Unchained - Ethereum L2s Are About to Be the Hot New Thing in NFTs - Ep.498

Episode Date: May 26, 2023

It’s in the name: mint.fun. Co-founder Luke Miles joins the show to talk about his platform’s efforts to make NFTs more discoverable, accessible and fun. He also shares his on-the-ground perspectives on emerging trends in the NFT space – everything from Bitcoin Ordinals to the rise of Ethereum L2s as NFT hot spots. With last cycle’s NFT mania in the rearview, what’s next? Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, TuneIn, Amazon Music, or on your favorite podcast platform. Show highlights: what mint.fun is and what problems it solves for NFT users how it is different from popular NFT marketplaces such as OpenSea and Blur why mint.fun is also launching on Ethereum layer 2s Luke’s thoughts on the current state of the NFT market  why the narrative has shifted from PFP projects delivering a roadmap to the ‘single creator narrative’ the difference between open-edition mints and limited editions why NFTs on layer 2s are “about to have a moment,” according to Luke whether mint.fun will launch on other blockchains what Luke thinks of Ordinals and the BRC-20 mania Thank you to our sponsors! Crypto.com Stader Labs Guest Luke Miles, CEO of mint.fun Links Dune dashboard Fundrop Recent coverage on BRC-20s: Bitcoin’s BRC-20 Mania: Is It Sustainable? Unchained: What Is NFT Farming? A Beginner's Guide Music NFTs: What Are They & How Do They Work? A Guide to Yuga Labs: The Most Important NFT Company Exploring the NFT blue chips What Is an NFT Marketplace? Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi everyone. Welcome to Unchained. You're a no hype resource for all things Crypto. I'm your host, Laura Shin, author of The Cryptopians. I started covering crypto eight years ago and as a senior editor at Forbes was the first May Street meter reporter to cover cryptocurrency full-time. This is the May 26th, 2023 episode of Unchained. With the Crypto.com app, you can buy, trade, and spend crypto in one place. Download and get $25 with the code, Laura. Link in the description. Stater Labs is a multi-chain liquid-staking platform with 40K plus DFI partnerships across six chains. Soon they'll be coming to Ethereum with their LSTEithX. Visit Staterlabs.com slash ETH to sign up for their ETHX alpha list. Today's guest is Luke Moiles, founder of mint dot fun. Welcome, Luke.

Hi, Laura. Thanks for having me. The NFT world has been all about Bitcoin Ordinals recently, but you're launching a new product on the OG chain for NFTs. What is mint dot fun? Mint.op fun is a aggregator where we show every NFT project on Ethereum that's releasing right now, like on the primary market, like new mints in one interface. And from this interface, you can mint directly onto like smart contracts.

So yeah, we show NFTs that people are launching today and we let you mint them from our website. It's kind of like the Reddit of Web3, or like, I like to think about it that way because we show the current moment of Web3 and let you kind of interact with it right from our website. And so why would users be interested in Mint Dot Fund? What problem are you solving for them? Yeah, so we solve a couple of different problems. One problem is like, I think people, I mentioned this kind of Reddit use case. I think that a number of people kind of want to understand, like, what are people doing with NFTs? Like, what's hot? What's going on right now? So just as like, you know, kind of a view interface, like, oh, like these are the NFT projects people are using right now. I actually have heard from a lot of people, even like project creators, like, hey, like, it's really important for us

in our strategy to get noticed on this like mint dot fund homepage just as like kind of a visibility thing because people want to know what's going on. The other problem we solve is, um, Discovery is like kind of the first thing we solve. The other problem we solve is interacting with different smart contracts and things like that. So we actually build the interface for NFT collections automatically. We can take a smart contract and we let people mint right from our website. And so the advantage to that is a couple of things. I think in general, Web3 front end, like the websites themselves are getting better.

But for a long time, like most front ends like didn't work on mobile. or would have like really subtle weird bugs or they wouldn't work with like this one wallet. So just by having a very polished front end, we kind of we support like every wallet. We support mobile really well. Over half of our traffic is actually mobile web. And I think that's because we support mobile really well,

which I think is higher than most Web3 DAPs or websites. And then like the final thing we solve is kind of security. So that's one nice thing about Mint. Fun is when you see a project on Mint Dot Fund and you click the mint button, you can be confident that what that will do is mint an NFT to your wallet, as opposed to, like, you know, maybe sign away your assets or do something like kind of sketchy because we're also on our back end verifying what's going on. We're like, okay, this function mince an NFT.

