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Crypto miner Marathon is not looking to buy any assets from bankrupt hosting provider Compute North, after considering a bid for a stake in the 280-megawatt wind power facility in Texas where it runs a large portion of its machines.

“We were prepared to bid on the King Mountain asset … in order to protect our interests if necessary — which in the end it wasn’t,” Marathon CEO Fred Thiel told The Block, referring to Compute North’s 50% stake in the joint venture with energy provider NextEra Energy.

Compute North agreed to sell its share of the partnership to US Data King Mountain in an auction on Nov. 15, according to an order approving the sale filed in bankruptcy court. That company is a subsidiary of data center developer US Bitcoin Corp, Thiel said.

“We wanted to make sure a competitor did not win the bid,” he also said. Thiel’s comments to The Block followed a report by Bloomberg, which said Marathon was mulling a bid on Compute North and had hired outside experts to advise on its exposure to the bankrupt hosting provider. 

Even as companies like DCG’s Foundry and mining company Crusoe buy up some of Compute North’s assets, Marathon appears unlikely to follow suit.

“We’re not interested in buying any of their sites and those have all been sold at this point, I think,” Thiel said. “And other than that, I don’t think there are a whole lot of assets that are worth looking at from our side.”

That’s not to say that the company would never consider buying up any distressed assets, according to Thiel. “If the right opportunities arise we’re obviously going to look at things,” he said.

Looking for profits

Marathon invested $31.3 million into Compute North. Its exposure to the bankrupt firm also included $50 million in operating deposits, of which $22 million of the remaining are likely fully recoverable as deposits and $8 million have already been written off, the company said this week in its November operational update.

Unlike other bitcoin miners, Marathon runs a more asset-light model, meaning that it doesn’t own its own infrastructure, instead contracting with hosting providers. Earlier this year it moved a large portion of its fleet from Montana into the recently energized King Mountain site and has been quickly ramping up production, especially since late September.

The broader industry is struggling with decreased profitability driven in part by bitcoin pricing and high energy costs and cash-strapped companies like Argo Blockchain have sold off thousands of machines.

Last month, Marathon mined 472 BTC, down 23.3% from October.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Two U.S senators have written to agencies tasked with supervising the financial sector to seek details about banks’ exposure to cryptocurrencies.

Sens. Elizabeth Warren, D-Mass., and Tina Smith, D-Minn., also want answers on how Sam Bankman-Fried’s Alameda Research was reportedly able to buy Washington state-based Moonstone Bank. 

”While the banking system has so far been relatively unscathed by the latest crypto crash, FTX’s collapse shows that crypto may be more integrated into the banking system than regulators are aware,” the letters said. 

The nearly identical letters, dated Dec. 7., were sent to Federal Reserve Chairman Jerome Powell, Federal Deposit Insurance Corporation Acting Chair Martin Gruenberg, and Acting Comptroller of the Currency Michael Hsu. 

The letters ask the agency heads nine questions including about plans to review crypto firms’ relationships with banks. The senators also want a detailed list of banks that provide cryptocurrency custody services, hold dollar deposits for crypto firms, provide loans and facilitate stablecoin transactions for crypto firms. 

The two senators, who sit on the Senate Banking Committee that recently scheduled a hearing on FTX, also want information on how Alameda was able to acquire Moonstone Bank and whether that transaction was reviewed by the Federal Reserve. Alameda invested $11.5 million into Moonstone, more than double the bank’s worth at the time, the senators wrote, citing a New York Times report on the transaction. 

Silvergate Capital, Provident Bancorp, Metropolitan Commercial Bank, Signature Bank and Customers Bancorp were named as other banks with crypto ties. Warren earlier this week joined a bipartisan group of senators to write to Silvergate Chief Executive Officer Alan Lane asking for more information on the bank’s link to FTX and Alameda. 

FTX, once the world’s second-largest crypto exchange, collapsed last month and filed bankruptcy along with Alameda and approximately 130 fellow corporate entities.

The U.S. Justice Department and multiple regulators are among authorities around the world now investigating the collapse of the multibillion-dollar crypto empire, including alleged mishandling of and theft of customer assets.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Bringing a whole new meaning to javascript, Starbucks is expanding its coffee empire to web3 in earnest, as it rolls out its loyalty program in the U.S. to beta testers.

The Polygon-based initiative allows Starbucks Rewards loyalty program members and the coffee purveyor’s employees to earn and purchase digital collectibles in the form of NFTs. It was announced in September.

At the time, the company said the membership program would unlock access to “immersive coffee experiences: from unique merchandise and artist collaborations to invitations to exclusive events.”

The experiences, called “journeys,” will involve playing interactive games or taking on challenges which are designed to give the customer more in-depth knowledge of the Starbucks brand and coffee. Completing journeys will earn them NFTs, which the company has dubbed “journey stamps.”

The first stamps will offer a nod to Starbucks history, with NFTs inspired by its first location in Pike Place Market in Seattle as well as classic designs, according to a TechCrunch report. Each NFT will have a point value based on its rarity and will be able to be put out for tender on the Starbucks Nifty Gateway-powered NFT marketplace, which launches next year. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The price of Grayscale Bitcoin Trust (GBTC) versus the bitcoin it actually holds hit an all time low on Wednesday, with the discount ratio reaching 47.3%, according to data from The Block.

