Fake SkyVerse project draws in more than $150,000
A scammer recreated the Twitter account for SkyVerse, a much-anticipated NFT land project due to launch in "mid-April". More than 250 NFT collectors eager to get in on a mint that has only vaguely pointed to a date have fallen prey to a scammer convincing them that not only has the project started minting, but they're rapidly selling out. The scammer implemented a "counter" on the webpage that appears to show the project quickly selling out in real-time, apparently hoping to increase the FOMO that might encourage someone to hastily connect their wallet. However, a glance at the website source shows the counter is just instantiated to a fixed value, and then increments arbitrarily to show the counter approaching the maximum number of NFTs that will be sold. So far, the website has drawn 50 ETH ($150,000) from would-be collectors trying to mint NFTs for 0.1 ETH ($300) each.
NFT collector gets $280 top bid for the Jack Dorsey tweet NFT he bought for $2.9 million last year
After Jack Dorsey made an NFT out of his first-ever tweet, then-cryptocurrency executive Sina Estavi won the auction in March 2021 with a 1,630 ETH bid (then around $2.9 million). A little over a year later, on April 6, Estavi tweeted that he would be selling the NFT. He listed the NFT on Opensea for 14,969 ETH (around $46 million), in an auction slated to last a week. When the auction closed, there were seven offers ranging from 0.0019 ETH ($6) to 0.09 ETH ($277). It's still up to Estavi whether or not to accept a bid.
Ethereum transition to proof-of-stake delayed again, as is tradition
For years now, Ethereum has been talking about a transition from its energy-intensive, expensive proof-of-work consensus model to a proof-of-stake consensus model, which sports a totally different set of flaws! Exciting.
The project has been delayed so many times that it has become a bit of a running joke — crypto critics regularly describe the Ethereum PoS migration as something that has been "only six months away" for several years now. Meanwhile, it has proven a useful way for Ethereum fans to dismiss the valid concerns about the enormous energy expenditure of their preferred blockchain, as though enormous emissions and e-waste are somehow a non-issue if there is some vague plan at some perpetually-in-the-future point to move away from them.
Anyway, Ethereum developers have projected new levels of optimism lately, with several of them describing "the merge" as imminent — I believe a June timeframe was the popular estimate. Unfortunately, this appears to have been just as unachievable as the prior "deadlines", with an Ethereum core developer stating it was now looking like it wouldn't happen until some time this autumn. This is particularly brutal timing, given Nilay Patel's interview yesterday with a16z's Chris Dixon, where he confidently pointed to an early July "merge" date (only to become substantially less confident when pressed on specifics). Anyway, see you this fall for the next hype cycle — between now and then, Ethereum will have again consumed energy comparable to the amounts used annually by some small countries, for little if any useful purpose.
- Tweet by Tim Beiko
- "Ethereum energy consumption", Ethereum.org
Texas Securities Commissioner issues emergency order to stop a metaverse casino
Securities Commissioner Travis J. Iles issued an emergency cease and desist order to stop "Sand Vegas Casino Club", a project that writes on its website "THE HOUSE ALWAYS WINS. And with SandVegasCasinoClub NFTs YOU can BE THE HOUSE!" The project would have allowed NFT buyers to participate in a "profit-share program" and earn "passive income" from a metaverse casino where people could not only gamble, but purchase metaverse items representing drinks and cigarettes (really).
In the order, the Commissioner alleged that the project was "leveraging interest in metaverses to perpetrate a high-tech fraudulent securities offering", and had been falsely claiming to their followers that securities laws don't apply to NFTs. "They are misleading purchasers by claiming they can simply avoid securities regulation by implementing illusory features or use different terminology," the Commissioner's announcement said.
Science fiction author Pierce Brown cancels NFT project after negative fan response
"Don't make your dystopian books our reality, Pierce," a fan replied to sci-fi author Pierce Brown's announcement of an NFT project. Brown, the author of the bestselling Red Rising series of novels, announced an NFT project called "Solar Society" based around his work. Fan response was overwhelmingly negative, with some expressing concerns over environmental impact, and others dismayed at the negative effect they feel NFTs have had on creative communities.
The day after the announcement, Brown released a statement saying that he had been drawn in by the hope that NFTs would allow him to avoid "big companies whose sole focus is strong-arming away the rights to projects they've never been a part of to turn a big profit." He wrote, "I felt that if I didn't jump on it myself, someone else would, without the love, care, and artistry we believe in". He concluded that, given the response from his fans, he would not be continuing the NFT project. Some encouraged him to use the artwork that had already been created for merchandise or other non-NFT art sales.
