Unchained - Why Crypto Developer Activity Continues to Grow Despite the Bear Market - Ep. 445

Episode Date: January 20, 2023

Maria Shen, partner at Electric Capital, unpacks the venture firm’s latest Developer Report. Hotly anticipated among crypto observers, the annual report captures which chains developers are building on. Despite 2022’s price carnage, the report finds developer interest remains strong. Ethereum is the leading chain by far but EVM-compatibility is emerging as a major force in winning developers’ hearts and minds. Shen unpacks Bitcoin’s stability, Terra’s implosion, and many more insights from crypto’s open-source code repos. Show highlights: why the report "undercounts" developers and how it defines active developers how developers represent a fundamental measure of the health of emerging technologies like crypto the meaning of developer numbers going up even when prices plummet why in recent years the speed of developer growth jumped so drastically what happened after the number of developers reached an all-time high in June 2022 the role of Terra in the decline of developer activity in 2022’s second half why Ethereum dominates the ecosystem and whether it will continue to be the leader the benefits of being part of “the EVM universe” why the number of Bitcoin developers has remained flat over the last year whether looking at the number of developers in the NFT ecosystem is even relevant Thank you to our sponsors! Crypto.com Guest Maria Shen: Twitter Electric Capital Developer Report Full report Maria’s 2022 thread 2021 report 2020 report Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi, everyone. Welcome to Unchained. You're no hype resource for all things Crypto. I'm your host, Laura Shin, author of The Cryptopians. I started covering crypto seven years ago. And as a senior editor of Forbes was the first mainstream reader reporter to cover cryptocurrency full time. This is the January 20th, 2023 episode of Unchained. If you're enjoying Unchained and have found it valuable, please rate and review us on iTunes. It really helps get the word out. about the show. With the crypto.com app, you can buy, earn, and spend crypto in one place. Download and get $25 with the code, Laura, link in the description. Today's guest is Maria Shen, partner at Electra Capital. Welcome, Maria. Thanks for having me. It's great to be here. Electric Capital recently published its annual developer report. Before we dive into all the findings, just give us a quick reminder of how you're defining your terms, such as developer activity, the various metrics that you are measuring versus white you're not. Yeah. I think the biggest caveat that we want everyone to take away from is that this is going to be an undercounting of developers.

We put a lot of work and thought into counting open source developers, but there's a lot of people working in close source. So who works in close source? Coinbase is closed source. OpenC is closed source. Magic Eden is close source. Some of the biggest companies in crypto are close source. So this report shows us two things. One is it looks at trend lines in terms of how developers are trending. Also, I think it's important to understand the health of open source in crypto because crypto is unique in that Bitcoin launched as open source code. Ethereum is open source. Some of the most important projects are open source. It's a very, very key part of the crypto DNA. And so understanding and evaluating the health of that core part of crypto's DNA is really important.

So to define some of the terms, in order to find a developer, we actually start from the commit, code commit level. Code commit is when a developer creates a code update. Within that code updates, we get information like the files that they change, the lines of code that they changed, the types of programming language that they use, the time at which they changed it. And we coalesce a lot of this information to like fingerprint every single code commit. Within our internal. databases, we have 250 million code commits. And so for any new code commit that comes in, we actually compare it to previous ones. And for this report, we only look at original code. So that means that if the code is forked, if it's copy-pasted, it will not count towards a

developer. This is not malicious, by the way, like code is forked all the time. That is not a bad thing, but simply for for ourselves and being able to understand the actual number of new open source developers or active open source developers. It's really important to actually sanitize the code in this way. And so most of the numbers that we'll look at include monthly active developers. A monthly active developer is any developer who has committed code in a 28-day period. We also do further segmentation into full-time, part-time, and one-time developers. A full-time developer is anyone who's committed code 10 or more days in a 28-day period. Part-time is two to nine days.

