GM Seedphrases 👋 We’re the pilot to your plane, the newsletter for your brain, keeping you entertained with crypto and web3.

📓 Today’s Agenda:

• 🔥 Hot Headlines

• 👨🏻‍🏫 Buying an Ethereum Identity

• 📉 The Crypto Bloodbath

• 🌍 Gemini goes International

• 😂 Tiktokers Turned Experts

🔥  HOT HEADLINES

📈 Market Headlines

• The $PEPE run continues and takes over Twitter Saturday night - Take a look

• Ethereum’s latest upgrade could mean more institutional investment into staking - Read more

• Tornado Cash Dev Alex Pertsev to Be Released on Bail - Read more

🖼 NFTs

• Beeple releases “Nakamigos: Chapter Two” and wrote about the future of Nakamigos - Read more

• The Pudgy Penguins IP is going to the Las Vegas Licensing Expo! Read more

• Judge Rules Bored Ape Yacht Club Ripoff NFTs Violated Yuga Copyright - Read more

• Massive Mutants sweep for almost $1M sends the floor 1 ETH higher - Take a look

• RTFKT and Nike merging worlds on a billboard in Shinjuku, Japan - Watch this

🤖 AI

• The US Department of Homeland Security is creating an AI task force - Read more

• German magazine Die Aktuelle faces backlash & legal action from Michael Schumacher's family after using an AI-generated 'interview' with the F1 legend - Read more

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👨🏻‍🏫 BUYING AN ETHEREUM IDENTITY

The Ethereum Name Service (ENS) announced a partnership with Moonpay which will allow users to buy ENS domains with fiat.

What is ENS: ENS is a digital identity protocol that allows users to purchase a domain (similar to web2 domains) and link it to their wallet.

For example, Puma’s Twitter name is “Puma.eth” since they own the Puma ENS domain. If you wanted to send money to Puma, you could easily send it to Puma.eth Instead of a string of random numbers and letters.

Why it matters: With this news users won’t have to buy ETH in order to buy an ENS domain making it easier to onboard new users.

Degens gonna degen: Domain squatting has been around for years. When the internet first became popular, people would buy what they thought would be high-demand domains and wait for someone to make them an offer. And it worked. A company bought Hotels.com for $11M in 2001!

History once again repeated itself. ENS domains became a speculative purchase for many in 2022. And once again, it worked. A crypto investment firm named Paradigm bought Paradigm.eth for 420 ETH ($1.5M) in October 2021!

Here’s a short list of other famous ENS sales:

• 000.eth sold for 300 ETH

• abc.eth sold for 90 ETH

• patriots.eth sold for 75 ETH

• dotswoosh.eth sold for 19.72 ETH

Homework: Most ENS domains might end up being worthless, but there will be some that have a ton of value. In crypto, we always have to think about risk/return. In this situation, the risk is low (kinda). ENS domains are relatively cheap to mint and the returns can be massive. One area to keep an eye on is 3 and 4-letter ENS names, Vitalik seems to think they could have a lot of upside.

📉 THE CRYPTO BLOODBATH

The crypto market turned red this weekend with BTC back $27k and ETH down to $1,850.

Here are a few reasons why the market could be down:

• Longs are liquidated

  • When ETH and BTC crossed key metrics like $2k and $30k, people thought it could be the start of the bull run

  • There was a lot of money that came in that decided to go long based on this price action

  • However, when ETH and BTC didn’t continue their run, these investors were forced to liquidate their positions

  • These forced liquidations caused a further sell of that brought prices down to where they are now

• ETH Withdrawals

  • Since the Shapella upgrade, people can now withdraw their staked ETH

  • Almost 1M ETH has been withdrawn from the Beacon chain since the upgrade

  • This could be causing sell pressure on ETH which is flowing through the rest of the market

• GCR says “Take Profit”

  • It’s crazy to think that one person can have that much influence over the markets but GCR is #BuiltDifferent.

  • GCR called the top of the 2021 crypto bull run AND the recent bottom as well

  • Many speculated that he could be referring to the recent meme-coin mania

  • When GCR tweets, people listen

Seedphrase Take: It’s important to realize there are still many macro conditions that remain unchanged. Regulatory uncertainty is as important as ever and high-interest rates are still impacting everyday citizens.

It could be as simple as we’re going to be in this sideways, ranging motion for a while.

🌍 GEMINIS INTERNATIONAL FUTURE

In the early days of the internet and social media, the US was the place to be. It was the easiest place to raise capital and find high-end talent.

However, one thing that can overshadow those benefits is regulation. No matter how much capital is available, if the regulatory environment makes it too difficult to operate in a certain jurisdiction, companies will be forced to leave.

Unfortunately, that’s the case with crypto and the US. This week we saw Brian Armstrong, CEO of Coinbase, say Coinbase could move out of the US if regulatory clarity doesn’t improve.

On top of that, Gemini (a US-based crypto exchange founded by the Winklevoss Twins) announced they are opening a crypto derivatives platform and they chose to open it outside of the US.

The new division, called Gemini Foundation, said their first product will be a perpetual bitcoin contract and it will be denominated in GUSD (Gemini’s stablecoin).

What are derivatives: It’s a contract that derives its value from an underlying asset, in this case it’s BTC.

The Gemini contracts are perpetual too which means they don’t have an expiration date.

Why it matters: Derivatives are a big deal. In traditional finance, the market cap of all derivative contracts is estimated to be $1 quadrillion on the high end. In crypto.

In the Crypto world, derivatives represent about 70% of the entire crypto space and are worth $2.04 trillion.

The Seedphrase Take: There are 2 important takeaways from this. First, derivatives are a huge deal and it’s great that Gemini has decided to open a derivatives exchange. Second, is that Gemini chose to locate this exchange outside of the US. If this trend continues, US citizens will be at a disadvantage compared to the rest of the world in terms of the crypto economy.

😂 TIKTOKERS TURNED EXPERTS?

Smart degens get their news from Twitter, Reddit, and us of course. But it turns out there are a lot of influencers on TikTok shilling crypto and still living in their parent’s basements.

A research company called dappGambl analyzed over 1k TikTok videos focused on Crypto and here’s what they found:

• 9 out of every 10 videos did not talk about the risks of crypto

• 47% only focus on making money through the services they push to their viewers

• 1 out of every 3 misleading TikTok videos focused on Bitcoin

Why it matters: About 40% of TikTok users are between the ages of 18 to 24. And for many of these individuals, this is the only information they’re receiving about the crypto industry. Plus, these videos have received billions of views cumulatively.

We cannot understate the importance of education in the crypto space and this misleading information could have long-term impacts on how people view crypto.

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