Get The Litepaper

New Week, New Vibes

Happy Monday! It looks like a bullish sentiment is back in the crypto market.

Crypto’s king and queen – Bitcoin ($BTC.X) and Ether ($ETH.X) rose over 5% each, to $44,000 and $3,100 respectively.  

The top-20 cryptocurrencies regained ground from the market’s paltry start to the year – with Shiba Inu ($SHIB.X), Polygon ($MATIC.X), and XRP ($XRP.X) all making inroads. They were the stars of today’s show – find out more about them below.

  • Axie Infinity changes economic strategy in order to recover from losses
  • Ethereum Name Service removes core team member over a Tweet
  • One to Watch: Altcoins riding on the bullish wave
  • Crypto firms work together to promote market integrity

Check how the major cryptocurrencies are performing:

Bitcoin (BTC)
Ether (ETH)
Binance Coin (BNB)
Cardano (ADA) $1.20 +6.06%
Solana (SOL)
Terra (LUNA)
Dogecoin (DOGE)
Polkadot (DOT)
Avalanche (AVAX) $83.88 +10.45%

Gaming Tokens

With New Strategy, Axie Infinity Says It’s Still in the Game

After hitting a record $4 billion in sales last year, Axie Infinity saw a steep decline in its token and NFT values during the recent market contraction. We’ve covered the leading play-to-earn (P2E) game – see an earlier edition of The Litepaper – in its heyday. But now, in order to position itself for the future, the P2E game has to change its incentive structure.

Axie Infinity has a dual-token structure – the $AXS.X token is the “native token” used to purchase NFTs available in-game on the Axie marketplace. The second token, Smooth Love Potion ($SLP.X), is used to award players for completing daily quests and clearing levels. 

The distribution of $SLP.X is a critical ingredient in the game’s success – some might even argue that nobody would play Axie without it. And that’s about to be put to the test as Sky Mavis, the developer behind the blockchain-based game plans to cut the distribution of Smooth Love Potion ($SLP.X) tokens in the next “season” in the game.

However, that doesn’t necessarily mean that $SLP.X will crash – it is needed to breed new Axies from old ones. However, seeing as though there have been more being generated than burned from gameplay activity, inflation in the “reward token” has skyrocketed.

To address the issue, the developers have decided that players will no longer be able to earn $SLP.X by completing daily quests and playing adventure mode. The supply of $SLP.X will drop by up to 56% in Season 20, which will make the token more scarce. Consequently, Axies will become more valuable. 

“The daily quest, in principle, was great to encourage people to play everyday, but it’s now become a mass emission mechanism for SLP. By removing the daily quest, we are able to reduce issuance by around 45 million SLP per day,” said Axie Infinity.

Axie Infinity said that its economy “requires drastic and decisive action now or we risk total and permanent economic collapse.” The blockchain-based game also claimed that that move would create a $6 million prize pool for Season 20. The upcoming changes also include the creation of a $6 million prize fund. Plus, the top 300,000 gamers on the leaderboard will get 117,676 $AXS.X

After the announcement, $AXS.X saw a 40% jump, trading at $68. $SLP.X jumped in conjunction, rising more than 25% today, trading at a high of $0.01576.

The question still remains whether or not the new changes will affect positive change in Axie Infinity’s economy. However, it is a necessary step – at least in their minds – in prolonging the longevity of the P2E game (and its ardent fanbase.)

Crypto Controversy

Ethereum Name Service Embroiled in “Cancel Culture” Controversy

If you’ve spent a healthy amount of time on Twitter, Discord, or Etherscan, you’ve probably seen somebody with a .eth domain. In recent months, .eth domains have become a zeitgeisty – with celebs such as Paris Hilton, Shaquille O’Neal, and Ethereum’s own Vitalik Buterin securing their own names as domains.

The shorter, more aesthetically pleasing domain names are a replacement for Ethereum’s messy (and randomly assigned) wallet addresses. And thanks to Ethereum Name Service, the team behind the .eth domain movement, you can do away with the world of 0x88ajdsbfbahdahinsertothercharacters… and move into a simpler future.

However, this future has come under siege – or, rather, at least its clean veneer has. Brantly Millegan, the Director of Operations at True Names Limited (TNL), was attacked this week for tweets he made on Twitter in 2016. TNL, the nonprofit “that funds and organizes development on [ENS]”, terminated his contract in response to a particularly sour response he made to “his first mob.”

Cutting Millegan off was probably a necessity for TNL. Not only were some of the Ethereum ecosystem’s most prominent players complaining about Millegan’s “regressive comments”, but TNL’s bags – their compensation – are likely related in-part to the price of the Ethereum Name Service token. 

$ENS was issued in a famous airdrop several months ago. It made early adopters of the .eth domainspace a pretty significant paycheck – or ownership in the protocol, whatever they chose. However, those that didn’t abandon ship probably regret not doing so – within weeks, $ENS fell over 70% from its highs. And ultimately, a drawn-out negative PR campaign would have probably weakened its price even more. 

However, the timing of Millegan’s termination comes in close sequence with another one in the crypto sphere. In January, Coopahtroopa, was terminated by the DAO Friends With Benefits ($FWB) after old tweets were unearthed showing him using racial slurs. He was suspended from the organization – and will be able to reapply for membership in the future.

That’s one reason that this controversy offends all who can be offended – but not all who are offended are created equally. Prominent members of the Ethereum ecosystem and web3 space have leaned in, suggesting that diversity and inclusion in web3 is more important than people’s personal, biased views. But others have complained of “Cancel Culture” – alleging that Millegan, who stood behind his apparent religiosity in defense for his comments, should not be censored.

