Weekly Report | Telegram CEO arrested by police at French airport; Terraform Labs bankruptcy reorganization hearing scheduled for September 19; Robert F. Kennedy Jr. withdraws from the 2024 U.S. presidential election
The arrest of the Telegram founder has shaken the market, with voices of support from Musk, Vitalik Buterin, and Sequoia partners; the MEME launch platform is in chaos: over a dozen platforms have emerged, Sun Pump has entered the scene, and VCs are observing; BlackRock, Citigroup, and others are vying for the $16 trillion RWA sector. What new strategies are there?Organizer: Luan Peng, ChainCatcher
"What Important Events Happened This Week (8.19-8.25)"
1. Telegram CEO Arrested by Police at French Airport
According to BBC reports, Telegram CEO Pavel Durov was arrested by French police after landing at Le Bourget Airport in northern Paris. Sources say that Durov was detained due to drug trafficking, arms black market, and child pornography content on the Telegram platform, as Telegram had previously refused to cooperate with the police on these matters. French police also searched Durov's property.
Additionally, the Russian state news agency TASS reported that the Russian embassy in France is taking "immediate steps" to clarify the situation.
2. TON Issues Statement on "Telegram CEO Arrest": TON Will Continue to Operate Fully
TON issued a statement regarding the "Telegram CEO Arrest," assuring everyone that the TON community remains strong and fully operational.
"As a community dedicated to freedom of speech and decentralization, we stand firmly with Pavel during this challenging time. Pavel has always been a staunch advocate for these values, and we believe his efforts to promote an open and decentralized internet will continue to inspire millions. The TON community remains focused on our mission, and we will continue to work globally to uphold these principles. We encourage everyone to stay calm, united, and to keep building as we collectively face this situation. Thank you for your continued support."
According to Jinshi reports, Yekaterina Mizulina, head of the Russian Safe Internet League, believes that the arrest of Telegram founder Pavel Durov in France was at the request of the United States.
She wrote on her personal Telegram channel: "I have long believed that the Telegram leader is in danger outside of Russia and could be arrested at any moment, as similar situations have occurred at the request of the U.S. I initially thought that no one would touch him because he might have cooperation with Western intelligence agencies, but recent news suggests that everything seems different."
Moreover, Mizulina believes that Durov's arrest is aimed at cracking down on the super currency Toncoin circulating on Telegram. She stated that this way, the U.S. will continue its sanctions policy.
4. Foreign Media: Robert F. Kennedy Jr. Withdraws from 2024 U.S. Presidential Election
Cointelegraph reports that an official document submitted to the Arizona Secretary of State shows that independent candidate Robert F. Kennedy Jr. withdrew from the race on August 22.
5. 140th Ethereum ACDC Meeting: Next Ethereum Consensus Layer Upgrade Named "Fulu"
According to Christine Kim, Vice President of Galaxy Research, Ethereum developers held the 140th core developer consensus call (ACDC).
The meeting, hosted by Ethereum Foundation researcher Alex Stokes, discussed the development progress of the Pectra upgrade, PeerDAS, and the naming of the next Ethereum consensus layer upgrade. Developers decided to name this upgrade "Fulu" and plan to use "Fusaka" to refer to the "Fulu-Osaka" upgrade in the future.
Additionally, the meeting covered technical issues in the Pectra development network and the progress of proposals such as EIP 7742.
Fu Rao, Executive Director of the Hong Kong International New Economy Research Institute, wrote in a Ta Kung Pao article titled "Improving Virtual Asset Regulation for Healthy Industry Development," pointing out that the Supreme People's Court and the Supreme People's Procuratorate of China jointly issued an interpretation regarding the application of laws in handling money laundering criminal cases, which explicitly lists virtual asset transactions as one of the methods of money laundering, impacting the virtual asset industry in several ways:
- Increased compliance costs for the industry. The introduction of regulations means that practitioners need to pay more attention to compliance issues and increase compliance investments to ensure their business is legal and compliant. The market will undergo restructuring, and some non-compliant U businesses and projects may exit the market, further increasing industry concentration.
- Strengthened investor education. The introduction of regulations will prompt investors to pay more attention to the risks of virtual assets and improve their risk identification capabilities.