It's not going to be doing anything else. So those are kind of the three things we kind of help with, like discovery, like actually helping you, you know, go from discovery to minting an asset really fast. And then we do, you know, vetting and security just on a technological level. So how does this differ from like a blur or an open C? The primary difference between blur or open C is the main use case for blur or open C is the secondary market. So usually projects have already released and people are trading the assets post release or they're not generally available. We focus on the moment that NFTs first come out, the primary market.

So our focus is just almost entirely on how can we help you, discover the stuff that's still releasing. You know, you could imagine a scenario where, like, you know, one common, like, story is like, oh, like, you know, the crypto punks, like, you know, took like a few months to mint out. And that's because, you know, the market was much smaller. Not a lot of people knew about it. We can kind of surface those moments as they're happening.

Like, in my opinion, NFTments are kind of like really exciting, like cultural forces. Like, this is a really fun moment. And so by focusing on that, that's our, that's how we're different. Blur and OpenC are both great at like kind of the secondary trading. experience. And I think we can complement those products also. And so I was curious, like on the back end, is this really challenging in the sense that, like, I know for exchanges that integrating coins from different blockchains can take, you know, a fair amount of work. But is it that since everything is on Ethereum, that basically,

and it's all following the same standard, that it's pretty automated for you? Or is there more complexity to that? It's both like probably easier than integrating different chains and like harder than like building a marketplace. It's like kind of it's in between. So the way it works is there is a standard for NFTs on Ethereum, you know, ERC 721 or ERC 1155. Those are standards that, you know, are composable and easy to build upon. The thing that there's not actually a standard for is how do you create an NFT? How do you mint an NFT? How do you sell an NFT? So the clever part that we do is we actually look at. okay, looks like NFTs are being created here at this contract.

And then our software kind of parses what's going on and then turns like, looks at the chain, looks at the smart contract and says, oh, like this is this function. If you call it and send it this amount of ETH, you will get an NFT back. And so the thing we solve there is like we automate like the entry point to like minting an NFT. So that's kind of the clever bit that we figured out.

And we can even do this without having access to the source code or the ABI, like we can do it if you don't see an option on EtherScan to do it. And so that's, yeah, so it's kind of like somewhere in the middle between like, you know, supporting 20 blockchains and like, you know, supporting like the standardized functionality of NFT contracts. Yeah, I mean, in my personal experience, and I'm not an experience to NFT person, but I have minted NFTs on EtherScan. So prior to Mint.

What were the main ways that people minted NFTs? Yeah, yeah. So I think there's a couple of ways. I mean, I would say the most common way, like, number one is people would make websites, like one off websites. And as I alluded to earlier, you know, sometimes even really great Ethereum smart contract developers don't know how to like make a great website. Like that's kind of a different orthogonal skill set. So probably number one would just be websites. And so some would be great. Some would be poor. Maybe again, maybe it wouldn't support the wallet that you decided to use. And then yeah, ether scan. I mean, I think those are probably the two main. And then. Of course, like, you know, the longer tail of, like, platforms, like, you know, you can think of, like, the foundations and the Zoras of the world, the manifolds, all these platforms where that kind of give creator tools. I think that's kind of what the landscape looked like a couple years ago. It's still what it looks like now. Although I will say that, like, we've seen, for example, smart contract devs, like they don't want to put together website. They say, hey, you can mint our NFT on ether scan. And I've seen this happen organically, like, maybe a dozen times.

Someone in the replies is like, actually, you can also mint this on mint. fun. And then the smart contract developer is like, oh, yeah, here. Like, I'll share that link because that's like a lot easier than figuring out the ether scan UI or something like that. Yeah. Yeah. I mean, for me as, you know, like a, yeah, I just cover crypto, which is different from like being in crypto. It is a challenge when I go to try to do these things. And it's like, I know in theory what they are and everything, but then the actuality of trying to use the tools is totally different ballgame. So you also launched. a reward system called Fund Drop. What is that? Yeah. So Fun Drop is our reward system. We thought it would be

really fun to experiment with different ways of rewarding our users. So we launched this mid-April. The way we launched this was we announced the Fun Drop, like this series of rewards, and we said, okay, if you want to be part of these rewards, you can mint a Fun Drop Pass, which is an NFT, that has no value. It's just kind of your membership into the program. It's actually soulbound. Like you can't transfer it. It's just meant to be like commemorative to show that you did something on chain. And on chain is really important to us as a product. You did something on chain to join. And so that was like really, really exciting. In the in the first month that we launched the fund drop pass, you know, just announcing the past really. And we showed a leaderboard with like points.