This formula means that Millegan’s suspension – and his comments, already controversial – will alienate somebody. Maybe not as many, now that TNL has parted with one of the team’s most prominent voices. However, the impact of this event has stained the perception that ENS was a well-stewarded, inclusive, and decentralized Ethereum app. 

And while the token has added some 5% intraday, that’s a losing shake for ENS – because you simply cannot make everybody happy.

One to Watch

It’s a Bull Market, Make Your Move Now

There is a strong recovery going on in crypto and altcoins are riding that wave. Here are a few options worth reviewing:

1. Shiba Inu: Shiba Inu was one of the top tokens of the day, adding 42% at its peak in the last24 hours. $SHIB.X traded at $0.00003237 today, up from $0.000022 on Sunday evening. 

In addition to the ongoing rally, another factor that led to the surge was Shiba Inu’s tie-up with Welly’s, a fast-food chain. Shiba Inu-themed products and imagery will be included in Welly’s stores, and non-fungible tokens (NFTs) will be issued to customers, per the announcement

Despite the current surge, the token is still 62.8% off its all-time high of $0.00008616, which it reached in October 2021, according to CoinGecko.

2. XRP: Amid the bullish wave, Ripple’s XRP token ($XRP.X) was a top gainer among major cryptos – adding 23% and rising to over $0.83 per token. In the wake of positive news concerning the SEC’s allegation that Ripple sold the token as an unregistered security, the price surged. Last week, New York Southern District Court Judge Analisa Torres unsealed three documents related to the case. The new evidence included Deposition Notices and Email Messages from Ripple CEO Brad Garlinghouse, as well as an email thread from Ripple Executive Chris Larsen. The XRP community is excited to see what could happen next. Considering how things are going, the case may be resolved soon. 

3. Polygon: Polygon, the decentralized layer-2 scaling solution for Ethereum, is in the news for its new look. The platform has not only made some changes to its website appearance, but also raised $450 million today from big investors like Sequoia Capital India, SoftBank, and Tiger Global. 

The network is making progress on NFTs as well. Today, Drips Network, a web3 protocol for automated recurring payments, went live on Polygon for NFT subscriptions and memberships. OpenSea, the biggest NFT marketplace, is also using the Polygon network because it’s much cheaper and faster than the Ethereum base chain. 

Among a handful of scaling solutions, Polygon helps Ethereum enhance its performance. Due to its usage, its native token ($MATIC.X) has caught the attention of investors, trading at $2.03, up 20%. 


A New Crypto Alliance Targets Market Manipulation

There’s no doubt that DeFi, NFTs, and meta tokens are becoming mainstream, but it’s also true that crypto crime and fraud have multiplied in recent years. In 2021, scammers took a record $14 billion in cryptocurrency. The theft of cryptocurrency increased 516% from 2020 to $3.2 billion in value. On top of that, many people lack an understanding of how crypto works, so they become targets of fraudsters.

To address the issue, a group of cryptocurrency companies –including stablecoin provider Circle, crypto exchanges such as Coinbase, Huobi Global, and others – have come together to launch a coalition against crypto market manipulation. It aims to increase consumer protection by noting the risk of fraud in the crypto market.

As part of its initiative, the Crypto Market Integrity Coalition (CMIC), companies are being asked to sign a pledge of market integrity, focusing on “a fair digital asset marketplace to combat market abuse and manipulation and promote public and regulatory confidence” in crypto.

The coalition was convened by Solidus Labs, a market surveillance company. “It is really about recognizing that you need entities that are focused on a fair and orderly system here and really trying to prevent the abuses that can happen if you’re not paying attention,” said Kathy Kraninger, vice president of regulatory affairs at Solidus Labs. 

An initiative like this comes at a time when the crypto industry is under global scrutiny. The SEC in the U.S. calls crypto a “wild west,” while China has already outright banned cryptocurrency. Crypto exchanges like Coinbase have been ‘threatened’ by the authorities, and $USDT.X issuer Tether is on the radar of financial watchdogs. 

In the context of regulations, the CMIC said, “Regardless of regulatory requirements, market activity should be reviewed and monitored on a reasonable ongoing basis for purposes of detecting and eliminating market manipulation and unfair market abuses. Clear instances of fraud and manipulation are illegal, and we will commit to preventing these activities to the best of our ability.”

The website promises a serious crack down on market and consumer protection. But there’s one problem: it doesn’t clarify how it will deal with market manipulation, who will fund it, and what the resources are. Additionally, there are already a few platforms that track cryptocurrency fraud and theft, so how this coalition will make a difference isn’t clear. Moreover, how much the alliance is decentralized and transparent, is yet to be determined. Hope the coalition turns into a powerful platform, not just a toothless organization. 

Tl; DR

Bullets For The Day

  • Tesla holds $2 billion in Bitcoin: One year after revealing that it had invested $1.5 billion in Bitcoin, Tesla revealed today it now owns $2 billion in the cryptocurrency. In addition, the company suffered impairment losses of about $101 million due to value changes in Bitcoin holdings last year. Read more in Barron’s.
  • Valkyrie’s bitcoin mining ETF on Nasdaq tomorrow: The Valkyrie Bitcoin Miners ETF, an exchange-traded fund (ETF) featuring exposure to bitcoin miners, has gotten approval for listing on Nasdaq with the ticker “WGMI.” The fund that will invest at least 80% of its net assets in companies that derive a minimum of 50% of their profit from bitcoin mining is expected to start trading tomorrow. Read more in The Block. 
  • It’s ok to out the BAYC founders: “Gordon Goner” and “Gargamel,” the pseudonymous founders of Yuga Labs, the company that developed Bored Ape Yacht Club NFT, were revealed in a BuzzFeed News story last Friday. With a generally agreed-upon culture of secrecy and anonymity in the crypto world, is it okay to have your identity revealed if you don’t want it? Read an opinion piece in CoinDesk