- Gradual improvement of industry regulation. The release of this judicial interpretation will help regulatory authorities to more effectively supervise the virtual asset industry and promote healthy industry development.
As Hong Kong vigorously develops its virtual asset economy, the mainland has responded to serious crimes most easily triggered by virtual assets. In this context, both U businesses and ordinary investors should raise their legal awareness, ensure compliance in transactions, and avoid legal risks.
7. Vitalik: Ethereum's Latest Developments Make Its Fundamentals Very Strong
Ethereum co-founder Vitalik Buterin posted on social media, highly praising the latest developments in the Ethereum ecosystem. Buterin pointed out that Ethereum has made significant progress in several key areas:
- L2 network transaction fees have dropped below $0.01;
- The two EVM-compatible L2 networks, Optimism and Arbitrum, have entered their first phase;
- User experience across L2 wallets has significantly improved;
- ZK tools have become more powerful and mature, simplifying application development; second-generation privacy tools are beginning to emerge;
- The identity, reputation, and credential ecosystem has become stronger and more widely used;
- Progress in STARK technology has enhanced long-term security and decentralization prospects;
- The roadmap for account abstraction and block construction has become clearer;
- Staking decentralization remains stable, breaking the notion that "PoS is more centralized than PoW."
Buterin emphasized that these developments have made Ethereum's fundamentals exceptionally strong.
8. FTX: Restructuring Plan Has Received Overwhelming Support from All Classes of Creditors
According to a press release, the bankrupt cryptocurrency exchange FTX and its affiliated debtors announced that the restructuring plan submitted to the U.S. Bankruptcy Court in Delaware has received overwhelming preliminary support from all classes of creditors. An unofficial voting report shows that over 95% of voting creditors supported the plan, accounting for 99% of the voting creditor value. The restructuring plan is expected to exceed the acceptance threshold set by the Bankruptcy Code.
FTX CEO and Chief Restructuring Officer John J. Ray III stated, "The plan provides for the return of 100% of bankruptcy claims and interest to non-government creditors and resolves complex disputes with dozens of government and private stakeholders. We will continue to engage constructively with creditors and the court in the coming weeks until the confirmation hearing."
FTX will submit the final voting results to the U.S. Bankruptcy Court in Delaware before the confirmation hearing scheduled to begin on October 7, 2024.
Web3 asset data platform RootData released the survey results of "Web3 Secondary Market Trading Sentiment." This survey targeted participants in the Crypto secondary market, covering aspects such as user trading behavior, attitudes towards AI products, and market outlook, collecting a total of 480 valid samples. The survey showed that 58.3% of respondents were aged between 26-35, 70.8% had over a year of Crypto trading experience, and 58.4% of users invested 10%-50% of their total assets into the Crypto market.
The survey indicated that these users have achieved considerable returns this year in SOL, BTC, and a small number of Meme coins. In terms of losses, ETH, MATIC, and most Meme coins and newer projects were mentioned by many users. In terms of trading behavior, spot trading is the main type, accounting for 91.7%, with 37.5% of users adopting a long-term holding strategy.
Regarding the market outlook for the next month, opinions are relatively dispersed but slightly lean towards an upward trend, with an overall optimistic sentiment. Among them, English-speaking users showed more pronounced optimism (42.5% vs 35%). Users believe the most promising sectors are the Bitcoin ecosystem (66.7%), AI (52.1%), and MEME (47.9%). However, only 20.8% of users hold a positive attitude towards the emerging AI+Crypto projects, as most users believe these products lack practicality, and their accuracy and reliability are questionable, with no phenomenal products having emerged yet.
In terms of information sources, 85.4% of users rely on social media (such as X, Telegram), while 62.5% obtain information through professional media websites. In terms of tool usage, RootData and CoinMarketCap lead with usage rates of 79.2% and 62.5%, respectively, followed closely by Dexscreener and DefiLlama. Regarding user needs, 64.6% of users most need more comprehensive risk assessment tools, and 58.3% need more in-depth on-chain data analysis features. Notably, there are differences between English and Chinese users in tool usage and needs, with English users more inclined to use professional analysis tools (such as Glassnode, Arkham), while Chinese users rely more on social media and private communities (90% vs 70%).
