What will happen to Solana ecosystem and SOL token price

Solana developers managed to get rid of associations with bankrupt FTX and Alameda. Our experts talk about the prospects of blockchain and its SOL token

The Solana eco systemic connection to the collapsed FTX exchange and the Alameda Research fund took a huge knock on its reputation. This is despite negative assessments from the community. As well as the departure of a number of projects to other blockchains and a decrease in the price of SOL token, the protocol itself managed to hold up. And new services are increasingly allowing to rid it of unwanted associations. The Solana network remains technically innovative. And it has seen an increase in activity, both in the number of developers participating in projects. Also by the amount of funds in the turnover of existing decentralized financial protocols.

The consolidation of the Solana community has made it possible to create a replacement for those ecosystem entities in which FTX or Alameda previously played a prominent role. For example, the decentralized exchange OpenBook succeeded Serum, a key liquidity provider for the ecosystem. Losing more than 96% of its value in 2022, the network’s native token Solana (SOL). Once again, judging by its capitalization growth, it looks attractive to investors.

Increasing liquidity in Solana

Record low transaction fees on the Solana network. This is one of the key factors contributing to its attractiveness for developers of DeFi- and NFT-platforms. As well as the expansion of these spheres in the cryptoindustry as a whole. In the case of Ethereum, even when using network scaling solutions such as Arbitrum or Optimism. Then almost any network interaction scenario will cost a few dollars per transaction. Which in itself is uncomfortable for the mass user and, as a result, slows down the spread of the technology.

It is possible to work comfortably with Solana platforms even at the lowest available liquidity, which is about $10 or less. Low network fees also matter for games and social networking applications. Which can run on the main Solana network without the need for any add-ons. Similar decentralized applications for Ethereum on Layer 2 blockchains are creating additional networks that meet the necessary requirements, such as Arbitrum’s Nova.

In February, the developers of the Helium Network protocol, with a market capitalization of more than $180 million, planned to move it to the Solana network at the end of March. But they later pushed it back to April, citing unpreparedness in the community. The postponement of the expected date had a negative impact on the price of the project’s native token (HNT), which plummeted more than 21% in the moment. However, if Helium’s transition to Solana does happen soon. The ecosystem will see an impressive influx of new liquidity. As well as additional activity from new community members.

The second significant recent event for the Solana ecosystem is the Grizzlython hackathon, the organizers of which have recently finished accepting applications. The contest has attracted 800 new projects, with up to $5 million in development funding. The success of even a small number of projects in this hackathon could lead to the emergence of innovative infrastructure products in the Solana ecosystem.

Price of SOL token

Despite the generally optimistic fundamental analysis. The technical indicators of the SOL price do not look bullish. The price of the coin failed several times to pass the resistance and consolidate above the level of $25. The asset is trading inside a symmetrical triangle pattern. And the next move could start with a rapid spurt after the price breaks above or below the triangle.

The closest level of support, which has stopped the price fall in 2023 more than once, is the $20 mark. More conservative and less risky purchases are possible at the next support level of $15-16. The lowest point from which we can predict an upward price movement in case of a new bear market or ecosystem problem. It could be the support level of $10, which on the daily timeframe also coincides with another indicator, Doji candle. Which indicates a change in the trend of the coin on January 1, 2023.

The situation on the chart of token in pair with BTC looks worse than in pair with dollar. The price has been in a distinct trend decline since January 15. For this chart the range of 0.00072-0.00073 BTC may be considered as a resistance area. The key area of purchases in case of a bearish scenario will be the range of 0.00064-0.00054 BTC. This also coincides with the value of the Doji candle indicator of the daily timeframe of January 1.

Weaknesses of Solana

A significant disadvantage of Solana is the excessive centralization of nodes for the sake of speed and network stoppages that have occurred in the past. Situations where developers shut down an entire blockchain are isolated and anomalous. Solana has had such cases more than once.

So far, no consensus has been reached on the way Bitcoin is represented on the Solana blockchain. Already, more than ten technically suitable tokens are competing for user liquidity. The previously used soBTC has been found to be out of business. And its exchange rate has long since decoupled from the Bitcoin price and is around the $1,000 per token mark. As a result, Solana’s financial protocols are almost completely devoid of liquidity pools paired with the main asset and flagship of the crypto sector. Even if the situation changes, the issue of the reliability of using BTC in Solana protocols will remain open.

