Toughest week for the crypto HODLers but we keep building, LFGI🚀
Hello there! 👋
Glad to have you as a part of the Safient family. Welcome to our newsletter. At Safient we prioritize community growth through product growth, making us a reliable and trustless protocol. Our ecosystem offers every individual the opportunity to be a contributor by simply joining our community, tap on the discord server link https://discord.safient.io to join us today!
We are going to make the next 6-8 minutes worth your while by covering topics centered around trending topics in the crypto space, as well as educating you through the “self-custody gyaan” section.
If you loved the newsletter, message us! If you hated the newsletter, message us! We're always looking for a fresh perspective on things to cover and feedback to make your experience better!
- Team Safient.
What we're covering this week:
FTX and Binance debacle 🧐
Bitcoin and Ethereum prices are plunging! 😶🌫️
All you need to know about Hot and Cold wallets. 🔐
Updates from Safient.💥
A WEEK IN CRYPTO
The FTX and Binance debacle 🧐
It was just another random day with crypto activities running as stable as it has been over the last few months and then an announcement was made by one of the most influential CEOs in crypto, CZ Binance.
CZ Binance announced on Twitter that due to recent revelations (Pointing to the Coindesk article on Alameda’s Balance sheet, a sister company of FTX) that have come to light, plans have been made to liquidate all $FTT which happens to be the native token of FTX held by Binance.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 Binance (@cz_binance)
Nov 6, 2022
This thread by CZ Binance sparked up mixed reactions and most were speculations alleging that CZ was trying to cut down on FTX since they have become his biggest competitor in the space. But in recent developments, the whole world of crypto now understands that foul play has been going on by Sam-Bankman Fried who has been allegedly gambling with billions of dollars from depositors, while all of this remains speculation, it is also assumed that FTX is mostly insolvent as they don’t have enough liquidity to pay back all the depositors on the exchange.
A full story and comprehensive gist on the Alameda research and the collapse of FTX can be found in the thread below. 👇
FTX is dead.
The deal with Binance is dead.
Billions of dollars - dead.
Some thoughts on the FTX debacle and where things are going from here...
But first, why should you listen to me? 🧵👇
— Ishan B (@Ishanb22)
Nov 10, 2022
Post all the major events that led to the collapse of FTT token, CZ from Binance had offered to acquire the FTX exchange contingent to due diligence. But post all the due diligence the acquisition offer has been revoked and FTX is on it’s own to come out of the big hole that it has dig for itself.
Here is the latest tweet by SBF post all the drama apologizing about the situation and giving some clarification:
1) I'm sorry. That's the biggest thing.
I fucked up, and should have done better.
— SBF (@SBF_FTX)
Nov 10, 2022
Pointers From the FTX saga
The FTX saga only proves one point, Self-Custody is the ultimate solution to decentralization and crypto in general. Most assets if not all might likely get lost because people had them stored on the FTX exchange if they got insolvent.
We need to be aware that until we take total control over our assets, risk of losing assets in situations like this would continue for a long while. Though Self-Custody has its challenges, we cannot have a better-decentralized system without it!
Bitcoin and Ethereum prices are plunging! 😶🌫️
It has been a week of turmoil for the crypto market after weeks of relative stability for Bitcoin and Ethereum. Both currencies are now down by over 20% over the last week driven by fresh investor skepticism and souring sentiment on the heels of Binance’s announcement that it would buy out rival FTX after concerns over FTX’s liquidity were raised. At this time, Binance has pulled out of the deal following reports of mishandled customer funds and alleged US agency investigations. In light of all the news, bitcoin’s price continued to plunge, falling below $16,000 for the first time in two years late Wednesday afternoon. Ethereum is seeing a similar downturn, falling below $1,200 for the first time since crypto’s crash over the summer.
Why Is Crypto Crashing?