The GBTC discount hit a previous all-time low on Nov. 21, when it reached 45.2%. Concerns over the liquidity profile of Grayscale’s sister firm Genesis have put pressure on the fund. One hedge fund is suing Grayscale to force redemptions from the fund.

GBTC trades at a discount to the net asset value (NAV), as shares in the fund don’t grant the holder access to the underlying assets. Shares traded at a premium until early 2021 before flipping to a discount. As a result, the market price of GBTC shares is over 47% lower than the value of the bitcoin in the fund or its net asset value (NAV).

Fir Tree Capital revealed plans to sue Grayscale this week. The fund hopes to get information to investigate potential mismanagement and conflicts of interest, according to Delaware court documents. Fir Tree will use the information to push Grayscale to address the considerable discount it trades at relative to the bitcoin it holds by lowering fees and resuming redemptions, Bloomberg said. 

The discount narrowed before the Fir Tree news on the back of positive murmurings from the Fed on potential for the pace of interest rate increases to slow as soon as this month, but expansionary economic indicators tempered hopes of Fed action.

The Fed’s next rate decision is Wednesday.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Shibuya, a decentralized video platform co-founded by Emily Yang of pplpleasr fame, has raised $6.9 million in seed funding. 

Crypto investment firms a16z and Variant led the round, with additional participation from Joe Tsai, GMJP, Kevin Durant and Paris Hilton, among others. 

Shibuya will use the funding to bring in new creators and intellectual property onto the platform, as well as to grow its engineering team and overall platform. 

Yang first announced Shibuya at ETHDenver in February of this year. The platform’s main entertainment offering is a serialized show called White Rabbit, which Yang previously described as a mix of anime, the English drama Black Mirror and web3.

Users can mint NFTs, called Producer Passes, and vote with them to direct the next chapter of the story. When the White Rabbit film is completed, users can own fractions of the IP through $WRAB tokens. 

Shibuya raised $1.5 million via NFT sales to support the show’s development, Yang said in a release. 

Yang, under the name of pplpleasr, helped the business magazine Fortune raise $1.3 million by selling its crypto-focused issue cover as an NFT on Aug. 13, 2021. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Ren Protocol, an Alameda-funded issuer of a wrapped bitcoin asset called renBTC warned its users of the potential risk of losses after it shuts down its existing product. 

The Ren team said that this tokenized bitcoin, referred to as Ren 1.0, would soon be shut down. The primary reason for the shutdown of Ren 1.0 is the lack of funding after the financial collapse of Alameda Research.

Ren allows bitcoin holders to lock their assets and mint a wrapped version that can be used on Ethereum, but this mechanism has been put on hold for some time. After Ren’s version 1.0 is shuttered, it will be replaced by a new community-run Ren 2.0.

But the two versions may not be compatible. The project told users to immediately burn the circulating tokens on Ethereum and claim them back to the original chain as soon as possible to protect themselves from potential risk. “As compatibility between Ren 1.0 and 2.0 cannot be guaranteed, holders of Ren assets should bridge back to native chains ASAP, or risk losing them,” the team noted.

According to data from The Block, there are currently 1130 renBTC ($19.2 million) that exist on Ethereum. After version 1.0 is retired, it’s possible its holders may not be able to recover their assets, as noted by the team.

Earlier this year, Alameda Research, the trading firm closely linked to FTX, acquired the Ren project and funded its development each quarter.

After Alameda and the FTX exchange filed for Chapter 11 bankruptcy protection, Ren said its main source of funding would be removed, forcing it to wind down. Ren’s team previously said it was left with a runway that would finish at the end of the year. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Cosmos-based decentralized exchange Osmosis has launched a stableswap — a protocol for trading stablecoins. 

With this launch, Osmosis developers hope to become the main venue where Cosmos users can access and trade a wider range of stablecoins, both centralized and ones backed with crypto tokens. If successful, it could become the Cosmos-equivalent to Ethereum’s main stablecoin exchange Curve.

“We want to support multiple stablecoins in the Cosmos ecosystem — both larger centralized stablecoins (like USDC, USDT, BUSD), as well as some of the newer stablecoins in the Cosmos ecosystem,” Osmosis founder Sunny Agarwal, said in a statement.

The Osmosis stableswap is similar to other stablecoin exchanges, leveraging what’s called a “curve algorithm” that concentrates tokens in asset pools in a way that traders can exchange large amounts of stablecoins with minimal price impact or fluctuations in value. 

Osmosis is the largest decentralized exchange in the Cosmos ecosystem by daily volume and holds over $177 million in crypto assets, according to DeFiLlama.

Growing stablecoin volume on Cosmos

As various bridging solutions have come online in the last one year, including Axelar and Gravity Bridge, many Ethereum-based stablecoins have poured into Cosmos, including USDC, USDT, BUSD and DAI. In October, Circle, the issuer of USDC stablecoin, said it planned to natively launch on Cosmos in the first quarter of 2023.