Our experts note that competing blockchains with unique characteristics also continue to expand in the cryptosphere. The fast-growing Aptos, Sui and other blockchains could potentially replace Solana in the crypto market. Which use different programming languages from Solidity and similarly give users record-low fees and speed.

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Chinese state company opens two venture capital funds in Hong Kong

CPIC and investment firm Waterdrip have launched new crypto venture capital funds. Which targets institutional and high net worth private investors from Hong Kong

Hong Kong-based China Pacific Insurance Company (CPIC) has partnered with investment fund Waterdrip Capital to launch two investment funds in Hong Kong. Which are focused on the blockchain and digital assets industry, reports the Chinese publication 36kr.com.

Hong Kong-based Chin Pacific Insurance Investment Management is part of the CPIC group. According to Forbes, the group’s income for the year 2022 exceeded $68 billion. CPIC is the fourth-largest insurance company in China and more than 60% of its shares are owned by government.

Waterdrip Capital is an investment fund specializing in blockchain projects and has already supported more than 45 crypto startups. This includes the blockchain Polkadot and the Web3 infrastructure project MetisDAO.

The companies launched two digital asset funds, Pacific Waterdrip Digital Asset Fund I and Pacific Waterdrip Digital Asset Fund II. The funds will target institutional investors as well as high net worth private investors.

Pacific Waterdrip Digital Asset Fund I will invest in early stage blockchain projects. Pacific Waterdrip Digital Asset Fund II will manage digital assets that can be channeled into staking (cryptocurrencies on the Proof-of-Stake algorithm).

Our experts note that more and more companies are thinking of opening cryptocurrency-related businesses in Hong Kong. According to The Wall Street Journal, more than 20 industrial companies have informed the government of their plans to open branches there. As well as another 80 have expressed interest in doing so.

 

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South Korea seized assets of ex-employees of Terraform for $150 million

The authorities claim that the damage from the illegal activities of ex-managers of Terraform is not less than this amount. That is why the suspects’ property was seized during the investigation. Crypto Upvotes expert review

The Financial Crimes Investigation Unit of the Seoul South District Prosecutor’s Office seized property of former Terraform Labs employees worth 200 billion KRW ($153.6 million), local newspaper KBS News reported.

According to the South Korean law enforcers, the total damage from financial crimes. Terraform Labs creators are suspected of at least 200 million KRW, according to the report. Authorities have seized the property of eight former Terraform employees for that amount, including real estate. This will prevent the suspects from disposing of the property while they are under investigation.

Among those whose assets were seized is the company’s co-founder, Daniel Shin. The South Korean prosecutor’s office suspects him of making about $105 million in illegal profits from the sale of LUNA tokens. And it has already twice asked the court for a warrant for his arrest. Both times, the court refused, citing the vagueness of the charges and the fact that Shin is unlikely to destroy any evidence or flee.

Sheen faces charges of scam, breach of duty and capital markets laws. He denies all of the charges and claims that when he left Terraform Labs in 2020, he was no longer involved in its operations.

Do Kwon, the former head of Terraform Labs, was arrested in late March. This happened in Montenegro while trying to fly to Dubai with false documents. He is now in a local prison awaiting trial on a document forgery case. South Korean authorities have already requested his extradition. However, he will first have to serve his sentence in Montenegro if the local court finds him guilty.

 

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Hackers stole $211 million worth of cryptocurrency in March

Hackers have stolen a total of $255.8 million in cryptocurrencies and another $31.5 million in NFTs since the beginning of this year

Hackers made 26 hacks of crypto projects in March. In doing so, they stole $211.5 million in cryptocurrencies, according to PeckShield. In addition, attackers stole $10.9 million worth of NFT.

The largest amount in cryptocurrency was stolen in the attack on DeFi-platform Euler Finance. About $197 million was stolen here, but the hacker later apologized and returned $182.7 million to the project.

