Gryphsis Cryptocurrency Weekly: FTX Expected to Fully Repay Customers, BTC Price Rebounds to $43,000
According to the court hearing, the cryptocurrency exchange FTX, founded by Sam Bankman-Fried and now bankrupt, stated that it expects to fully repay its customers, but this will depend on the actual timing of FTX's bankruptcy. This date has been preliminarily approved by U.S. Bankruptcy Judge John Dorsey.Author: Gryphsis
Market and Industry Snapshot
Layer 2 Overview:
Last week, Layer 2 saw growth in all areas except for zkSync Era and Optimism, with Base showing the most significant increase of 3.82%. Protocols like Sablier, Superfluid, Interport Finance, Dexilla, and StarkDefi demonstrated notable TVL growth rates.
LSD Sector Overview:
In the LSD sector, both Ethereum deposits and total withdrawals saw a slight increase, but the withdrawal amount was more pronounced at 4.49%. In terms of market share, all blue-chip LSDs experienced a significant decline, with stETH showing the most notable drop of 17.47%.
RWA Sector Overview:
Last week, the market capitalization of global real-world assets decreased by 1.56%, with a more significant drop in 24-hour trading volume of 37.94%. The tokenized treasury and tokenized U.S. Treasury values saw little change. Notable growth tokens included $LCX, $TIA, and $BRTR, while tokens like $IMO, $MZERO, and $MIMO experienced significant losses.
Main Topics
Macro Overview:
- US Stock V.S. Crypto
Major Events This Week:
- FTX expected to fully repay customers, BTC price rebounds to $43,000
Weekly Protocol Recommendation:
- Puffer Finance
Weekly VC Investment Focus:
- BRC-137 (2.5M)
- Stride (4M)
- Clusters (9M)
Twitter Alpha:
- @0xTindorr on Puffer Finance
- @Flowslikeosmo on AVAX
- @poopmandefi on WhalesMarket
- @MoonKing___ on B Squared Network
- @thesmartape on $ALEO
Macro Overview
This week, the stock market saw SPX and NASDAQ grow by 1.39% and 1.27%, respectively. In the coming week, keep an eye on significant events such as the S&P Global Services PMI, ISM Non-Manufacturing PMI, ISM Non-Manufacturing Price Index, and consumer credit.
Major Events This Week
FTX expected to fully repay customers, BTC price rebounds to $43,000
According to court hearings, the cryptocurrency exchange FTX, founded by Sam Bankman-Fried (now bankrupt), stated that it expects to fully repay its customers, but this will depend on the actual bankruptcy timeline of FTX. This date has been preliminarily approved by U.S. Bankruptcy Judge John Dorsey.
Kris Hansen, a lawyer for the FTX creditors' committee, said at Wednesday's hearing, "Many claims are based on currencies that significantly depreciated during the tumultuous period before the filing date."
The U.S. bankruptcy court requires claimants to submit proof of the assets they held on FTX and subsequently lost, which will be reviewed by restructuring advisors. Due to a lack of buyers, the exchange has abandoned plans to restart its platform and is instead focusing on compensating its former customers. According to data from bankruptcy claims exchange platform Xclaim, approximately 15 million people lost between $30 billion and $35 billion in various cryptocurrencies after the FTX collapse.
FTX's native token FTT surged over 11% following the announcement of the company's plans but quickly fell, dropping about 15% on Wednesday.
At the time of publication, Bitcoin's price had rebounded to over $43,000, up 110% from approximately $20,500 when FTX collapsed in early November.
Weekly Protocol Recommendation
Welcome to our weekly protocol segment—here, we focus on protocols making waves in the crypto space. This week, we chose Puffer Finance, a native Ethereum liquidity re-staking protocol (nLRP) supported by EigenLayer.
Puffer is a decentralized native Liquid Restaking protocol built on EigenLayer, which lowers the entry barrier for node participation in Ethereum staking by introducing a native Liquid Restaking Token (nLRT) - pufETH, and increases returns through re-staking.
Binance Labs has announced a strategic investment in Puffer Finance. In addition to this round of financing, Puffer has raised a total of 6.15 million, having received funding from the Ethereum Foundation and investments from institutions such as Jump Crypto, Brevan Howard Digital, Bankless Ventures, Animoca Ventures, and numerous angel investors across two funding rounds.
The protocol mainly includes: ordinary stakers (retail), NoOp node staking, and RestakingModule contracts in the system.
Here is its workflow diagram:
Source: Official Doc
Ordinary stakers can deposit ETH and mint pufETH as a staking certificate. Compared to traditional liquid staking tokens (LST), pufETH can provide more rewards to its holders. pufETH includes not only PoS rewards and staking rewards but can also rapidly appreciate in value due to the sale of Validator Tickets.
NoOp validators need to deposit Validator Tickets and 1 or 2 ETH as collateral for the PufferProtocol contract, in return for which they will mint pufETH and keep it locked until their validator successfully exits.
Each RestakingModule contract contains a pending NoOp registration queue. As PufferPool accumulates 32 ETH blocks from deposits and rewards, these blocks will be provided to the pending validators of NoOps as scheduled.
