Coin360 Daily Dispatch | Crypto Market Updates & Highlights | April 2, 2024

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Crypto Market Update

Table of Contents

Market and Regulatory Updates

• Bitcoin's Slide and Strategic Profit-Taking
• Ethereum Faces Controversy and ETF Delays
• April's Crypto Highlights: Halvings and Legal Battles
• FTX Aims for 2024 Creditor Repayment

Exchange and Platform News

• FixedFloat Suffers Second Major Theft
• Ethena's Stablecoin Hits $1 Billion Market Cap
• MakerDAO Considers Major DeFi Sector Investment
• Fhenix and EigenLayer's Security Enhancement Initiative
• dWallet Network Integrates Bitcoin Rollup Solution

Investment and Innovation

• a16z Invests in Web3 Gaming Startups
• Paradigm Eyes Industry's Largest Fund Post-Crash
• BNB Chain's $1 Million Meme Coin Campaign
• Gomble Games' $10 Million Funding for Web3 Expansion

Market Movements and Trends

• Solana's Bobaoppa Experiences Price Volatility
• Crypto.com Launches Trading App in South Korea
• Solareum Closes Following Security Incident
• Vitalik Buterin Critiques Layer 3 Networks

Bitcoin's Slide and Strategic Profit-Taking

Bitcoin plunged to $65,500 after failing to sustain above the $70,000 level, driven by large liquidations on retail-heavy exchanges like Binance. This downturn saw $500 million in liquidations across exchanges, with Bitcoin and Ethereum facing the brunt. Amid these developments, Bitfinex report showed that long and short-term holders have been engaging in strategic profit-taking, with $2.6 billion in realized profits recorded in March, affecting Bitcoin’s price volatility. 

Moreover, the U.S. government moved 30,175 bitcoins, worth approximately $2 billion, to a Coinbase wallet, influencing market dynamics. Adding to the pressure, upbeat U.S. factory data bolstered the dollar and DXY, pushing Bitcoin below $66,500. Despite the market correction, sentiment analysis indicates a strong confidence among investors, according to Santiment, with a notable increase in buy signals. This optimistic stance is juxtaposed with the strategic profit-taking by long-term holders as Bitcoin reached new highs, underscoring the cyclical nature of the market and investor behavior patterns.

Ethereum Faces Controversy and ETF Delays

ETH dumps to the $3,200 range while the Ethereum community is divided over a proposal to reduce token issuance, aimed at preserving solo staker viability against liquid staking protocols, facing criticism for potentially undermining Ethereum's monetary role. Meanwhile, the delay in Ethereum ETF approval in the US is seen positively by some experts, suggesting a lack of immediate market demand for such products and regulatory clarity on Ethereum's security status, particularly concerning staking features, could benefit from a longer preparatory period. 

Additionally, Coinbase identifies restaking and liquid restaking tokens in Ethereum's DeFi sector as emerging innovations with potential hidden financial and security risks, despite being pivotal for the ecosystem's infrastructure, signaling a delicate balance between innovation and risk management in Ethereum's evolution.

April's Crypto Highlights: Halvings and Legal Battles

April's crypto calendar is packed with key events. Bitcoin Cash undergoes a halving, followed by delistings on major exchanges and AI token merger rumors. The U.S. CPI data release brings macroeconomic impact. Legal battles between SEC and Coinbase intensify. The highlight is Bitcoin's halving at the end of the month, signaling potential market changes and CZ's trial verdict.  

FTX Aims for 2024 Creditor Repayment

The FTX bankruptcy estate aims to repay creditors by 2024 end, collaborating with FTX Digital in the Bahamas. Claim submission deadline may extend to June. FTX sold AI shares to repay creditors. Founder Sam Bankman-Fried sentenced to 25 years for fraud. Collaboration ensures fair distribution, while ongoing developments are closely monitored for updates.  

FixedFloat Suffers Second Major Theft

Decentralized exchange FixedFloat experienced a $2.8 million theft, leading to suspicious transactions involving various digital assets. Stablecoin issuer Tether blocked addresses related to the incident, freezing $400,000 in USDT tokens. This marks FixedFloat's second attack in two months, following a previous $26 million loss, prompting domain transition to ff.io for enhanced security measures.  

Ethena's Stablecoin Hits $1 Billion Market Cap

Ethena Labs, having launched its ENA token, quickly became the fifth-largest stablecoin issuer with a $1 billion market cap and over $10 billion in fully diluted valuation. The project distributed 750 million ENA tokens (5% of total supply) to early adopters after a six-week incentivization campaign. The largest airdrop recipient bagged nearly $2M worth of ENA. Amidst its expansion, an analyst highlighted "critical flaws" in Ethena’s USDe, a synthetic dollar stablecoin, potentially endangering user investments. 