The second largest loss was the SafeMoon ecosystem hack. Hackers there withdrew about $9 million worth of assets, followed by the ParaSpace protocol attack with $5.2 million in losses and the hack of the General Bytes ATM network, which claimed $1.7 million.

A total of $255.8 million worth of cryptocurrencies were stolen in the first three months of this year. $8.8 million was stolen in January and $35.5 million in February.

In addition to cryptocurrencies, $10.9 million worth of NFTs were stolen in March. Half of the stolen tokens were sold on trading floors within the first two hours of the theft. About 74.9% of the NFTs were sold on the Blur Marketplace, while 19.5% were sold on OpenSea.

Since the beginning of the year, a total of $31.5 million worth of NFTs were stolen. In January they stole $4.4 million worth of tokens, in February – $16.2 million. Our experts recommend everyone to be careful and closely study the site before you connect your wallet.

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The excitement for risk has returned. What will happen to Bitcoin in this week

Our experts have analyzed the situation on crypto market and told how it can change in the short term and what will happen to Bitcoin price

The final week of March on the crypto market began with a decrease in the pair BTC/USDt. Bitcoin fell by 5.81% to $28,484. The fall was caused by negative news in the crypto industry. The Commodity Futures Trading Commission (CFTC) filed a lawsuit against the head of Binance, Changpeng Zhao, and the heads of three other organizations that run the Binance platform. The regulator claims that the exchange failed to register as a platform that trades cryptocurrency derivatives. And therefore had no right to provide services to U.S. clients. However, it actively worked with U.S. investors, ignoring legal regulations.

In zone $26.5-26.6 thousand buyers regrouped and fought back on the positive news from the banking sector and the rise of American indices. The U.S. Federal Deposit Insurance Corporation (FDIC) announced that deposits and loans from bankrupt Silicon Valley Bank (SVB) are going to U.S. First-Citizens Bank.

On March 29, bitcoin recouped earlier losses, returning to the $29,184 level. Risk appetite returned for market participants as concerns about the banking sector eased following congressional hearings on the SVB bankruptcy.

Rising movement did not continue. The buyers, having met sellers’ volumes, started to fix profits from long positions. It was a purely technical factor, because this day external background was on the side of buyers. Also the dollar index was declining and S&P 500 futures were rising.

In the evening the buyers’ activity might have been low because of the speeches of the U.S. Federal Reserve representatives, who supported the further tightening of the monetary policy, despite the collapse of the three American banks.

On Friday (March 31), the price corrected to $27,511 and then went back to $28,656. Buyers have so far ignored the U.S. crackdown on Binance, Coinbase and TRON founder Justin Sun. This comes amid a rally in stock indexes and weakness in the U.S. dollar.

The S&P 500 index rose 3.23% to 4,109 points for the week and 6.88% for the quarter. Bitcoin in the first quarter of 2023 rose 72.08% against the dollar to $28,465.

Waiting for a level test of $30,000 for Bitcoin

In this week of April 3-9, the focus of market participants will be on U.S. statistics. These statistics will include: business activity in the manufacturing and services sectors, industrial production data, the labor market report for March. In Europe, it is a shortened week. Europeans will celebrate Good Friday on Friday (April 7) and Easter on Monday (April 10). Liquidity will affect the dollar, and through the currency market, the crypto market.

According to our experts’ estimates, the quarterly timeframe indicates a price recovery to $34,000. At the same time, the monthly – to $43,000 by August (with a very positive external situation). If the market gets stormy because of the actions of U.S. regulators or new bankruptcies, then by mid-September. Here we need to look at what wave structure of upward movement will be formed when the level of $34,000 is reached. Therefore, we are waiting for the test of $30,000 for Bitcoin this week.

 

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What are Arbitrum project prospects and what will happen to its price

Crypto Upvotes experts evaluated the effectiveness of airdrop Arbitrum and told how ARB token exchange price may develop in future

After the sensational airdrop project Arbitrum (March 23), 1 billion ARB tokens were released to market. Which were distributed among 625 thousand addresses. The total market capitalization of token stabilized at $1.63 billion.