And one time is going to be actually a very strict definition, which is you only committed code once in a three-month period. All right. So now let's talk about this report because obviously 2022 was quite possibly the worst year in crypto history, at least when it comes to the industry's reputation. Yes. So I'm super interested to hear what the results were from this past year, especially because, you know, like I said, reputation is one thing, but developer interest is another. So what would you say are the top takeaways from the 2022 report? Yeah. I mean, this points to why we look at developers as a measure in the first place. Developers are a fundamental measure of the health of an emerging industry, more so than prices. Prices fluctuate and they're very, very, very prone to change. Developers tell us how many people are actually building, how many people are

pushing new code, how many people are creating protocols and useful things, dev tools to bring in more developers, applications to bring in more users. And so that's why that developer number is really important. And of course, like, one of the really interesting things we've seen is that year over year, developers actually increased. So prices fell 70% from peak this time around in 2022. developers increased 5% year over year. And that's very consistent with our findings in the past bear market as well. In the 2017-2018 cycle, after prices peaked in January of 2018, prices fell 90%, more than 90%, as I'm sure a lot of people painfully remember.

But developers stayed flat, which is incredible, right? What that means is that prices fell, but developers are sticky. And so that means that we're actually able to grow developers really significantly over time. Prices today are back at where they were, roughly, in January 2018 levels. But developers have increased by 297%. So that's the kind of retention and growth that we're seeing when developers stick around like they do in crypto. Yeah, one thing also that struck me is when I was looking at the kind of like line graph of the, growth in the number of developers. When you look at 2021 in the first half of 2022, it just was

growing at this especially fast rate. And I was curious if you could talk about that 18-month span, like if, you know, what you think caused that or just anything else about it. Like, it really stands out in the chart. Yeah, yeah. One of the things I find really fascinating is this, what you're alluding to, which is the speed of growth. Crypto grew very slowly in the beginning. It took us close to seven years to get to 1,000 monthly active developers. So from the first time that Satoshi Open Source Bitcoin Code to when Ethereum launched, we had 1,000 open source developers. In the next seven years, we actually added 22,000 more monthly active developers.

And so these are kind of step function differences. And so that's one of the things that we definitely saw in the 2021, 2021, 2022 period. a record number of new developers joined crypto between 2021 and 2022, 109,000, more than 109,000 new developers committed code to open source crypto. So again, like, this is an undercounting, right? This is not counting the new Coinbase employees or new Accomy or Magic Eden employees versus 2017 to 2018, 44,000 new developers. So we had a massive influx of new developers in that 2021 to 2022 period, which is where you see that chart kind of going vertical for developers. And we also can see a lot of ecosystems grew significantly since 2018. Bitcoin grew 3x. So Bitcoin is 3x bigger than it was in 2018. Ethereum is 5x bigger.

A lot of the ecosystems that we kind of talk about as really big players today that have more than a thousand total developers. So this would include like Polygon, Cosmos, Pocodot. These ecosystems barely existed in 2018. They had fewer than 200 total developers, monthly active total developers. So there's really been a kind of a tremendous shift since that 2018 period. So let's now, of course, talk about the second half of 2022, which obviously for various reasons looks quite a bit different. Talk a little bit about how you believe the crypto bankruptcies have affected either developer interest or at the very least developer activity. And I was just kind of curious if you think some of those declines that you noted were attributed directly to things

like job layoffs or if it was really more a reflection of just sort of like natural, you know, a natural decline rather than sort of a direct forcing. I think there's kind of two things we can look at here. One is just all-up developer numbers, and then we can actually go into a Terra anecdote. So for all-up developer numbers, we had a peak of all-time high. So this is a historical high for monthly active developers in crypto. That happened June of 2022. That peak had 26,323 developers. Since that peak, we have fallen 11%.

