🍂Boo! Did the crypto market scare you last month? 🍎
This fall's best in crypto journalism and research
Me too, pumpkin, me too.
It’s almost the end of the year, and the crypto markets are doing what they do best — embracing bearish prices, sending dog coins to the moon when Elon Musk tweets, etc. etc.
It’s been a pretty impressive month for crypto journalism — for the first time in 93 years, Bloomberg Businessweek dedicated its entire 40,000 words issue to just crypto. Crypto journalists also came together at Bitcoin Amsterdam to debate responsible crypto journalism in a fiery discussion, and several more big crypto hacks had to be covered as well as the breaking news story of Kim K being banned by the SEC for any more crypto promotions for the next few years. Oh, and Do Kwon, arguably the most (in)famous crypto entrepreneur of 2022, gave an exclusive interview to Unchained about everything to do with the Terra crash and what he’s up to now (but not where he lives…)
And now, without further ado, read more about all of these stories (and others) in our fall newsletter.
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Top crypto journalism in October
The Crypto Story: Where It Came From, What It All Means, and Why It Still Matters by Matt Levine, Bloomberg
In his latest (and arguably greatest) opus, Matt Levine translates the relatively brief but never boring history of crypto into a Homeric retelling of why the average person should care about crypto. Highly informative if you’re new to the industry, even crypto vets might find Matt shines new light on what makes some of the ideals behind blockchain technology so appealing.
Do Kwon of Terra: ‘It Was Never Really About Money or Fame or Success’ – Ep. 408 by Laura Shin, Unchained
In her podcast, Laura Shin speaks with Do Kwon several months after the Terra stablecoin ecosystem collapse. An interview with Kwon seemed like an almost impossible get, considering that Interpol has issued a red notice for the Terra creator as lawsuits pile up worldwide over the Terra/LUNA aftermath. While it’s a fascinating insight to have access to one of crypto’s most infamous figures in an extended interview, we only wish that Laura’s promo tweets about the interview didn’t lead with “where is he?” and not include the answer in the interview.
Welcome to Hell, Elon by Nilay Patel, The Verge
With Elon’s takeover of Twitter complete on paper, the transition amongst Twitter users has been less smooth. While elsewhere Jack Dorsey’s decentralized social network project, Bluesky, now has an open beta, Elon has put himself squarely at the top of the Twitterverse, for better or worse. This first-person piece by The Verge breaks down all of the problems that Musk wants to solve, and why this journalist thinks its a losing game.
It's Lonely in the Metaverse: DappRadar Data Suggests Decentraland Has 38 ‘Daily Active’ Users in $1.3B Ecosystem by Cameron Thompson, CoinDesk
At the peak of NFT Summer (and still to this day, if you listen carefully enough) a common rallying cry was that NFTs would finally lead to “mass adoption,” as they represented real utility beyond the crypto industry and would give rise to the Metaverse. But, looking at two of the top valued Metaverse projects, Decentraland and The Sandbox, adoption may be slower going than token holders hoped. This piece did produce some backlash in the GameFi community over the right metrics to judge blockchain-based games — daily active users, blockchain activity, NFTs sales, or time spent playing the game?
Kim Kardashian Charged by SEC for Unlawfully Promoting EthereumMax by Adam Morgan McCarthy, The Block
Remember when Kim Kardashian was promoting EthereumMax? Turns out she told everyone but the SEC about EMAX tokens. The regulator said that Kardashian didn't disclose the payment received to promote the EthereumMax project. Kim subsequently agreed to pay $1.26 million in penalties and will work with the SEC on its ongoing investigation into the project.
Crypto Executive Exits Continue as Firms Trudge Through Bear Market by Kristin Majcher, The Block
Whether you’d consider this typical bear market activity or not, top executives are leaving crypto firms left and right. What began in September as the fallout of the Terra collapse started to settle has continued throughout October. Notable exits include Celsius Network, Voyager Digital, Kraken, Galaxy Digital, FTX, OpenSea and others.
Crypto Dev Creates Way to Access Prohibited Apps like Tornado Cash by Tim Copeland, The Block
After the U.S. Treasury Department sanctioned Tornado Cash, resulting in the website and code being taken down, people in the crypto community began sharing ideas for how to still access these decentralized applications without the need for their centralized front ends. Dappnet, introduced by former Synthetix developer Liam Zebedee, is an application network that allows users to bypass the prohibited front ends of restricted applications like token mixers.
History Is Repeating Itself in DeFi with Balancer and Aura by Brady Dale, Axios
In this relatively technical piece for DeFi heads, Axios explains how the mechanics behind Balancer and Aura’s success has been done before, and why we might want to learn from the Curve Wars as deposits rise.
Barely Halfway and October’s the ‘Biggest Month’ in Crypto Hacks: Chainalysis by Jesse Coghlan, Cointelegraph
As if the bear market wasn’t enough, blockchain analysis firm Chainalysis called October “the biggest month in the biggest year ever for hacking activity” with over $700 million lost as a result of exploits halfway through the month. Of the nearly $3 billion lost to over 125 hacks, DeFi bridges emerged as the most popular targets.
Binance Launches $500 Million Fund to Provide Loans to Bitcoin Miners by Yogita Khatri, The Block
Bitcoin miners have had a rough year. Rising energy costs, regulatory uncertainty, and political instability have disrupted many of the world’s largest mining pools. Binance Pool’s $500 million fund for Bitcoin miners is the latest in a series of organizations offering assistance to smaller groups struggling to break even.
