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Quick Take

• Total adjusted on-chain volume decreased by 36.3%, to $498 billion.
• A total of 122,074 Ethereum, equivalent to $175 million, was burned.
• Monthly volume of NFT marketplaces on Ethereum decreased significantly, by 73.3%, to $1.07 billion.
• Centralized exchange spot trading volumes decreased by 24.2% to $629.1 billion.
• FTX came in 2nd place for the second time in CEX spot trading volume, ahead of Coinbase, with a share of 11.4%.
• Derivatives presented a mixed bag, with open interest declining significantly for futures and options, and trading volumes up for futures but down for options.

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AltLayer, an Ethereum scaling startup that will offer application-specific chains, has raised $7.2 million in a seed funding round.

Sharing the news exclusively with The Block on Friday, AltLayer said Polychain Capital, Jump Crypto and Breyer Capital co-led the round. Other investors in the round included Gavin Wood, Ethereum co-founder and Polkadot founder; Balaji Srinivasan, a former Coinbase CTO and a former a16z general partner; Sean Neville, co-founder of Circle; and Kain Warwick and Jordan Momtazi, co-founders of Synthetix and Bodhi Ventures.

AltLayer is being built by Yaoqi Jia, who previously co-founded the Zilliqa blockchain and served its CTO. AltLayer’s unique selling point is application-specific chains, Jia told The Block.

“Other scaling networks are general purpose in the sense that more than one decentralized application (dapp) can be launched on it,” said Jia. “AltLayer will provide application-specific chains.”

Application-specific chains are customized blockchains for single applications. Instead of building on blockchains like Ethereum, app developers build their own blockchain from the ground up through platforms like AltLayer.

Application-specific chains have increased in popularity in recent months. Earlier this year, Binance said its blockchain BNB Chain plans to introduce such sidechains to cut costs and increase the speed of transactions for resource-intense applications such as gaming.

AltLayer’s initial focus will also be the gaming, non-fungible token (NFT) and the metaverse sector, said Jia. AltLayer can be seen as a system of individual optimistic rollups that derive security from an underlying Layer 1 (e.g., Ethereum) or Layer 2 networks (e.g., Arbitrum and Optimism), with each rollup tailored to a specific application, he added.

With fresh capital in hand, AltLayer plans to expand its current team of about 10 to around 25 in the near future and ship its platform later this year, said Jia.

AltLayer started building the platform last December. It started raising the seed round in April and closed it in early May before the recent market downturn, said Jia. The round was raised via a simple agreement for future tokens (SAFT) sale, he added.

© 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.

Finblox announced that it is increasing its withdrawal limit from today, two weeks after lowering it.  

The daily withdrawal limit has been doubled to $3,000, for a maximum of $30,000 a month, and reward functions have been restored for select assets including bitcoin, ether, USDC and USDT among others. Finblox said it will look to gradually increase yields available to clients, based on market and platform conditions.  

The crypto savings platform, which gives users the opportunity to earn rewards on digital assets, dropped its withdrawal limit to $1,500 on June 16 following news that crypto hedge fund Three Arrows Capital (3AC) was facing liquidity issues.  

At the time, it also froze reward functions on the platform, the referral and deposit program and disabled the creation of crypto addresses for new users.  

On June 24, Finblox said it had sent “multiple demands” to 3AC requesting repayment of its outstanding loan balance, to which the hedge fund has yet to respond. Meanwhile, Finblox has consulted external legal counsel to provide specialist support.  

Several companies offering high-yield reward programs have come under significant pressure amid the recent market downturn. Crypto lending platform Celsius, which offered up to 17% on some of its earn products, halted withdrawals on June 12 and has yet to re-enable them. 

© 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.

Cryptocurrency and commodities trading platform Bitpanda told its employees it would not resort to mass layoffs amid the economic downturn, just three weeks before a big employee cull.

According to a Slack screenshot obtained by The Block dated May 31, the company’s chief product officer, Lukas Enzersdorfer-Konrad, tried to dispel rumors that the company would downsize and halt hiring. 

“There will not be any kind of massive layoffs within Bitpanda,” Enzersdorfer-Konrad said. “We have not yet reached our limit and will continue hiring until all the positions we need are filled.” 

He said the company was “very well funded” with no liquidity problems. While he noted that its 2022 financial results were “below budget,” he said that this had been caused by macroeconomic conditions, including a supply crisis and the Ukraine conflict. The executive urged employees to focus on product and tech infrastructure improvements in preparation for the “next bull run.”

