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Aave Companies acquired Sonar, a mobile social gaming app that supports NFT-based avatars, in an effort to expand Lens Protocol for identity across web3 consumer products.

Sonar co-founder Ben South Lee joins Aave as senior vice president of product and design. His brother, Sonar co-founder Randolph Lee, will transition to a principal engineer role with Aave. The two will lead a team focused on developing mobile facing applications that integrate Aave’s Lens protocol, a decentralized identity platform for web3 services.

Available on iOS, Sonar hosts thousands of active users who may interact with one another with avatars depicted as colorful dots or 3D characters for users who equip Moji NFTs to their profiles. Aave is targeting 2023 for wider integration between Lens Protocol, Sonar as well as other web3 applications.

“Sonar will be the first social mobile metaverse powered by Lens Protocol,” an Aave representative told The Block via email. “For niche communities, being able to move seamlessly between applications in the Lens ecosystem without having to start from scratch will be important and one of the biggest differentiations from web2 apps.”

The identity system provided by Lens will also integrate with Sonar. “Users will be able to mint Lens profiles and get ownership of their profiles and benefit from all the features Lens Protocol provides,” said Aave.

Specific terms of the deal were not disclosed.

© 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.

Quick Take

• Rapid Insights provide a deeper analysis of the current crypto landscape in a timely fashion.
• The fallout of FTX has caused an industry-wide credit crunch which has negatively impacted many market participants
• Auros, a digital asset market maker, has recently defaulted on one of its DeFi loans of $3M on Maple Finance
• The missed payment comes amidst rumors of Auros’ exposure to FTX, indicating the likelihood of Auros’ liquidity problems
• Auros’ DeFi positions also indicate the likelihood of undisclosed CeFi positions which may spell further trouble for the firm

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Facing a phalanx of regulators, cryptocurrency lending platform Nexo says it is “phasing out” the U.S. side of its operations. 

In a statement announcing a “gradual” departure, Nexo cited a “dead end” in talks with U.S. regulators. 

In particular, the firm noted a recent scramble from state regulators and the federal Consumer Financial Protection Bureau to investigate Nexo’s “Earn” offering. 

“This was made crystal clear by the Consumer Financial Protection Bureau’s (CFPB) decision this past Thursday insisting it has jurisdiction to investigate our Earn Interest Product, which the SEC and state regulators have simultaneously insisted is a security subject to their jurisdictions,” the firm’s announcement read. On Thursday, the CFPB rejected a petition from Nexo to cease an investigation into the product after the company argued that only securities regulators hold jurisdiction over it. 

Still, Nexo said it wasn’t happy with them either. 

“In addition, a number of the very state securities regulators we had been cooperating with for several months blindsided us by filing actions against us without advance notice,” the departure statement said. 

The Earn product, like many crypto lending platforms, in theory replicates a bank account with higher rates of return. But the SEC has taken issue with similar products, including a $100 million fine against BlockFi that Nexo cited in its petition for the CFPB to drop an investigation. State regulators, who sometimes coordinate with federal authorities, also sent the company cease and desist letters in September. 

Nexo, which has a large portion of its operations in Bulgaria, had announced that it would no longer pay interest on new Earn deposits from the U.S. earlier this year.

The firm is the last major crypto lending platform functioning, as competitors like BlockFi, Celsius and Voyager have filed for bankruptcy protection. 

© 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.

Panoptic, a Uniswap-based decentralized finance protocol for trading perpetual options, raised $4.5 million in a seed funding round.

Gumi Cryptos Capital led the round, with Uniswap Labs Ventures, Coinbase Ventures, Jane Street, Avalanche Foundation’s Blizzard fund and others participating, Panoptic announced Monday. The funding was secured via an equity plus token warrant arrangement, Panoptic co-founder and COO Jesper Kristensen told The Block.

Panoptic was established in July by Kristensen, a former head of research at Advanced Blockchain AG, and Guillaume Lambert, a professor of applied physics at Cornell University. The duo aims to revolutionize decentralized crypto options trading the way Uniswap has for decentralized crypto spot trading.

The first version of Panoptic will be based on Uniswap’s automated market maker (AMM), said Kristensen, adding that the protocol later intends to support other popular and successful AMMs. “We can integrate with other concentrated liquidity AMMs if and when needed,” he said.

With fresh capital in hand, Panoptic plans to expand its team, build its protocol and audit its code, said Kristensen. There are currently six people working for Panoptic, and the firm is looking to add two more people, said Kristensen.

Panoptic is set to launch its platform in the first quarter of next year.

The funding comes as DeFi-related projects have started to receive venture capital injections after a long lull period. Last month, Polkadot-based protocol t3rn raised $6.5 million, and Cosmos-based DeFi protocol Onomy raised $10 million in private token funding rounds.

© 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.

Maple Finance’s token, Maple (MPL), plummeted on Monday following the revelation that Orthogonal Trading defaulted on $36 million of loans on the crypto lending protocol.

Orthogonal Trading interacted with Maple Finance through its credit arm as a delegate and through its trading arm as a borrower in order to access credit. As a delegate, its credit arm processed due diligence for investors looking to access the permissioned protocol. The USDC lending pool it ran originated $850 million in loans — with a default rate of 1.2%.

The trading arm did not access any loans in the pool run by its credit arm.

The MPL token was trading at $5.29 at 1 p.m. EST, according to data from CoinGecko. The token, built on the Ethereum network, has fallen 24.7% in the past 24 hours. 

MPLUSD chart by TradingView

Orthogonal Trading defaulted on $36 million, representing about 30% of active loans across the entire protocol. The crypto hedge fund recently had its funds tied up on FTX following the exchange’s bankruptcy filing. 