We gave people points both for the retroactive Ethereum usage and a continued usage of Mint. Dot Fund. We saw about 200,000 passes get minted in the first month, which was really cool to see, like 200,000 people or 200,000 wallets, I should say, signed up for rewards. And the idea that we've been doing is so we've been giving points for, again, Ethereum activity before we started the fund drop using mint dot fund. And we've also been encouraging people to keep up like a streak on the website, which is like mincing an NFT every day. Just trying to make it like a fun little like game of how can you get to the top of the leaderboard.

How can you keep get points? Now, you know, one question we get a lot is like, okay, well, what are the points good for? Like, you know, they're just, there's just numbers in a database. They're not, the points themselves aren't even on chain or tradable. Well, the points, we've been giving out weekly rewards based on, the points. So we, the first Fun Friday was on, I think it was May, May 19th. Yeah, it was the first fun Friday, which is our like, now we're giving rewards for the points. Stop me if you have any questions, but I can just, I'll just wrap this up and say that we, we announced the first

fun Friday with an NFT drop that was like an exclusive NFT drop. We gave that to about half of the people admitted an NFT to kind of make it somewhat exclusive. And then we gave an even rare version of that to like I think I think four or five thousand people we put on the allow list. So we worked at this pixel artist NUmo. He made this really fun animation of a arcade machine. And we we kind of gave that out to every single person who had met that criteria. The other really exciting thing we did, which has been like really fun is we announced this thing called gas rewards. And on the 26th, which might be the day this comes out, we're going to be giving the first gas rewards to the users, which more or less we're going to be reimbursing people's gas that they've used to keep their streak

alive on the website. We're still, you know, we're doing the math. Like we've been modeling this out on our end. You know, paying for people's gas demand NFTs can get very, very, you know, we're doing, expensive very quickly. And we don't view this as like the long-term goal. We definitely don't have unlimited money to give out. But we thought it would be cool to, again, like give people a reward for, you know, participating on the platform and like, you know, hey, you've been mincing NFTs every day. You've been supporting the tough fun. You know, gas has been kind of all over the place lately. Like, can we give you a rebate? And so we're going to give out the first gas awards on Friday. We're going to keep revisiting, you know, what that means in future weeks.

But the long-term or medium-term goal over the next couple months is we will also launch mint. dot fund on layer two's where gas is a lot cheaper. That's another thing we're building towards. So gas rewards right now is kind of a way of saying thanks while, you know, us and all the other NFT platforms, you know, migrate from more expensive Ethereum layer one to layer two technologies. I talked for a while, so I'm curious if you have any thoughts or reactions or, you know, from there. But that's what we've been working on.

It's been a lot of fun and people have been very excited about it. So it's been exciting to work on. Yeah, my main reaction is that it reminds me that for certain banks, if you use a different ATM, then they will reimburse you your ATM fees. So it's something like that. But you're right that in the case of certain banks that do that, I think they're doing it because they save on brick and mortar branches. And in your case, you know, as you mentioned, this is probably not sustainable

because you're not like saving other costs that you would have otherwise. Right, yeah. So in a moment, we're going to talk about the wider NFT market, but first a quick word from the sponsors who make this show possible. Meet Stater Labs, the non-custodial multi-chain liquid staking platform transforming the liquid staking landscape. With over $120 million in asset staked and more than 40K users across six chains, Stater has partnered with 40 plus top defy protocols like ABE, Balancer, etc. With a unique multi-pool architecture and tokenomics, ETHX, their liquid staking token on. on Ethereum, empowers stakers everywhere to run a node with as little as four ETH and earn 35% more than solo staking.

Sign up for their ETHX alpha list today and be the first to know about $1 million in D5 rewards. Back to my conversation with Luke. So NFTs were the catalyst to the last bull market, but we're not quite in that same mania that we were in late 2021 and early 2022. So how would you describe the last 12 months in NFTs? Yeah. I think the last 12 months have been, you know, it's been kind of like the, you know,

evening off of the cycle. I think that there was this moment and, you know, I wasn't around for like the ICO bubble. That wasn't exactly something I was participating in. But I feel like, you know, with what I do know, there might have been some parallels where it seemed like there were so many NFT projects that, you know, sold their NFTs on this, like, vision of like we're going to have this like really really fantastic roadmap and like here's what the project is going to like we're going to do great things with the community and I think some projects actually you know made good on that promise I think you know probably the best example is