One of the core things we tried to understand is who, left, right? When developers fall by 11%, what happened? So the segmentation that we did was through the frequency of commits. We want to understand, you know, not developers, not all developers are contributing code at an equal rate. Some contribute more code than others. It turns out that what we define as full-time developers, so developers who are active for 10 or more days in a 28-day period, they contribute 76% of the code. So they're a really important metric to track for. for the actual health because they're the ones building the core protocols, keeping the lights on, moving things forward in a very fundamental way. Full-time developers only accounted for 5% of the churn,

which means that 95% of the developers who left were part-time and one-time. And I think that intuitively makes sense, right? Who's a part-time developer? They're the hackathon participants. They're the ones hacking on something in a weekend, playing around tinkering. One-time developers are the ones who maybe made a documentation change. Maybe they added their validator profile. And those are the types of people that we are seeing leaving in these types of market conditions. But I think the most important sign of health is are those full-time developers staying? And I think by looking at the fact that only 5% of the developers who churned were full-time,

that gives us a lot of confidence that the people who are writing 76% of the code is continuing to write code. All right. So before we hop into the Tara anecdote, we're going to take a pause to get a quick word from the sponsors who make the show possible. Amazon presents Jamal versus the Shih Tzu. Descending from the gray wolf, shih Tzu's live by their own untamed primal code of not giving a single Shih Tzu. But Jamal shopped on Amazon and bought dog treats, chew toys, and 32 ounces of carpet cleaner. Hey, Jamal, you've been promoted to PAC Leader. Save the everyday with deals from Amazon.

Join over 50 million people using Crypto.com, one of the easiest places to buy, earn, 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. Back to my conversation with Maria. So obviously, probably what kicked off the beginning, at least, of the decline of developer activity and the second half of 2022 was the collapse of Terraluna. And you said you had some interesting data around that in terms of developers.

Yeah, absolutely. We going into this year, one of the things we definitely wanted to analyze was, what happened to Tara and where did Tara developers go? What happened after the collapse? And so from the time that Tara launched to when their network halted in May of 2022, Tara got up to 175 total developers. So actually not a huge, not a huge ecosystem, but that growth is very fast, right? I think these decentralized networks take a very long time. to come together and to really like kind of hit a critical mass. And so Tara actually grew developers incredibly quickly and they had 175 very healthy monthly active developers at the time when their network halted. After their network halted, they had seven days of kind of deliberations

around what to do. And then after seven days, Tara two created its first. commit. So Tara 2 then emerged as the successor to Tara. Since then, we see that Terra has 67 monthly active developers. They have seven full-time developers. And so, you know, I think a lot of people think, oh, maybe Tara doesn't have developers anymore. There's, there actually are, continue to be people building on Tara 2. But obviously, that is a tremendous decrease from where they were before their network halted. So one of the things that we did look at is, okay, let's look at the developers who were there before network halt and then after network halt. How do we account for this delta? So over the first half of 2022, 32 323 developers committed code to open source

Terra repositories. And of those, 56% seems to have stopped contributing code to open source crypto. They could have left. Maybe they're working in close source. At the very least, we no longer can track them. We don't know, you know, they're not contributing new code to open source crypto at all. The remainder went to other ecosystems. And by far, the most went into the cosmos ecosystem. A handful went to continue to work on Terra 2.0. And five developers went to Solana. Two developers went to near. So it's really interesting to see that, you know, it's a, you know, 56% seems to maybe have left or just stop contributing to open source and the remainder continue to work and but are just now in other ecosystems. Yeah, I find it amazing that 56% just stopped

contributing to crypto altogether. That's pretty incredible. So now let's obviously talk about kind of the biggest developer ecosystem, Ethereum, has historically dominated, when it comes to attracting developers, but during this time period, it also faced a lot of competition from other layer ones. So how have you seen its ability to attract developers hold up? I would say very well, but you can see in the numbers that there are other chains emerging. So there are, first of all, I think what we've noticed is this is our fourth annual report now. And year after year, Ethereum is the biggest developer ecosystem by a long shot. So even today, their developer ecosystem is 2.8 times larger than the next biggest ecosystem.

