Dispatch #114: FTX Contagion Points to DeFi as a Solution
In this patch of your weekly Dispatch:
- SBF’s mask slips as FTX fallout continues
- Early access for Nexo’s non-custodial wallet
- One senator still eyes a stablecoin bill this year
The Big Idea
FTX Fallout Leads People to DeFi
The incredible story of FTX’s implosion continues to rock the crypto and larger business world. Picking up from where we left off last week, on Friday, beleaguered CEO Sam Bankman-Fried announced that the company would be going into Chapter 11 bankruptcy and Elon has made it his favorite topic on Twitter. Nothing was particularly revelatory until a series of text messages between Sam and a Vox reporter were published that made it pretty clear that all of the effective altruism and ethics and good guy persona were a carefully cultivated lie.
Now if there is a bright spot, it’s that some legacy players – e.g. JP Morgan whose CEO Jamie Dimon has been a longtime cryptocurrency skeptic – understand that the failure here wasn’t with crypto or with the technology.
Most wrongdoing in the financial world – whether crypto or TradFi - happens in the dark, and is enabled by unclear and opaque practices. Blockchain and decentralization have the technological means to shed light into markets, through tools like real-time proof-of-reserves and attestations. The people who have have been flocking to non-custodial solutions have made the same realization. We’re thus very excited to announce that after a year of product development, the Nexo team is launching a multifunctional non-custodial smart wallet – the Nexo Wallet.
It’s a smart wallet. It’s an identity wallet. It’s an innovative wallet. With fewer fees, batched transactions, aggregated balances, and in-wallet swaps.
Currently in its pre-launch phase, the novel product is designed to bring seamless UX (synonymous with Nexo), as well as new functionalities to the world of non-custodial wallets. In essence, it is a self-governed yet user-friendly solution for sending, receiving, swapping, and storing digital assets across five chains: Ethereum, Polygon, Binance Smart Chain, Fantom, and Avalanche-C. Within its forward-looking scope lie fiat on- and off-ramps, DeFi crypto cards, and an NFT aggregator…
Sign up for early access to the soon-to-be-release Nexo Wallet.
The Latest In…
FTX’s demise has set a new context for US regulation. Also changing that landscape are the results of last week’s midterm elections, which saw the Republicans take control of the House. That means that the House Financial Services Committee and the House Agriculture Committee – both important to determining the fate of crypto – will be helped by pro-crypto Republicans. Still, it could be rough for a little while with a FTX-related hearing being scheduled for December. Interestingly, NY Senator Kirsten Gillibrand is working on a last-ditch stabelcoin bill that could be voted on this year.
The Latest In…
Unsurprisingly, not many crypto companies have wanted to make big announcements. However, one interesting tidbit from Circle did come out. Merchants who build on Circle can now accept Apple Pay. This could have significant UI improvements, such as allowing customers of NFT marketplaces, crypto gaming applications and more to pay without having to laboriously enter payment information. What’s more, in many cases it could allow them to pay without having to actually interact with crypto. A small but nice step forward for crypto payments.
The Latest In…
The Crypto Market Integrity Coalition (CMIC) – the alliance of 42 leading blockchain companies Nexo is a proud member of, launched the CMIC Academy. This is a comprehensive training program, covering the most pertinent topics every crypto stakeholder should know. As a member, alongside Solidus Labs, Circle, BitGo, and Chainalysis, among others, we at Nexo firmly support the notion that disseminating knowledge and awareness is the path forward to a safer and more constructive interaction with the digital assets space. Check the academy out!
The Week’s Most Interesting Data Story
Self-Custody on the Rise
Bitcoiners were more skeptical than most of SBF, and in the wake of revelations about FTX, they’re withdrawing their Bitcoin to self-custody at historic levels. Currently, BTC is being withdrawn at a rate of 106,000 BTC per month – a level only matched by a few other turbulent moments in the past few years, including the Covid crash and Luna/3AC. At Nexo, we’re glad to be on the cutting edge of transparency through our reserves attestation and other features that ensure that when you are working with us, your crypto is as secure as possible. We are and will continue to be good stewards of your resources because we care about those same principles.
What the Community Is Discussing
It does kinda seem weird…
There’s always something else to work on.
What to Watch for Next Week:
- Will Sam continue to not be arrested?
- Will we start announcing anything other than FTX-related things?
- What will we tell our families at Thanksgiving?