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Last week was one of the worst on record for holders of Bored Ape Yacht Club NFTs, with prices reaching a low point not seen since late 2021. One investor in BAYC creator Yuga Labs, the $4 billion startup, blames traders.

BAYC’s floor price — the price of the cheapest item in an NFT collection — dropped below 34 ETH ($64,000) for the first time since November 2021, according to The Block Research data. That coincided with a period of heavy selling.

Some attributed the crash to the actions of rapper-turned-NFT enthusiast Jeffrey Huang, otherwise known as Machi Big Brother, who suddenly offloaded 50 apes. Huang has recently drawn the ire of crypto Twitter over suing blockchain sleuth ZachXBT for defamation.

But Lior Messika, who runs crypto venture firm and Yuga Labs-backer Eden Block, sees rife speculation as the bigger driver of the decline in BAYC prices.

“The NFT market of today rewards traders and speculators, not builders utilizing the underlying IP in creative and valuable ways,” said Messika, whose fund recently hired the former CEO of Goldman Sachs in Israel. He added that NFTs are highly risky assets and often “first to suffer” in volatile markets. 

Blur’s impact on the market

A driving force behind that shift in dynamic is Blur, the Paradigm-backed platform built for pro traders. Since October last year, Blur has dominated an otherwise suppressed NFT market — today accounting for 66% of volumes, compared with OpenSea’s measly 10%, according to The Block Research data.

“Some will blame Blur and some will blame the lack of royalties, but the situation is simple: a trader’s market is repricing the cultural and utilitarian aspects of BAYC, and that situation won’t change — not until new capital enters the NFT space (and the BAYC collection) for the right reasons,” Messika said.

He added that where once NFT whales identified as “collectors,” they are increasingly branding themselves as traders or even “Blur farmers” — a reference to the rewards customers can earn in the platform’s token.

“Sadly, the market is now dictated by the fear and greed of a few traders, and collectors across the space are struggling to find footing in this new reality,” Messika added.

At its all-time high a little over a year ago, BAYC’s floor price stood at 128 ETH ($240,000), with individual items selling for millions of dollars. Messika thinks Yuga is unlikely to do much in response to recent price pressure, however.

“Yuga’s building a place for those collections and underlying communities to grow through utility and unique experiences. I believe that in the long term, this approach will lead to the best outcome for their collections as they expand their market. The best thing that Yuga can do to react to negative price movement is simply ship,” he added.

Yuga Labs did not immediately respond to a request for comment. 

© 2023 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 fund founded by Su Zhu and Kyle Davies suffered big losses on the collapse of the Terra ecosystem starting in May 2022 and took on additional leverage despite already being insolvent, the liquidators say.

Liquidators of Three Arrows Capital aim to recover $1.3 billion from the failed crypto hedge fund’s co-founders, Su Zhu and Kyle Davies.

The liquidators, two partners at the consultancy firm Teneo, allege that Zhu and Davies were responsible for losses equal to that sum — after racking up leverage in the months immediately prior to 3AC’s collapse, according to a Bloomberg report published today that cited an anonymous source. Teneo and 3AC did not immediately respond to requests for comment.

The allegations were reportedly discussed during a meeting with 3AC’s creditors on Tuesday. The Block was first to reveal, in July last year, that 3AC owed its creditors more than $3.5 billion when it collapsed.

3AC accused of taking on ‘significant leverage’ 

Both Zhu and Davies went quiet in the weeks following their fund’s implosion, but gradually made a return first to social media and later to entrepreneurship.

The pair teamed up with Mark Lamb, founder of CoinFLEX, the crypto lender that filed for restructuring in the Seychelles last year, to launch a new business named OPNX. Among other things, it aims to allow users to trade bankruptcy claims. 3AC’s liquidators, meanwhile, have repeatedly complained about Zhu and Davies’ lack of cooperation. 

According to Bloomberg’s report, 3AC’s liquidators accuse Zhu and Davies of taking on “significant leverage” between May and June 2022, after the fund had taken a major hit from bets on luna tokens and other crypto investments. At that point, liquidators believe 3AC was already insolvent, the report states, adding that liquidators are now taking action against the pair in a British Virgin Islands court to recover those losses.

© 2023 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.

New claims put FTX and Alameda Research founder Sam Bankman-Fried and his friends even closer to the center of a brazen conspiracy.