the Basie, the Yuga Labs. You know they you know they had their eight best. They're making their video game. You know, they it seems like they're doing like they're doing the roadmap that they promised. Unfortunately it seems like a lot of other projects, you know, weren't so lucky. I think 2021 was the year where he saw a lot of these kind of like pfp projects that once had a lot of like attention say actually no we're going to like you know we're going to decentralize the community or we're going to like actually not do the roadmap or you know it turns out we don't have as much money as we thought and so 2021 I think was marked with a lot of I would say kind of like you know we woke up to maybe a more unpleasant reality especially you know if if trading volume goes down

if there's not as many secondary royalty or revenue streams. And even just if the price of Ethereum is like not where it once was, you know, I think that I think 2021 was kind of like a repricing moment across the board. The positive or the upshot or the thing that also was happening, I think, kind of like mid-2020- Towards the end and beginning of 20. I've been saying 2021 and I mean 2020. I suppose. But yeah, I meant to say last year, 2022, I think there was like this huge repricing. And then the beginning of this year, 2023, the end of it to the beginning, there was also kind of a moment where open additions became really hot.

And that actually seemed really interesting to me for a couple of reasons. one because it kind of marked a shift from like this like pfp project being like the primary like hotness and NFTs where like okay like everything has to be like this like hype you know 10 for a pfp project i almost feel like one of the last big pfp project was probably paradigms art gobbler's project which like saw this immense hype and then it leveled off kind of quickly for a couple of reasons that I won't probably get into right now. But point being is it kind of felt like something shifted where the idea of like the PFP project being like this organization that's going to do a roadmap for you is kind

of now like dissolving more into like back into the single creator narrative, which I think is like probably good because I don't think all NFT projects should or can be companies to thread it back through to open editions. Probably the most successful recent example of this is Jack Butcher's very, visualized value, his like checks project, which started off as a series of open editions released on, I think, both Zora and Manifolds platforms. And those, I think he kind of released those as a satirical response to kind of what was happening with Twitter and the checkmarks. Plus, I think that like his like style of like explaining stuff through infographics, like it all

was kind of a perfect storm with also people wanting to mint open additions. And then I think he just kept building on it and just added more and more mechanics. I think actually, he's doing like more auctions he's making physical pieces and I think that's kind of like a refocusing where you know I think he had done NFTs before but I think this like addition format we're going to actually you know make a time window where as many of these NFTs as you want to be minted there's not necessarily a roadmap but like maybe we'll build some cool stuff later is kind of becoming more of the norm and I guess like to summarize I think this kind of heavy model of we're going to create this like big nfti project for the road map is kind of evaporating in the sense of okay no like

nfts maybe shouldn't be these 10th floor assets or maybe not all of them can be these 10th floor assets so let's like let let's try to make nfts that are lighter weight and fun i mean to give other quick examples of like you know open editions that's seen a lot of attention um when coinbase announced base they they made an open edition that saw a ton of mince i know nouns uh they minted an ad And also, I think WorldCoin, I think those examples are both interesting because it shows a lot of appetite for these assets. But on the other hand, like I have wondered if some of the excitement around those three I just mentioned are like because people want some sort of token to speculate on. Like, you know, the base open edition kind of happened in the wake of base announcing also mentioning there's no token for the base chain. and then we're going to do an open edition.

I think there was a moment where people thought, oh, I can speculate on this NFT instead. And I think that also, I think BASE really tried to stomp that out. But I'm digressing a little bit. But what I'm saying is, like, I think people are now kind of figuring out how to speculate on these, like, lighterweight assets. And I think hopefully having a lot of fun along the way.

And I was curious. So, like, with a limited edition, typically that meant it was capped at like $10,000 or $7,000 or whatever. So, like, in the open edition, like how many NFTs are we seeing minted? Yeah, yeah, that's a great question. Like, is it a lot more than like 10,000 or? Yeah, yeah, no, it often is.

So I think usually the way that the most common release format is like a timed open edition where, okay, we're going to have a week as many can be mentioned in the week. So for the most successful ones, we've seen, you know, anything from 10,000 to, I think like Coinbase recently had a like we stand with crypto charity commemorative at an NFT that has like hundreds of thousands of mince. I think that people, yeah, they see a lot more quantity because I think people like collecting these, you know, I guess like souvenirs or stamps. And it doesn't really matter that there's like a huge limit or a huge supply.

