TLDR Crypto 2024-02-21

Hong Kong's central bank has issued guidance for firms looking to provide digital asset custody services. The guidelines require firms to undergo comprehensive risk assessment, have adequate resource allocation for custodial activities, and segregate clients' digital assets from the firm's own in the event of insolvency. The firms are also being asked to prevent client asset misuse and minimize the risk of digital asset loss due to illicit activities.

Crypto wallet MetaMask saw a 55% increase in active users in the past four months, from 19 million in September to over 30 million in January - comparable to the record numbers the wallet hit in 2022. Its growing user base has coincided with a surge in crypto prices, as more users return to or find the wallet for the first time. MetaMask has rolled out Blockaid, a web3 security tool, by default for multiple blockchains to protect users against malicious transactions.

Fantasy, a new trading card game combined with social finance, lets you create a roster of crypto Twitter influencers to compete for weekly prizes based on their real-life social media performance. Players can also trade digital influencer cards to enhance their lineups and win bigger rewards. The game offers a Hero program that allows influencers to monetize their Twitter presence, earn royalties, and gain additional game points.

Starknet, an Ethereum rollup, airdropped 728 million tokens to around 1.3 million addresses, marking the biggest airdrop of the year so far. STRK fluctuated in price following the airdrop, reaching a high of $5 before falling back to $3.50, putting the total supply of 10 billion tokens at an FDV of $35 billion. Its current market cap is $2.32 billion. The tokens will be progressively unlocked over 31 months starting from April. This is a faster timeline than what is typical for unlocks in the industry.

Ethena Labs rolled out USDe, a trust-minimized scalable stablecoin, earlier this week. It also released sUSDe, a yield-bearing version that offers a 27% yield. Ethena generates its returns using yield from staked Ethereum and financing rates from its short positions, using staked Ethereum and perpetual contracts to maintain the stablecoin’s peg. This means the yield is not without risks.

One of the more active and vocal airdrop farmers in the space is predicting that this year will be a significant year for airdrops, with many opportunities already emerging. In an interview, this airdrop farmer shares insights on how consistent organic usage over several months is crucial for farming airdrops. He also identifies several underrated airdrops and emphasizes the marketing potential of airdrops in attracting and retaining users.

Major US banking associations have asked the SEC to amend its definition of crypto assets because they want to be able to serve as custodians for newly approved spot Bitcoin ETFs. The banks have asked the SEC to change guidelines issued in March 2022, which make it more costly for banks to offer large-scale crypto custody services.

MicroStrategy's Executive Chairman Michael Saylor declared the company has no intentions of selling its bitcoin, even though it is sitting on a nearly $4 billion unrealized profit, as he considers it to be a superior asset compared to gold, real estate, and the S&P. Saylor says there is no reason to sell a winning asset. After being ridiculed throughout the bear market for being underwater on his purchases, his view has been vindicated by the entrance of institutional capital into the bitcoin ecosystem via spot ETFs.

Many influencers do more harm than good. Users should simply ignore them, foster a more ethical and informed community, and prioritize true decentralization over quick gains.

John Deaton is challenging Senator Elizabeth Warren for her Senate seat as a cryptocurrency advocate and attorney.

Walmart has re-upped its agreement with Pudgy Penguins for its Pudgy Toys line, rolling out new Pudgy products across 3,100 of its stores.

This blog post provides an update on the markets and discusses general thoughts around Bitcoin and Ethereum prices, rumors of the FTX estate selling its Solana, Pudgy Penguins, and the Starknet airdrop.