have opposed several of Kaplan's rulings before and during the trial and are expected to appeal the verdict.

Damian Williams, the U.S. Attorney for the Southern District of New York overseeing the SBF case, told a group of reporters outside the courthouse on Thursday evening that SBF's conviction serves as a "warning" to cryptocurrency wrongdoers, and federal agents and attorneys are "putting handcuffs on all" fraudsters and scammers.

Sequoia Capital partner Alfred Lin posted on X that the company had been deliberately misled and deceived by SBF, and that they had to remain silent during the prosecution and trial over the past year. They are pleased that the trial has concluded.

Uniswap founder Hayden Adams tweeted that the winners of the SBF trial are several law firms and various cryptocurrency opponents. (Source link)

2. Bitcoin White Paper Marks 15th Anniversary, Up Over 43 Million Times Since Launch
According to ChainCatcher, Satoshi Nakamoto published the Bitcoin white paper "Bitcoin: A Peer-to-Peer Electronic Cash System" on the P2P foundation website, marking its 15th anniversary. On January 3, 2009, at 6:15 PM, the Bitcoin genesis block was generated on a small server in Helsinki, Netherlands, marking the official birth of Bitcoin. The early trading price of Bitcoin was $0.0008. If calculated at the historical peak price of $68,789, Bitcoin has increased over 43 million times since then.

3. HashKey Exchange Launches App for Retail Investors and Plans to Issue 1 Billion HSK Tokens
HashKey Exchange has launched a mobile app for retail investors. HashKey COO Livio Weng stated in an interview that HashKey has received approval from the Securities Regulatory Commission to launch the application, serving both professional investors and retail users. Additionally, at the HashKey Exchange product launch event, HashKey Group COO Weng Xiaoqi announced the roadmap for the HashKey Exchange platform token HSK.
The roadmap includes five phases: The first phase is to update the HSK economic model in November 2023 and announce the token distribution rules; the second phase is to complete HSK ERC-20 minting and on-chain distribution in November 2023; the third phase is in Q4 2023, to announce the HSK incentive plan, including launching a fee discount program, distributing trading incentive pools, releasing standards for premium asset subscription, and HSK holder participation plans, with HSK buyback expected to start in the second half of 2024; the fourth phase is from Q2 to Q3 2024, to launch the HSK listing plan, announce future plans, and start preparations in legal, compliance, and market aspects; the fifth phase is to promote the public listing of HSK in the second half of 2024, with early contributors to HSK receiving incentives.

According to official disclosures, the current HSK economic model has a total issuance of 1 billion tokens, with 650 million tokens (65%) allocated for ecological growth, including 520 million for business growth, 78 million reserved for cooperation, 36 million for listing incentives, and 16 million for genesis incentives; 300 million tokens (30%) for team allocation; and 50 million tokens (5%) for treasury allocation.

4. Lightning Network Taproot Assets Ecosystem Nostr Assets Issues First Token Airdrop
The Lightning Network Taproot Assets ecosystem Nostr Assets announced via tweet that the Taproot Assets mainnet has launched Nostr Asset. Additionally, Nostr Assets announced that the first Taproot Assets token airdrop will be Halloween-themed.

Nostr Assets is an open-source protocol that brings Taproot assets and Satoshis (the unit of Bitcoin) into the Nostr ecosystem. Once assets are introduced, users can send and receive them using Nostr's public and private keys at the Nostr protocol layer. The settlement and security of the assets still rely on the Lightning Network, while the Nostr assets protocol itself does not issue assets but merely introduces them into Nostr through the protocol. (Source link)

5. Unibot: Trading Resumes Normal, Refunds Fully Compensated
The token approval vulnerability encountered by Unibot on October 31 has been fully resolved, and Unibot trading has returned to normal. The issue was only related to transactions involving router contracts deployed in vulnerable new deployments. It is reported that the issue was limited to tokens and did not affect ETH balances, and refunds have been processed. The vulnerability caused a total loss of approximately $600,000, and Unibot has fully compensated for it.

6. RootData Releases October Hot Search Rankings, Celestia, Supra, Big Time, Scroll, GRVT in Top Five
Web3 data platform RootData released the October hot search rankings, with modular blockchain network Celestia, cross-chain oracle Supra, action RPG game Big Time, Layer 2 solution Scroll, and institutional-grade crypto trading infrastructure GRVT occupying the top five spots.

