8/12/22 FAL Weekly Digest
The FAL Weekly Digest is a source for this week’s biggest cryptocurrency-related news and updates. This newsletter features excerpts and links to this past week’s biggest news articles written by members of FAL Consulting’s writing team or gathered from other listed sources.
Crypto Companies Reporting Q2 Losses
Coinbase reports $1 billion loss
The Q2 report was released August 9 and includes more information this quarter, organized into 6 chapters to “help investors better understand their results.”
Chapter 1 highlights that the crypto market is cyclical. During down markets, Coinbase remains focused on building products. They even go on to state that “each crypto cycle landed higher than the previous one, due to innovations built during the down turns.” Chapter 2 goes on to explain how these down markets are reflected in their Q2 results, but highlights the fact that their year-over-year growth in subscription and services grew 44%.
Like many of the other crypto companies reporting losses in Q2, Coinbase was just as affected by the aftermath of the Terra Luna collapse, crypto liquidity crisis, and macroeconomic conditions.
In their full-year 2022 outlook, some estimates have been adjusted to better react to the current market conditions. Coinbase lowered their expense range for Technology & Development and General & Administrative expenses from $4.25 - $5.25 billion to $4 - $4.25 billion. The lower range is a direct result of their hiring freeze and cutting around 18% of their work force back in June.
Marathon Digital Holdings reports $192 million loss
Marathon Digital Holdings is a digital asset technology company that mines cryptocurrencies. According to the company website, Marathon is still on track to deploy 199,000 miners by early 2023. At a price of $30,000 per Bitcoin and a total network hash rate of 325 EH/s (Exahash per second), this would generate Marathon 58 BTC per day (roughly $640.4 million per year).
Marathon has operations in Texas, Montana, South Dakota and Nebraska. Most of their facilities are using Bitmain Antminer S19, the industry leading Bitcoin miner. Due to their continued expansion plans combined with the recent crypto environment, the company recorded a $127.6 million impairment in their bitcoin holdings.
Marathon’s Texas mining operation is their largest with over 100,000 S19 miners.
Cipher Mining Reports $29 million loss
Cipher Mining is a U.S. based Bitcoin mining company. The company released results for its second quarter ending June 30, 2022.
Cipher reported a net loss of $29.2 million, which equates to around $0.12 per share.
The Merge
The final testnet merge completed with Goerli
The Goerli testnet is now the third public testnet to be merged/forked to a proof-of-stake network. This is expected to be the final test fork before the upcoming merge on the mainnet.
Ethereum has many test networks, like most other blockchains, which allow developers to test functionalities and transactions using test ETH.
Mainnet Merge Incoming
Yesterday on the Consensus Layer call, client engineers agreed on Mainnet parameters for the Merge – a Bellatrix epoch of 144896 and a Paris TTD of 58750000000000000000000 (tentative). The TTD is based on Proof-of-Work difficulty and is thus a bit hard to estimate precisely. The target date is September 15, 2022, but this estimate might have even a week of error. On this coming week’s All Core Dev call estimates will be re-checked, and the TTD will either be confirmed or a final adjustment will be made to better hit the target date.
Hodlnaut
Hodlnaut Freezes Withdrawals
Hodlnaut is a crypto lender based out of Singapore, and the latest cryptocurrency company to stop withdrawals because of “recent market conditions.”
The announcement was made on Hodlnaut’s website, the company says it made this decision to allow it “to focus on stabilizing our liquidity and preserving assets” while working in collaboration with local law firm Damodara Ong LLC on the “feasibility and timelines” of its restructuring and recovery plan.
The firm is now informing Singapore’s Monetary Authority (MAS) that it is withdrawing its license application. Due to this revoking, the corp will no longer allow token swaps on its platform.
The lender will reportedly provide more information on this matter on August 19th, but did not mention any estimate of when withdrawal functions will be reinstated.
Nomad
Two weeks ago, the crypto bridge Nomad was victim to a $190 million hack, now it's reported that 88% of those who participated were copycats.
The report comes from Coinbase's claims that all these hackers had to do, was copy the critical attacker's code and engage in their own attack.
The Coinbase report details how 88% of participants in the exploit were given “the copycat” moniker as all together they stole around $88 million in coin from the bridge.
“The majority of copycats used a variation of the original exploit by simply modifying targeted tokens, amounts, and recipient addresses,” Coinbase researchers said.
Read more on Info Hub (Premium)
The Nomad bridge is a protocol that gives users the ability to move digital assets between blockchains, such as Milkomeda C1, Avalanche (AVAX), Ethereum (ETH), and Moonbeam (GLMR).
This is biggest hack since Axie Infinity's Ronin Bridge Sidechain was compromised back in March, and has just plagued the Nomad token bridge which allowed malicious actors to steal around $190 million.
Market
Market Cap: $1.146 T; up from $1.093 T last week
24h Volume: $67.2 B; down from $69.9 B last week
BTC Dominance: 40%; down from 40.6% last week
ETH Dominance: 20.2%; up from 18.9% last week
None of our posts or newsletters are meant to be taken as financial advice.
