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Welcome to The Node! This is Ben Schiller to take you through the latest crypto news. In today's news: Options tied to BlackRock’s bitcoin ETF IBIT attract $2B;DCG bets on decentralized AI; Sky's USDS yields woo Solana traders; FTX's ex-CTO Gary Wang won't serve prison time. The Takeaway: When the crypto industry is traveling continuously, how does it get any actual work done? Azeem Khan has thoughts.👇 |
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Bitcoin ETF Options Attract $2B on Day One |
Options tied to BlackRock’s bitcoin exchange-traded fund IBIT racked up nearly $2 billion in notional exposure on their debut, a feat some analysts term “unheard of” for those metrics. “1st day of options is just shy of $1.9 billion in notional exposure traded via 354k contracts. 289k were Calls & 65k were Puts,” Bloomberg Intelligence analyst James Seyffart said in an X post. “That's a ratio of 4.4:1.” “These options were almost certainly part of the move to the new #Bitcoin all time highs today,” Seyffart added, pointing to bitcoin move to new record nights in late U.S. hours Tuesday. IBIT options went live Tuesday in a first, a move that market participants widely expect to draw more institutional interest in bitcoin (BTC). In September, the U.S. SEC approved options for several of the 11 spot bitcoin ETFs on several exchanges, and more options products are expected to be available in the coming days. Options are financial derivatives that provide the buyer the right, but not the obligation, to buy (in the case of a call option) or sell (in the case of a put option) an underlying asset at a specified price on or before a certain date. A call option gives the holder the right to purchase an asset at a specific price, known as the strike price, within a set time frame. A put option gives the holder the right to sell at the strike price within the specified period. Call options are purchased when expecting price increases; if correct, traders can exercise the option to buy at the strike price or sell it for profit. Put options serve as insurance against price drops or for betting on declines, enabling selling at the strike price if it exceeds the market value. |
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Sky's USDS Woos Solana Traders |
Solana traders are quickly embracing the newest stablecoin to join their decentralized finance (DeFi) fray: USDS, issued by Sky (formerly MakerDAO). Less than a day into launch, USDS's circulating supply on Solana has already surpassed $89 million. Such launch day largesse puts the coin formerly known as DAI well ahead of the other recent entrant, PayPal's PYUSD, as Solana's fastest-growing stablecoin out of the gate. The heady growth is about as preordained as anything could be in DeFi. Sky is spending $2 million a month to incentivize traders that swap into USDS and deploy it, said Rooter, the pseudonymous leader of borrow and lend protocol Save, which is handing out 400,000 worth of USDS a month to suppliers of the new stablecoin. "With Sky heavily incentivizing it's no surprise" that USDS is growing so fast, Rooter said. USDS lenders on Save, Drift and Kamino are chasing yields in excess of 20% because of the rewards boosts provided by Sky. The rate juicing makes USDS farming competitive with USDC, the most popular stablecoin on Solana. |
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DCG Bets on Decentralized AI |
Digital Currency Group (DCG), an early champion of cryptocurrencies and the digital asset industry, is now turning its attention to AI as well. Not just any artificial intelligence, but a decentralized version that drives the Bittensor ecosystem. The conglomerate led by Barry Silbert has unveiled a new company, Yuma, focused on incubating and building new businesses that use decentralized AI to perform tasks and earn rewards. At its core, Bittensor is a decentralized network for AI that creates incentives for people to contribute data and computing power for activities ranging from text translation and data storage to predicting the structure of complex protein chains. “If you ask five people: 'What is Bittensor?' You will get five different answers,” Silbert, a cryptocurrency OG investor and evangelist, said in an interview. “If you remember early bitcoin, some people would say it's money, some people would say it's gold. Some people would say it's this blockchain [...] The way that I look at Bittensor is as the World Wide Web of AI.” There's no doubt AI is a foundational technology with all sorts of possibilities, but it also has the potential to hand way too much power to the Microsofts, Facebooks