At the time of publication, the price of ARB is at $1.28. Having analyzed the experience of projects such as Optimism, Aptos and Blur, whose tokens have also entered the market as part of large-scale airdrops. Our experts told us how the rate of ARB token may behave in the future.

The general bullish trend continues

After listing on exchanges, tokens of projects with airdrops tend to exhibit high volatility. Therefore, there can be both sharp price jumps and drawdowns of tens of percent all at once. Overall, ARB is in line with the “most positive trend.” That’s because the token price didn’t collapse after the start of trading on Bybit, Kucoin, MXC, Huobi, Okex. And then on Binance, although it experienced serious fluctuations. On Huobi, the exchange rate was as high as $11 per token on listing day, though the price went down almost immediately.

First of all, such volatility is due to the fact that those who received ARB tokens during the Airdrop. And then decided to lock in profits immediately after listing, which put pressure on exchange rates. On another note, our Crypto Upvotes experts observed that a significant number of sell orders were placed well in excess of the market price, pushing the rate higher.

If you compare listing of ARB on exchanges with other large tokens with airdrop. The similarity can be seen in the high volatility at the start of trading. The major difference is the “general bullish sentiment” of investors regarding ARB. And this is favored by such data as the growth of total blocked value (TVL) of Arbitrum network by a quarter during the last week. According to DefiLlama, Arbitrum’s TVL stands at $2.18 billion, while its closest competitor, Optimism, has $907 million of locked-in capital in its ecosystem.

Predicting the price of Arbitrum after trading starts is difficult

Starting ARB trading was marked by the fact that on some exchanges trading started a little later than announced. And also the fact that the influx of users led to disruptions in the resources for receiving tokens and on exchanges. Listing of Arbitrum on exchanges was immediately accompanied by high trading volumes, which further attracted crypto-traders. This gives big players an opportunity to form positions without much damage to the average purchase price.

Our experts note that it is difficult to predict the further development of ARB price. Because the price levels have not been fully formed yet. In the short term it is necessary to focus on the level of $1, as it will be a psychological support. In case of a positive scenario, we should be attentive at the price level of $1.5. If this level of resistance is exceeded, the price is likely to quickly approach $2.

Why airdrop Arbitrum became successful

The effectiveness of an Airdrop depends directly on marketing work that the project has done before distributing these tokens. First, the project needs to develop their community, to attract new capital. And constantly pointing to the possibility of a profitable airdrop for active participants. Under such conditions, you can talk about success – even if some of the users in the community decide to sell ARB tokens.

The effectiveness of such a model is good for the popularity a project – it’s an excellent marketing move, our experts say. In the case of Arbitrum, the popular topic media “literally bursting with news”. Because people like to get something for free, especially if it will bring good profits in the future.

However, most traders will fix some part of the received tokens, e.g. 20-30%. The rest will go into stacking or long-term storage waiting for price growth if the project really deserves it. According to experience of our experts, even now we can see that large participants of crypto market actively accumulate ARB in their wallets.

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U.S. vs Binance. Who will benefit from problems of the largest cryptocurrency exchange

U.S. exchange regulators are pressing charges against Binance and trying to disconnect it from the U.S. market. Our experts tell us who can take advantage of this situation and what the risks are for Binance and its users

The U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Binance and its executives. The regulator intends to completely deprive Binance, the largest cryptocurrency exchange of the U.S. market. It also accuses it of facilitating illegal activities and trade manipulation.

The text of the indictment took 74 pages. Citing quotes from internal chats, to which the agency managed to gain access, the service representatives accuse the exchange, its head Changpeng Zhao and former director of compliance Samuel Lim. That they knowingly allowed Americans to trade cryptocurrency derivatives without a license, in flagrant violation of U.S. law. The CFTC also alleges that Binance circumvented money laundering laws (AMLs). And “know your customer” (KYC) rules deliberately helped large U.S. clients circumvent their own compliance procedures.

What are the goals of U.S. regulators ?

The CFTC seeks a complete ban on Binance in the U.S. and return all trading revenues and commissions received from transactions of users from the U.S. Because, in their opinion, they were obtained illegally. The CFTC estimates that in 2019 and 2020, 18 to 20% of Binance’s revenues were generated by “illegal” transactions of U.S. citizens, although no data for later periods are provided. The exchange’s management supposedly turned a blind eye to the violations to maintain its market share in a key jurisdiction.

