Research Summary
The report covers the collapse of cryptocurrency exchange FTX, the repayment plans for its customers, and the criminal charges against its former CEO. It also discusses the successful airdrop by Jupiter, a DEX aggregator on the Solana network, and Tether’s record profitability in 4Q23. The report further highlights the high utilization of stablecoin lending on Aave and Compound, and other updates from the crypto industry.
Key Takeaways
FTX’s Collapse and Repayment Plans
- FTX’s Bankruptcy: FTX, a cryptocurrency exchange, has abandoned plans to reboot after its collapse. The company aims to fully repay customers for lost funds in US dollars, based on crypto asset prices from November 2022, when FTX filed for bankruptcy.
- Legal Consequences for Former CEO: Sam Bankman-Fried, FTX’s former CEO, has been convicted of fraud and money laundering, with a sentencing date set for March 28, 2024, potentially facing up to 110 years in prison.
Jupiter’s Successful Airdrop
- Significant Airdrop: Jupiter, a leading DEX aggregator on the Solana network, executed the largest Solana-based airdrop to date, distributing one billion tokens to users who interacted with the platform before November 2, 2023.
- Future Plans: An additional 350 million Jupiter tokens are set aside for launch pools, market makers, and emergencies, with a total of 40% of the supply planned for airdrops in three more phases over the next year.
Tether’s Record Profitability
- Impressive Earnings: Tether’s profitability reached new heights in 4Q23, with a reported $2.85 billion in profit, driven by US T-bills interest and returns from gold and bitcoin holdings.
- Bitcoin Investment Strategy: Tether’s bitcoin holdings increased by 70% quarter-over-quarter, ending the year with $2.8 billion in bitcoin and $5.4 billion in excess reserves, a record high.
High Utilization of Stablecoin Lending
- Strong Borrowing Demand: Stablecoin lending utilization on Aave and Compound on Ethereum Mainnet has remained high, between 80% and 90%, indicating a strong borrowing demand against the supplied capital.
- Increased Rates: Borrow rates for stablecoins have escalated to over 10%, a significant jump from the 3% seen in February 2023, due to the increased utilization.
Actionable Insights
- Monitor the Repayment Process: Stakeholders should closely watch the repayment process of FTX to understand how such situations are handled in the crypto industry.
- Research the Potential of Jupiter: The successful airdrop by Jupiter indicates its potential growth and innovation within the Solana ecosystem. It’s worth exploring its future plans and offerings.
- Understand Tether’s Investment Strategy: Tether’s record profitability and its bitcoin investment strategy provide insights into how the company is diversifying its portfolio and achieving significant returns.
- Assess the Stablecoin Lending Market: The high utilization of stablecoin lending on Aave and Compound suggests a strong borrowing demand. Stakeholders should assess this market for potential opportunities and risks.
