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Right this moment marks two years for the reason that 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 extensively 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 have been in reality 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 have been borrowed in opposition to FTT successfully fell underwater.
On the similar time, Alameda additionally held an impressive mortgage of 20 million MIM (the stablecoin of Abracadabra protocol) in opposition to $5 million FTT.
Supply: Abracadabra
Alameda absolutely paid that debt as FTT cratered on Nov. 9 — two days earlier than FTX filed chapter — to keep away from automated sensible contract liquidations. In sum, DeFi labored.
Right this moment, 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 common “Frog Nation” cult to…memecoins on the Sonic (beforehand Fantom) chain. The Abracadabra-affiliated undertaking 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 undertaking 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.
Right this moment, Abracadabra and Wonderland have turned out to be simply one other sequence of ghost initiatives within the ethereal graveyard of crypto’s historical past.
When FTX collapsed, there have been issues 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 largest L1 by TVL.
Right this moment, Binance retains its place as the biggest world cryptocurrency change, however fears of a “monopoly” haven’t come to go.
The BUSD stablecoin was deprecated after the New York Division of Monetary Companies (NYDFS) ordered its closure in February 2023. Binance then switched to a little bit identified stablecoin, FDUSD, for stablecoin liquidity on its change, which has seen progress from $350 million to about $2.3 billion as we speak.
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 significant 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 forged a looming shadow over the way forward for these initiatives. Right this moment, most of those initiatives appear to be doing simply nice.
Lastly, a post-FTX crypto business shortly consolidated round the usual of “proof of reserves” at the least safety commonplace 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 like crypto has a minimum of discovered a number of classes.
