TLDR Crypto Daily Update 2022-11-10

Binance pulls FTX deal 💰, Solana sell off ☀️, FTX's Alameda bailout 🏦

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Markets & Business

Binance Backs Out of FTX Rescue, Citing Finances, Investigations (2 minute read)

Binance has backed out of the bailout deal for FTX due to issues beyond its control. The company could not continue with the takeover after completing its due diligence. FTX is being investigated by US regulators on whether it properly handled customer funds. The deal falling through likely means that FTX customers will take losses.

Solana Blockchain Hit by FTX Tremors as Nearly $800M SOL Tokens Set to Be Unstaked (2 minute read)

Solana's SOL token price tumbled over concerns that Alameda might need to sell some of its SOL tokens to raise liquidity. Alameda holds $292 million of unlocked SOL, $863 million of locked SOL, and $41 million of SOL collateral. Solana validators are set to unlock nearly $800 million worth of their SOL holdings at the end of the token period Epoch 370. Investors are likely to sell all or part of their positions when they are unlocked.
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Innovation & Launches

Say hello to the newest crypto startups from web3 accelerator Alliance DAO’s demo day (9 minute read)

Alliance DAO's demo day saw new crypto startups present their ideas. The DAO puts web3 founders through a three-month program twice a year. Its alumni have so far created over $10 billion in market capitalization. Only 17 teams were chosen to be part of the most recent cohort out of 953 applications. This article presents a breakdown of the 17 startups.

Crypto Exchanges Scramble to Compile 'Proof of Reserves' as FTX Contagion Grips Markets (2 minute read)

Binance, Gate.io, KuCoin, Poloniex, Bitget, Huobi, OKX, Deribit, and Bybit will soon publish their Merkle tree reserve certificates to increase transparency. Merkle trees are data structures that serve to encode blockchain data efficiently and securely. Using Merkle trees will allow third parties to verify user holdings. Binance founder Changpeng Zhao urged the industry to start providing proof of reserves after the recent events involving FTX.
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Guides & Resources

Here's everything you need to know about Alameda Research and the collapse of FTX (6 minute read)

This Twitter thread looks at the story of FTX's collapse and how FTX and Alameda colluded while retaining a legal and legitimate-seeming arms-length relationship. FTX was the world's third-largest crypto exchange, and now it is insolvent. It is owned by Sam Bankman-Fried, who also owns Alameda, a crypto hedge fund. Last week, a CoinDesk report revealed Alameda's balance sheet and its close relationship with FTX.

I found evidence that FTX might have provided a massive bailout for Alameda in Q2 (3 minute read)

FTX may have provided a massive bailout for Alameda in Q2 following the collapse of Three Arrows Capital and others. If it had let Alameda collapse, then all of the FTT tokens vested in September would have been liquidated. The bailout likely caused FTX to become insolvent. There is a chance that Binance knew about this arrangement and deliberately tanked the FTT market to force FTX into a liquidity crunch.
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Miscellaneous

Bear in Mind: Long-term builder’s guide to the bear market (4 minute read)

This article discusses the effects of the bear market and how builders can navigate through it. There is less funding and liquidity and more failed projects and increased regulation during bear markets. This can result in high burn rates, adoption stagnation, treasury devaluation, and other risks for web3 projects. There will always be enough opportunities for builders who are in it for the long run.

A Failed FTX-Binance Deal Is ‘Catastrophic’ for Crypto Sector (2 minute read)

Binance made an offer to bail FTX out of its liquidity issues, but the offer was quickly rescinded, sending crypto markets plunging. Bitcoin sank below $16,000 for the first time in two years. FTX's downfall will further erode trust in the crypto industry from both retailing and institutional investors. Many normal users will lose their money with FTX unless the exchange is bailed out by another major player.

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FTX Warns of Bankruptcy Without Rescue for $8 Billion Shortfall (4 minute read)

FTX will need to file for bankruptcy if it doesn't receive a cash injection.

Sam Bankman-Fried's FTX Empire Faces US Probe Into Client Funds, Lending (3 minute read)

The US SEC and CFTC are investigating whether FTX mishandled customer funds.

Rollups: Centralised front-end, decentralised back-end (10 minute read)

Rollups allow developers to focus on the centralized frontend while a decentralized backend protects all assets held by the off-chain system.

One of the most challenging and unspoken issue facing the Solana ecosystem are the wrapped Sollet tokens, namely soBTC (2 minute read)

soBTC is issued by FTX or Alameda and no one knows if they still have the underlying assets.

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