Although users generally hold a cautiously optimistic attitude towards the market, they also express concerns about the uneven quality of projects, low innovation, excessive hype, and regulatory uncertainties, calling for strengthened project reviews and market regulation.
Additionally, users who participated in this survey and filled out the RootData associated account will receive RootData points as a reward.
10. Terraform Labs Bankruptcy Restructuring Hearing Scheduled for September 19
According to an official announcement from Terra, the confirmation hearing for the Chapter 11 bankruptcy restructuring case of Terraform Labs Pte Ltd (TFL) and Terraform Labs Limited (TLL) is scheduled to be held on September 19, 2024, at 10 AM Eastern Time (10 PM Beijing Time).
"What Exciting Articles Are Worth Reading This Week (8.19-8.25)"
According to AFP reports, on August 24 (Saturday) between 7:30 PM and 8 PM local time in France, Telegram founder Pavel Durov was arrested at Bourget Airport near Paris. French investigators issued a search warrant against him for violations related to his encrypted messaging platform, while French police also searched Durov's property.
It is reported that the 39-year-old billionaire holds dual citizenship in France and Russia. The OFMIN of the French National Judicial Police issued a search warrant against him, which is only effective on French territory. Pavel Durov rarely travels in Europe, but this time he arrived in Paris on a private jet from Baku with a woman and bodyguards, planning to spend at least one night in Paris.
Durov was arrested by agents from the French National Anti-Fraud Office (ONAF). According to information from agency employees, Durov's arrest is mainly related to his social media platform Telegram, which regulators accuse of being filled with drug trafficking, arms black market, and child pornography content, while Telegram had previously refused to cooperate with the police on this matter.
The currently hot TON ecosystem is built on Telegram's products and user base. As of the time of writing, Coingecko data shows that the price of TON's native token has dropped about 14% within 24 hours, and DefiLlama data shows that Toncoin's TVL has fallen over 40% in the same period.
Elon Musk, founder of Tesla and owner of the X platform, commented on the news of "Telegram CEO Pavel Durov being arrested by French police" on X, stating that this incident is "promoting the First Amendment of the U.S. Constitution" and sarcastically remarked, "Now it's 2030 Europe, and you can be executed for liking a meme."
2. Corn Launches Airdrop Plan After Securing $6.7 Million in Funding, How to Participate?
This year, no one wants to miss out on the BTC ecosystem.
WBTC, as the primary Wrapped Bitcoin, is an important bridge between Bitcoin and the Ethereum ecosystem, and has recently been controversial due to changes in custody.
Coinbase subsequently announced that it would launch a token called cbBTC, with Base protocol head Jesse Pollak adding, "I love Bitcoin and am very grateful for its pioneering role in the cryptocurrency space; we will build a huge Bitcoin economy on @base."
Bringing BTC into the Ethereum ecosystem is not the only solution. Corn is a new Ethereum Layer 2 network that uses hybrid tokenized Bitcoin ($BTCN) as gas and redirects network revenue back to users and protocols.
Recently, Corn completed a $6.7 million funding round led by Polychain Capital, attracting numerous investors in the seed round, including Binance Labs, Framework Ventures, ABCDE, Symbolic Capital, HTX Ventures, and Relayer Capital. Additionally, well-known project developers such as Sandeep Nailwal, Smokey, and Papa Bear (Berachain) also participated in the investment in their personal capacity.
In this speech, Federal Reserve Chair Powell sent the strongest signal yet for interest rate cuts, clearly stating that action will be taken to prevent further weakening of the U.S. labor market. Powell emphasized, "We do not seek or welcome further cooling of labor market conditions," and stated that now is the time to adjust policy. This statement almost marks the end of the Federal Reserve's anti-inflation efforts.
Below is the full text of Federal Reserve Chair Powell's speech compiled by ChainCatcher:
Four and a half years after the outbreak of the COVID-19 pandemic, the most severe economic distortions caused by the pandemic are dissipating. Inflation has significantly decreased. The labor market is no longer overheating, and current conditions are more relaxed than before the pandemic. Supply constraints have normalized. The balance of risks facing our two main tasks has also changed. Our goal is to restore price stability while maintaining a strong labor market, avoiding a sharp rise in unemployment during the early deflationary period when inflation expectations are less stable. We have made significant progress toward this goal. Although the task is not yet complete, we have made substantial progress.