I think people want to just collect these assets. So that's been an interesting shift. I also think that maybe we're towards the end of open edition season just because gas has been so high and collecting these cheap or free assets became a lot more expensive. But I'm also, maybe this would be a good time to also talk about where like layer twos are going and what that could mean for NFTs, unless you have more questions on this topic. No, go ahead. Yeah, I mean, I don't have any grand big predictions.

I think there's something in the air when I talk to. other founders and builders working in the NFT space. I think that layer twos such as optimism, such as the upcoming base, which is also built in optimism, and there are others. Layer twos are potentially about to have a moment. I mean, you know,

it's kind of like a knock on wood, like this is the summer of layer two's. I think some people have been saying for like the past three years or something like that. So, you know, I think that it's very possible layer twos will have a moment. In the next few months, I know a lot of platforms I've heard, you know, through the Great Vine people are seriously deploying their platforms to optimism, seriously considering base.

Again, those are the top ones I hear about the most. I think Polygon is also, you know, remains to be a very viable option. And so I think that, you know, NFTs, you know, they went from this moment with like the apes and the punks of being these like really expensive like super desirable luxury assets and i think the shift we're seeing is they're becoming like a lot cheaper like okay like let's just like collect something to commemorate this fun moment and because they're becoming these cheaper assets like across the board it means that you know the economics of paying $15 to collect you know $15 in eath to uh in transaction fees to collect one of these assets makes a lot less sense now and so um i think

layer twos kind of are poised to have a moment alongside the like the broader shift we're seeing in NFTs. So well, it remains to be seen. What I can say is mint dot fun is building towards integrating layer twos as I mentioned earlier because high gas and expensive gas is very crushing to the like the, this wave of experimentation we're seeing in NFTs. And ultimately I think, you know, the name of our product is mint dot fun and we think it's important that people can have fun, like collecting crypto and NFTs. So we just want to enable that. Yeah. And so you're adding layer twos on Ethereum, but obviously we've also seen a lot of activity on Solana and Bitcoin for NFTs. So I was curious if you were going to add those chains as well.

So I definitely like having carefully watching ordinals. I think that they're, you know, potentially one of the most interesting use cases of Bitcoin ever. I mean, I like Bitcoin as an asset, but as an application chain, it's definitely not had a ton of, you know, huge moments. And Ordinals is really awesome. Yeah, like the first couple of weeks it launched. I, like, I synced a Bitcoin node and ran the Ordinol software, you know, did an inscription. It's something that I, we definitely look at. I think it's not something that we're going to support, you know, right away. But I mean, who knows? I think that like as more and more activity moves to Bitcoin or even like coin.

Like that could be really interesting for us to support. I think for us, the way we're thinking about it is, okay, all we support is Ethereum main net. So we kind of need to like build a product around supporting multiple chains. And then the conversation gets a lot easier. I actually recently made a Dune dashboard. I could maybe link it to you. I tweeted it recently that shows all of the chain like layer two chain NFT activities.

And someone kind of thought it was being silly. But I also put Bitcoin Ordinals, like the NFTs. I even excluded the, I think people are doing like, people are doing like, like, fungible coins on ordinals. So I excluded the BRC 20s. BRC 20s. Yeah, the name was escaping me. So I'm like, I just kind of showed that as a baseline because actually like, yeah,

there's more activity than on Bitcoin ordinals for NFT assets than like a lot of layer two's right now. And so I have the hunch that just for a number of reasons, because I've, Again, I own some ordinals. I've like interacted with it. It's kind of my job, I think, to at least see what's going on. I think that there's, I think we will see more adoption with Ethereum layer twos, mostly because I do think Bitcoin ordinals are like pretty difficult to use like a number of levels. And I think they're really cool. But it is cool to see people like Magic Eden, other marketplaces support them like and build stuff that I think some people didn't

even think was possible a few months ago. So it's really exciting because I love experimentation. I love when people have fun. I think what's something that we will probably, if we do support it, it'll be a little bit later, but I definitely like keep tabs on it. And with Salana NFTs, it's, to be honest with you, I haven't actually done as much digging in Salana with NFTs specifically. It's just not something we get a lot of requests for, weirdly enough. Like, we've got more requests for Bitcoin ordinals. It's just when we talk to our users, like people care a lot about layer two's. You know, we've even had some requests for like ordinals and things like that. We just haven't seen like, you know, kind of a broader like kind of artist or

community on Salon in the same way. But it's, again, I never say never. It's just it's probably something we'll support down the line if we do it. Yeah, yeah, I think that wave was really more earlier before Mint Dot Fun was around. All right, Luke, this was a fascinating conversation. Thank you so much for coming on Unchained. Okay, thank you, Laura. Great. Don't forget.