The rankings are based on nearly 100,000 search data points from RootData for the month, reflecting the market heat and user attention towards Web3 projects. Other projects that made the monthly search rankings include RepubliK, Linea, Aleo, Manta Network, zkSync, ZTX, DappOS, Kroma, Port3, Lightlink, LayerZero, Memeland, Sui, De.Fi, and Farcaster. (Source link)

7. Web3 Security Company Stelo Labs, Backed by a16z, Announces Termination of All Product Services
According to ChainCatcher, Web3 security company Stelo Labs announced that it will terminate all Stelo product services on October 31, 2023, including the Stelo plugin, stelo.com, approvals.xyz, and Stelo API. Stelo stated that when they began researching Stelo, they "hoped to address the hard technical and design issues surrounding security and usability, but after building the Stelo product suite for a year, they realized that many of the assumptions made earlier turned out to be incorrect, such as that transaction security would create data network effects," "every cryptocurrency user would have an independent wallet," and "consumer adoption of cryptocurrency was just around the corner."

According to crypto data platform RootData, Stelo Labs completed a $6 million seed round of financing in February 2023, led by a16z. (Source link)

8. Aragon Association Announces Dissolution, ANT Holders Can Exchange Tokens for ETH
The Aragon Association, under the DAO management platform Aragon, announced its dissolution, allowing ANT holders to exchange ANT for ETH at a fixed rate of 0.0025376 ETH/ANT.

To facilitate this, the Aragon Association is deploying 86,343 ETH to a redemption contract on the Ethereum mainnet. Due to legal restrictions, particularly regulatory risks arising from token speculation and market manipulation, this decision could not be submitted for public voting. The remaining funds will be used for product development in a product-centric structure to continue fulfilling its mission. (Source link)

9. OpenSea Lays Off 50% of Staff, Realigning Team Around "OpenSea 2.0"
According to Decrypt, NFT marketplace OpenSea confirmed on Friday that it has laid off about half of its employees.

OpenSea co-founder and CEO Devin Finzer stated on social media, "We are realigning the team around 'OpenSea 2.0,' which is a major upgrade to our product, including foundational technology, reliability, speed, quality, and experience. We will change the way we operate, moving to smaller teams that connect directly with users."

A spokesperson added that OpenSea will adopt a flatter organizational structure. Affected employees will receive four months of severance pay, six months of healthcare and mental health services, and accelerated equity vesting.

Previously, due to the crypto winter and macroeconomic instability, OpenSea laid off 20% of its staff in July last year. (Source link)

10. Aave: Received Issue Report and Has Taken Temporary Precautionary Measures, All Funds Are Safe
Decentralized lending protocol Aave stated on social media that it has received a report regarding an issue with a certain feature of the Aave protocol.

After verification with community developers, the following temporary precautionary measures have been taken: pausing the Aave V2 Ethereum market; pausing certain assets on Aave V2 on Avalanche; and freezing certain assets on Aave V3 on Polygon, Arbitrum, and Optimism.

The team stated that all funds on any Aave market are safe. The Aave V3 markets on Ethereum, Base, and Metis, as well as the V2 markets on Polygon and Avalanche, are not affected. A governance proposal to restore normal operation of the protocol will be submitted soon, with a detailed post-mortem analysis to be released after the issue is fully resolved. (Source link)

11. Musk: None of My Companies Will Create Cryptocurrency Tokens
DogeDesigner, the designer of Dogecoin, reminded on social media that Elon Musk and his AI project xAI have no association with any such cryptocurrency tokens, to which Musk replied, "It is very clear that none of my companies will create cryptocurrency tokens." (Source link)

12. Data

• RootData: October crypto market financing amount is $426 million, continuing to hit recent lows
• friend.tech protocol total revenue exceeds 14,000 ETH
• Nansen: FTX transferred $156 million in crypto assets in the past three days
• Oracle project Pyth Network will airdrop 600 million PYTH tokens to over 75,000 wallets
• Tether issued 1 billion USDT to replenish the Tron network inventory
• Approximately 1.35 billion USDT transferred from the address starting with TDqSq to Binance cold wallet

"What Great Articles Are Worth Reading This Week (10.30-10.5)"

1. "Vitalik's Latest Long Article: Sorting Out the Differences Among Various L2s"

In his latest blog post, Vitalik discusses his understanding of various L2s. He states that the ZK-EVM rollup ecosystem represented by StarkNet, Arbitrum, Optimism, and Scroll is progressing rapidly, continuously improving its security. Some teams are building sidechains while also starting to develop rollup solutions (like Polygon), and some L1 projects are attempting to move towards validity verification (like Celo), along with entirely new attempts (like Linea, Zeth…). However, one inevitable result is that we see L2 projects tending towards being more heterogeneous.

