It is halfway through the week, and we already have 25+ major news stories to cover. The most discussed topic was Bitcoin's -5% flash crash on April 2, leading to $400 million in total crypto market liquidations. Following the price drop, there was a lot of concern about the recent transfer of $2 billion in Bitcoin from a wallet linked to the DOJ, but the recent airdrop hype on Ethena and Wormhole helped to balance out investors' sentiment.
Top Story
$2B Silk Road Bitcoin Seized By DOJ Moves to New Wallet
On April 2, a crypto wallet associated with the U.S. Department of Justice (DOJ), which holds about $2 billion in Bitcoin seized from the Silk Road marketplace, made a small test transaction of 0.001 BTC to a Coinbase Prime wallet. This action led to speculation among crypto influencers on Twitter that the DOJ might be preparing to sell the assets, prompting close monitoring of on-chain activity.
After the initial transfer, a larger amount of 30,175 BTC was moved to a new address. Online investigators linked this transaction to a wallet that held Bitcoin seized from James Zhong. Zhong was convicted in 2022 for unlawfully obtaining cryptocurrency from Silk Road and had accumulated over 50,000 BTC from the platform in 2012 through illegal activities.
Market Updates
Hidden Risks With Restaking: Coinbase Report
Analysts at Coinbase have pointed out the risks associated with restaking and liquid restaking tokens (LRTs) on Ethereum. They note that while restaking can lead to higher earnings, it can also increase risks, particularly as LRTs may encourage users to opt for providers offering the highest yields. Other potential risks covered in the report include slashing conflicts, complexity of operator role, downward sell pressure on non-ETH AVS rewards, valuation risks, and risk of forced liquidations.
Currently, restaking and liquid restaking are among the top methods for earning returns in DeFi. EigenLayer, a leading restaking protocol, has become the second biggest project overall by total value locked (TVL), just behind Lido—the top liquid staking protocol. Liquid restaking is also rising, with projects like EtherFi contributing to $8 billion TVL of the sector.
Ethena Labs’ New Token Rallies Overnight But Also Raises Concerns
Ethena Labs, a new player in the stablecoin market, just launched its ENA token and reached a $1.6 billion market cap. The launch included an airdrop of 750 million ENA tokens, with the top recipient receiving $2 million in it. The token launch marked the start of “The Sats Campaign,” Ethena’s second phase of incentives for onboarding Bitcoin as collateral and opening up Bitcoin perpetual futures.
MakerDAO, a leading lending protocol, is considering allocating up to $1 billion into sUSDe and USDe via Morpho Labs vault. The move has been criticized by Marc Zeller, founder of Aave Chain Initiative, as potentially leading to minting about 20% of the stablecoin’s supply out of thin air.
Andre Cronje, co-founder of the Fantom Foundation, has also expressed concerns, warning of the risks associated with relying on yield-generating assets as collateral, drawing parallels with the collapse of Terra Luna, suggesting that this could lead to a scenario where negative shifts in funding rates could erode the collateral, leading to liquidation.
Three Platforms to Merge AI Tokens And Capture 20% Market Share
Three leading decentralized AI platforms, Fetch.ai, SingularityNET, and Ocean Protocol, are merging their tokens to create the Artificial Superintelligence (ASI) token. AI coins are one of the best-performing sectors since the start of 2024, even though it only accounts for ~1% of crypto’s total market cap.
The collaboration of the 3 coins aims to establish a decentralized AI collective as an alternative to big tech-controlled projects, while promoting transparency. Together, these platforms make up about 20% of the AI tokens’ market share, valued at around $5.17 billion at the time of writing.
MORE BITE-SIZED STACKS
Bitcoin
- Bitcoin Sees Capital Influx & Wealth Shifts To New Holders
- Coinbase To Integrate Bitcoin Lightning Network
- Bitcoin Miners Monthly Revenue Hit Record $2 Billion
- Bitfarms’s $240M Mining Upgrade To 3x Post-Halving Hash Rate
Ethereum
- Vitalik Buterin Shares The Next Steps For Ethereum Purge
- Vitalik Buterin Says Layer 3s Won’t Magically Increase Throughput
DeFi
- Wormhole Debuts at $3B Valuation in 617M Token Airdrop
- Lido Staked SOL Holder Fret As $24M Remains Stuck On Broken Contract
- Celestia Brings Blobstream Solution To Arbitrum Orbit Chains
ETFs
- Cathie Wood’s ARK Bitcoin ETF Posts Record $87M Outflow
- Grayscale’s GBTC Total Outflows Eclipse $15B
- ProShares Launched a Leveraged 2x “Ultra Bitcoin ETF”
- SEC Seeks Public Input On Proposed Spot Ether ETF
Funding
- A16z Invests $30M in AI, VR/AR, Web3 Gaming Startups
- Paradigm Looking to Raise Up to $850M for New Fund
Hacks/Scams
- Crypto Phishing Attacks Reached “Alarming Levels" — CertiK
- ZachXBT Investigates Fake Hack On Solana’s NuddiesNFT
- Nearly $100M Recovered From Crypto Hacks In March
Misc
- Tether Announces Completion of ‘Gold Standard’ Security Audit
- Forbes: The Richest Crypto And Bitcoin Billionaires In The World 2024
- Fed's Powell Needs More Evidence That Inflation Is Easing Before Cutting Rates
Tweets For Thought
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