91st Edition

Apr 29, 2023

Hey, hey, hey! 👋🏻

It's Flippening, the crypto newsletter that's always ahead of the game. We're like the early birds of blockchain. 😎

Disclaimer: All price movements are recorded up to 03:30 PM UTC, 28th Apr 2023

The top cryptocurrencies saw a fair bit of price correction in the past week, but Ethereum went against the tide with a considerable gain in price.

Crypto simplified

‘Trust is the question to which blockchain is the answer!’

Does this mean that everything taking place on a blockchain should be assumed to be trustworthy? Definitely not! ❌

That is why proper audit firms are in place that validate the authenticity of different blockchain projects. These firms rate projects on several parameters, such as the team, tokenomics, marketing, etc., that are integral to the success of a project. Certik is the most popular blockchain audit firm.

🙌 These firms are similar to equity rating agencies, such as Moody’s, Standard and Poor’s (S&P) Global Ratings, Fitch, etc.

If we were to draw comparisons between blockchain auditing firms and these rating agencies, the results are not very different. Until six days before the collapse of the Lehman Brothers investment bank in 2008, S&P had given them an “A” rating.

Similarly, Certik had rated Merlin, a decentralized exchange, a score of 90 until a couple of days back. The DEX on zkSync lost approximately 2 Million of its $MAGE token after one of the team members drained all the funds.

Several of Certik’s competitors criticize the audit, stating that if there’s a possibility of a master key that can drain the whole fund, it should’ve been communicated more clearly.

The key takeaway: An audit is not a guarantee of absolute safety. That said, audit firms should be held to a higher standard. As the industry matures, we should aim for audit firms to face the consequences of their mishaps.

Ensure you’re conducting proper diligence and mandate portfolio company to allocate a percentage of their capital towards security-related efforts.

Top Highlights of the Week

1. You miss, I hit

It was a totally weird week for the crypto market.

1️⃣ First Republic Bank announced a massive loss in their quarterly results. Following this their stock price crashed. Bitcoin and other top cryptos seemed to be steroids following the event.

2️⃣ Alerts showed that the US govt. and Mt. Gox addresses were selling Bitcoin. The market started free-falling within a very short span. However, these turned out to be false alarms and the market regained stability.

Our takeaway: The banking system’s loss is crypto’s gain. We strongly believe that there is never a dull moment. However, even with that mindset, this was one roller coaster week for crypto.

2. Spreading their wings

Franklin Templeton, the multinational asset management firm, has officially expanded its OnChain US Government Money Fund (FOBXX) to the Polygon blockchain. Since its launch in 2021, the fund was erstwhile available only on the Stellar blockchain. FOBXX is the first US-registered mutual fund to use a public blockchain for processing transactions.

Our takeaway: Whoever’s working on Polygon’s partnerships deserves a raise if they already haven’t gotten one. The layer-2 blockchain’s been on a roll when it comes to finding top companies to partner with and adding the FOBXX, a fund with over $270 million in AUM, to their portfolio is another feather in Polygon’s highly decorated cap.

3. Another day, another airdrop

LayerZero, the omnichain interoperability protocol, sparked rumors of dropping its own native token after users found mentions of a $ZRO token on LayerZero’s GitBook code. And right now, while that’s all it remains- a rumor, the gossip has resulted in a huge increase in activity on Stargate, LayerZero’s flagship DEX. Trading volume on Stargate shot up by a whopping 30% on April 27th as users flocked to the platform in a bid to fit the bill for the airdrop before the snapshot.

Our takeaway: The mad rush to be eligible for the airdrop resulted in Stargate seeing its first month with a $1 billion trading volume. And STG, Stargate’s native token, witnessed a mammoth 95% surge in volume in 24 hours. Mind you, LayerZero hasn’t even officially announced the airdrop yet- all of this is essentially the result of rumors.