The document alleges that the exchange offered U.S. residents to trade leveraged futures and options contracts on Bitcoin, Ethereum and Litecoin without registering with the CFTC as a futures commodities trader (FCM). The agency considers these assets to be commodities, which is at odds with the Securities and Exchange Commission (SEC), which considers most crypto assets to be securities.

Our experts point out that different agencies in the U.S. have different views on what is going on. This inconsistency in itself can create more doubts. But lawyers can also use some language against others in their defense strategies. Even if a serious trial were to begin on any of the named charges. Then the investigation itself will require many months of work by lawyers on both sides of the conflict, our Crypto-Upvotes experts say.

Charges are directed at Binance, not a separate division of Binance.US

Binance.US is a separate division of Binance for the U.S. market. This division does not offer derivatives trading and is not mentioned in the complaint. There is a separate legal entity behind the platform, while Binance itself has no registration in the United States. And access to the exchange for American citizens is prohibited. In this case, the representatives of the CFTC precisely put forward charges against “global” Binance. They argument that the exchange falls under the U.S. law, working with local customers.

The CFTC complaint says that Binance not only serviced American users. But also deliberately didn’t take measures to block their accounts. Exchange executives also allegedly advised large institutional customers to move trading accounts to jurisdictions inaccessible to U.S. regulators. And they didn’t officially encourage the use of VPNs to bypass blockades. A spokesman for Radix Trading of Chicago confirmed to The Wall Street Journal that they had been trading on Binance for several years through offshore affiliates and a separate broker. While having legal backing for any cryptocurrency transactions.

The regulator also uncovered several other likely violations based on conversations from internal correspondence in work chats. In addition, the CFTC accused Binance of having about 300 internal trading accounts under its management. Which “directly or indirectly belonged to the head of Binance,” and the exchange failed to disclose their existence amid an anti-insider trading policy. Zhao responded in a statement, calling the allegations “an incomplete statement of facts.” And claims that Binance “under no circumstances” manipulates the market ! And “affiliates’ liquidity work” is under special control.

Who benefits from this?

The lawsuit against Binance is not the first precedent for a confrontation between the CFTC and the crypto business. In October 2020, the agency brought charges against BitMEX and its three founders, Arthur Hayes, Benjamin Delo and Samuel Reed. The exchange actually invented a new format for cryptocurrency derivatives – perpetual futures contracts. And it created an entire market around the instrument, whose popularity quickly led to its appearance on other trading platforms as well. The Commission also accused BitMEX of operating in the U.S. futures market without proper authorization and FCM status.

The case was closed when BitMEX agreed to pay a record $100 million fine for the crypto industry, as well as to forcibly close the accounts of all U.S. customers and implement proper anti-money laundering measures. Hayes and Delo resigned from the company and pleaded guilty. They each paid an additional $10 million fine and were sentenced to two years’ probation.

This ended BitMEX’s influence in the cryptocurrency derivatives market. Which, until August 2019, it controlled nearly 100 percent of. However, her absence led to the rise of other platforms that now dominate this niche. These include Deribit, ByBit, and Binance, which regularly lists perpetual futures on most liquid crypto assets in demand.

Our Crypto Upvotes experts believe that if Binance is forced to reduce its share of this market. ByBit, as the next largest exchange in terms of trading volumes on the futures market, will benefit the most from this. Kraken and Coinbase will be able to pick up the remaining volumes, given that both have the necessary statuses and licenses to operate in the US.

When it comes to the global crypto market, Binance’s role as a player in the U.S. is not as significant compared to other states. Binance.US has tried to increase its share and its weight by buying distressed companies’ assets. Which left the market in 2022, but U.S. authorities prevented Binance from doing so.

What are the risks for exchange users?

Coinbase, Gemini, eToro, Kraken and some other platforms are much more present in the U.S. market than Binance. And also the volume of trades is ahead of its U.S. division. In this regard, leaving Binance from the North American market will not create difficulties for U.S. investors. Which have alternative exchanges, causing less questions from regulators.