- Tweet by Pierce Brown announcing the project
- Tweet by Pierce Brown announcing the project's cancellation
Someone once again appears to trade on insider knowledge of Coinbase listings
On April 11, Coinbase announced 50 new cryptocurrencies they were considering listing on their exchange. These announcements tend to increase the price of the tokens under consideration, as traders take bets that the coins will be listed, and that their being listed on a major exchange and made more easily accessible will result in a price increase down the road.
The day after the announcement, crypto influencer "Cobie" wrote on Twitter, "Found an ETH address that bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was published, rofl". The wallet had spent around $400,000 on multiple currencies listed in the announcement, which certainly appears as though they knew about the contents of the announcement before it was published.
This is not the first time allegations of insider trading have been made based on Coinbase announcements. In February, a trader made a profit of over $700,000 by trading on what appeared to be advance knowledge of two upcoming Coinbase announcements.
The Wikimedia community formally requests that the Wikimedia Foundation no longer accept cryptocurrency donations
Wikipedia editors and other members of the Wikimedia communities completed a three-month-long discussion about whether the Wikimedia Foundation (WMF) should continue to accept donations in crypto. The WMF, which is the non-profit that owns and operates Wikipedia and related projects, has accepted crypto donations via BitPay since 2014. They have been a small source of donation revenue — in the last fiscal year, the WMF received about $130,000 worth of crypto donations. "Crypto was around 0.08% of our revenue last year, and it remains one of our smallest revenue channels," wrote a Wikimedia Foundation staff member.
The community member writing the closing summary of the discussion wrote that "Common arguments in support include: issues of environmental sustainability, that accepting cryptocurrencies constitutes implicit endorsement of the issues surrounding cryptocurrencies, and community issues with the risk to the movement's reputation for accepting cryptocurrencies.... Excluding new accounts and unregistered users, the tally is 232 to 94, or 71.17% in support of the proposal. These results indicate overall community support, with a significant minority in opposition. Thus, the Wikimedia community requests that the Wikimedia Foundation stop accepting cryptocurrency donations."
Attacker cashes out more than $11 million from Elephant Money in a flash loan attack
A person was able to use a flash loan attack to drain the Elephant Money project, crashing the token price to 0 while cashing out 27,416 BNB ($11 million). Losses to the project were likely higher, including the loss of 30 billion $ELEPHANT tokens (~$10 million). The project boasted audits by both CertiK and Solidity Finance on its website, though CertiK later tweeted that the flaw was with the treasury contract, which was unverified and unaudited.
Elephant Money is a defi project with some questionable promises — its Twitter account advertises that people can "earn 672% APY", and a recent tweet encouraged people to use Elephant Money "as your new bank: Your share of ELEPHANT tokens can be compared to your debit account, except that it also generates you money. Stampede Perpetual Bonds is your retirement fund." Hopefully no one took them up on their suggestion to put their debit account balance or retirement money into the project.
Celsius stops allowing non-accredited investors in the United States to lend out their crypto
Celsius announced that, in order to comply with United States regulations, they would no longer allow non-accredited investors from the U.S. to "earn rewards on" (that is, lend) their crypto using their Earn product. Earn advertises that people can "earn up to 18.63% APY, get paid weekly" by putting their crypto into a Celsius account, which Celsius then lends out in exchange for interest. There are, of course, no insurance protections for the user in case of losses. Non-accredited investors will now be limited to only using their Celsius account to exchange, borrow, or transfer crypto — not lend.
Individual accreditation is based on net worth or income: only those with net worth above $1 million, or yearly income above $200,000, qualify. American Celsius users were largely unhappy with the change, with one writing, "Celsius Network making the rich richer. Shameful."
Ichi token plummets 90% after Rari liquidity pool is emptied
Ichi, a defi project that allows other projects to create their own stablecoins suffered cascading liquidations in its Rari pool, leading to a token price crash. Rari is a protocol that allows users earn yields on liquidity pools for various assets. Ichi's liquidity pool on Rari was set up with an extremely high collateral factor (85%) and no supply caps, which allowed borrowers to borrow more $ICHI to use as collateral than actually existed in the liquidity pool, with many borrowing $ICHI to buy more $ICHI. As borrowers did this, the price briefly spiked from the token's early April price of around $70 to $139 before plummeting to below $2.
One Rari developer blamed Ichi for the disaster, writing, "Fuse is a permissionless protocol. Pool operators are responsible for following best practices to avoid situations like this one". Rari Capital's official Twitter account also blamed Ichi, stating, "This is a permissionless pool that is owned and operated by Ichi. We hope to see an announcement from Ichi regarding redemption strategies and next steps to make users whole."
In the FAQ about the incident, Ichi wrote that they had allowed such a high LTV ratio in the pool because they expected "users would make responsible decisions that would benefit the community". There is currently around $30 million of bad debt in the liquidity pool.