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Gobble Up the Calm: Crypto Flat As Turkey Day Approaches

Crypto avoided the common weekend price shenanigans, but neither bulls nor bears wanted to take control today. Very flat price action to start the week of Thanksgiving. 🦃

In today’s Litepaper, we’re looking at why big money is looking at DeFi for maximizing returns. 

Also on deck: Tether freezes $225 million of USDT tied to human traffickers, Argentina’s new pro-BTC pres,  and a look at CoinDesk’s sale. 

Here’s how the market looked at the end of the trading day: 

Bitcoin (BTC) $37,499 0.33%
Ethereum (ETH) $2,032 1.01%
Total Market Cap $1.389 Trillion 0.02%
Altcoin Market Cap $656 Billion -0.22%
Hedera Hashgraph (HBAR) – Biggest Winner
Avalanche (AVAX) – Biggest Loser $21.14 -7.39%

Maximizing Returns: How DeFi Merges Growth And Yield Featured Image

A not-so-obvious secret in the crypto world, especially among well-capitalized individuals and entities like hedge funds and institutions, is the allure of Decentralized Finance (DeFi). 💋

Despite traditional finance and crypto critics scoffing at DeFi since the market peak in August 2021, savvy players with a long-term perspective have quietly accumulated boatloads in the space.

In our December 30, 2022, analysis of the Stocktwits Crypto Indices, DeFi, often ridiculed and overlooked, emerged as the fourth best-performing index of 2022 out of eleven. Fast forward to this year, and DeFi is leading the pack as the top-performing index, boasting a nearly 200% increase, closely followed by the Proof-Of-Stake Index at +196%.

Growth vs. Yield In Crypto vs. TradFi

In traditional finance (TradFi), capital typically shifts back to growth sectors like the stock market when yields diminish. However, this trend isn’t mirrored all the time in crypto. For newcomers, this is where DeFi becomes particularly enticing. 😃

Despite being relatively new and about 75% down from its all-time highs, DeFi offers compelling opportunities. Many high market cap cryptocurrencies in DeFi, DEX, Lending, and Proof-of-Stake categories offer in-kind yields exceeding 8%.

Consider the BDCcompany $PSEC, popular for its monthly dividend, which you get in $$$. Unlike receiving cash dividends, ‘in-kind’ means receiving the asset itself. For instance, in staking (a key component of DeFi), rewards are paid in the staked asset. Our Crypto 101 article on staking delves deeper into this.

Take, for example, a Cardano wallet’s staking rewards shown on Cardano PoolTool:

Source: Cardano PoolTool

The appeal of in-kind rewards lies in the potential appreciation of the underlying asset, which is still significantly below its peak value.

Imagine receiving 31.42 $ADA, valued at about $8.11 (or roughly $0.258 per ADA). Fast forward a month, and that 31.42 ADA is now worth $12.20, a 50.43% increase. 👍

DeFi and Crypto: High Reward, High Risk, Guaranteed Heart Burn

While the above example is promising, glancing at any crypto chart over the past two years reveals the sector’s volatility and risks.

However, on-chain data suggests that some entities with substantial wallets view the past year as an opportune time to acquire assets at a discount, aiming to capitalize on their growth and yield potential. 😍

Human Trafficking Scum Are Much Sad, $225 Million Worth Of Sad Featured Image

In a landmark collaboration, Tether ($USDT) and crypto exchange OKX have teamed up with the U.S. Department of Justice (DOJ) to freeze a record $225 million in USDT, linked to a Southeast Asian human trafficking ring involved in global romance scams. 👊

This operation, announced on Nov. 20, represents the largest USDT freeze in history.

The funds, discovered in multiple self-custodial wallets, were identified during an investigation by blockchain analytics firm Chainalysis. Tether and OKX played a pivotal role by alerting the DOJ to suspicious fund movements, leading to the DOJ’s request to freeze the involved wallets.

Tether has clarified that these wallets are not associated with its customers and affirmed the legality of the freeze. The company is committed to collaborating with law enforcement and the wallet owners to resolve the situation. 🚨

Tether has seized around $835 million in assets tied to thefts and other illegal activities in its history.