Next up is the weekly news recap. Stick around for this week in crypto after this short break. Join over 80 million people using crypto.com. One of the easiest places to buy, trade, and spend over 250 cryptocurrencies. Spend your crypto anywhere using the crypto.com visa card. Get up to 5% cash back instantly. Plus 100% rebates for your Netflix and Spotify subscriptions and zero annual fees. Download the crypto.com app now and get $25 with the code Laura.

Link in the description. The scorebed app here with trusted stats and real-time sports news. Yeah, hey, who should I take in the Boston game? Well, statistically speaking. Nah, no more statistically speaking. I want hot takes. I want knee-jerk reactions. That's not really what I do. Is that because you don't have anything? Nice? Or...

The score bet. Trusted sports content, seamless sports betting. Download today. 19 plus, Ontario only. If you have questions or concerns about your gambling or the gambling of someone close to you, please go to conicsonterio.ca. Investing is all about the future. So what do you think's going to happen?

Bitcoin is sort of inevitable at this point. I think it would come down to precious metals. I hope we don't go cashless. I would say land is a safe investment. Technology companies. Solar energy. robotic pollinators might be a thing. A wrestler to face a robot, that will have to happen.

So whatever you think is going to happen in the future, you can invest in it at WealthSimple. Start now at WealthSimple.com. Thanks for tuning in to this week's news recap. Binance commingled funds, Reuters says. Binance is being accused by three insiders who alleged that the firm commingled customer funds with company revenue in 2020 and 2021. Reuters reported this week. Though the article cited an insider who said the co-mingling ran into the billions and happened nearly daily,

Reuters saw evidence only for a transaction in February 2021 of $20 million in a finance corporate account being mixed with $15 million from an account that also had received customer money. Binance spokesperson Brad Jaffe denied the allegations and said the funds were corporate and used for purchasing the BUSD stable coin. The SEC is reportedly investigating Binance CEO. Cheng Peng Zhao's ties with trading firm Merit Peak, which had accounts at Silvergate and allegedly was the owner on the account where business and customer funds were co-mingled. John Reed Stark, a former chief of the SEC's enforcement team, voiced concern over the opacity of Binance's financial transactions, arguing that customers should not require a forensic accountant

to trace their funds. Meanwhile, could FTX rise again? Time logs showing work being done on a potential revival of the bankrupt crypto exchange FTCX have fueled optimism among investors and creditors. CEO John Ray the Third's core filings hint at plans for a 2.0 reboot, triggering a 15% surge in FTC's native token, FTT. Tribe Capital's potential $250 million fundraising campaign to restart FTX as to the hopeful speculation. However, concrete plans for FTCX 2.0 are still preliminary, with Ray stating, quote, everything is. on the table. The future role of FTT within the reformed FTCs remains uncertain due to its classification as a security by the SEC. Meanwhile, as part of the investigation into FTC's founder Sam Bankman-Fried,

federal prosecutors amassed more than 6 million pages of evidence, a record amount for a white-collar securities fraud case. In related news, Coindex reports that Alex Grebove, the CEO of SBF-backed crypto projects, Maps.Me, and Oxygen, faces charges in a lawsuit. brought by Gregory Fishman, reportedly a co-owner of Crypto News site Coin Telegraph. Grubnev is accused of misusing funds and stealing ideas related to his uncompleted crypto projects. Fishman claims Grebnev dissolved their collaboration following financial backing from Bankman Freed and later co-opted Fishman's proprietary ideas.

Ledger pauses recover launch. Amidst backlash and criticism, hardware wallet firm Ledger Labs, has opted to postpone the release of its controversial recover service. The service initially received unfavorable responses from the community, including concerns over potential government access and seizure of user funds. Recovery was originally conceived to allow users to restore their private keys via encrypted shards, stored across three different custodians. Don't miss last Friday's episode for more insights into the topic.