Once a NoOp validator registers successfully, they are eligible to validate the number of days their deposited validator tickets have been held. During this period, NoOps retain 100% of the generated PoS rewards. Their execution rewards are immediately deposited into their wallets, while their consensus rewards accumulate in the module's EigenPod and can be withdrawn after the NoOp withdrawal process. Since NoOps receive 100% of the PoS rewards, they are incentivized to maximize validator performance, helping to protect stakers' ETH.
Our Insights
Puffer Finance belongs to the Liquid Restaking track and opened $stETH staking services on February 1. Just two days after its launch, it achieved a TVL of $300M, becoming the TOP2 in the track, reaching half of the TVL of the first place, Ether.fi, indicating its strong momentum.
Source: Defilama
Stakers earn pufETH while staking ETH; NoOp validators need to purchase Validator Tickets (VTs) to operate, and the ETH spent on purchasing will be returned to stakers as an additional subsidy for funding their validators; after purchase, validators need to lock VTs and 1 ETH of pufETH as collateral, and the ETH staked by Stakers is sent to ReOps for re-staking; ReOps returns re-staking rewards to validators and Stakers, while all POS rewards earned on Ethereum go back to validators, with ReOps taking a portion of the re-staking fees as income.
Source: Official Doc
In addition to multiple revenue streams, Puffer Finance's AVS technology and Secure-Signer remote signing are also highlights of the project. The Secure-Signer remote signing of Puffer has received funding from the Ethereum Foundation, allowing validators to reduce slashing risks while improving capital efficiency within the Puffer protocol.
As part of its strategy, Puffer plans to run its upcoming L2 as EigenLayer AVS. This move is expected to generate network effects, especially as more AVS come into play and benefit from the economic security provided by Puffer. This integration plays a key role in increasing the rewards for Puffer's permissionless validators. This not only incentivizes participation but also helps strengthen Ethereum's decentralization.
Weekly VC Investment Focus
Welcome to our weekly investment focus, where we reveal the most significant venture capital dynamics in the crypto space. Each week, we will highlight the protocols that have received the most funding.
BRC-137
The BRC-137 protocol is based on the Ordinals protocol, allowing anyone to create composable DIDs on the Bitcoin blockchain in a completely permissionless and decentralized manner. BRC-137 enables users to monetize their digital identities and facilitates on-chain value exchange and social ecosystems.
https://x.com/brc137io/status/1753704919272685632?s=20
Stride
Stride is the largest liquid staking protocol in Cosmos today, holding over 90% market share and $100 million in TVL across chains like Cosmos Hub, dYdX, and Osmosis. In just one year, Stride has launched over 10 LSTs, consistently focusing on liquid staking.
https://x.com/stride_zone/status/1753468392428728639?s=20
Clusters
Clusters is a multi-chain domain service designed to address issues such as address fragmentation, wallet management complexity, and domain squatting. It was launched by Delegate in collaboration with the cross-chain interoperability protocol LayerZero.
https://x.com/clustersxyz/status/1753085068522963012?s=20
Protocol Events
Ryder Ripps must pay Yuga Labs $9 million after lawsuit's final judgment
Genesis asks bankruptcy court to approve $1.4 billion sale of GBTC shares
Epic Games is listing Call of Duty-style crypto video game 'Shrapnel'
OPNX a crypto derivatives exchange to shut down in February
Aevo plans airdrop for early adopters of derivatives protocol
Industry Updates
BlackRock's spot bitcoin ETF overtakes Grayscale's GBTC in daily volume
Hong Kong to release consultation on regulating OTC crypto venues
DOJ charges trio for $400 million SIM-swapping hack targeting FTX
Valkyrie adds BitGo as custodian for its spot bitcoin ETF
Bitfinex Securities launches digital asset services in El Salvador
Twitter Alpha
There is a lot of Alpha contained in crypto Twitter, but navigating through thousands of Twitter threads can be challenging. Each week, we spend hours researching to curate insightful threads and present you with a weekly selection. Let's dive in!
https://x.com/0xTindorr/status/1753794385807114584?s=20
https://x.com/Flowslikeosmo/status/1753810645718622488?s=20
https://x.com/poopmandefi/status/1751256778044739870?s=20
https://x.com/MoonKing___/status/1753478935801741443?s=20
https://x.com/the_smart_ape/status/1753825705337708963?s=20
Upcoming Events
News Sources
++https://www.theblock.co/post/275909/ryder-ripps-must-pay-yuga-labs-9-million-after-lawsuits-final-judgment++
++https://www.theblock.co/post/275907/genesis-asks-bankruptcy-court-to-approve-1-4-billion-sale-of-gbtc-shares++
++https://www.theblock.co/post/275776/epic-games-is-listing-call-of-duty-style-crypto-video-game-shrapnel++
++https://www.theblock.co/post/275735/blackrock-spot-bitcoin-etf-gbtc-daily-volume++
++https://www.theblock.co/post/275728/hong-kong-to-release-consultation-on-regulating-otc-crypto-venues++
++https://www.theblock.co/post/275695/crypto-derivatives-exchange-opnx-to-shut-down-in-february++
++https://www.theblock.co/post/275530/aevo-airdrop-token++
That concludes this week's content. Thank you for reading this week's report. We hope you benefit from our insights and observations.
You can follow us for real-time updates on Twitter and Medium. See you next time!
This weekly report is for informational purposes only. It should not be considered investment advice. You should conduct your own research and consult independent financial, tax, or legal advisors before making any investment decisions. Past performance of any asset does not guarantee future results.
