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Most bitcoin mining stocks tracked by The Block trended downward on Friday.

The coin was trading at around $19,200 by market close, according to data from TradingView.

BTCUSD Chart by TradingView

Cipher’s stock fell 9.46%, followed by Stronghold Digital Mining (-7.48%), Northern Data (-7.13%) and Argo Blockchain (-5.79% on the London Stock Exchange).

Bitcoin mining stocks also fell over the course of the week — Argo Blockchain by 21.38% on the London Stock Exchange and Northern Data by 20.29%.

Here’s how crypto mining companies performed on Friday, Oct. 21:

An overview of how miners fared over the week of trading:

© 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 bankruptcy judge in the Southern District of New York has approved Voyager’s plan to sell its assets to FTX, setting the stage for an upcoming creditor vote.

Judge Michael Wiles signed the asset purchase agreement at the close of yesterday, marking another step closer to closing the $1.4 billion sale of Voyager’s assets to FTX. The embattled lender entered the Chapter 11 process in July after halting withdrawals. Customers and creditors have since been waiting to recoup their funds.

During the auction process, Voyager accepted a bid from FTX that would allow Voyager users to access what remains of their assets on the FTX platform with newly created FTX accounts.

At a Wednesday hearing, counsel told the court they expect creditors to recoup 72% of their assets through the deal.

The final purchase price of Voyager’s crypto is still to be determined. The plan will use a 20-day historical average for the price, a window that will be set at a future point in time. How much customers receive will be dependent on this price mechanism, but they will receive their sum through a mix of in-kind crypto, USDC and fiat depending on their claim. 

Only those who elect to transition to the FTX platform will be eligible to receive their payout in crypto. Those who do not make the move will receive cash from the Voyager estate. 

However, FTX’s platform does not support the VGX token. As of now, FTX has offered a floor price of $10 million to purchase all VGX. The firm said in a blog post that it’s working to find “a higher and better solution,” but will accept the $10 million offer if it isn’t successful. 

The court approval of the deal is one step closer to closing. Next comes a creditor vote, and Voyager urged customers to vote in favor of the plan before the deadline of Nov. 29 in its post.

“Because we believe the Plan, including the sale to FTX US, maximizes recoveries to Voyager’s creditors, we urge all customers and creditors to vote in favor of the Plan,” the company said.

Creditors will receive information on how to cast their votes through a solicitation packet sent by claims agent Stretto. That packet may include an additional letter from the creditor committee informing customers about releases in the agreement protecting executives from future legal action.

The bankruptcy court could confirm the plan as early as mid-December following the vote. Then, the closing process and transition of customers to the FTX platform to receive their assets would come after.

© 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.

MakerDAO, the issuer of the stablecoin DAI, appears set to move forward with a proposal to onboard an account to Coinbase prime and transfer roughly 33% of its USDC ($1.1 billion) into custody.

a16z deal partner, Porter Smith, announced the venture capital firm’s support for Coinbase Institutional’s Maker Improvement Proposal (MIP) 81 that would provide institutional rewards for USDC with MakerDAO. Founded by Marc Andreessen and Ben Horowitz, a16z cast the majority vote that solidified approval of MIP81.

The ongoing vote ends Oct. 24, and as of press time, 88.19% of voting MKR tokens are in favor of approval. 

Under the proposal, MakerDAO will use the 1.6 billion USDC to participate in Coinbase’s USDC Institutional Rewards program, after which Maker Governance will have access to near-instantaneous (<6 minutes) mint, burn, settlement, and withdrawal functions on Coinbase Prime. Coinbase will calculate rewards on a monthly basis from the weighted average of assets on the platform. Rewards are to be paid out the fifth business day, a month after the calculation and Maker will pay Coinbase zero custody fees.

“According to the rewards schedule proposed by MIP81, the implementation of this proposal would represent ~15 million USDC in annual revenues for MakerDAO,” MakerDAO tweeted.

Smith expressed hope the implementation with Coinbase will drive a path towards long-term decentralization and resiliency for DAI in a thread on MIP81 on the MakerDAO governance forums. However, in the final proposal, he said that automating liquidity flows between the peg stability module smart (PSM) contract, which manages Governance fees the protocol earns from swaps, and the Coinbase Prime account “could be important from a technical perspective.”

If the funds were instead “deposited into a Coinbase smart contract that didn’t have custodial access to the funds” it “could automatically deposit funds back into the PSM based on programmatic thresholds,” said Smith, who added that such a method would prevent Coinbase’s “custody” from becoming an obstacle to a surge of user redemptions.

However, before all that happens the Maker will undergo an onboarding process that includes a legal review with contractual arrangements to ensure Maker Governance has control over liquidity, that no third parties may block the capacity of Maker Governance to execute decisions or modify structures, and that no weak links or edge cases allow for the misappropriation or freezing of funds, the proposal noted.