The crash is likely a result of the unfolding drama happening at FTX, a popular crypto exchange. As a result of a significant liquidity crisis at FTX, Binance CEO CZ announced that Binance would acquire FTX. Binance is the world’s largest centralized crypto exchange, and FTX was one of its biggest competitors. But shortly after introducing the deal, Binance announced late Wednesday afternoon that it would scrap its plans and will not acquire FTX, sending further shockwaves through the market.
Many investors have become disheartened following the news of FTX’s collapse.
It has been a terrible week for the world of crypto and very bad news, especially at this time when the world is experiencing economic turmoil.
Since we are already talking about importance self custody of assets through user owned wallets, what better topic to discuss than the types of wallets available for the crypto users?
All You Need To Know About Cold and Hot Storage Wallets. 🔐
When you purchase cryptocurrency, deciding where to store your digital asset is a very important step. Unlike our usual physical currencies, cryptocurrencies run on a blockchain and thus require a digital storage system which is known as a wallet.
These wallets contain private and public keys which allow holders to transfer and receive their crypto assets.
With wallet storage, there are two types depending on the user's preferences. They are Cold and Hot Wallet.
Cold Wallet: Cold Storage wallet system stores crypto keys offline often through a physical device similar to a thumb drive and so users have full control over their private keys and assets. Cold wallet devices are portable and are often small plug-in devices that can be carried around wherever in the world and can be easily used to create transactions to interact with decentralized applications.
With cold wallets, private keys never leave the device and are stored offline which means transactions are signed locally on the device which is never connected to the internet, making the devices significantly less vulnerable to malicious cyberattacks. The cold storage wallets are often required to get connected to software wallets like MetaMask wherever a transaction needs to be initiated but these transactions are signed on the cold storage device and only the signed data is sent to the software wallets. Cold storage wallets are one of the safest ways to store but they are not so convenient for day-to-day usage. Trezor and Ledger are the prominent players here.
Hot Wallet: Hot wallet is an application or platform-based wallet that is connected to the internet or a blockchain network. Hot wallets are used to send and receive cryptocurrency as they are linked to private and public keys locally on the same device which helps in facilitating transactions swiftly. There are varieties of hot wallets for desktops such as Metamask, Rabby, Coinbase, and Binance, and mobile wallets such as Trust wallet, imToken, and many more. Hot wallets have their perks as they are user-friendly, free to use, and convenient.
But despite these great perks, hot wallets are sometimes vulnerable to malicious hacks since they are connected to the internet. Another main issue is its accessibility, since they are connected to the internet, some specific wallet features may be restricted in certain countries or jurisdictions, depending on laws binding the locality.
Safient Protocol has a generic use case that would make hot wallet storage safe. Safient protocol through their SDKs can integrate with hot wallets like Metamask to provide storage conditions that are less susceptible to malicious cyber attacks and provide convenient security access for users who store their private keys on these hot wallets. Safient Protocol also makes it possible for asset holders to recover their digital assets in situations where they get missing as a result of the loss of private keys. This is made possible through their guardian network system.
If you want to know more about all the kinds of wallets that are available, read this Twitter thread by Koshik:
A 🧵 on the current state of #crypto wallets:
— Koshik (@rajkoshik)
Apr 5, 2022
Also, check out our natively designed web wallet that leverages Safient protocol to provide recovery solutions.
SAFIENT WEEKLY INSIDE
Let us update you on what are we up to at Safient this week.
Safient Voucher public launch:
We are continuing to demo the Safient Voucher and getting a lot of great feedback that will ensure to incorporate it before the public launch. We have a big announcement about the public launch in the next week. LFG 🚀
Our first community Twitter space:
We did our first community space this week where we talked about self-custody and much more. You can listen to the recording if you missed it here. Thanks to Guangmian from Kleros for joining us and sharing his thoughts 🤝
We will be hosting a lot more spaces in the future. Let's go 🚀
Safient MPC Key management Infrastructure for wallets!
We have been cooking something internally to provide the best MPC key management experience for the wallets using the Safient protocol. Stay tuned for the updates and reach out to us on Discord to know more.
Have a lovely weekend y'all. Cheers!