So they dominate and they don't dominate just by a little bit. They dominate by a lot. And a lot of that has to do with how easy it is to be a developer in Ethereum. I think like solidity may not be the easiest. Working in blockchain may not be the easiest, but there are amazing learning resources for anyone who wants to get started in solidity, for anyone who wants to get started in EVM-compatible kind of ecosystems, that resource is probably the richest that we have in crypto. And so we kind of see that 16% of all new developers that come into crypto start in the Ethereum ecosystem. So Ethereum is kind of this like starter pool for anyone who's coming in, and they're able to retain a lot of developers that way. But one of the really

interesting things we see where, where, you know, hey, it's possible that there's kind of this chipping away is actually when it comes to defy developers. During defy summer, Ethereum had 70% of all defy developers. So 70% of all developers that was building anything in defy built it on Ethereum. And defy summer was summer of 2020. By December of 2022, Ethereum no longer had the majority of defy developers. They only have 50%, and 50% are now working in other chains, including places like Cosmos, B&B, Solana, Pocodot, Polygon, Avalanche, and Kusama. These are the other biggest ecosystems for defy developers. And so that's where you begin to see kind of this multi-chain universe starting to emerge. Ethereum is by no means unseated, but I think you see the emergence

of other very healthy ecosystems by developer standards outside of Ethereum. And out of curiosity, how do you see Ethereum's dominance playing out, or the competition it faces, playing out in EVM-compatible chains? EVM was a really interesting ecosystem for us to look at. I almost think of it as kind of like a EVM universe at this point. It turns out that 37% of layer ones and twos that have more than 50 developers, full-time developers are a VM compatible chain. And so that's a pretty significant number. And it speaks to the strategy that different ecosystems are taking to get developers. Right. So there's,

there's tremendous benefit to being part of the EVM ecosystem. It means that you, your ecosystem gets to access the really excellent developer resources that everyone has already created for EVM. And it also means that it's very easy for anyone to extend an existing application to your chain. So the way that we measure this sort of like multi-chain behavior is through looking at multi-chain developers and what we call primary developers. Arbitrum is an excellent example where someone like GMX is counted as a primary. Anyone working on GMX would be a primary developer on Arbitrum. But Uniswap also supports Arbitrum. There's a host of other types of applications that support Arbitrum.

It's not exactly, you know, there's some work involved to actually extend your application. into that chain. And so we count that as multi-chain developers versus primary developers. So if you segment developers in this way, it's very clear across the biggest EVM ecosystems that there is tremendous benefit that comes from being EBM. So Polygon, Avalanche, B&B, Selo, Arbitrum, and Optimism are the biggest developer ecosystems in EVM, and all of them across the board have more multi-chain developers than they do primary developers. And their own primary developers and multi-chain developers kind of grow at different rates. So if we go back to that Arbitrum example, Arbitrum has grew 38% year over year, which is very significant. But let's remember that by

absolute numbers, this means they now have 215 monthly active developers. So very healthy, strong growth, but relatively, you know, still still kind of in that emerging state. That being said, they have four times more multi-chain developers. So they have 839 monthly active multi-chain developers, and that's a really kind of interesting dichotomy where you can look at the number of developers that's supporting Arbitrum versus the number of developers that's building on Arbitrum. Optimism, very similar. Optimism has five times more multi-chain developers than they do primary developers and primary developers grew by 73%, meaning that optimism now has 183 total developers, while multi-chain developers fell by 8%. So we're starting to see kind of these interesting

these interesting divergences come out of between multi-chain and primary developers. Yeah, that seems like definitely an area to watch because, yeah, they're, Ethereum's dominance is definitely a storyline, and yet the competition nipping at its heels is also a storyline. So one other area that I definitely wanted to ask about was Bitcoin developers remained flat from December 2021 to December 2022. Why do you think that was? I would say it's because Bitcoin is a very mature ecosystem already. And Bitcoin is an ecosystem that actually does not encourage a lot of change. And that's by design, right? They're very resilient. It works. It's not an ecosystem where you're looking to shake things up or there's a very, very high bar to make any

sort of change. And so correspondingly, I think there's a difference in the types of trends that I'm looking for in Bitcoin. I'm not looking for, you know, did Bitcoin grow by 50%. I'm actually looking at, was Bitcoin able to hold on to its existing developers? And it did. And I think what's really remarkable about Bitcoin is unlike almost any other ecosystem, it has a very different chart if you look at the new developers that come into the space. It's very resistant to market cycles. it's almost flat at 100 new developers every single month since November of 2017. So in a good cycle, in a bad cycle, it's 100 monthly active. You know, it's 100 new developers.