These vulnerabilities were spotlighted without full disclosure, raising concerns over the system's integrity. Despite these challenges, Ethena's ENA token is listed on major exchanges, following a $14 million funding round that valued Ethena at $300 million. The project’s approach diverges from traditional stablecoins by using derivative hedging and arbitrage, aiming for stability and shared profits among USDe holders.

MakerDAO Considers Major DeFi Sector Investment

MakerDAO is evaluating a proposal to invest $600 million in DAI into USDe and sUSDe, leveraging DeFi lending protocol Morpho Labs for investment diversification and DeFi ecosystem resilience. The move aims to reduce liquidity risk and boost insurance fund revenue, setting a $600 million cap with a possible increase to $1 billion. Meanwhile, Aave debates dropping DAI as collateral, citing contagion concerns from MakerDAO's embrace of USDe, highlighting the interconnected risks and strategic considerations within the DeFi sector.

Fhenix and EigenLayer's Security Enhancement Initiative

Fhenix partners with EigenLayer to develop FHE coprocessors for efficient computing over encrypted data on Ethereum. This collaboration aims to enhance blockchain security by processing encrypted data without decryption. FHE coprocessors optimize performance, utilize fraud proofs, and ensure economic correctness through EigenLayer's staking mechanism. They promise faster confirmations and scalable confidential computing solutions.  

dWallet Network Integrates Bitcoin Rollup Solution

The partnership between dWallet Network and Avail introduces a Bitcoin rollup solution enabling native Bitcoin management without the need for bridging or wrapping. This integration aims to enhance security, prevent asset theft, and enable smart contract functionality for users while maintaining control of their BTC, addressing critical issues in the Bitcoin community.  

a16z Invests in Web3 Gaming Startups

a16z has allocated $75 million for Web3 gaming startups via its SPEEDRUN program, offering $750,000 to each selected project. The initiative provides financial support, mentorship, and access to industry experts. This investment reflects growing optimism in Web3 gaming, as major players increasingly recognize the potential of blockchain technologies in shaping the industry's future.  

Paradigm Eyes Industry's Largest Fund Post-Crash

Paradigm, a major player in the cryptocurrency industry, is reportedly seeking to raise $750-850 million, potentially marking the largest fund in the industry since the crypto market crash. The company has a track record of substantial fundraising, with a $2.5 billion fund in 2021. Paradigm has also faced criticism and legal challenges in recent times.  

BNB Chain's $1 Million Meme Coin Campaign

BNB Chain is offering a $1 million reward to attract memecoin developers, aiming to accelerate the growth of the memecoin landscape. The "Meme Innovation Campaign" will run from April 10 to May 9, with requirements including a minimum $2 billion trading volume and completing a security audit. Other blockchain networks are also incentivizing memecoin development.  

Gomble Games' $10 Million Funding for Web3 Expansion

Gomble Games, the web3 branch of South Korean gaming studio '111%', has secured $10 million in funding from venture capital firms. The company plans to expand into the web3 space, develop sustainable reward systems, and create accessible games for global players. Their innovative approach focuses on transitioning the Web2 gaming model to Web3.  

Solana's Bobaoppa Experiences Price Volatility

The Solana memecoin Bobaoppa, created by Taiwanese music celebrity Machi Big Brother, saw volatile price swings after a $40 million presale. The token opened at $0.001474, dropped 74%, then partially recovered to $0.0007194. Despite a $73 million market cap, not all investors are satisfied with the wild price fluctuations.  

Crypto.com Launches Trading App in South Korea

Crypto.com is set to launch its cryptocurrency trading app for South Korean retail investors on April 29, offering access to over 150 cryptocurrencies and NFTs. Despite increasing regulatory scrutiny in South Korea, the exchange has been expanding its presence since acquiring OK-Bit in 2022 and obtaining regulatory registration in the country.  

Solareum Closes Following Security Incident

Solareum, a Solana-based Telegram trading bot, will permanently shut down due to a $515,000 security breach. Developers cited funding issues and evolving market trends as reasons for the decision. Users were advised to withdraw funds promptly, but the project lacks the resources to refund affected users. Additionally, SOL, the native cryptocurrency, has declined by over 3%.  

Vitalik Buterin Critiques Layer 3 Networks

Vitalik Buterin critiques Layer 3 (L3) networks, arguing they don't significantly enhance throughput. He suggests lighter cost-saving alternatives and debates the distinction between L3 and L2 networks amidst evolving multi-rollup ecosystem architecture. Polygon's Marc Boiron sees L3s as siphoning off value from Ethereum, triggering debate on Ethereum's security and the strategic role of L2 networks. Key players in the L3 space include Orbs, Xai, zkSync Hyperchains, and Degen Chain on Arbitrum Orbit, though the sector remains relatively small.