The biggest crypto news and ideas of the day |
Were you forwarded this newsletter? Sign up here. Don't want this newsletter? Unsubscribe |
|
|
Welcome to The Node! This is Marc Hochstein to take you through the latest crypto news. In today's news: Polychain says ex-general partner made undisclosed side deal with portco; Sam Altman’s blockchain project opens to devs; soccer star hypes obscure meme coin on Instagram, and guess what happened next. The takeaway: MEV has spread to bitcoin, in subtler forms than on Ethereum, and that's worrisome, writes CoinDesk senior analyst George Kaloudis. Read an excerpt from his latest piece below. 👇
|
|
|
Crypto VC giant Polychain has accused Niraj Pant, a former employee, of making a backroom deal with portfolio company Eclipse Labs that broke the fund's policies. According to three sources close to the situation and internal Eclipse documents reviewed by CoinDesk's Sam Kessler, Neel Somani, the former CEO of Eclipse Labs, quietly allocated Pant 5% of a forthcoming Eclipse crypto token in September 2022 – just days after Pant directed Polychain to lead the company's $6 million pre-seed funding round. The allocation was eventually reduced to 1.33%, worth $13.3 million at the token's most recent fully diluted valuation in a private investment round. (According to a source close to Eclipse Labs, the company's latest funding round valued the token at a fully diluted value (FDV) of $1 billion.) After leading Eclipse's August 2022 pre-seed funding round, Polychain went on to participate in its $50 million Series A funding round in March 2024. Pant spearheaded the pre-seed deal, and a CoinDesk investigation revealed that around that same time, he was allotted about as many Eclipse crypto tokens as Polychain itself. The deal was not, according to CoinDesk's sources, disclosed to most of Eclipse's executives, advisors or large investors. Pant insists the arrangement was completely kosher because it wasn't finalized until September 2022 – the month after Polychain had already invested in Eclipse. He shared legal documents with CoinDesk showing that his "advisory" allocation of Eclipse tokens was revised to 1.33% in 2024 but would not discuss the size of his original stake, or why it was altered. Polychain told CoinDesk it was unaware that Pant had a financial stake in Eclipse until after he left the firm in 2023. The fund said he should have disclosed the deal under its policies, which are meant to protect the firm and its investors against conflicts of interest. Polychain's statement grants a rare insight into the sausage-making process of the cozy world of crypto VC firms and the projects they fund. Venture firms rarely discuss personnel matters or deal structures publicly, and Polychain did not publicly disclose Pant’s policy breach until CoinDesk reached out for our story. RTWT. |
|
|
This week CoinDesk is publishing a "theme week" devoted to the emerging field of GameFi - or the fusion of Web3 gaming with decentralized finance. Here, to start off, is an interview with Catizen's Tim Wong about the runaway success of that game on TON and a second article about gaming on TON. (Note: Catizen is also the sponsor of the week). We'll have continuing coverage throughout the week. Catizen’s Tim Wong: 'We Are Here to Build a Business Ecosystem' The Chairman of the Catizen Foundation explains how the team behind the Web3 game attracted 23 million players, and how it hopes to build a lasting franchise. Move Over Hollywood: Why Gaming Is the New King of Entertainment To stay relevant in this dynamic environment, the entertainment industry must integrate emerging technologies like blockchain, or be satisfied with increasingly reduced engagement, says Yemel Jardi, co-founder of Decentraland. |
|
|
Soccer legend Lionel Messi promoted Solana-based meme coin WATER on his Instagram story on Monday, prompting a 350% surge in the token's price. Messi shared an image displaying the token's mascot, a cartoon glass of water, perched on his shoulder, with a link to the project's Instagram page on Monday. WATER jumped from $0.00032 to $0.00146 in the two hours following the post, a surge of 356%. WATER subsequently pulled back. The project's website says WATER "aims to have a net-positive impact on real world with the help of charity," though it doesn't elaborate how. One of the exchanges where it is available for purchase is Bitget, which may explain Messi's apparent endorsement. The Argentinian Inter Miami star has partnered with Bitget since October 2022. |
|
|
The developer firm behind the Worldcoin protocol shared Tuesday that its upcoming layer-2 chain, World Chain, is open for developers to use. This means that select developers can apply to build, test, and give feedback to Tools For Humanity, the developer firm behind Worldcoin, according to a press release shared with CoinDesk. World Chain has tapped Optimism’s OP Stack, a customizable toolkit that lets developers build their own blockchains using Optimism’s technology, to build out its own network. OP Stack has become a popular choice for creating layer-2 chains, and was used by Coinbase to build its "Base" network. Worldcoin is best known for its co-founder, Sam Altman of OpenAI fame, and its retina-scanning approach to identity. |
|
|
Phemex CEO shows how to capitalize on meme coin trends Federico Variola Shares Tips as a Pioneer of the Web3 Revolution Federico Variola’s journey from academic researcher to Web3 entrepreneur is a unique one. Variola, known popularly by his nickname Fed, earned a doctorate by studying how state actors can resist cyber intrusions. And now, as CEO of Phemex, he’s leading a non-state, distributed system. This must have been a huge departure for him. “Transitioning to the crypto industry can be a challenging journey that presents a steep learning curve,” Fed says. “This is precisely why I place such a high value on user experience at Phemex. We are dedicated to creating an interface that simplifies the entry into the world of crypto for newcomers.” Continue reading |
|
|
The Takeaway: MEV Has Spread to Bitcoin |
By George Kaloudis, senior analyst, CoinDesk The discussion around MEV, or maximum extractable value, is expansive. Is it good? Is it bad? Is it illegal? Depends whom you ask. On the plus side, MEV is the free market figuring out the actual costs of things on blockchains by snuffing out inefficiencies which will be taken advantage of until the inefficiency approaches zero. On the minus side, MEV makes it possible for unknowing laypeople and newer users to get absolutely demolished by the experts and the power users (sound familiar?). Most discussion of MEV focuses on Ethereum because, for all its first mover advantage, MEV has historically not existed on Bitcoin. It existed in theory, but in practice it’s not economically viable (except in very specific situations). You’re probably wondering: “No MEV? If there’s MEV for Ethereum-based automated market makers then surely there’s one for the Bitcoin-based AMMs?” And you’d be right except that there aren’t any (meaningfully sized) Bitcoin-based AMMs. That’s because Ethereum is more expressive than Bitcoin, meaning you can “do more stuff with it,” like create coins with dog mascots or other memes to trade on AMMs and become rich. And because Bitcoin isn’t as expressive, there isn’t a thriving market or AMM for new tokens on Bitcoin. And without new, fresh non-bitcoin assets on Bitcoin how could an AMM-related MEV opportunity present itself? What exactly would you be doing? Trading bitcoin for other bitcoin? Well, yes. This is exactly where MEV on Bitcoin has begun to present itself. Read the full op-ed here. |
|
|
|