🔪The Collapse of Voyager. 🦸‍♂️Sam Bankerman, the crypto hero.

GM 👨‍👩‍👧‍👦

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Today’s estimated research time is 5 hours and 58 minutes condensed into a read time of 5 minutes. Stay tuned to where we talk about:

• 🔪The Collapse of Voyager.

• 🦸‍♂️Sam Bankerman, the crypto hero.

• 👨‍💻Fake Job offer takes down most popular crypto game Axis Infinity

🔪The bulls keep getting slaughtered

We all know what happened to Luna, 3AC, and Celsius, the other contenders eliminated by the bear market's liquidity problems. The latest one is Voyager, which just filed for chapter 11 bankruptcy!

Voyager is a broker that helps you buy crypto by comparing the prices across various exchanges and then fulfills your order using the best price and of course, they were giving out APYs you couldn't get anywhere else.

They have listed more than 100 000 creditors, with Alameda Research (Sam Bankman-Fried) being one of the largest lenders, holding unsecured loans worth $75M.

What did we say?

We saw this coming weeks ago; Voyager saw significant signs of distress when they allegedly loaned 3AC $657M so they could buy a super yacht LOL. If you've been keeping up with all the bankruptcies through the different exchanges, we can see that they've all moved similarly before the eventual collapse👀. For example, they'll lower APY THAN freeze or limit withdrawals indicating that they're running low on liquidity and then eventually declare bankruptcy taking everyone's money in the exchange/platform.

The good news is that Chapter 11 bankruptcy allows a company to reorganize its assets and debts while" staying" in business. They announced that people would receive benefits like tokens in the new Voyager coin, common shares, and a percentage of their money lost. Basically, they try to take out as much of their money before it all crashes in this period. 😂

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🦸‍♂️Our crypto hero tries to saves the day

The CEO of FTX, one of the biggest exchanges, said he and his company still have a few billion (with a B) to spend trying to save crypto-oriented businesses from having the same fate.

The man who went from $0-$27B in four years. 📈

Who is this guy, and how does he have so much liquid cash? 🤔

Sam Bankman-Fried is a 30-year-old man from California, living in the Bahamas. Some call him a child prodigy, graduating from MIT with a physics major in 2014 and started working for a proprietary trading firm called Jane Street Capital shortly after. This was his first step into the financial world, and he only entered because it would raise the amount of money he could donate compared to a regular job.

Why did he get into Crypto? 🔍

At first, Sam wasn't even interested in the fundamentals of bitcoin and just saw it as a good trading opportunity in 2017 when Bitcoin was peaking at $20K.

He saw that you could buy Bitcoin in the US and sell it for a substantially higher price in other countries like Japan. This was a popular method called arbitrage trading: buying Bitcoin in a country like the US and sending it to an exchange where the price was higher. Think of it like Amazon FBA or dropshipping. 📝

The Kimchi Premium

Yes, the food. This name came from the gap in cryptocurrency prices in South Korea compared to other global exchanges. In 2017, it soared to all-time highs of a 30% markup! So if you sent $10K worth of Bitcoin at the time, you'd have a return of $13K. This sounds like a free money glitch, so why didn't EVERYONE do this?

The problem was that exchanging the Korean Won had a bit more steps than that; signing up for an exchange in a country you don't reside in has its own issues with foreign investment policies, anti-money laundering laws and other headaches. 🚓

Sam's Plan to get rich 💰

While everyone was trying to figure out how to get their money out of Korea, Sam looked at the Japanese Premium, which was only 10% compared to Korea's. But because of his financial background, he understood that 10% compounded daily for a year would be a substantial amount of money.

He was successful while everyone failed because he managed to find all the components involved in the trade going from the right platform to buying Bitcoin at scale, approval to use Japanese exchanges/accounts, and the difficulty of getting millions of dollars out of Japan every day.🏯

With that, he decided to quit his job and launch Alameda Research, picking a name that sounded legit enough to attract new investors. It’s a quantitative trading firm that made billions of dollars in arbitrage trading. For three and a half years, he did this process, scaling and compounding each investment until eventually, he made $9B from arbitrage. Today Alameda Research is a global trading company that deals with quantitative digital currency trading and manages a total of $2.5B worth of assets.