They have over 900 monthly active. And so I think that's what's really interesting is the steadiness and the stability of Bitcoin, which is what you would expect to see in a healthy, kind of mature ecosystem like that. So one, I believe this is a new area of. your report is you also talked about NFTs and development in that. What did you find there? Yeah, we touched upon the development of NFTs. And the reason we did that is because we looked at the change in, or we looked at what new wallets did on chain. And it turns out that before 2021, new wallets on chain did a lot of stuff on defy. Right. So they would swap on a decentralized exchange,

They would do something with stable coins. They would use a lending protocol. And then that completely flipped, where now new wallets are actually doing more things in the NFT universe than they are in the defy universe. And so, of course, we're naturally curious about what's happening with developers there. So developers grew 299% since January of 2021. Year over year, they are flat. Although year over year, their full-time developers grew 30%.

And most of the losses come from one-time and part-time developers. That being said, I think we actually ended on a note saying that, you know, we're not sure that looking at developers is the right lens for NFTs and gauging NFT health. Because so much of NFTs, if you think about it, are based on games or ecosystems where the smart contract for creating the tokens is a fairly minimal amount of code. but the work comes in for maintaining the community, encouraging activity in the community, having a very active membership. And so for NFT specifically, we continue to think that perhaps looking at open source code in NFTs is not the right metric. It's shown a lot of growth.

And so that trend line is really interesting. But we think NFTs, unlike many other sectors, need other signals. And so one of the things we've been doing internally and we want to push more publicly is what we call a community signal. And so what is the health of your discord? What is the health of people who's engaging with you on Twitter? How many people are talking about you? How many people are actively participating and actually doing something? So we think for NFT ecosystems, that might actually be the right set of data to look at.

All right. Well, this has been an amazing discussion. And there's just so much in your report. I did also want to ask if there's anything that. we didn't get to touch on that you think people should know about the report. Yeah, I would say the last part is this is the first year where we launched developer report.com. And so this is a site where you can not only explore the data from the report, but also go very, very deep. We have actually time series on developer change across 100 different ecosystems

and projects. And so that's a resource that we hope can be really useful for the community. Oh, yeah. I enjoyed digging around that site. And yeah, that's where I saw some of these eye-popping charts. All right, Maria, I have enjoyed this so much. Thank you for coming on Unchained. Thank you so much for having me. Don't forget. Next up is the weekly news recap.

Stick around for this week in crypto after this short break. Welcome aboard via rail. Please sit and enjoy. Please sit and stretch. Steep. Flip. Or that. And enjoy.

Via Rail, love the way. Thanks for tuning in to this week's news recap. New FTX leadership is considering reviving the exchange. According to the Wall Street Journal, the new leader of the failed cryptocurrency exchange FTCS, John Ray III, announced that he has established a task force to investigate possibly restarting the platform. In an interview for Unchained Premium two weeks ago, Sineal Kavuri and FTCS creditor, claimed most of the creditors were in favor. The idea was also mentioned in an unchained episode with Thomas Brazil and Wazi lawyer.

Ray said everything is on the table as FTX explores the options for reviving the exchange. This includes examining whether relaunching FTX's international exchange could potentially provide greater recovery for customers than liquidating assets or selling the platform. Currently, the market for bankruptcy claims on FTX's crypto deposits is not optimistic about their value. Data from X claim shows that FTX claims. are selling for 15.5% of the face value of account balances. However, this week, the FTX debtors group, represented by law firm Sullivan and Cromwell, revealed that it has identified $5.5 billion worth of assets, which includes $1.7 billion of cash, $3.5 billion of

crypto assets, and $300 million of securities. It is worth noting, however, that the firm is counting FTT, FTX's exchange token, as a liquid asset. which is somewhat questionable. Moreover, in order to repay creditors, the company has been granted permission to sell some of its assets, including its subsidiaries, LedgerX, Embed Technologies,