In a public, Maya Colpa, led your CEO, Pascal Gautier, acknowledged the concerns and assured users of the company's commitment to security and transparency. He emphasized that most of Ledger's codebase was already open source, and the decision to accelerate its open source roadmap would include as much of the ledger operating system as possible. Acknowledging the complexities of self-custody, Gauthier added, quote, the main pain point for crypto self-custody adoption is precisely the problem of seed phrase recovery, indicating that despite the controversy, the need for a service like Ledger Recovery remains. In a further escalation of Ledger's recover service controversy, company co-founder and former C,

E. O. Eric Larchevac conceded in a Reddit thread that it's theoretically possible for governments to subpoena third-party custodians and thereby access user funds. He recognized the rollout of this service as a, quote, PR disaster, increasing concerns among ledger's user base. Coinbase appeals for regulatory clarity. Crypto Exchange Coinbase pursued further legal action this week, demanding a response from the SEC regarding regulatory clarity for digital assets. The dispute deepened after a Coinbase's new court action following an April petition, seeking court intervention for the SEC's specific rulemaking for crypto assets. The SEC had previously argued that it was not obligated to respond to Coinbase's petition, considering it, quote, an extraordinary remedy.

However, in response, Coinbase chief legal officer Paul Graywall vehemently counter argued, calling its mandamus petition, quote, the tailor-made remedy for the extraordinary facts presented here. and he highlighted the lack of a clear path to SEC registration. BlockFi hits a snag. Adding a twist to the BlockFi saga, the U.S. Bankruptcy Court ordered the crypto lender to retract premature statements about its reorganization plan. The official committee of unsecured creditors heavily criticized BlockFi's management for their actions, accusing them of undermining the bankruptcy process and recklessly handling customer assets. Court documents showed. Furthermore, the committee expressed concern over a hefty 22.5

million worth of customer funds that BlockFi used to purchase directors and officers' liability insurance policy. In a backdrop of accumulating debts, BlockFi's alleged substantial loans to FTX's sister company, Alameda, have also raised eyebrows. With the official committee of unsecured creditors opposing the unapproved reorganization plan, the discourse has veered toward the legal culpability of BlockFi's leadership. As creditors and other parties wait, the court scheduled a hearing on the reorganization plan for June 20th. DCG misses $630 million payout. Digital Currency Group, or DCG, embroiled in the bankruptcy proceedings of its subsidiary

Genesis, missed a $630 million payment last week, according to Crypto Exchange, Gemini. This debt obligation to the Genesis bankruptcy estate has raised fears of default and intensified deliberations among the stakeholders on granting DCG forbearance to avoid the fallout. Gemini, Genesis, and creditors, including the unsecured creditor committee and the ad hoc group of creditors, are evaluating the potential for a consensual deal with DCG. In a twist of events, should the parties fail to reach an agreement, Gemini intends to advance a new plan without DCG's consent. Gemini also plans to request the return of $1.1 billion to over 200,000 earn users with active loans as of January 19th. Doe Kwan's bail bid is rejected. Terraform Labs co-found

under Doe Kuan's efforts to secure bail in Montenegro hit a roadblock as a high court overturned a lower court's decision for his release. Bloomberg reported Wednesday. Kwan, along with Tara's former CFO, Han Chong-June, was looking at a possible release under a $400,000 or $430,500 bail. However, the prosecution's prompt appeal to the high court resulted in a reversal. With both the United States and South Korea seeking Kwan's extradition over the collapse of Terraform Labs last year. The situation remains tense. It now falls upon the lower court to take into account the high court's ruling and make a subsequent decision, leaving the fate of the disgraced crypto mogul hanging in the balance. Tornado Cash goes through governance turmoil.

Tornado Cash, a decentralized crypto mixer, found itself in a tempest this week when an attacker took control of its governance by granting themselves 1.2 million governance votes, overshadowing the roughly 700,000 legitimate votes from other members. The sudden takeover allowed the attacker to potentially inflict massive damage, including the withdrawal of all locked votes and draining all tokens from the contract. However, in a surprising turn of events, the attacker then proposed to restore the governance control back to its original state. Community member Tornadoaurus Hex stated that although the community has little choice,

but to comply with the attacker's proposal, there's a quote, good chance it will be executed. Tornado Cash goes through governance turmoil. Tornado Cash, a decentralized crypto mixer, found itself in a tempest this week, when an attacker took control of its governance by granting themselves 1.2 million governance votes, overshadowing the roughly 700,000 legitimate votes from other members. The sudden takeover allowed the attacker to potentially inflict massive damage, including the withdrawal of all locked votes and draining all tokens from the contract.