The two Far East financial hubs take a comprehensive approach to overseeing crypto, and are likely to attract businesses from around the world. They don’t appear on CoinDesk’s Crypto Hubs 2023 ranking of the 15 best places to live and work for crypto professionals, but they should not be ignored.

Circle, the issuer of the USD Coin stablecoin, said that its Cross-Chain Transfer Protocol is now operational on Arbitrum, a Layer 2 scaling solution for Ethereum. The protocol is designed to enable faster and more secure transfers of USDC across multiple chains including Ethereum, Avalanche and Arbitrum.

CCTP enables the transfer of USDC across different blockchain networks by burning the native USDC on the initial chain and minting an equal amount on the recipient chain. Arbitrum is the third chain offering support for CCTP and is live on the official Arbitrum Bridge, as noted by Circle.

The CCTP integration comes after Circle announced a native version of its stablecoin on the Arbitrum network.

USDC transfers

Other bridge projects and interoperability-focused protocols, such as Celer Network, Li.Fi, Wormhole, O3 Labs, Wanchain and Router Protocol, have already integrated CCTP into their systems to allow USDC transfers via their platforms.

Notably, the integration of CCTP with Arbitrum aims to supersede the conventional “lock-and-mint” bridging process traditionally used to transfer tokens between chains. That mechanism has previously been implicated in security incidents. Moreover, employing CCTP contributes to more expedited bridge transfers, according to Circle.

USDC is the second-largest centralized stablecoin in the market after USD Tether, with a supply nearing $28 billion.

© 2023 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.

Asset management giant Fidelity is close to submitting its own filing for a spot bitcoin exchange-traded fund, joining a long list of issuers keen to be first to market with such a product. 

A source familiar with the firm’s plans says that it could submit its filing as soon as Tuesday, following the lead of asset management giant BlackRock.

BlackRock’s June 15 filing has been followed by other asset managers looking to launch their own spot bitcoin funds including Invesco, WisdomTree and Bitwise.

This will be Fidelity’s second attempt at such a product. In 2021, it filed for a bitcoin spot exchange-traded fund called the Wise Origin Bitcoin Trust but was denied by the U.S. Securities and Exchange Commission in early 2022.

Fidelity declined to comment when contacted by The Block. 

The promise of a bitcoin ETF

The launch of a spot bitcoin ETF has been described as a gamechanger among market pundits since it can provide a way for investors to get exposure to the market without having to deal with the underlying asset. BlackRock’s filing specifically has been pointed out as significant given the firm’s size and significance in global markets. 

“BlackRock’s decision to file for a Bitcoin ETF signals that large institutional players are positive on the long-term outlook for the digital asset,” Ark analyst Yassine Elmandjra wrote.

Fidelity is also a powerhouse, with tens of millions of retail brokerage clients and over $11 trillion in assets under its administration. The firm is also no stranger to crypto as it has operated an institutional custody and trading services business in the market since 2018. 

On the asset management side of the house, it has offered fund products to European clients via Fidelity International since February 2022.

© 2023 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.

Coinflex, the former cryptocurrency exchange responsible for the BCH to sBCH cross-chain bridge, has made partial repayments to SmartBCH Alliance Limited as part of its restructuring plans. 

SmartBCH, a Bitcoin Cash sidechain compatible with Ethereum, received distributions from Coinflex, including approximately 4.28 million rvUSD ($750,000), 652,000 USDC ($652,000) and 6,834 BCH ($1.6 million), according to a blog post. Of the USDC received, 80% has been swapped into bitcoin cash while reserving the remaining portion for legal and operational expenses. SmartBCH currently owns a total of 10,758 BCH.

Bitcoin cash surge

The repayment comes after a surge in the price of bitcoin cash, which has gained more than 110% over the last seven days, outperforming other major currencies in the top 100, according to CoinGecko data.

Bitcoin Cash and other Bitcoin forks have particularly benefited from the rising crypto market following a flurry of spot bitcoin ETF filings, with Wisdom Tree, Bitwise, Invesco and Valkyrie all submitting applications to the U.S. Securities and Exchange Commission after BlackRock’s filing on June 15.

EDX Markets, a new cryptocurrency exchange backed by Citadel Securities, Fidelity Investments and Charles Schwab launched last week, has also listed bitcoin cash.

FLEX and OX, tokens connected to Coinflex, rose 53% and 65%, respectively, over the last week.