With the increasing expansion on Cosmos, stableswap pools will get a great deal of use, especially as the ecosystem further matures, Osmosis said. It added that it will allow developers to create pools of different stablecoins similar to Curve’s 3pool, which it said will help improve stablecoin liquidity in the Cosmos ecosystem.

In addition to hosting stablecoin trading, Osmosis also let quasi-pegged assets like liquid staking derivatives be traded with their corresponding native assets with similar efficiency.  For example, trading of staked ATOM (stATOM), the liquid staking token issued by Cosmos’ native asset called ATOM, will have a pool called ATOM/stATOM.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Tranchess, a liquid staking provider for the BNB ecosystem, will expand liquid staking on Ethereum with the launch of a non-custodial staking service and the qETH token.

A majority of leading liquid staking protocols on the Ethereum network come from centralized sources. In the wake of the collapse of centralized service providers such as FTX and those companies caught up in the backlash, decentralized approaches are becoming a greater necessity, Tranchess CEO and co-founder Danny Chong told The Block in an interview.

“We didn’t really want to be a centralized entity,” Chong said, adding that the company is working with node operators it can trust for technical execution. Offering a decentralized alternative to major competitive staking services like Lido, Tranchess provides a 4% return on staked ETH, according to its website.

A market has grown around liquid staking protocols in the absence of an exact date slated for the Shanghai upgrade on Ethereum. The upgrade would allow users to withdraw their staked ETH. The protocols allow users to stake tokens. In turn they would receive a token of equivalent value — such as qETH— that serves as a redeemable receipt, usable as collateral with participating DeFi platforms.

Bringing with it lessons learned validating on BNB Chain, the Tranchess team took time to ensure its deployment on Ethereum would be seamless, according to Chong. The company today has just over $45 million in total value locked, which it hopes to grow by branching into the Ethereum liquid staking ecosystem.

“DeFi is now back into the limelight especially in the lights of liquid staking,” Chong said. “The yields in terms of returns are stable and people know exactly where it comes from, which is from gas fees.”

On the difficult topic of centralization on Ethereum and censorship, Chong admitted that the team doesn’t have the perfect solution.”It’s a topic that was widely discussed within the team.” 

The Tranchess team recently met with Ethereum founder Vitalik Buterin in Singapore, who advocated the integration of zero knowledge proof protocols that allow for transactional verification and user privacy. The team is now looking into this.

The approach encouraged by Buterin appeals to Tranchess, according to Chong, who noted, “You do not have to reveal every single part of yourselves or information just because you need to prove who you are, what you do. I think that doesn’t really make sense.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The Nouns DAO community voted to donate 100 ETH ($123,000) to crypto on-chain sleuth ZachXBT as a retroactive reward for their efforts exposing cryptocurrency scammers.

Thursday’s vote was based on a proposal submitted to the DAO’s governance forum. It ended with 90% approval from participants, according to data from the voting page.

The governance proposal that spurred the vote called ZachXBT, who runs a pseudonymous Twitter account with 335,000 followers, a “public good.” It described ZachXBT as working tirelessly to research and expose scams in the crypto space. The account has revealed several fraudulent crypto activities, especially in the NFT space.

Nouns is an NFT project that sells a profile picture every 24 hours. Proceeds of these auctions are deposited in the Nouns DAO treasury, with decisions on spending governed by Noun owners. 

Nouns DAO treasury

The donation will be made to the zachxbt.eth crypto address from the Nouns DAO treasury, which currently holds 29,124 ETH denominated almost entirely in ether and staked ether. The Nouns DAO treasury draws funds from Noun NFT auctions and the community is able to vote on grants that the funds can be used to support.

The 100 ETH donation has not been made as of the time of publishing.

Responding to the gesture, ZachXBT expressed gratitude in a reply to a post by the DAO. The on-chain sleuth said the funds may remain unspent if the bear market lasts for a long time or be used to hire an intern.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

NFT marketplace Blur is offering some traders a 50% refund after a user lost 70 ether (about $83,300) due to the platform’s user interface.

A pseudonymous Twitter user with the handle Keung pointed out the issue with Blur’s new bidding system, adding that it could have been a human error that caused the mistake. The loss occurred after the user deposited more than 140 ether into the bidding pool and accidentally paid 70 ether for an Art Gobblers NFT. This mistake could have been avoided if the marketplace were to auto-add a zero in front of a bid with a decimal point as its first character, they said. They also suggested disabling the bid button when the bid price exceeds the collection’s floor price. 

“We originally considered the bid mistake to be a user error because there was no bug in the product per see,” Blur wrote in a thread on Twitter. “After evaluating further, we see how this can be considered a bug from the user’s perspective, so we will refund 50% to traders who were affected by this UI behavior.” 

“Specifically, we will query for collection bids that were accepted over 25% of the non-flagged floor and refund them automatically,” the team added. “We’ll do this within the next 10 days (likely sooner).” 

Blur launched mid-October to much fanfare from the NFT community — muscling in on an increasingly competitive market corner. The move to refund fat-fingered traders comes just days following the platform’s second airdrop to its users. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.