However, in a surprising turn of, of events, the attacker then proposed to restore governance control back to its original state. Community member Tornado Soros Hex stated that although the community has little control but to comply with the attacker's proposal, there is, quote, a good chance it will be executed. In related news, a Dutch court allowed Alexei Pritzv, the tornado cash developer who was arrested last year and is now facing money laundering charges, to question blockchain analytics firm Chainalysis to dispute evidence linking him to criminal activities. Fahrenheit wins bid for Celsius's assets.

Crypto Consortium Fahrenheit has outbid NovaWolf, winning the bankruptcy auction for the troubled crypto lending company Celsius Network. The consortium, backed by ventures such as Arrington Capital and U.S. Bitcoin Corp, will acquire Celsius' institutional loan portfolio, staked crypto, and other alternative investments, with a transaction hinging on a $10 million deposit due within three days. Celsius's new ownership will distribute a large amount of liquid cryptocurrency and will construct various Bitcoin mining facilities, including a new 100-magawatt plant. Celsius also confirmed that its account holders will own 100% of the new company's equity, overseen by a board predominantly appointed by creditors. Candidate DeSantis advocates for Bitcoin.

Florida Governor Ron DeSantis, who announced his presidential candidacy on Wednesday, voiced his support for Bitcoin and crypto. In its Twitter spaces with Elon Musk and venture capitalist David Sachs, DeSantis claimed that the current administration poses a threat to Bitcoin. He said, quote, Bitcoin represents a threat to them. They're trying to regulate it out of existence. And if it continues for another four years, they'll probably end up killing it. BitFinex had systemic failures. Report. Tech Magazine Wired reported that the organized crime and corruption reporting project acquired a confidential report shedding light on the 2016 Bitfinex hack. The significant breach led to the theft of 119,754 Bitcoins, then valued.

at $72 million. The document produced by Ledger Labs pinpoints BitFinex's, quote, systematic failure to uphold operational, financial, and technological controls proposed by its digital security partner, BitGo. The report said that BitFinex stored two essential security keys on a single device, leading to the breach. The keys allowed the hacker to manipulate Bitfinex's operating system and elevate transaction limits, permitting a swift drain of Bitcoins, the report said. Despite Bitfinex challenging the accuracy and completeness of the report, it did not dispute its authenticity. Bicco refrained from commenting.

Multi-chain meets force major. This week witnessed an upheaval in the cross-chain protocol multi-chain, with rumors swirling around arrests of team members in China. Several crypto entities, including the Phantom Foundation and Tron founder Justin Sun, have withdrawn funds, triggering a plunge in multi-chains' native token multi, by almost 40% in the past seven days. The drama began with unanticipated delays on multi-chains platform, with some transactions held it for over 24 hours. Multi-chains cited force majeure, a term usually reserved for external unforeseen events,

as the cause for this disruption and paused activity on some cross-chain bridges. As a response, Binance the world's largest exchange, also suspended deposits of several tokens linked to multi-chain. Despite the turmoil, multi-chain has pledged to compensate affected users, tweeting, quote, pending transactions will be credited automatically. Time for fun bits. Ginny from Unchained shares her thoughts on the potential increase in the debt ceiling.

It was made its way into the U.S. debt ceiling crisis, which seems great. Injects them Bitcoin into the conversation. That should clear everything up. Basically, Biden and Republican Speaker of the House, Kevin McCarthy, haven't reached a deal on whether or not to raise the U.S. debt ceiling. And if they don't reach a deal by June 1st, the U.S. government might default and then stop functioning. I know, right? I had no idea the U.S. government was currently functioning. And Biden has his own set of requirements. He says he doesn't want to protect crypto traders, which prompted critics

everywhere to say, Biden knows what crypto is. See, it's mainstream. It's not just the thing for the under 80s anymore. People in the crypto community are really upset by these statements, and I get it. But at the same time, Biden clearly said that he doesn't want to protect wealthy tax cheats and crypto traders. Wealthy, okay? Check your coin-based balances. That may not apply to you anymore. We are one mini-FTX away from Biden loving all the crypto bros. Maybe Biden doesn't totally get crypto though because he wants to get rid of tax loss harvesting, which allows people to make money on their crypto losses. Anyone who knows anything about crypto knows that losing money on it is kind of the point. Thanks so much for joining us today. To learn more about Luke and mint dot fun, check out the show notes

for this episode. Unchained is produced by me, Laura Shin, with help from Kevin Fuchs, Matt Pilchard, Zach Seward, Juan Aranovich, Sam Shre Rum, Ginny Hogan, Jeff Benson, Leandro Camino, Pamma Jimdara, Shashonk, and Margaret Curia. Thanks for listening.