Governance activities for Maker spiked lately as eight of nine recent polls on the platform are marked as High Impact for the protocol, among them MIP81, MakerDAO tweeted. Another Coinbase transaction-focused proposal seeks to collateralize a 500 million USDC loan to Coinbase with ETH and BTC via the PSM with an interest rate between 4.5% to 6% to be paid monthly.

Other proposals focused on a complex restructuring of MakerDAO to support decentralization, dubbed the “Endgame Plan,” and offboarding core units of MakerDAO.

In an effort to strengthen the project’s balance sheet, Maker also recently took steps to issue $500 million of its stablecoin reserves into short-term US treasury bonds and investment-grade corporate bonds.

© 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

• LooksRare has revised its listing reward program that compensates traders for listing eligible NFTs within a certain price range.
• Yesterday, changes pertaining to the second part of this update went live.
• Because listing rewards are now limited to the 200 lowest-priced NFTs in eligible collections, this has created negative externalities for select collections.
• Otherdeed’s floor price has dropped by -19.7% since this update was implemented.

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Troubled Asian crypto lender Vauld needs more time to sort out its financial problems, as the firm has applied for another four months of protection against creditors, according to court documents obtained by The Block.

The application, filed on Oct. 18 in the Singapore High Court, seeks additional protection through March 7, 2023. Vauld’s existing creditor protection expires on Nov. 7.

The new application comes shortly after Nexo, a Vauld rival and its potential acquirer, further extended its due diligence period for “as long as needed,” as The Block reported last week.

Vauld states in the court documents that the four-month extension is needed to prevent legal proceedings while it proposes a restructuring plan with its creditors and any potential investors. As for Nexo’s potential acquisition, discussions are still ongoing.

“Even if the deal with Nexo does not materialize, I am confident that there would be another party that would be interested in a potential investment in the Vauld platform,” Vauld co-founder and CEO Darshan Bathija states in the court documents. “We have also received support from significant creditors that Defi Payments’ business ‘remains attractive’ and would likely receive ‘further offers for acquisition’.” Defi Payments is the Singapore entity of Vauld involved in the court proceedings.

Earlier this month, Vauld formed a committee of creditors, according to the court documents. The committee comprises 17 undisclosed Vauld creditors, per the documents.

The committee held its first meeting on Oct. 10 along with Vauld’s management team and its financial advisors Kroll LLC. Vauld discussed the draft terms of its restructuring plan at the meeting, among other things, and concluded that if Vauld were to go into liquidation, estimated recoveries for creditors are expected to be in the range of 38% and 49%.

But Vauld said “it is a possible outcome of any deal with Nexo that creditors may recover 100% of their claims.”

Vauld is also weighing the conversion of its assets into a fund managed by a third-party “professional crypto asset fund manager.” Recoveries under this restructuring proposal would depend on the fund’s performance, but it is “possible that the returns to creditors may exceed 100% depending on fund performance,” per the court documents.

Vauld’s creditor committee is apparently in support of the four-month extension, according to the court documents. If granted, Vauld will buy more breathing space to finalize a restructuring plan, or it could face liquidation.

Vauld halted client withdrawals in July and owes $402 million to creditors, and $363 million — or 90% — of that amount comes from individual retail investors’ deposits.

Vauld did not respond to The Block’s request for comment by press time.

© 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.

Polkadot co-founder Gavin Wood is stepping down as the CEO of blockchain infrastructure company Parity, according to Bloomberg.

He will be replaced by fellow Parity co-founder Björn Wagner. Parity is a key development firm behind the Polkadot blockchain ecosystem. 

“The role of CEO has never been one which I have coveted (and this dates back long before Parity,” Wood said in a statement sent to Bloomberg. “I can act being CEO well enough for a short while, but it’s not where I’m going to find eternal happiness.”

Wood is also one of the co-founders of Ethereum as well as a creator of the Kusama network.

This is a developing story.

© 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 report from the research arm of Galaxy Digital, a digital asset-focused financial services firm, laid out data showing that, while NFT royalties benefit small artists, the main beneficiaries are top NFT projects like Bored Ape Yacht Club and corporations like Nike. 

Royalties for Ethereum-based NFT projects earned a total of $1.8 billion in revenue. The top 10 NFT projects netted $489 million, or 27% of all royalties earned. Yuga Labs, with its Bored Ape, Mutant Ape and Otherside projects, brought in $147.6 million in royalties, followed by Art Blocks with $82 million. 

NFT royalty data compiled by Galaxy Digital Research.

Sportswear firm Nike earned over $91.6 million from NFT royalties, the highest among prominent web2 brands. Adidas was next, raking in $4.7 million in royalties, with Gucci’s royalties seeing $1.6 million. 

NFT royalty data compiled by Galaxy Digital Research.

In all, 482 NFT collections brought in 80% of all royalties earned. 