Today’s news is just the latest contagion linked to FTX’s bankruptcy. On Nov. 28, BlockFi filed for Chapter 11 bankruptcy protection. FTX.US is a creditor in the filings, with the centralized crypto lender owing it $275 million, which appears to be linked to a credit line from the summer. 

According to a statement, Maple Finance has severed all ties with Orthogonal Trading, the parent entity that runs both a crypto hedge fund and a credit business.

The crypto lending protocol will remove Orthogonal Trading as a borrower on the platform and Orthogonal Credit as a delegate and shut down its lending pools.

© 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.

FTX US’s insurance company Relm is “well-capitalized to serve the needs of the industry” following the implosion of FTX Trading, CEO Joseph Ziolkowski said.

“On the asset side of our balance sheet, we have remained highly conservative with approximately 95% of our assets in cash or U.S. Treasury Bills,” the executive said in a post on the company’s website. Relm said it provides coverage to FTX.US.

Ziolkowski said that Relm also provides insurance to other companies that “have been compromised due to their relationship with FTX and Alameda,” without providing further detail.

“We are actively assessing the extent to which our coverage could be triggered,” he said. “Accounting for the potential for direct and indirect losses, we have allocated a portion of our general reserve for both known and unknown claims related to this market impact.”

© 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.

A term for the slovenly and lazy among us beat out the metaverse for Oxford’s Word of the Year in a landslide vote.

“Goblin mode,” which refers to a “a type of behavior which is unapologetically self-indulgent, lazy, slovenly or greedy, typically in a way that rejects social norms or expectations,” was first seen on Twitter in 2009 and went viral on social media in February.

The word “metaverse,” which the maker of the Oxford English dictionary says was only used in specialist contexts until last year, came in second place, with usage increasing almost fourfold from the previous year.

“While some of this increase can be attributed to the name change of social media conglomerate Facebook in October 2021, the concept of the ‘metaverse,’ how we use it, and what it means for the future, has also been widely discussed,” Oxford Languages said. 

Google Trend data shows that search interest in the term indeed spiked following Facebook renaming to “Meta” as part of its efforts to rebrand as a metaverse company.

Oxford Languages said that words commonly occurring near metaverse include web3, virtual, crypto, build, vision and NFT, the latter of which which was crowned as word of the year by rival dictionary publisher Collins in 2021 as trading volume hit all time highs for high-profile projects.

© 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.

Crypto prices were in the green on Monday while stocks declined across the board. Grayscale’s ether trust hit a new low. 

Bitcoin has been trading above $17,000 since about noon EST on Sunday, according to TradingView. The leading cryptocurrency by market cap was up 0.3% to $17,087 at 10:45 a.m. EST today. The price of bitcoin began to show weakness shortly after 10:00 a.m. EST, dropping below $17,200.

BTCUSD chart by TradingView

Ether ticked higher by over 0.5%, trading at $1,266. Elsewhere, Binance’s BNB was up 0.5%, and Ripple’s XRP rose by 0.2%. Litecoin experienced more significant gains, tacking on over 7% in the past 24 hours. 

The U.S. Dollar Index was trading at 104.83, its lowest level since August; bitcoin’s price in dollars tends to move higher when the dollar weakens. The U.S. dollar has shed over 50% of its gains made this year as traders bet on the Fed slowing the pace of its interest rate hikes. The probability, based on Fed funds futures pricing data, of a 50 basis point increase on Dec. 14 is now 77%, according to the CME Group’s FedWatch tool.

DXY chart by TradingView

Crypto stocks and structured products

The S&P 500 fell by 0.8%, and the Nasdaq 100 dipped by 0.7%.

Coinbase shares were trading around $47, down 0.9% at 10:45 a.m. EST, according to Nasdaq data. Silvergate shares sank 5.2% shortly after the open in New York. 

Block was also down, dipping 4.7% to $64.92, while MicroStrategy shed over 5% to $195. Michael Saylor’s firm opened the week above $200.

Grayscale’s closed-end bitcoin fund, GBTC, was trading at a discount of 42.3%. The discount on the asset manager’s ETHE product fell to a new all-time low of 45.7%.

Both of the funds trade 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 had traded at a premium until early 2021.

The daily average volume of GBTC increased by 17% to $36 million in October from the previous month, according to The Block Research. 

© 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.

Quick Take

• Sorare is a fantasy sport platform powered by NFTs.
• As part of its strategic expansion, Sorare extended its product scope to additional sports, now catering to soccer, basketball, and baseball fans.
• The platform has generated enormous NFT trading volumes in 2022, peaking at a monthly high of $174.3mm in February.

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members of The Block Research.
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1inch, a decentralized exchange aggregator, is about to experience a massive unlock that will see tokens currently worth $111 million released from their vesting schedule, according to data from TokenUnlocks.

The website’s dashboard shows that nearly 227.2 million 1inch tokens — that account for almost 15% of the total supply of 1.5 billion tokens — will be unlocked on Dec. 30. There are over 800 million 1inch tokens currently locked.

The DEX aggregator launched its native token in December 2020. Only 6% of the total supply was released then, with the remaining tokens locked in a four-year vesting schedule ending in December 2024. Tokens were initially distributed among entities including the core team, investors, advisors and the community, as with other DeFi projects.

1inch token is down 80% this year. Image: CoinGecko

The last 1inch token unlock was in June. At the time, the spot price of the coin dipped 25% from $0.81 to $0.60. The token price is down more than 80% this year as crypto prices have tumbled.

A whale wallet deposited 15 million tokens to Binance in the days leading up to the June unlock. Data from Etherscan show this same wallet deposited another batch of 15 million 1inch tokens to Binance on Dec. 2.

© 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.