Additionally, he emphasizes the complex trade-offs between rollup solutions, validiums (validity verification), and other systems for specific applications, and which one is reasonable for them.

2. "In the Crypto Company Version: Start Entrepreneurship with 'Dumb' Things That Can't Be Scaled"

Ten years ago, Paul Graham wrote an article titled "Do Things That Don't Scale," which is one of the most important articles Y Combinator has released for the startup community. The core idea is that startups in their early stages must: 1) manually recruit users; 2) manually provide extraordinary experiences for users. These things are rarely done by large companies, thus considered "dumb" things that cannot be scaled.

Since founding AllianceDAO three years ago, AllianceDAO has been pondering whether these suggestions apply to crypto startups. After three years and nearly 200 startups, AllianceDAO has enough data points to answer this question.

3. "Stelo Labs: The Three Reasons for Our Failure That May Provide Some Reference for Other Startups"

Web3 security company Stelo, which was backed by a16z, terminated all products on October 31. They reflected on three assumptions made during their startup phase that did not hold true. Perhaps these can provide some lessons for other startups.

4. "Dialogue with the TON Foundation: The Mindset Behind Building the 'Web3 Super Application Ecosystem'"

"Large-scale applications" and "super gateways" have always been hot topics in Web3. What is Telegram and TON's mindset in building "Web3 super applications"? What is the current status and future space of TON? How do they view future challenges and industry competition? Recently, ChainCatcher invited Steve Yun, president of the TON Foundation, and Bill Qian, chairman of Cypher Capital and board member of the TON Foundation, to delve deeper into these topics.

5. "Cosmos Infighting Continues: Why Did the Founder Blast the Co-Founder?"

This article is adapted from a recent blog post by Jae Kwon, one of the founders of Cosmos. Jae Kwon reveals a series of issues he has encountered within the project since he joined in 2013. The main issues focus on another founder, Ethan Buchman, whom Jae Kwon believes orchestrated the project's split and misappropriated funds.

6. "Deep Dive into Celestia Token Distribution and Unlocking: Is Its Value Underestimated?"

The highly anticipated Celestia governance token—TIA—has been launched, immediately attracting market attention, with over half of the token supply held internally. This uneven distribution has led to many questions about its circulation in the market: is it undervalued? Let's explore.

7. "The 'Fat Application Chain' Theory: The Growth Path of Application Chains"

Evaluating application chains has always been a challenging task for investment analysts, as application chains function similarly to independent applications at a fundamental level while inheriting characteristics of protocols or what is now called the base layer, such as security and data availability. The $150 million ecosystem fund announced by Injective sparked my interest in the first generation of the "Fat Protocol Thesis," as I believe understanding how the market perceives the evolution of blockchain value will give me insights into how to consider the current value of application chains, or specifically, application chains with ecosystems.

8. "DeFi Applications Launch Custom Chains: Can 'One Application, One Chain' Bring New Gameplay?"

"One application, one chain" is becoming a new approach for established DeFi applications. Most applications issuing new chains choose to use frameworks like OpStack and Polygon CDK, while DeFi applications are adopting a more diverse underlying architecture for developing "dedicated chains," such as MakerDAO expressing a preference for Solana architecture, and dYdX Chain opting for CosmosCDK architecture. So, how is the current progress of application chain development among DeFi applications? What solutions are being adopted?

9. "Friend.tech Economic Model Expansion: What Kind of Price Curve Does SocialFi Need?"

Since October, the competitive landscape of SocialFi has gradually become clearer, with some competitors fading from the market's view. Looking back at the development process of Friend.tech, the economic model (especially the pricing curve) has played a crucial role. The biggest difference between Fi and Ponzi lies in whether the asset exists and has value; we must never overlook this point.

10. "Solana's 'Post-Disaster' Reconstruction This Year: What Doesn't Kill Me Makes Me Stronger"

Compared to the turmoil of last year's FTX crisis, Solana has been able to hold its head high at this year's Breakpoint. Now, after surviving the crisis, Solana is making a comeback, with multiple indicators showing growth trends, and its technical foundation and ecosystem development are recovering and even breaking through. Perhaps more people are willing to believe that Solana, the "Ethereum killer," is writing a story of "what doesn't kill me makes me stronger" as it approaches two cycles of bull and bear markets.