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Welcome to a new month in crypto. Here’s to hoping that your February consisted of more than binge-playing Dookey Dash. Although Yuga Labs’ new game has paid off for some—the player who holds the high score already sold his prize NFT for $1.6 million.
Today: Binance makes headlines, Ordinals lands an NFT behemoth, and GTA goes web3 (maybe). Let’s go.
—Angelina
Binance Fact or FUD?
When you’re the largest player in crypto, it’s tempting to make up the rules as you go. But Binance may have crossed the line.
What’s giving crypto FTX flashbacks: A new Forbes investigation raised serious concerns about Binance’s management of customer assets and stablecoin collateral.
The findings: Forbes found on-chain evidence showing that Binance transferred $1.78 billion worth of collateral out of wallets intended to back stablecoins and into various crypto entities (including the defunct Alameda Research hedge fund and Tron founder Justin Sun).
According to Forbes, this outflow of collateral wasn’t accompanied by a corresponding reduction in the circulating supply of B-peg USDC—leaving the stablecoin undercollateralized and breaking Binance’s own rule of keeping its B-peg tokens 100% backed.
Binance’s response? In an official statement, the exchange dismissed Forbes’ findings as “huge leaps to conclusions based on flawed observations.” Binance CEO Changpeng Zhao was equally defensive, accusing Forbes of spreading FUD.
What does this mean for Binance? Two scenarios:
Best case: The funds transferred weren’t actually stablecoin collateral but normal client assets being withdrawn. It’s entirely possible that the on-chain transactions at issue were innocuous, as Binance claims.
Worst case: Forbes uncovered Binance engaging in some sort of rehypothecation (loaning out customer funds unbeknownst to customers—the practice that destroyed FTX). Binance’s inconsistent attempts to explain Forbes’ findings tend to strengthen this theory.
Big picture: It’s too early to know what’s what yet. What we do know is that this latest investigation comes amid mounting evidence of problems with Binance’s asset management practices. FYI, Binance admitted to failing to maintain a 1:1 backing of its wrapped b-assets and co-mingling collateral in the past.
Accolades for Ordinals
Ordinals (aka Bitcoin NFTs) are right up there next to the Hailey Bieber/Selena Gomez drama in the category of “things that are impossible to miss.”
The hype gets bigger: Bored Ape creator Yuga Labs is hopping on the craze with the release of a Bitcoin-based NFT collection minted on the Ordinals protocol. The “TwelveFold” collection will star 300 generative art NFTs that combine 3D elements with hand-drawn features.
This is big. Yuga’s move demonstrates that Ordinals is drawing new projects to Bitcoin, which has long lacked any significant builder’s momentum. Ordinals could help shape a new narrative around Bitcoin—one defined by innovative projects and experimental applications adding functionality to the OG blockchain.
Zoom out: Yuga Labs is one of the NFT space’s biggest and most popular players—its Ordinals move might inspire similar strategies from its peers. But since Bitcoin-based NFTs are still novel, the infrastructure around them is lacking.
Unlike Ethereum-based NFTs which are traded on marketplaces like OpenSea, Ordinals still trade via old-school auctions (think Excel spreadsheets for prices and buyers manually organizing transfers).
Looking ahead: With major NFT projects moving to Bitcoin, marketplaces designed specifically for Ordinals are about to be in high demand. How’s that for a free business idea?
The Largest Web3 Onboarding…Ever?
Rumor has it that Rockstar Games is integrating NFTs into its new game, Grand Theft Auto 6 (GTA 6). If there’s some truth to the gossip sparked on Seeking Alpha, crypto is in for a ride.
Why? GTA 6’s decade-old predecessor is one of the most successful games of all time. Let’s say GTA 6 pulls in the same number of users as GTA 5 (which sold 175 million units and still has 2.5 million monthly active users). A successful web3 integration with, say, Ethereum, could increase Ethereum’s monthly active users by up to 30%.
Looking ahead: Rockstar Games has yet to confirm the rumors or a launch date. But if GTA 6 can prove the web3 model in gaming, other publishers will no doubt follow.
In other news:
The future looks bleak for crypto-bank Silvergate.
NFT TV shows are a thing.
This is what the metaverse could look like, according to metaverse visionary Neal Stephenson.
Tether allegedly used fake documents to open bank accounts.
Crypto plays a notable role in the Ukraine war—on both sides.
Crypto Job Board
Based in Europe or the UK? Cere Network is hiring a Web3 Business Developer to help build its decentralized data cloud solutions.
Bridge the worlds of clinical trials and web3 as a Technology Lead/Engineer at Voluntas.
If you’re bullish on zero-knowledge tech, help spread awareness for the mission as the Head of Community at Sismo.
And that’s what you need on your radar today in crypto. If you’re planning on launching the first Ordinals NFT marketplace, hit me up. In the meantime, catch you back here next week!