‘Biggest Risk in DeFi’ Seen Coming From Backdoor Software Threat by Olga Kharif, Bloomberg
Bloomberg’s coverage of a Coin Metrics report into a software threat is succinct and to the point. After reading it, you can more clearly understand how admin keys can be used for rug pulls in DeFi and what the industry is doing (or not doing) about it.
In one of the biggest moves into crypto by the tech giant to date, Google announced that it will begin allowing some of its Google Cloud customers to pay for services using virtual currencies, leveraging Coinbase as its partner to process the payments. Coinbase will also move a portion of its operations to Google Cloud off of Amazon Web Services, a notable move considering much of crypto’s reliance on AWS for hosting.
The notoriously slow to change Bitcoin software ecosystem is seeing one of its most noteworthy changes in nearly a decade as Stratum V2 is released to the public. The interface most miners use to access the Bitcoin protocol, Stratum V2 represents a significant upgrade to the protocol and could open up access to a wider variety of home miners and improve network security. It’s always cool to see mainstream reporting on a Bitcoin technical upgrade.
DJ Steve Aoki on Making More Money From NFTs Than Music Royalties by Morgan Chittum, Business Insider
Steve Aoki, one of the best-known DJs in the world, told Insider how he "dived head first" into Web3. The DJ created a membership club based on NFTs called the "A0K1VERSE.” He was shocked at how much more money he made from NFTs compared to his music royalties and was inspired as to how Web3 could disrupt the music industry.
Who Is Avraham Eisenberg and Why Is He All Over Crypto Twitter? by Protos Staff
This story covers the very strange case of a DeFi “fraudster” and how he claims that his alleged exploits of protocols for financial gain aren’t actually illegal under the argument that “code is law.” It’s a tricky way to understand and interpret decentralized financial crime, and Protos clearly breaks down the multiple perspectives in this story over whose actions are illegal, and who the money really belongs to.
Former Celsius executive Aaron Iovine has joined JPMorgan Chase & Co as executive director of digital assets regulatory policy. Iovine was head of policy and regulatory affairs at bankrupt crypto lender Celsius, which he left in September as one of many executives leaving their positions.
And now — on to some research!
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Top crypto research in October
Ethereum's New Staking Model Does Not Make ETH a Security by Rodrigo Seira, Amy Aixi Zhang, Jake Chevrinsky, Paradigm
Among the horde of regulators trying to mark their territory and establish authority within the crypto ecosystem are those claiming Ethereum’s transition to proof-of-stake removed any shadow of doubt that the ETH token is a security as defined in the United States. Rodrigo, Amy, and Jake construct a convincing counter argument, breaking down the infamous Howey test point by point.
Credible Decentralized Exchange Design via Verifiable Sequencing Rules by Matheus V. X. Ferreira, David C. Parkes, Harvard
MEV has been in the hot seat lately — since the curtains have been drawn back on the phenomenon, many have tried to figure out how to curtail the practice. This paper suggests a framework wherein miners commit to respecting a sequencing rule that specifies transaction execution ordering for block building and is verifiable. The authors attempt to find sequencing rules that would limit price manipulation by miners in two-token liquidity pool exchanges.
The Financial Stability Oversight Council’s Report on Digital Asset Financial Stability Risks and Regulation by Financial Stability Oversight Council
The U.S. Treasury Department’s Financial Stability Oversight Council released a report on digital assets detailing the risks and regulatory framework and challenges the sector faces. The report acknowledges and dives into gaps in current regulations and enforcement processes. Notably, the Council recommends improving its “capacities related to data and to the analysis, monitoring, supervision, and regulation of crypto-asset activities.”
Using On-Chain Data for Policy Research: Part 1 by Brendan Malone, Paradigm
Brendan from Paradigm makes a convincing argument for how publicly available on-chain crypto data can be used to inform policy research, leading to more well-rounded, realistic, and appropriate regulations. This first part in the series looks at where on-chain data comes from, basic means to acquire it, and how the data is structured.
Concave Pro-Rata Games by Nicholas A. G. Johnson, MIT; Theo Diamandis, MIT; Alex Evans, Bain Capital; Henry de Valence, Penumbra Zone; Guillermo Angeris, Bain Capital
This paper introduces concave pro-rata games, games where players place assets in a shared pool and receive payouts as a function of a concave curve. These games are analogous to simplified batched decentralized exchanges and have a number of unique properties including a unique equilibrium point. Using the Cosmos-based decentralized exchange Penumbra Zone as an example, the paper shows how to design systems that are not economically dependent on transaction ordering.
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Off the Record returned — how to get the scoop
The ACJR’s Off the Record season 5 has returned, with even more sessions that help journalists and researchers understand how to cover often confusing or complex crypto topics.
Thank you to everyone who joined us on Oct 18. Dan Roberts, editor-in-chief of Decrypt, led a great discussion about major stories of 2022 related to SEC regulation and crypto bailouts.
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Top crypto interview in October
Bitcoin’s Media Problem by Daniel Prince, Jemima Kelly, Izabella Kaminska, Pete Rizzo, and Joe Hall
Recorded earlier this month at Bitcoin Amsterdam, this panel discusses responsible journalism, especially regarding Bitcoin, and how it can affect people's lives for the better.
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Top crypto unhinged tweet(s) in October
And on the third day of October, Gary sued Kim
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