What came after? ⏭

With the success he found in his Bitcoin strategy, in 2019, Sam and his partner decided to start a crypto exchange called FTX. A digital currency derivative exchange built for traders. All signs led to this, already having a wallet infrastructure, a matching engine and enough experience in traditional financial systems. FTX has become the fourth largest global cryptocurrency exchange with over 100,000 users and an average daily trading volume of $500M.

Doing even more side quests in the crypto space, they decided to acquire Blockfolio, a platform for users to manage their digital currency portfolios. On top of that, launched Serum, a decentralized exchange founded on the Solana blockchain.

And now? 📆

Sam is one of the youngest Billionaires before the age of 30, is the #60 richest man, running one of the biggest crypto exchanges and amassing a net worth of $24B, according to Forbes.

He is single-handedly keeping Crypto alive, offering a few billion out of his pockets to platforms in dire situations to prevent something like Voyager again.

In January, FTX unveiled FTX Ventures, a $2 billion venture capital fund focused on digital asset investments, which it has since drawn on to help bail out firms that are lacking liquidity, but not assets. His take on the current market is that "the worst of the liquidity crisis has likely passed and that the length of Crypto's current bear market will likely be impacted by macro factors."

"The goal of the bailouts was to protect customer assets and stop contagion from ricocheting through the system," And "Having trust with consumers that things will work as advertised is incredibly important and if broken is incredibly hard to get back," Bankman-Fried said.

Even using his own cash to backstop failing crypto companies when it didn't make sense for FTX to do so "FTX has shareholders, and we have a duty to do reasonable things by them, and I certainly feel more comfortable incinerating my own money,"

And in the future plans to give away 99% of his wealth and that he could spend up to $100 million supporting candidates in the 2024 election cycle, focusing on issues like pandemic prevention and bipartisanship. 🙏

Full Article

Sam Bankman-Fried is a crypto hero, someone in such a prominent position of power and influence, not being greedy by selling his soul. Instead, he uses his wealth to uplift and helps other people struggling🫂

👨‍💻Fake Job offer takes down most popular crypto game Axis Infinity

With all great heroes, there are villains to maintain balance.

Senior engineer at Axie infinity got finessed when he applied for a job at a fake company via LinkedIn.

After multiple rounds of interviews, the engineer was offered a job with an extremely generous compensation package and the "offer" was then sent through a PDF file that the engineer downloaded, allowing spyware to infiltrate his computer while having access to all of Ronin's systems, the Ethereum-linked sidechain that underpins play-to-earn game Axie Infinity.⛓

From there, hackers were able to attack and take over four out of nine validators on the Ronin network — leaving them just one validator short of total control and taking around $540M in crypto earlier this year. Validators fulfill various functions in blockchains, including the creation of transaction blocks and the updating of data. Ronin uses a so-called "proof of authority" system for signing transactions, concentrating power in the hands of nine trusted actors.

Axis Infinity was one of the biggest P2E games out there! With 2.7M active daily users at its peak and $214M in weekly trading volume.

We have a problem.

The rate of Defi hacks has accelerated this year, totalling $2B in funds lost! 🤯

Although, as traders, we can't help big corporations tighten up their security, we can look at what we can do on the micro level to prevent getting scammed and losing OUR wallets.

1. Always research a project you're looking into.

2. Use a burner wallet if you're unsure.

3. Don't download anything that's sent to you, especially not online

4. If it's too good to be true, it most likely is.

5. Trust your gut

🌱NewSeeds:

Doodles founder @poopie purchased Doodles for 155.55Ξ ($178K). Puuuump! Floor is snow sitting at 13.75Ξ🚀

Polium introduces first ever web3 gaming console. Can we play Axis Infinity here? Too soon? 😩

NBAAllWorld reveals upcoming Web3 game. Featuring new gear. New shoes. And much more! 🤗

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See you tomorrow! ✌️ 💎

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None of this is financial advice. This newsletter is strictly educational and is not investment advice or solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research!