The report comes as royalties become an increasingly contentious subject in the NFT space. NFT wrapping makes it almost impossible to have blockchain-based NFT royalties, leaving them up to marketplaces. And more and more marketplaces are opting to make royalties optional or eschew them altogether. 

The NFT marketplace X2Y2 appears to be the first platform to make NFT royalties optional this year. However, when the marketplace SudoAMM cut royalties to whittle transaction fees down to 0.5%, the move sparked a debate over the utility of NFT royalties, with some projects saying they’re crucial to supporting artists while unnecessary due to economic pressure on these platforms. 

Since then, Solana’s NFT platform Magic Eden decided to make NFT royalty payments optional on Oct. 15, 2022, and the Solana-based NFT project DeGods removing their own royalties. 

Economic pressures to cut costs wherever possible may be driving the open season on NFT royalties. OpenSea, which enforces artist royalties up to 10%, has dominated NFT trading volume, The Block’s Data Dashboard shows. However, the marketplace has lost significant volume to its royalty-optional competitor X2Y2 since June of this 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.

Two prominent Ethereum figures said the ETH community must be more positive and focus more on solving its problems, rather than complaining about them.

While Ethereum underwent its most ambitious upgrade to date last month — seamlessly transitioning from proof of work to proof of stake — its community has been focusing on other issues. Chief among them is the rising level of censorship that has resulted from sanctions placed against crypto mixer Tornado Cash, helped in part by the increasing use of a service called Flashbots.

Flashbots founder Phil Daian said on Twitter that it’s time to be more constructive. “ETH has a small but growing maxi contingent that sits on the sidelines but sees tarring and feathering others in the community as acceptable. I’ve seen this movie once before and it ends poorly.”

Flashbots remains under heavy fire

Flashbots has become a major target for this sort of criticism. The service supports a form of front-running called maximal extractable value (MEV), which is a growing problem for the network. Flashbots’ approach is not to not pretend the problem doesn’t exist, but to provide a home for it and let Ethereum developers and the community figure out how to adapt to it. 

Flashbots also censors transactions related to Tornado Cash due to the U.S. government sanctions that were placed against the protocol. Since the Flashbots service is used to create 49% of Ethereum blocks, this has had a big impact on the blockchain and caused many community members concerns that this could lead to broader censorship on the network.

While MEV and censorship are two separate issues, they are tied together because Flashbots censors transactions and is the protocol used for a strong majority of MEV-related transactions.

Daian defended Flashbots, arguing that if MEV is allowed to grow unchecked, it could become a greater problem. While Flashbots does enable MEV to take place, he said it will help Ethereum to avoid censorship in the long term.

Addressing the present state of Flashbots’ dominance, he said that it’s not resulting in network censorship because blocks are still being produced that don’t censor transactions. As a result, transactions are not being blocked from the network, they are only being delayed. And he doesn’t see an outcome where Flashbots is used to create 100% of blocks (which would result in full censorship).

If MEV is not enabled and addressed within the Ethereum ecosystem, Daian said the situation would be worse. He likened it to the way high-frequency trading has marred the traditional financial system.

If MEV were to spread unchecked on Ethereum in the same way, he said, it would be unfortunate: “If we can’t avoid this dystopia long term, censorship resistance is lost.”

Uniswap founder backs him up

Uniswap founder Hayden Adams chimed in with support for Daian’s viewpoint. He argued that attacks on those building in the Ethereum ecosystem should stop. 

“The reality is the scale, ambition, and complexity of what Ethereum is trying to accomplish does not play well with constant shaming, outrage, and purity tests,” he said.

Adams added that Ethereum’s growth has been faster than most people expected and this has led to unprecedented challenges.

He said: “The Ethereum community needs to grow and adapt to these new problems, not eat itself alive.”

© 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 UK’s Financial Services and Markets bill is home to new amendments seeking to regulate crypto and ban unauthorized service providers, following an amendment paper published on Friday.

Andrew Griffith, financial services minister, tabled amendments and added a note “to clarify that the powers relating to financial promotion and regulated activities can be relied on to regulate cryptoassets and activities relating to cryptoassets. Cryptoasset is also defined, with a power to amend the definition.”

If passed, the amendments will give the UK a more comprehensive regulatory framework for crypto. Specifically, it will provide the Financial Conduct Authority and HM Treasury with more oversight powers.

Currently, the UK’s crypto regulatory powers are largely in the hands of the FCA, which decides on the registrations of crypto firms according to strict anti-money laundering requirements. 

The proceedings on the bill should be concluded on November 3. However, with turmoil following Prime Minister Liz Truss’ resignation on Thursday, changes in the schedule may be anticipated. 

The Financial Services and Markets bill’s framework already focuses on stablecoins, and the broader framework will tie the UK closer to the EU’s comprehensive Markets in Crypto-Assets regulation.

© 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.

This research piece is available exclusively to
members of The Block Research.
You can continue reading
this Research content on The Block Research.