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🟣 FTX to distribute funds, VanEck tracks Memecoins

FTX has filed a reorganization plan to distribute nearly all its recovered assets to creditors.

Author

Marc-Thomas Arjoon
May 09, 2024

Welcome back to 0xResearch – quick hitting alpha for the crypto degens. Here's what we got for you today:

  • FTX expects to distribute $16.3B to creditors 

  • Grayscale pulls ETH futures ETF application

  • Lawmakers propose a 2-year ban on crypto-mixers

  • Vaneck launches Memecoin index

FTX expects to distribute $16.3B to creditors

FTX has filed a reorganization plan to distribute nearly all its recovered assets to creditors. FTX had a massive shortfall at the time of the Chapter 11 filing in November 2022—holding only 0.1% of the Bitcoin and only 1.2% of the Ethereum customers believed it held. However, thanks to other sources of recoverable value, FTX expects to distribute $14.5 to $16.3 billion to creditors. Most will be paid in full, while creditors with claims under $50,000 might get a slight bonus (118% of their claim). Investors may still feel cheated as they were unable to participate in the upside of the crypto market’s gains since then. To avoid lengthy legal battles, the plan also involves settlements with the IRS, CFTC, Department of Justice, and customer groups.

Grayscale pulls ETH futures ETF application

Grayscale, a major player in crypto asset management, surprised many by pulling its application for an Ethereum futures ETF from the SEC. The withdrawal notice offered no explanation but did detail the SEC's repeated delays in reviewing the proposal since its September 2023 filing. However, there's speculation that Grayscale might re-file the application with some changes. On the spot ETF side, the overall outlook, once considered promising after the SEC greenlit Bitcoin spot ETFs in January, has grown increasingly negative. 

Lawmakers propose a 2-year ban on crypto-mixers

US lawmakers are proposing a two-year ban on cryptocurrency mixers that allow users to hide the origin and destination of their cryptocurrency transactions. The motivation aims to prevent criminals from laundering money and financing terrorism. The bill would penalize financial institutions that handle mixer-related transactions. While the bill is Democrat-led, some Republicans are concerned it could stifle innovation in the cryptocurrency industry. Law enforcement agencies are cracking down on mixers, with the Treasury Department recently proposing new rules against them. 

Vaneck launches Memecoin index

VanEck’s MarketVector has launched a meme coin index (MEMECOIN) that tracks the performance of major meme coins like Dogecoin and Shiba Inu. This meme coin index has significantly outperformed other crypto benchmarks like Bitcoin and the CoinDesk20. The strong performance is attributed to the overall growth of the meme coin market, fueled by factors like low fees on Solana. The popularity of meme coins is further exemplified by the recent rise of PoliFi tokens like MAGA and BODEN which capitalize on the current election season.

– Marc Arjoon (X: @marcarjoon | Farcaster: @marcarjoon) 

  • Evidenced through APT, SEI, SOL and SUI price performance over recent months, 2024 Q1 brought a resurgence in interest for high throughput blockchains and parallel execution.

  • Aptos stands out from the others through its capability to handle large verifiable transaction loads with sub-second latency, as well as its integration of the Move programming language. Combined with Aptos Keyless and Aptos Passkeys, this enables a powerful developer and user experience when compared to other contenders.

  • Technological innovations, such as the Block-STM execution engine, the Move Prover, and Quorum Store, fuel a secure, lightning-fast execution environment, designating Aptos as a perfect home for the next generation of tokenized assets, DeFi, gaming, and consumer and AI applications.

  • Network data shows promise that Aptos is at an inflection point, where a blossoming ecosystem of dApps is ready to onboard a new wave of users. Aptos Ascend competitively positions the network to onboard TradFi entities and RWAs with baked-in compliance and customizability on day one.

Bitcoin Miner Revenue per TH/s (7DMA):

Runes, a new token standard that launched at the halving helped push both the number of transactions and the amount of fees being paid on the Bitcoin network to new all-time highs. However, the hype around the new token standard has subsided, and the number of transactions and fees have both fallen back to normal levels.

This has put a strain on miners and although Bitcoin's hash rate has dropped slightly since the halving, it is still historically very high. Miner revenue per TH/s can rise if BTC’s price increases, but unless miners start exiting the market, transaction fees will need to pick up again.

Kamino Finance emerges as the preeminent money market on Solana, offering leading products for lending, borrowing, and liquidity provision. With over $1B in deposits, Kamino has flippened the incumbent competitors. The KMNO token launched on April 30th, airdropping 7.5% of the token supply to users. In spite of an underwhelming TGE, a high KMNO stakerate coupled with the ongoing growth in deposits suggests continued success for the protocol.

With the spot BTC ETF behind us, the market can now turn its attention to a potential US spot ETH ETF approval/denial on May 23rd while Hong Kong’s first ETH ETF has started trading. April marked the first full month post the Dencun upgrade leading to a 90%+ reduction in L2 fees. Demand for restaking protocols continued strong with EigenLayer hitting $16B in TVL. However, ETH saw an 18% drawdown MoM alongside a downturn in the wider stock, bond and crypto markets.

Crypto and blockchain can provide a safer, fairer, more human-centric collaboration between AI and the rest of us.

SEC Commissioner Mark Uyeda says that the SEC needs to create a “pathway for compliance”.

The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.