At this time marks two years because the eventful day FTX filed for chapter. Sam Bankman-Fried is in jail for 25 years, Ryan Salame likewise for 7.5 years, Caroline Ellison simply commenced a two-year jail time period and the FTX chapter property is making progress.
Although the story was broadly publicized throughout mainstream media as a colossal failure of crypto writ massive, that was by no means really true. The precise areas of failure within the FTX debacle had been the truth is the sorts of centralized establishments that cryptocurrency was designed to upend.
Recall the commingling of funds — about $14.6 billion of FTX’s native FTT token — between FTX and its buying and selling arm, Alameda Analysis. When the worth of FTT plummeted, Alameda’s loans that had been borrowed in opposition to FTT successfully fell underwater.
On the identical time, Alameda additionally held an impressive mortgage of 20 million MIM (the stablecoin of Abracadabra protocol) in opposition to $5 million FTT.
Alameda totally paid that debt as FTT cratered on Nov. 9 — two days earlier than FTX filed chapter — to keep away from computerized sensible contract liquidations. In sum, DeFi labored.
At this time, Abracadabra appears to be just about lifeless. Its MIM stablecoin nonetheless has a market cap of about $44 million, however hasn’t seen any progress since FTX’s collapse.
Abracadabra’s founder, the notorious Daniele Sesta, has apparently moved on from his as soon as fashionable “Frog Nation” cult to…memecoins on the Sonic (beforehand Fantom) chain. The Abracadabra-affiliated mission Wonderland, which at one level handed greater than $2 billion in TVL, was additionally stealth-rebranded right into a lending protocol, Volta, in late 2023. The transfer occurred after the mission was scandalized with information that its pseudonymous treasury supervisor turned out to be Michael Patryn, the beforehand convicted co-founder of the failed Canadian crypto change QuadrigaCX.
At this time, Abracadabra and Wonderland have turned out to be simply one other collection of ghost initiatives within the ethereal graveyard of crypto’s historical past.
When FTX collapsed, there have been considerations that Binance would successfully monopolize the centralized crypto change market. At the moment, its BUSD stablecoin was the third largest, and BNB Chain was additionally the second greatest L1 by TVL.
At this time, Binance retains its place as the biggest world cryptocurrency change, however fears of a “monopoly” haven’t come to cross.
The BUSD stablecoin was deprecated after the New York Division of Monetary Companies (NYDFS) ordered its closure in February 2023. Binance then switched to somewhat identified stablecoin, FDUSD, for stablecoin liquidity on its change, which has seen progress from $350 million to about $2.3 billion right now.
As for BNB Chain, it’s nonetheless fourth by TVL, overtaken solely by Solana’s meteoric rise previously 12 months.
Below FTX Ventures, SBF was additionally a serious investor in dozens of crypto initiatives. A few of these included LayerZero, Yuga Labs, Close to, in addition to MoveVM chains like Aptos and Sui — whose mainnets weren’t but launched — and naturally, Solana.
FTX’s massive token holdings solid a looming shadow over the way forward for these initiatives. At this time, most of those initiatives appear to be doing simply wonderful.
Lastly, a post-FTX crypto business rapidly consolidated round the usual of “proof of reserves” at the least safety customary for centralized crypto product choices, as seen in newer efforts like Coinbase’s cbBTC or Kraken’s annual audits.
The failure of FTX undoubtedly set the business again. However two years out, it looks as if crypto has a minimum of discovered a number of classes.
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