and Googles of this world as users shovel their data in the corporations mighty computers. Decentralized AI may help avoid that, not only when it comes to harnessing vast untapped computational resources, but also removing some of the tech’s opaque and creepy reputation. Bittensor’s native cryptocurrency, $TAO, is used to incentivize an army of decentralized workers: either miners contributing advanced computing services to certain tasks or validators assessing contributions for quality and allocating rewards. This interest in AI didn’t happen overnight. DCG made its first investment into Bittensor in 2021. More recently, DCG’s asset management firm, Grayscale, added funds dedicated to AI including the $TAO token. Underscoring his belief in the project, Silbert will step into the CEO position at Yuma, which will have some 25 employees on day one. In some respects, the Yuma incubation and design studio is to Bittensor what Joe Lubin’s Consensys model was to Ethereum. But rather than owning 100% of the subnets grown under Yuma’s auspices, it's more like the Y Combinator model of a venture capital firm mixed with an accelerator, Silbert said. |
Former FTX CTO Gets No Prison Time |
Former FTX chief technology officer and close friend of Sam Bankman-Fried, Gary Wang, won’t have to serve prison time for his involvement in the crypto exchange’s fraud scheme, The New York Times reported. Wang pled guilty to four criminal counts in December 2022, including wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud and conspiracy to commit commodities fraud. It is thanks to his extensive cooperation with U.S. prosecutors in putting Bankman-Fried behind bars that Wang has avoided prison time, Judge Lewis A. Kaplan, who has presided over the entire FTX case, said. Wang immediately met with prosecutors after FTX’s collapse, making him one of two key cooperating witnesses in Bankman Fried’s trial, alongside former Alameda Research CEO and Bankman-Fried’s former girlfriend, Caroline Ellison. For that, he deserved a “world of credit,” Kaplan told Wang during his sentencing. |
The Takeaway: Too Much Traveling? |
By Azeem Khan If you’re part of Web3, odds are you’ve spent much of this year traveling abroad. It’s likely you just got back from a conference if you’re reading this. Maybe you’re at one while reading this now. Regardless of where you’re based, you’ve likely hopped from one international conference to another. Over the years, these events have stretched across the United States, South America, Europe, Asia, and might soon make it all the way to Antarctica with the pace of how it’s going now. Around each major gathering, hundreds — soon thousands — of side-events pop up (the recent Devcon in Bangkok featured more than 700). It’s the reality of working in this space: relentless travel and endless panels. But let’s be honest: it’s time to reconsider the conference circuit. This isn’t to say all conferences are useless — some, like Consensus, Eth Denver and others, are valuable. But, spending an entire year bouncing from one event to the next is hardly a recipe for adoption. If it were, we’d have more to show for it than empty crowd shots and panelists answering their moderator’s questions to vacant seats. Some photos which got more attention than entire side events. While it makes sense for a decentralized industry with no central hub to meet up in person, it’s become a running joke: even people based in the same city often have to meet at a conference halfway across the world. It’s neither efficient nor sustainable. It’s true that, for now, most networking in this space happens at conferences, and until a central industry hub emerges, that will likely remain the case. But collecting a handful of new Telegram contacts and snapping selfies with promises to reconnect doesn’t compare to having focused time at home to create real value. The reality is that most of those chats become a graveyard of forgotten messages, never evolving beyond the initial promise to “connect after the conference.” And unless there’s some sort of return you can quantify every quarter for all the cost then it doesn’t make sense. Will mass adoption really come from panels where everyone agrees, speaking to rooms with mostly empty seats? And of those in attendance, how many are there simply to reinforce the same views? All this, financed by a “pay-to-play” model that rewards stage time over genuine merit, leaving little room for truly innovative ideas to spread. Instead, it creates an echo chamber where fresh perspectives are rare, and real differentiation of thought is almost nonexistent. |
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