Making matters worse, 3AC co-founder Su Zhu tweeted during the mass sell-off to promote stETH, which certainly gives the appearance that he was trying to pump the price to improve price or liquidity. BlockFi later confirmed that they had liquidated some positions that 3AC held with them.
Speculation about 3AC has swirled, with little comment from 3AC or its executives besides a June 14 tweet from Zhu: "We are in the process of communicating with relevant parties and fully committed to working this out". Meanwhile, other organizations including 8 Blocks Capital have reported that they've been unable to reach 3AC about money they're owed.
YGG pointed out that the seed investor agreement did not require investors to "provide any specific value add services", and "there is no provision for Merit... to unilaterally cancel the contract". The core team replied to say that, "We would like to honor all agreements, however... the DAO holds the ultimate power". One minority voice in the community argued, "You can not just look back 6 months later and be angry with someone who took an early bet on you and say 'here is a refund'. We must uphold trust in compensating those who take early risks."
Surprisingly, YGG ultimately accepted a deal with the DAO rather than take it to court. The final decision did not entirely eliminate their promised returns, but still only granted them around 30% of what they would have been owed with the original deal (which would have been over $5 million).
In a Twitter thread, CEO of the 101.xyz web3 platform detailed the saga and wrote, "it's hard to see this as anything other than a horrendous stain on the reputation of web3... Merit Circle DAO may not need outside support anymore, but many other projects do. And now they’ve made it harder for earlier projects to get the capital they need. Investors might rightfully ask 'what if your DAO decides to fuck us'".
Even without the $625 million hack in March, Axie's economy was in trouble. A November 2021 report from Naavik, titled "Infinite Opportunity or Infinite Peril?" wrote that the game's "economic policies are fundamentally unsustainable" and that "the value of new Axies and SLP is propped up by new players putting fresh money into the game".
As of May, even top-ranked players were making around $0.68 a day—certainly well below the $41.50 average daily wage in the Philippines that the game was once beating. Now, Axie Infinity downplays the financial promises of its game, with the company's head of product writing, "Axie Infinity first and foremost needs to be a game".
Coinbase broke the news to affected employees in a particularly cold way: by email, sent to employees' personal email accounts because they immediately cut access to employees' work accounts. "Given the number of employees who have access to sensitive customer information, it was unfortunately the only practical choice, to ensure not even a single person made a rash decision that harmed the business or themselves," wrote CEO Brian Armstrong in a message to employees that was subsequently published as a blog post.
- "A message from Coinbase CEO and Cofounder, Brian Armstrong", Coinbase blog
- "Crypto Exchange Coinbase to Lay Off 18% of Staff", Wall Street Journal
This is the latest in a long string of Discord compromises. Other hacked servers in recent days included those for Curiosities, Meta Hunters, Parallel, Goat Society, RFTP, and Gooniez.
It's hard to say why the collector accepted such a low offer. Some have speculated that they were tax loss harvesting to offset other gains, while others have wondered if the collector's account might have been compromised. It's also possible that the collector was cutting losses, not expecting the demand for their NFT to rebound anytime soon.
Rumors of a downturn across the tech industry more broadly have been swirling for several months, but crypto companies appear to be being hit particularly hard as they simultaneously endure "crypto winter".
- "Crypto crash wreaking havoc on DeFi protocols, CEXs", Cointelegraph
I love it when I go to my bank to grab some cash from the ATM and discover that I can't, because someone else's cash clogged up the pipe.
The pause occurred as Bitcoin was reaching record low prices not seen since 2020, contributing to the ongoing pattern of Binance suddenly pausing withdrawals or undergoing maintenance during periods of chaos in the crypto ecosystem.