When reached for comment today, a company spokesman said: “Three weeks before the day of the announcement we didn’t plan to do a restructuring and we have always transparently communicated our plans to our people.” He added: “We only took this tough decision days before the official announcement when, due to legal restrictions, we couldn’t openly communicate about it.” 

Bitpanda said it was doing its best to support those affected by the restructuring. 

Since cutting its workforce by a third and rescinding offers of employment last Friday, Bitpanda has no jobs currently advertised on its careers page. In a statement, the company said that it had made a necessary decision in order to navigate out of the current market downturn. The company said that it may have expanded too quickly, after having previously committed to a “hyper-growth” strategy.

Last August, the company raised $263 million to fund its plan for fast growth as it looked to attract top talent and expand product lines. This included hiring a JP Morgan executive to lead its institutional platform, snapping up its first acquisition in February of this year and launching new products including its Bitcoin-backed ETN.

Bitpanda is not the only company to suffer amid market volatility. In the last week, The Block reported that crypto trading platform Abra and exchange OSL have cut jobs. Last month, more than 1,500 people were laid off by crypto firms including Coinbase, Crypto.com and Gemini. 

© 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

• The list of reported lenders to 3AC already includes Genesis Global Trading, BlockFi Lending, Voyager Digital, and Blockchain.com. 
• But The Block has learned that the list of 3AC’s creditors goes well beyond these larger institutions. 

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Ankr, a node infrastructure provider for proof-of-stake blockchains, has suffered a domain name system (DNS) hijack on the endpoints for Polygon and Fantom, according to a tweet by Polygon’s chief information security officer Mudit Gupta.

The hijack appears to be an attempt to trick users into providing their wallet seed phrase. Users of the two networks have been urged to use other node providers while the issue is being fixed.

Ankr’s twitter account posted that it’s “investigating some reported issues.” 

This is a breaking story and will be updated.

© 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 derivatives exchange operator Deribit initiated the liquidation application against Three Arrows Capital (3AC) in a court in the British Virgin Islands (BVI), according to a court order seen by The Block.

Deribit confirmed to The Block on Friday that the company led the liquidation application against the investment firm. It added that a couple of other parties joined the initiative but declined to name those due to non-disclosure agreements.

Blockchain.com also pushed for 3AC’s liquidation, according to a Bloomberg report. It is unclear whether Blockchain.com joined with Deribit or has taken legal action against 3AC separately. The Block has reached out to Blockchain.com for comment and will update this story should we hear back.

Advisory firm Teneo is the 3AC liquidator, as The Block previously reported. The court order seen by The Block also names specific Teneo employees who will lead the liquidation — Russell Crumpler and Christopher Farmer — senior managing directors with Teneo in the BVI.

3AC insolvency 

Deribit applied for 3AC’s liquidation on June 24, and on June 27, 3AC applied for its own insolvency, per the order.

That was a legal technique by 3AC to spin things in their favor, a person with knowledge of the situation told The Block. But Deribit beat them by applying earlier, the person said. Otherwise, the liquidator nominated by 3AC might have been appointed. The Block has contacted 3AC for comment and will update this story if we hear back. 

3AC co-founder Zhu Su and the person named Chen Kaili Kelly are listed as creditors in the court order from 3AC’s own filing. It is not immediately clear who Kelly is.

Founded in 2012 by Zhu and his former classmate and Kyle Davies, 3AC had grown into one of the largest and best known crypto hedge funds. But May’s collapse of the Terra ecosystem resulted in a significant hit for 3AC as its investment in Terra’s native luna token sank to almost zero. 

Deribit’s initiative comes days after The Block reported that it was among exchanges that liquidated 3AC’s positions. 3AC is also a shareholder in Deribit.

BitMEX was also among the exchanges that liquidated 3AC and is owed $6 million by the fund, The Block reported previously. But BitMEX hasn’t joined the Deribit initiative, a company spokesperson told The Block.

© 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.

Meta has begun the roll out of a non-fungible token (NFT) feature on Facebook, just a week after chief executive Mark Zuckerberg had announced the plan. 

The feature will initially be open to a select group of US-based creators; similar to how the company rolled out NFTs on Instagram a month ago. Zuckerberg’s Facebook post announcing the move also said the company is looking into augmented reality NFTs and 3D NFTs using the company’s Spark AR software platform. 

The news was confirmed on Wednesday by Meta product manager Navdeep Singh on Twitter. Screenshots shared by Singh show that Facebook NFTs will appear under a ‘digital collectibles’ tab on a user’s profile. 