Today, I will first discuss the current economic situation and the future direction of monetary policy. Then, I will discuss the economic events since the outbreak of the pandemic, exploring why the inflation rate rose to levels not seen in a generation, and why the inflation rate has significantly decreased while the unemployment rate remains low.
4. Dialogue with Sun Yuchen: Meme Launchpad Competition's Second Half, the Rules Have Changed
The leading project in the Meme Launchpad, PumpFun, generated nearly $100 million in revenue with just a three-person team in six months, and the project has not raised funds—this business narrative is so compelling that a batch of PumpFun-like projects have sprung up. However, none have managed to shake PumpFun's position.
On August 13, TRON announced its entry into the Meme space, supporting its first fair launch meme coin platform, SunPump, attracting a large number of memes to the platform through gas fee reductions, subsidies, and incentives. About a week after SunPump went live, on August 22, Dune data showed that SunPump's revenue exceeded that of PumpFun. Sun Yuchen stated on the X platform that SunPump has reached 30-40% of PumpFun's current traffic.
What factors led TRON to choose this timing to enter the Meme Launchpad space? Is SunPump's emergence aimed at growing traffic alongside PumpFun, or is it diverting traffic from PumpFun?
In this regard, ChainCatcher had an exclusive dialogue with TRON founder Sun Yuchen, who stated that the current market is sluggish, and memes are one of the few exciting narratives, but the Meme Launchpad space is currently still a zero-sum game. If it wants to bring in new growth, the platform needs to have sufficiently low launch costs, deep liquidity, and even trading flexibility.
5. Meme Launchpad Battlefield: Over a Dozen Platforms Emerge, Sun Pump Enters, VC Observes
A three-person team generating nearly $100 million in revenue in six months has led to a flood of competitors entering the market. Will the stories of Uniswap and SushiSwap repeat themselves with PumpFun and its future competitors?
Recently, multiple users of the cryptocurrency exchange Websea reported that they have been unable to withdraw funds from the WebSea platform.
On August 5, Websea officially announced that due to a severe and unexplained attack, it decided to immediately suspend deposit and withdrawal services. Websea needs to conduct comprehensive security maintenance and will restore services once it is confirmed to be risk-free.
The domestically produced 3A game "Black Myth: Wukong" officially launched at 10 AM Beijing time on August 20, with over 1 million concurrent users within the first hour, causing Steam's servers to crash temporarily.
Data one hour after the game's release surpassed popular titles such as "Cyberpunk 2077," "Elden Ring," and "Baldur's Gate." As of the time of writing, the peak number of concurrent users exceeded 2 million, ranking first in Steam's online user count history, becoming the third game in history by peak concurrent users, with the first being "CS 2" and "Dota 2."
As the gaming industry heats up, the capital market has also reacted, starting to hype related concepts. A-share related concepts performed in succession, with Wind data showing that as of the close on August 20, Qitian Technology (300061.SZ) hit the daily limit, with a price increase of 20%; CITIC Publishing (300788.SZ) also hit the daily limit, closing at 29.86 yuan/share, with a 20% increase; Huayi Brothers (300027.SZ) surged 19%, closing at 2.94 yuan/share.
Cryptocurrencies riding the wave of this game have seen even more astonishing price increases. According to gmgn.ai data, the meme coin $WuKong issued on Solana surged over 99,999% within 24 hours, with some users earning $350,000 in just five hours. Meanwhile, multiple trading pools of the same name $WuKong meme coin appeared on Solana, with varying price fluctuations. Additionally, $WuKong meme coins also emerged on ETH and BNB, all showing different price increases.
8. Number of Developers Second Only to Ethereum, Base Becomes a New Battleground for DeFi Protocols
On August 15, Growthepie data showed that the daily transaction volume processed by the Ethereum Layer 2 ecosystem had exceeded 13 million (approximately 13.15 million), setting a new historical high for daily transaction volume, with the overall increase in Layer 2 ecosystem transaction data driven by the Base network.
After entering late July, the daily transaction volume of the Base network repeatedly soared to peaks of over 4 million. On July 27, the Base network set a historical record with a daily transaction volume of 4.432 million. In other words, currently, one-third of the transaction volume in the Layer 2 ecosystem occurs on the Base network.