FTX Japan, and FTCS Europe. Sam Bankman-Fried reiterates FTCS is solvent, as SEC charges him with fraud. Former FTCC CEO, Sam Bankman-Fried, is disputing claims made by Sullivan and Cromwell that the exchange has a substantial shortfall, In a post on his recently launched substack newsletter, Bankman Freed asserted again that FTCUS is solvent

and that the numbers presented by Sullivan and Cromwell do not accurately reflect the exchange's financial status. He provided an Excel spreadsheet that he created as evidence, which he claims shows that customer balances, bank balances, and net asset value have been understated by the litigation firm. On Thursday morning, the Securities and Exchange Commission filed charges against Bankman Freed for allegedly defrauding equity investors in the platform. The SEC's complaint alleges that SBF orchestrated a year-long fraud to conceal from FTX's investors, the undisclosed diversion of customer funds,

to his privately held crypto hedge fund Alameda Research, as well as the special treatment afforded to Alameda on FTCS. The complaint seeks injunctions against future securities law violations, disgorgement of Vilgotten Gaines, a civil penalty, and an officer and director bar. The SEC's ongoing investigation is being conducted in conjunction with the U.S. Attorney's Office and the Commodity Futures Trading Commission. In other FTX news, a week after the new management of FTCS requested all political donations to be returned, CoinDesk reported that 196 members of the new Congress, roughly one-third of the total, took cash from the former FTX CEO and other senior executives.

Only 27% responded to queries about what they planned to do with the money. In a Twitter thread, former president of FTX U.S., Brett Harrison, claimed that Bankman Freed showed emotionally volatile behavior and avoided conflict, ultimately leading Harrison to leave the company. A coalition of major news outlets submitted a petition to the court handling the FTX case, requesting the release of the identities of the individuals, besides his parents, who signed Bankman Fried's $250 million bail bond. The media outlets include the Associated Press, Bloomberg, The Financial Times, CNBC, Reuters, Insider, and the Washington Post publisher, who argue that it is in the public interest to know who is financially backing Bankman Freed.

Genesis may soon file for bankruptcy. Major crypto lender Genesis Global Capital, part of the Digital Currency Group conglomerate, is expected to file for Chapter 11 bankruptcy as soon as this week, according to Bloomberg. Sources familiar with this situation say that creditors of Genesis are currently in negotiations regarding a potential bankruptcy filing. The negotiations involve a pre-packaged bankruptcy plan in which creditors agree to a forbearance period of one to two years. In exchange for this agreement,

creditors would receive cash payments and equity in DCG. Scott Johnson, a finance lawyer, said pre-packaged bankruptcy would almost certainly mean little to no market impact and a very quick process, about as good a resolution as one would hope for. The company froze customer redemptions on November 6th, 16th following the downfall of FDX, and this week it informed its shareholders that it will be suspending its quarterly dividend payments until further notice. As the crisis has come to ahead,

a lawsuit seeking class action status was filed against Tyler and Cameron Winklevoss and their exchanged Gemini for allegedly defrauding investors by falsely advertising unregistered securities. This lawsuit comes after the SEC charged Gemini and Genesis with offering unregistered securities last week. Meanwhile, popping up as he is want to do in situations like this, Tron's CEO Justin Sun revealed in an interview with Reuters that he is open to investing up to $1 billion in the acquisition of certain assets of DCG. CoinDesk explores potential sale. The Wall Street Journal reported that CoinDesk, the media company owned by DCG, enlisted the help of investment bank Lazard to explore potential options for the company,

including a full or partial sale. In a statement, CEO Kevin Worth, revealed that the company has received many inquiries and expressions of interest in recent months, leading to the engagement with Lazzard and the exploration of a potential transaction. Silvergate reports significant losses. Silvergate, the crypto-focused bank

that has been under the spotlight for its involvement with FTCS reported a net loss of $1 billion in the fourth quarter of 2022. The dire earnings report shows the extent of the impact on the digital asset industry from the downfall of FDX, which spurred Silvergate customers to withdraw $8 billion from the bank in Q4. The bank also said it would take an impairment charge of $196 million in assets. Silvergate CEO Alan Lane stated that the bank was in the process of evaluating its product portfolio and customer relationships with a focus on profitability.