For quite a long time Binance has been under the scrutiny of U.S. regulators. Major business media outlets have released several investigations about the internal structure of the exchange’s business. At the same time accusing it of various manipulations or non-transparent practices. The day after the CFTC lawsuit, the British Financial Times spoke about Binance’s longstanding ongoing relationship with China. And at the same time referring to internal documents, which came to the journalists of this edition. A few days before that, the exchange experienced a technical failure due to which it stopped trading for four hours. The cumulative negative events inevitably affected traders’ actions – in less than a week $2.2 billion worth of assets were withdrawn from this exchange.

In the context of the CFTC’s lawsuit, the fact that there is access to the correspondence of Binance employees is alarming. Our experts think that it might be an indirect evidence of an authorized “high-level” surveillance. Which could be due to investigations into very serious allegations. But thanks to the fairly distributed structure of Binance, we do not see any real risks of a complete trading stop or paralyzing difficulties.

The decision to withdraw assets from centralized exchanges depends on each investor’s individual needs and strategy! All investors need to keep in mind that withdrawing tokens to non-custodial wallets in and of themselves can seriously reduce risks of holding cryptocurrencies.

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Chinese banks started offering services to cryptocurrency firms in Hong Kong

Chinese banks offices in Hong Kong are trying to take advantage of the situation with the closure of cryptocurrency banks in the U.S. and take their place in an industry of digital assets in this region

Major Chinese banks have started offering banking services to cryptocurrency companies in Hong Kong. After cryptocurrency-friendly banks from the U.S. faced difficulties. Support for the industry from Chinese banks could fill the void and give a new boost to the industry in the region.

Over the past few months, Hong Kong branches of banks such as Bank of Communications, Bank of China and Shanghai Pudong Development Bank have reached out to local cryptocurrency firms to offer their services. And in one case, representatives from a Chinese bank even visited a cryptocurrency company’s office.

Due to regulatory uncertainties and the riskiness of digital assets, traditional financial institutions have usually avoided working with cryptocurrencies. But the latter need banking services to hold fiat money, pay staff and pay suppliers. According to Hong Kong cryptocurrencies, digital asset firms have been forced to find various workarounds to meet such operational banking needs.

At the same time, banks in Hong Kong did not routinely offer digital asset exchange services for fiat currencies. Therefore, many crypto firms turned to overseas banks such as Silvergate and Signature. Since the closure of these banks, crypto firms have had to look to them for a replacement. And industry representatives note that the “green light” from Beijing is opening up new opportunities for the market.

Hong Kong regulators to hold meeting between crypto companies and banks

Hong Kong authorities have scheduled a meeting of representatives of cryptocurrency companies and banks, according to Bloomberg. It will discuss the provision of banking services to firms working with digital assets.

The meeting will be held on April 28 at the Hong Kong Monetary Authority (HKMA) and will be held jointly with the Hong Kong Securities and Futures Commission (SFC) Both regulators oversee cryptocurrency activities. According to the announcement, the purpose of the discussion will be to “facilitate direct dialogue” between banks and cryptocurrencies and “share practical experiences and perspectives in opening and maintaining bank accounts.”

HKMA and SFC representatives told the publication that they would not comment on any details of the meeting. But they clarified that they are in dialogue with interested parties.

Huge benefit for Hong Kong

This year, Chinese government officials in Hong Kong started to frequently attend cryptocurrency events in Hong Kong. Industry participants see this as a positive attitude from Beijing toward Hong Kong’s intentions to become a cryptohub. Companies previously operating in mainland China (does not include Hong Kong and Macau), as well as foreign firms have begun to register their business in Hong Kong and plan to move to Chinese territory.

At the same time, the ability to open bank accounts and access banking services are among the priorities for companies from the crypto industry. Who intend to develop in this region. Banks in Hong Kong are well positioned to take advantage of the situation after the banking crashes in the U.S. While many Asian companies have partnered with friendly U.S. banks in the past, this is unlikely to happen again in the future due to regulatory issues.

Our experts note that Hong Kong would greatly benefit from such actions. However, the question remains whether the geopolitical climate will deter non-Asian crypto projects from cooperating with Chinese banks.