On Instagram, NFTs are backed by Ethereum and Polygon blockchains with Solana and Flow support coming soon. Facebook hasn’t announced if that will also be the case for NFTs on its platform. 

The Block has reached out to Facebook for further detail.

© 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.

Bitcoin registered its worst decline in 11 years during the second quarter amid the crypto market downturn.

Following the turbulence of May and June, the 56% drop was its worst quarterly drawdown since the third quarter of 2011.

At the time of writing, bitcoin was trading hands at $19,452 according to data via CoinGecko. Bitcoin had been hovering on either side of $19,000 on Thursday, before recovering slightly to gain 1.9% over the past 24 hours.

The quarterly loss comes as multiple crises have played out across financial markets. In June, crypto lenders Celsius and BlockFi came under persistent scrutiny following the former’s decision to halt withdrawals for customers and speculation that the latter was set to be acquired at a cut-rate price by FTX. 

Contagion has spread across the markets, with crypto hedge fund Three Arrows Capital now facing liquidation in the British Virgin Islands after the Eastern Caribbean Supreme Court appointed Teneo to handle the proceedings. This contagion risk hasn’t completely played out yet, Eli Ndinga, director of research at 21Shares, said on an analysts call on Wednesday.

Meanwhile, traditional financial markets have been rattled over the past month as inflation increases and central banks around the world raise interest rates. Furthermore, the Atlanta Fed revised its projections for the second quarter this week, predicting negative growth for the second consecutive quarter — implying that the US may be in a recession.

© 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.

Episode 60 of Season 4 of The Scoop was recorded live at The Block headquarters in New York with The Block’s Frank Chaparro and Anatoly Yakovenko, co-founder and CEO of Solana Labs.

Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests to podcast@theblockcrypto.com.

Many Web3 platforms require users to connect their crypto wallets before engaging with the platform in any meaningful way.

Consequently, the Web3 experience on mobile devices is tedious at best, given current devices are not designed with such functionalities in mind.

Solana Mobile — a subsidiary of the development team behind Solana — hopes to address the difficulties that surround the Web3 mobile user experience with its new Android phone called ‘Saga,’ which is slated for release in early 2023. 

Last week, Solana Labs co-founder and CEO Anatoly Yakovenko announced the new mobile device, which will run a ‘Solana Mobile Stack’ (SMS) operating system and will feature a marketplace for decentralized Web3 applications.

In this episode of The Scoop, Anatoly Yakovenko said he believes Saga’s early success will be linked to its ability to significantly enhance the mobile crypto user experience:

“The theory is that crypto users might be crazy enough to switch from iOS to Android because of crypto. It might be so important to have that experience, that they’re willing to change their habits.”

If Solana Mobile is successfully able to prove there is consumer demand for crypto-forward mobile products, Yakovenko believes it will inspire major tech companies to integrate crypto infrastructure into their own mobile devices moving forward:

“You need Google and Apple to do it, but they’re not going to do it until there is proven demand that people need it — and so somebody has to kind of make that leap…”

During this episode, Chaparro and Yakovenko also discuss:

• Yakovenko’s background working for Qualcomm
• The $10 million fund to bring developers to SMS
• How the ‘Saga Pass’ NFT will allow early adopters to guide development

This episode is brought to you by our sponsors Fireblocks, Coinbase Prime & Cross River
Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, lending desks, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. Fireblocks serves over 725 financial institutions, has secured the transfer of over $1.5 trillion in digital assets, and has a unique insurance policy that covers assets in storage & transit. For more information, please visit www.fireblocks.com.

About Coinbase Prime
Coinbase Prime is an integrated solution that provides institutional investors with an advanced trading platform, secure custody, and prime services to manage all their crypto assets in one place. Coinbase Prime fully integrates crypto trading and custody on a single platform, and gives clients the best all-in pricing in their network using their proprietary Smart Order Router and algorithmic execution. For more information, visit www.coinbase.com/prime.

About Cross River
Cross River is powering today’s most innovative crypto companies, with banking and payments solutions you can rely on, including fiat on/off ramp solutions. Whether you are a crypto exchange, NFT marketplace, or wallet, Cross River’s API-based, all-in-one platform enables banking as a service, ACH & wire transfers, push-to-card disbursements, real-time payments, and virtual accounts and subledgers. Request your fiat on/off ramp solution now at crossriver.com/crypto.

© 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.