Ongoing restructuring and OPNX rebrand

Coinflex is currently undergoing a legal process for restructuring, as approved by the Seychelles Courts on March 6. The exchange first suspended withdrawals in June 2022, citing “extreme market conditions and continued uncertainty involving a counterparty.” Coinflex was one of many crypto firms hit by the collapse of the Terra ecosystem in May 2022, which wiped out over $40 billion in investor value in a matter of days. In September, the company unveiled its restructuring proposal to turn over more than 65% of its equity to creditors and vest 15% to employees.

On March 8, Coinflex rebranded to Open Exchange (OPNX) following approval of its restructuring plan. Coinflex founders Mark Lamb and Sudhu Arumugam are working with the co-founders of bankrupt crypto hedge fund Three Arrows Capital — Kyle Davies and Su Zhu — on the new venture.

SmartBCH said it plans to open an account on OPNX and will gradually convert rvUSD into bitcoin cash through the exchange. It added that, according to the terms of restructuring, it was still entitled to, but hadn’t yet received common equity in Coinflex and one board set at Coinflex.

It has also burned 33,365.67 sBCH, returning them to the old bridge address. As a result, there are now 67,756.766 sBCH in circulation on the sidechain. 

Maintaining the peg

SmartBCH said it had entered into an agreement with Coinflex to take over the responsibility of maintaining the 1:1 peg between sBCH, the sidechain’s native token, and BCH using the assets it holds. Receiving the assets from Coinflex strengthens the stability of the sBCH:BCH peg, it said. 

© 2023 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.

Tokens issued using a new protocol known as Ethscriptions, which draws inspiration from Bitcoin Ordinals, have exceeded 560 ether ($1 million) in trading volume since their launch in mid-June, according to data from OpenSea.

Ethscriptions, also referred to as the ESC-20 token standard by its users, provides a way for users to create unique tokens leveraging transactional calldata on the Ethereum blockchain. The protocol was launched in mid-June by Ethereum developer Tom Lehman. 

Ethscriptions draws inspiration from Bitcoin Ordinals, which leverages a process known as “inscription” to assign image data to individual satoshis across the Bitcoin network. However, Ethscriptions adopts a different strategy, utilizing transaction calldata to generate unique NFT-like image artifacts that are embedded within Ethereum transactions.

As an open-source project, Ethscriptions has sparked interest among traders, given the surge in trading volume to more than $1 million within just a few weeks. One of the most prominent Ethscriptions that’s being actively traded is a copy of the notable CryptoPunks NFT collection, among others.

Still, the protocol is currently in a highly speculative phase, lacking a clear value proposition. This uncertainty may be due to the existing acceptance of NFTs leveraging the ERC-721 token standard, often considered the default mechanism to generate and trade image-based collectibles on the Ethereum blockchain. Despite this, its creator Tom Lehman asserts that Ethscriptions presents a cost-effective alternative to Ethereum NFTs.

Lehman stated that Ethscriptions has a focus on the use of calldata as a data store for exchanging things like image art. This can be an affordable alternative to the high computational costs associated with running complex smart contracts on Ethereum, especially for projects without immediate financial returns like trading “JPEGs.” 

“Why do I believe Ethscriptions will eclipse NFTs? Because NFTs are only for rich people and Ethscriptions are for everyone.” Lehman asserted.

How does Ethscriptions work?

In Ethereum, calldata refers to a field in a transaction that contains the function signature and encoded logic necessary to call a specific function in a smart contract. 

This calldata is traditionally used to specify the instructions to the smart contract about what function to execute and with what parameters immutably recorded on the blockchain with the transaction. However, Ethscriptions uses calldata in a new way to create art collectibles.

In Ethscriptions, an image or other data is converted into a hexadecimal format, and then this converted data is put into the calldata field of a 0 ETH transaction. Once the data is recorded on the blockchain, an “Ethscription,” similar to an NFT is effectively created.

The data can then be indexed for easy retrieval and viewed by anyone who can access the blockchain. It’s important to note that while this method allows for the creation of unique digital artifacts, the Ethscriptions don’t behave exactly like traditional NFTs. They don’t adhere to the ERC-721 standard (the standard most commonly associated with NFTs on Ethereum) and can’t be transferred or sold in the same way. Instead, they are unique representations of data permanently recorded on the Ethereum blockchain.

© 2023 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.