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How to choose promising Airdrop that are similar in success to Arbitrum

Participants of the Arbitrum airdrop project received thousands of dollars in rewards. Review by Crypto Upvotes experts on how the sphere of earning tokens for activity in blockchain services is organized and what other projects can make an airdrop.

Offchain Labs, the company behind Arbitrum, organized an airdrop of tokens to encourage active users of this ecosystem. On March 23, token trading under the ticker ARB started on major cryptocurrency exchanges, and after a period of strong volatility at the time of listing, its price on trading floors stabilized at $1.2. Tens of thousands of addresses received between 3,000 and 10,000 tokens during this distribution. Thus, participants received significant amounts of incentives in dollar terms and caused a stir around other projects. Which in the future may make their own airdrops.

Airdrop is a new form of successful project launch ?

The idea of free distribution of coins to users is not new. The first airdrop, after which the term became popular, was invented by the developers of cryptocurrency Auroracoin back in 2014 at the stage of mass cryptocurrency market birth. According to their idea, every resident of Iceland was supposed to get coins. That project was quickly forgotten, but the concept itself became popular in the crypto industry and continued to evolve.

Now, airdrops serve as an effective method for blockchain services to attract an audience. It is also likely to increase the loyalty of users who receive rewards in the form of project tokens. Some ecosystem decentralized projects, in which investors see potential, conduct multimillion rounds of funding with the participation of famous funds like Sequoia or Andreessen Horowitz.

What is Project Arbitrum. And why it’s the most expected airdrops of this year

A few years ago, crypto companies chose different forms of ICO (initial coin offering) to raise capital and liquidity. Now there is a risk that tokens will be classified as unregistered securities in the U.S. or Europe when raising funds this way. The free distribution of tokens helps create a market for crypto projects. At the same time, most of their supply stays with developers and investors. At the same time, it creates a financial base for the former and a source of profit for the latter.

Developers of blockchain services often do not announce a token when launching their project. But the experience of their competitors helps community members determine which projects will sooner or later decide to release their own crypto-asset. And which types of activities will be eligible for rewards.

This was the case with Offchain Labs: an infrastructure has already been built around Arbitrum – decentralized exchanges, NFT marketplaces, games, wallets, social networks and other services. All of them are at an early stage of development and need active users and testing. It is for activity in such projects that tokens are eventually distributed.

The company remained silent about its airdrop until recently. But the successful experience of large projects such as Aptos, Blur or Optimism ( the main competitor of Arbitrum) made it clear that participation in projects on the Arbitrum blockchain. Most likely, in the end, will not remain without encouragement from developers.

From which projects to expect launch of new Airdrops

The first obvious candidate is zkSync, an Ethereum scaling solution with a different technical approach than what Arbitrum or Optimism offer. In November 2022, zkSync developer (Matter Labs) led several investment rounds totaling $258 million. And LightSpeed, Andreessen Horowitz as well as major venture capital crypto funds – Blockchain Capital and Dragonfly took part in them.

The zkSync development team includes Anthony Rose, who led engineering teams at SpaceX, creating software for Falcon, Dragon, and Starlink. And Steve Newcomb, who founded Powerset, which was acquired by Microsoft and later became part of the search engine Bing.

In one week before the launch of token from Arbitrum, users transferred $8 million in assets to projects in the zkSync ecosystem. According to DefiLlama, the amount of funds (total value locked) locked in the pool of the decentralized exchange ZigZag. Which runs on the zkSync platform, rose from $1.5 million to more than $13 million in just one day. In a comment for Coindesk, Martin Lee, head of analytics platform Nansen, says that it was the distribution of Arbitrum tokens that triggered the increased activity of “airdrop hunters.” They have attracted both new entrants and those who have participated in airdrops from other projects.

Other potential candidates for future airdrops include several other projects:

StarkWare – Ethereum scaling solution, similar to zkSync. The developer is the Israeli company StarkWare Industries, with an investment of over $150 million and an estimate of $8 billion.

Scroll – a similar Ethereum scaling solution. The project has attracted funding of $80 million with an estimate of $1.8 billion.