Paolo Ardoino, CEO of Tether, emphasized the firm’s commitment to preventing illegal crypto usage and enhancing safety standards in the crypto industry. Similarly, OKX’s Chief Innovation Officer, Jason Lau, highlighted the exchange’s dedication to partnering with law enforcement and industry stakeholders to ensure trust and public welfare. 👍

From Pesos To Satoshi: Pro-Bitcoin President Elected In Argentina Featured Image

Argentina decided to play a wild card in its presidential election, bringing outsider Javier Milei to the big chair. Milei is an anarcho-capitalist who’s just clinched the presidency with a whopping 55% of the votes. 🇦🇷

Now, here’s where it gets juicy for the crypto crowd. Milei is a big fan of Bitcoin – like, “write love songs about it” level of fandom. He’s all about decentralized finance (DeFi) and isn’t shy about throwing shade at central banks. 

But let’s not get ahead of ourselves. Milei hasn’t exactly rolled out the red carpet for Bitcoin as legal tender in Argentina. However, his game plan of giving central banks the cold shoulder and cozying up to decentralized financial systems has given Bitcoin a serious adrenaline rush.

 Let’s see if Milei’s presidency turns into a crypto success story. 📓

NYSE’s Ex-Prez Plays Crypto Cupid, Matches with CoinDesk Featured Image

WSJ: Bullish, the crypto exchange led by former NYSE President Tom Farley. Ironically, the deal was all cash – and not in crypto. The price? There are only guesses. 🐂

Digital Currency Group, CoinDesk’s parent, bought it for $500,000 in 2016. And earlier this year, a $125 million deal for CoinDesk fell through.

Bullish is keeping CoinDesk’s management, led by Kevin Worth, and promises business as usual. An editorial committee chaired by ex-Wall Street Journal editor Matt Murray is set to ensure journalistic independence.

Launched in 2021 with backers like Peter Thiel, Bullish is also eyeing the remnants of FTX. CoinDesk, with its media, events, and indexes, pulled in $50 million last year. Farley sees it as a key player in a crypto resurgence.

The plan? Invest heavily in CoinDesk, expanding its reach to Asia. 📰


Bullets From The Day:

🔒 dYdX v3 Funds Hit by Attack: dYdX  lost about $9 million (40% of its v3 funds) to liquidations following an attack. The open interest for Yearn Finance’s YFI token skyrocketed from $0.8 million to $67 million, trading at unusually high prices. This surge was linked to a malicious actor, suspected of a similar attempt on the SUSHI market. dYdX raised initial margin ratios for YFI and other tokens, but it wasn’t enough. YFI’s price plunged 35% in an hour. dYdX is working with exchanges to investigate and has banned certain trading strategies. They’re also offering bounties for help in the investigation. The FBI is being informed, and no user funds were affected.

🎮 Ubisoft’s NFT Avatars Enter The Sandbox: Ubisoft is bringing Rayman and ‘Captain Laserhawk’ NFT avatars to The Sandbox. Based on Ubisoft’s Netflix series, the collection will feature 1,866 unique avatars on the Polygon network. This includes characters from Beyond Good & Evil. The avatars have a cyberpunk vibe, with the mint scheduled for November 29. The company’s active involvement in Web3 includes plans for a free Ethereum NFT drop and collaborations with Immutable. Ubisoft’s blockchain initiatives also include Tezos NFT items in Ghost Recon: Breakpoint and support for the Cronos and Hedera ecosystems.

📈 ARK Defies SEC, Refiles Bitcoin ETF: ARK Invest, led by Cathie Wood, has refiled its spot bitcoin ETF, ignoring SEC advice to switch from in-kind to cash creations. In-kind creations involve direct Bitcoin-ETF share exchanges, while cash creations use cash to buy or sell Bitcoin. The SEC’s concern over potential manipulation with in-kind creations hasn’t deterred ARK, which sees tax advantages in this method. ARK’s proposed ETF, ARKB, disclosed a 0.80% expense ratio, the first to reveal fees for a bitcoin ETF.

💰 DOJ’s $4 Billion Settlement with Binance?: The U.S. Department of Justice is reportedly nearing a settlement with Binance for $4 billion to resolve a criminal investigation into alleged money laundering and sanctions violations. The deal might include criminal charges against CEO Changpeng Zhao (CZ) but would allow Binance to continue operating under certain conditions, like overhauling compliance programs. The DOJ has been investigating Binance’s transactions related to U.S. sanctions on Iran and Russia, especially following FTX’s collapse. Binance’s legal troubles include ongoing lawsuits from the CFTC and SEC, with allegations ranging from misusing customer funds to operating without proper registration. 

The Correlation IS Causation Chart Of The Day

If you are in Canada and you’re wondering what’s causing inflation, here you go.