ProBit Bits — ProBit Global’s Weekly Blockchain Bits Vol. 36

Solana’s Top Two NFT Collections to Switch Network

Have you been following the NFT world on Solana? It turned out last week that the network’s two main NFT collections, DeGods, and y00ts, have decided to migrate to Ethereum and Polygon networks respectively.

While no official reason(s) has been given, there are suggestions that the move is due to SOL’s recent volatility and the lack of trust after the FTX/Alameda collapse — the Layer 1 blockchain has reportedly lost almost 70% of its value since the FTX collapse. Deemed a short-term pain with long-term sustainability benefits, it is left to be seen what would become of the plan as such a move has never been done before at this scale.

More Restructurings, Bankruptcies Expected in Bitcoin Mining Industry

The entire bitcoin mining sector has a relatively high debt-to-equity ratio (1.8), according to Luxor Mining’s Hashrate Index, and this could mean the industry seeing many restructurings and potential bankruptcies going forward.

From Core Scientific and its $1.3 billion in liabilities as of September 30, 2022, to Marathon which has $851 million in liabilities, public bitcoin mining companies collectively owe more than $4 billion.

Out of the approximately 25 companies, almost half have debt-to-equity ratios higher than 2 — a level considered risky even in much more stable industries like consumer staples or agriculture, the mining data analytics index notes. It adds that the massive debts some of the public miners took on earlier have now returned to haunt them now that mining cash flows have deteriorated. With an equity of $2.2 billion, the companies’ inability to service their debt led them to restructure which resulted in massive losses.

Know the Blockchain with the Highest Cases of Rug Pulls?

Be it a hard or soft rug pull, most of the thefts go undetected because they occur exclusively on-chain. According to a report released last week by Solidus Labs, fraudsters deployed over 200,000 scam tokens from September 2020 to December 1, 2022. Based on scanning the source code of every new cryptocurrency deployed on an EVM blockchain since 2020 — amounting to 1.8 million tokens and 12 chains to date — Solidus’ Web3 AML solution finds that 8% of all Ethereum tokens are programmed to execute rug pulls while 12% of all BNB Chain tokens are scams (the highest of any blockchain). It also adds that despite the thefts which have led to almost two million investors losing funds to rug pull tokens, 15 new scam tokens are detected every hour.

Mango DAO Fraudster Arrested

The man who used Mango’s token MNGO futures to withdraw $110 million from other investors’ deposits without any apparent intention of repaying the funds has been arrested in Puerto Rico, according to Reuters. Avraham Eisenberg reportedly obtained a large number of loans from the decentralized cryptocurrency exchange run by Mango DAO by manipulating Mango’s collateral using two accounts to concurrently buy and sell futures based on the values of MNGO and USDC. Being on both sides of the transaction helped him to artificially inflate the price of MNGO relative to USDC. He later returned $67 million following negotiations with Mango.

Number of Global Crypto Owners to Likely Double in 2023

In its 2022 Year Review & 2023 Year Ahead report released last week, Crypto.com is projecting that the industry would see a 50% to 100% increase in the number of crypto owners in 2023 depending on market conditions. From an estimated 402 million users as of November 2022, and at a monthly average adoption growth rate of 2.9%, the exchange expects global crypto owners to reach between 600 and 800 million next year despite the tumult in the industry. This will come as the focus on security and user education continues to grow, and trust with end users is established in the wake of a few bankruptcies and hacks last year. The conundrum led to a total loss of US$3.7 billion.

What’s to Come: Ethereum Foundation Shares 2023 Outlook

Following The Merge being, by far, the most important thing for Protocol Support in 2022, the Ethereum Foundation last week released a summary and outlook article in which they stated that 2023 will focus on Beacon Chain withdrawals. The next upgrade will be centered around EIP-4844, ( protodanksharding). The withdrawal function will enable ETH stakers to withdraw their balances to their execution layer accounts while EIP-4844 will help bring about the implementation of sharding. Other areas to touch on include improving Remix’s performance and conducting internal security audits of Capella/Shanghai and of Layer 2/Bridges.

FTX, Bankman-Fried Tied to First Venture Funding as On-chain Data Shows Alameda Wallet Trading

It came out last week that Sam Bankman-Fried (SBF) would likely enter a plea against criminal charges levied at him, even as two $100 million investments in Mysten Labs and Dave were identified as the first examples of customer money being used by FTX and SBF for venture funding. At the same time, on-chain data showing Alameda wallet as actively trading altcoins into ETH and USDT, and then converting them into BTC using currency mixers FixedFloat and ChangeNow caught the attention of U.S. federal prosecutors who initiated an investigation. SBF denied any involvement in it.