SHIB’s endgame

Can the 3AC founders redeem themselves?

Welcome back. And Happy Lunar New Year to everybody celebrating. If crypto continues on its latest upward trajectory, the Year of the Rabbit is looking to be a prosperous one.

Today: SHIB’s adulting, business ideas from crypto’s burn list, and DC’s FTX problem. Let’s go.

—Angelina

When Meme Coins Grow Up

Confession: In the past, my attitude toward meme coins wasn’t exactly sympathetic. Sure, they make for great entertainment on crypto Twitter—but meme tokens (particularly the dog-themed kind) can suggest to the mainstream that hype and FOMO drive the entire crypto industry.

…but I might just have to change my mind. Because Shiba Inu (SHIB) could be graduating from meme coin status very soon.

Big news: Shiba Inu devs announced last week that the SHIB ecosystem is getting a major upgrade called “Shibarium.”

What is Shibarium?

  • A new proof-of-stake network built on top of Ethereum. Shibarium will allow users to become validators (or delegators) of the network, stake their tokens, and receive rewards.

  • As a layer 2 protocol, Shibarium allows for faster transaction times, better scalability, and lower fees because it reduces the load on the underlying blockchain.

  • Shibarium will also introduce a new burn mechanism that requires a small amount of SHIB to be burned with every network transaction. That’ll put deflationary pressure on the total SHIB supply.

There’s a clear vision behind the upgrade. Shibarium’s launch intends to make SHIB indispensable in the development of metaverse and gaming applications—which are both areas of web3 that require networks with low costs and high levels of scalability and speed.

SHIB devs didn’t specify when Shibarium’s testnet will launch. It’s “not a matter of wen but a matter of developing Shibarium correctly, and introducing it responsibly,“ said the official announcement.

Big picture: The massive Shibarium undertaking suggests that SHIB has some legit developers with a legit roadmap trying to create legit value. It’s unclear whether Shibarium’s efforts will pay off, but if they do, this could create a new pathway toward a more sustainable future for projects that once peddled primarily in hype.

Playing With Fire 3AC's Founders

You know why touching the stove as a five-year-old is such a valuable experience? It teaches you not to get burned twice. Now, the crypto world will find out if two of its most famously burned figures have learned their lessons.

Kyle Davies and Su Zhu, (in)famous for founding the collapsed crypto hedge fund Three Arrows Capital (3AC), are trying to raise $25 million for a new crypto business, according to leaked pitch decks.

Here are the details—we’ll let you decide how wild you think they are:

  • Davies and Zhu are partnering with the founders of CoinFLEX (a crypto exchange that filed for restructuring after halting withdrawals last year) to build an exchange where people who lost their money in collapsed crypto companies can sell their bankruptcy claims.

  • The name of the new marketplace? GTX—G, as in the letter after F in the alphabet.

How will GTX work? If you have money stuck in [insert crypto exchange that went bankrupt in 2022 here], getting those funds out can take years. GTX lets you sell your claims to parties that can wait it out.

Big picture: Any venture capitalists who back GTX could take on reputation risk simply by associating with Davies and Zhu, let alone stroking them a check.

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Complicated Creditor Clawback

Nobody likes giving money back—especially when you’ve already spent it. One out of every three members of Congress can relate…

Today we learned: 196 U.S. senators and representatives (many of whom were sworn in just earlier this month) received direct contributions from Sam Bankman-Fried or FTX execs, a new CoinDesk investigation shows.

The recipients range from high-profile names including Speaker of the House Kevin McCarthy down to Hill newbies. Both Democrats and Republicans took the contributions.

The messy part: Most affected lawmakers claimed to have already donated the tainted cash to charity. But the donations consisted of stolen FTX customer funds that were never theirs to give, whether they were aware of it or not. FTX creditors might be entitled to claw back that money, regardless of the impact on lawmakers’ finances.

In other news:

  • Genesis filed for Chapter 11 bankruptcy protection, citing $5.1 billion in liabilities.

  • FTX’s collapse took a dangerous turn last week as SBF allegedly faced scary physical threats.

  • Mango Markets’ attacker now also faces charges from the SEC in addition to those of the DOJ and CFTC.

  • Cardano recovered from a brief node outage.

  • Ethereum’s upcoming Shanghai upgrade could be great news for Coinbase, per JPMorgan.

Crypto Job Board

And that’s what you need on your radar this week. Will GTX really manage to scrap together some investment money? Shoot me a reply with your predictions. See you back here next Tuesday!