WhiteboardCrypto Newsletter - Dec 7

Welcome back to this week's edition of our WhiteboardCrypto Newsletter!

Fun Facts: Bitcoin hit $100k USD! And the market cap, meaning the entire amount of value of all Bitcoins in circulation right now, is just under $2 trillion! ETH and altcoins are also starting to boom, with BNB hitting an all time high (ATH), SUI hitting an ATH, and XRP is ticking towards its ATH and made it to the 3rd largest crypto by market cap. Learn more here and here.

Ethereum ecosystem wallet proposals

After consulting with various devs in the Ethereum ecosystem, Vitalik has once again come up with innovative ideas for making the Ethereum ecosystem work better. These ideas can also apply to other ecosystems, as this time they are in relation to better crypto wallet functionality. He suggests wallets could have built-in send functionality across L2s; two-sided security models to protect users against hacks, such as having two private keys, one for low balances and the other for high; and built-in stealth addressing for receiving funds so users don’t have to use sanctioned or third-party run privacy mixers or other tools that are often high risk themselves.

Learn more here.

Interest rates for borrowing stablecoins are “ouch”

Interest rates for borrowing stablecoins (like USDT and USDC) on Aave and Compound have surged above 20%, driven by high demand from speculators who are heavily leveraged, meaning they are borrowing a lot more than they currently own. Thus, borrowing costs are expensive, while lenders are earning attractive returns—also around 20%. Lenders can benefit from these high rates, but should be cautious, as the increased borrowing signals risky behavior. Borrowers, on the other hand, face higher costs and must be careful not to over-borrow, as failing to repay could lead to liquidation of their collateral. Overall, both borrowers and lenders should watch the liquidity pool's stability closely.

Learn more here.

US gov and crypto

President-elect Donald Trump has announced the appointments of a few key roles related to the crypto industry, many of which—at least preliminarily—appear positive. David Sacks has been appointed as “A.I. & Crypto Czar”. Paul Atkins has been appointed as SEC chair in place of Gary Gensler. And Scott Bessent will be Treasury Secretary. While at least one of these roles is new to the incoming administration so their exact purview is not necessarily clear, the returning roles will have to contend with some policies and permanent moves already in place, such as the likelihood of current Solana ETF applications being denied. There are also other positions that have significant sway on financial decisions that will be democratic, independent, or a third party.

Token unlocks not always good

According to new research by Keyrock, 90% of token unlocks cause sell-offs and cause the price of the token to drop. But different kinds of unlocks can lead to different things, such as team unlocks causing sell-offs but ecosystem development unlocks leading to more growth. Unlocks are scheduled events in a token’s roadmap that are usually for early investors such as the developers, sponsors, or venture funds that invested in a project in its early days. According to the article, “Every week, over $600 million worth of tokens enter circulation due to unlocks.” While timing the market is usually hit-and-miss, the report has some recommendations for when to buy and sell around certain kinds of unlocks.

Learn more here.

French Senator proposes unrealized gains tax

The norm when it comes to paying taxes on investments is that you don’t pay until you sell. If you sell at a loss, you have a realized loss, and if you sell at a gain, you have a realized gain. As long as you are holding the asset, the gains or loss from how much the value of the asset changed since you bought it are considered unrealized because you haven’t sold it for a “stable” asset such as stablecoins or fiat. A Senator in France thinks that cryptocurrencies should be taxed like luxury items and vacant properties under the category of “unproductive assets”, which means holders would have to pay tax on unrealized gains exceeding €800,000 too. How this would actually be regulated is still up for debate, especially considering how volatile crypto markets are.

Learn more here.

Ordinals to host Wikileaks’ Afghan War Logs

Ordinals were a fundamental change to the Bitcoin blockchain because the tech allowed data to be inscribed on the Bitcoin blockchain where traditionally only the bitcoin cryptocurrency was able to be on the chain. This led to a massive influx of NFT projects on Bitcoin, for better or for worse. Now, the Ordinals startup called OrdinalsBot is partnering with Project Spartacus to inscribe the Afghan War Diary on chain to preserve it. The Diary was originally published on Wikileaks by Julian Assange in 2010 and included tens of thousands of internal US military and gov. communications regarding what the US did in Afghanistan in the early 2010s. Ever since, the government has tried to remove these documents, so this project is an effort to further decentralize them so they can’t be removed from the internet. The free mint goes live on Dec. 12 at ProjectSpartacus.org and minters will only need to pay the bitcoin mining fee.

Learn more here.

Thanks for reading and I hope you learned something!

- Theodore