3AC founders planned to build new exchange for crypto bankruptcy claims. The former founders of the now defunct Three Arrows Capital, Kyle Davies, and Suu are trying to make a comeback. The duo is looking to raise $25 million in seed funding for a new crypto bankruptcy claims exchange that they initially proposed be called GTX. The name, as per the leaked pitch deck, was chosen because G comes after F. Though after the name was ridiculed, they backtracked. The exchange aims to fill the power vacuum left by FTX and aims to dominate the market within two to three months of going live. The platform plans to offer a solution for trading claims for users who have funds stuck on FTX, Celsius, BlockFi, and even Mount Cox.

The team estimates a claims market size of $20 billion based on FTC users caught in bankruptcy proceedings. The fact that the founders of 3AC, which also filed her bankruptcy, are now looking to raise funds for a new venture, has been met with mixed reactions, with some in the crypto community questioning the ethics of the move. Wintermute CEO of Genni Guyvoy warned that anyone investing in this new venture would find it hard to work with his company in the future. Crypto markets recover post-FTX losses. The markets are experiencing a much-needed relief rally. Bitcoin is trading in around $21,000, a price point even higher than before the collapse of FTCS. In the last 30 days, Bitcoin's up 25%. And meanwhile, ETH, the second largest

cryptocurrency by market cap, has risen 30% in the same period and is trading above $1,500. Metaverse-related tokens outperformed the markets last month, with Gala and MECLA and MECTA. Manna jumping over 100%. Moreover, as the Ethereum Shanghai upgrade comes closer, like what staking derivative tokens are benefiting, with Lido's LDO and RocketPools RPL increasing by 107% and 75% respectively. The SEC sets a new record of enforcement actions. According to a new report from consulting firm Cornerstone Research, in 2022, the SEC initiated a record number of 30 enforcement actions related to crypto, a 50% increase from the previous year. However, the entity led by Gary Gensler is getting some backlash. Grayscale, the issuer of GPDC, whose parent company is DCG, submitted a new

court filing criticizing the SEC for denying its application for a spot Bitcoin ETF, calling the regulator's central premise unreasonable. What's more, the American crypto-fed Dow, which the SEC is trying to prevent from registering and selling tokens, stated that the regulator has not been responsive to its complaints. The Dow claims to have attempted to engage in dialogue with the SEC regarding the November stop order, but it says its inquiries have not been addressed. NXO denies accusations of money laundering. Cryptocurrency lender NXO, disclosure, a former sponsor of unchained, denied the accusations against it by the Bulgarian prosecutor's office, following the arrest of four individuals last week as part of an ongoing investigation

into the company. According to the prosecutor's office, the suspects are believed to have laundered money through Nexo and concealed it from Bulgarian authorities. They are also suspected of tax crimes, computer fraud, and providing unlicensed banking services through the platform. Time for fun, DOJ's major action falls flat. On Wednesday, the Department of Justice had the crypto community on the edge of its seat with an announcement of a major international crypto enforcement action. The community was buzzing with speculation. But, drum roll please. They took down Bits Lotto, a relatively unknown crypto exchange that was processing $700 million in illicit funds.

The founder, Anatoly, like Kodomov, was arrested in Miami, Florida. Now, before you start stocking up on canned goods and preparing for the apocalypse, let me tell you this is not the end of days. The crypto community was getting ready for a major showdown, and what they got was a tiny little. exchange that most had never even heard of. All right, thanks so much for joining us today. To learn more about Maria and Electric Capital's Developer Report, check of the showness for

this episode. Unchained is produced by me, Laura Shin, withel from Anthony Yun, Mark Murdoch, Matt Pilcherd, Zach Seward, Bronneranovich, Samish-Rom-Rom, Pamajumdar, Shishonk, and CLKin transcription. Thanks for listening.