During the same period, Arbitrum's daily transaction volume was about 1.8 million, Op Mainnet only had 470,000, and the daily transaction volume of the Ethereum mainnet has remained around 1.1 million for most of this year. This indicates that Base has become the most active blockchain network.
This is confirmed by data from Base's official block explorer Basescan, which shows that the daily transaction volume on the Base network has surged by 700% over the past six months.
According to DeFiLlama data, the TVL of the Base network has reached $6.3 billion, making it the second-largest Layer 2 network.
An organization called "Colorado Prayer House," an affiliated church organization, has tokenized its main church. The pastor leading the project stated that tokenizing this building allows it to be placed on the blockchain as a digital asset that can be divided into shares to raise funds to purchase the $2.5 million building.
This is one of the recent cases of RWA, just a small part of this vast market.
In the current lukewarm market conditions, "Real-World Assets" (RWA) are rapidly developing. In July, CoinGecko pointed out in its Q2 2024 cryptocurrency industry report that Meme Coins, artificial intelligence, and real-world assets (RWA) have become the hottest categories, accounting for 77.5% of network traffic.
For the institutional market, RWA is a sexy concept. Several institutions have reported on the prospects of RWA, including Boston Consulting Group, Messari, and Binance Research, while traditional financial giants such as Citigroup, BlackRock, Fidelity, and JPMorgan have all entered the fray.
However, RWA is not a new concept; the most well-known use case is mapping the dollar onto the chain with USDT and USDC, which was hyped once between 2020 and 2021 but has since cooled down—similar to NFTs, even if there are people behind the scenes pushing it, it still needs a timing to explode.
According to Dune Analytics data, the RWA narrative has seen the second-largest growth this year, with this sector rising by 117%, second only to Meme.
RWA should not only be an opportunity for institutions but also a crypto narrative worth capturing. According to a BCG report, the global RWA market is expected to reach $16 trillion by 2030. What does this mean? Coingecko data shows that the current total market capitalization of the entire cryptocurrency market is about $2.1 trillion.
"As market awareness increases, retail business is the trend, just like previous crowdfunding, but the B-end business volume is larger. At this stage, the total RWA investments of many individual users may not even match the volume of a single B-end investment. For individual users, the best way to participate in the RWA space at this stage is to find good RWA project tokens," said A Wang, the principal of Web3 Xiaolu and a Web3 lawyer, in an interview with ChainCatcher—he laid the groundwork for RWA's mainstream recognition in 2023 by translating Citigroup's RWA research report "Money, Tokens, and Games" due to his background in the financial industry.
10. Interpreting the New Proposal ACP-77, How to Unlock Avalanche L1?
Avalanche has long been an advocate for horizontal scaling using "subnets," which are now being renamed as Avalanche Layer 1 (L1). Avalanche L1 is a sovereign blockchain that is typically application-specific and can be customized to meet the specific needs of different use cases.
This infrastructure has attracted many crypto-native and institutional clients to use Avalanche L1 to host their Web3 platforms, including the NFT platform of Japanese gaming giant Konami and Intain's secure tokenization platform.
Over the years, Avalanche L1 has undergone multiple upgrades to enhance its functionality. For example, the Banff upgrade achieved cross-subnet communication through Avalanche Warp Messaging (AWM). Meanwhile, Evergreen provides a framework for enterprises to launch privacy-protecting and regulatory-compliant Avalanche L1.
Despite this, the existing verification requirements for Avalanche L1 remain high. Current Avalanche L1 validators need to verify the main Avalanche network, including the contract chain (C-Chain), platform chain (P-Chain), and transaction chain (X-Chain).
As a reference, main network validators must allocate at least 8 AWS vCPUs, 16 GB of RAM, and 1 TB of storage for network validation. They also need to stake a minimum of 2,000 AVAX.
At the inception of the network, this staking requirement was not high. However, due to the appreciation of tokens over the years, it reached over $250,000 during previous market peaks, now equivalent to about $41,000. This high overall operating cost hinders the decentralization of the Avalanche L1 validator set and may impede the reliability and adoption of the Avalanche ecosystem in the long run.