Fuel Network – an Ethereum scaling solution similar to Optimism or Arbitrum. The project’s developer, Fuel Labs, raised $80 million in funding in September 2022.

Aleo – DeFi-protocol with a focus on privacy. The developers of Aleo Systems raised $200 million from SoftBank, Andreessen Horowitz, Samsung Ventures and other funds.

LayerZero – a protocol for exchanging data between blockchains from different ecosystems. The company behind the development, LayerZero Labs, has raised more than $173 million, with investors including PayPal Ventures and Andreessen Horowitz.

Other major projects without their own token include Sui, Celestia, Sei, Linera and others.

Terms of participation in airdrop from similar projects

As a rule, the developers of such projects do not name any criteria or conditions, fulfilling which it will be possible to get tokens in the future. Moreover, none of them guarantee the availability of airdrop for early users or the launch of a token. Activity sets are formed in the community based on the experience of predecessor projects. And when an airdrop is announced, the project team decides for itself each time who can claim their tokens and for what.

Some projects have even given away tokens for a single interaction with the ecosystem. And in the case of the Blur Marketplace, for example, a full-fledged multilevel airdrop strategy with a gamified approach was developed.

Risks from participation and scammers

Anonymity when using cryptoservices opens the door to manipulation. According to a joint study by journalist Colin Wu and the blog x-explore, about 150,000 addresses and at least 4,000 groups were identified in the Arbitrum airdrop.
Which are engaged in activity generation, which accounted for more than 253 million ARB tokens. And that’s about 22% of the entire airdrop.

There is growing evidence on the web that organized groups typically in countries such as Vietnam or Bangladesh – are scamming activity in blockchain projects. They use multiple accounts and wallets, working in offices on a schedule and getting paid. Our Crypto Upvotes experts managed to find several international groups in Telegram and Discord messengers. In these groups administrators offer services of “outsourcing” activity. Prices for the services range from $10 to $200 per account, depending on the project and activity set.

The growing popularity of cryptocurrency airdrop is being actively exploited by scammers. Interacting with blockchain projects implies a certain level of technical expertise. Therefore, inexperienced users often become victims of scammers. Tens of thousands of phishing pages appear on web that imitate sites of famous projects.

Sometimes these sites are designed with attention to detail and have high-quality design and convincing scenarios of interaction with the victim. It helps to avoid risks by interacting only with the official resources of the services. Where they also post links to ecosystem projects in which it is possible to participate, claiming a future airdrop.

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Playboy lost almost $5 million for one year from falling prices after NFT sale

Net book value of digital assets of Playboy as of December dropped to $ 327 thousand. A year earlier the figure was equal to $ 6.8 million

PLBY Group, parent company of Playboy magazine, said it suffered a $4.9 million asset impairment loss in Ethereum (ETH) in 2022, according to its annual report. The company was accepting the leading altcoin as payment for its 2021 Rabbitars collection NFTs.

In 2021, the company received $7.8 million from the sale of NFTs. At the end of that year, however, it recorded a $1 million loss on their impairment. At the end of 2022, the value of the digital assets on the Playboy balance sheet was $327,000.

Digital assets as of December 31, 2022 and 2021 consisted of Ethereum cryptocurrency from the sale of NFT. As of December 31, 2022 and 2021, the carrying value of our digital assets was $0.3 million and $6.8 million, respectively. The digital asset impairment charges for the years ended December 31, 2022 and 2021 were $4.9 million and $1 million, respectively.

Playboy explained that it accounts for its digital assets as “indefinite-lived intangible assets.” These are subject to impairment if their fair value falls below their carrying value at any time. Impairment losses that the company incurs on digital assets cannot be recovered. Even if the fair value of the assets increases after impairment losses are accepted.

The market price of a single Ethereum ranged from $964 to $3,813 during 2022. But book value of each Ethereum that Playboy owned at the end of a reporting period. It reflects the lowest price per Ethereum on the exchange at any time since it was received.

Our experts note that negative fluctuations in the market price of Ethereum could have a significant impact on Playboy’s profits and book value. While an increase in prices will only have a positive impact on company profits. If the tokens on the balance sheet are sold at a profit.

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