Category Archives: Cointelegraph.com

Binance CEO CZ on FTX crash: “We’ve been set back a few years”

Crypto exchange FTX joined many other fallen projects — including Terra (LUNA), 3AC, Celsius and Voyager — in filing for bankruptcy in 2022. Owing to the devastation caused by multi-billion dollar losses suffered by businesses and investors, the man running the biggest crypto exchange, Binance CEO Changpeng “CZ” Zhao, envisions an era of greater regulatory scrutiny in the near future.With one of the biggest crypto businesses falling overnight, CZ believed the episode was devastating for the industry, which took away a lot of consumer confidence. Speaking at Indonesia Fintech Summit 2022, he said:“I think basically we’ve been set back a few years now. Regulators rightfully will scrutinize this industry much, much harder, which is probably a good thing, to be honest.”Regulations in crypto historically circled around Know Your Customer (KYC) and Anti-Money Laundering (AML). However, CZ reiterated his long-standing belief that regulations must focus on exchange operations, such as business models and proof of reserves. As a result, he believed that tighter regulatory scrutiny around crypto business operations is around the corner.CZ sharing his thoughts on FTX and the future of crypto during Indonesia Fintech Summit 2022. Source: YouTubeWhile FTX’s collapse is bound to have a short-term impact on retail investors, in the longer term, this is a wake-up call for discussions about how to handle risks across crypto ecosystems. Speaking specifically about FTX, he said:“The last three days is just a revelation of problems. The problems were there way longer. This problem wasn’t created in the last three days.”CZ pointed out that the biggest red flag about FTX was Alameda Research’s financials, which were full of FTX Tokens (FTT) that made him finalize the decision to sell off Binance’s FTT holdings worth over $2 billion at the time. The following day, FTX CEO Sam Bankman-Fried reached out to CZ with a deal that “did not make sense from a number of fronts”. At the same time, CZ hoped to get an over-the-counter (OTC) deal for protecting users:“Original intention was let’s save the users, but then the news of misappropriating user funds, especially U.S Regulatory Agencies investigations (made us realize) we can’t touch that anymore.”CZ believes that increasing transparency and educating regulatory agencies about crypto audits and cold wallet information will make the industry much healthier. Finding the right balance of rules is not ask, he said.The entrepreneur highlighted the need for easy tools for saving private keys and other security functionalities but argued that the crypto ecosystem will grow in incremental steps and not giant leaps.Related: Binance Proof-of-Reserve pledge gains support following FTX crisisTaking a proactive approach in regaining investor confidence, Binance published a new page titled “Proof of Assets,” which displays details about the exchange’s on-chain activity for its hot and cold wallet addresses.“Our objective is to allow users of our platform to be aware and make informed decisions that are aligned with their financial goals,” said Binance in an official statement.

Tether blacklists $31.4M USDT following FTX’s alleged hack, Musk reacts

On the night of Nov. 11, several wallet addresses linked to FTX were found transferring millions of dollars worth of cryptocurrencies without an official notice — sparking speculations ranging from the commencement of FTX’s bankruptcy proceedings to the involvement of hackers. Within hours, FTX confirmed on Telegram that the fund transfers were part of an ongoing hack.FTX Telegram admin confirms being hacked. Source: TelegramFollowing FTX’s confirmation on Telegram about the hack, as shown above, Tether proactively blacklisted $31.4 million worth of USDT tokens linked to the transactions. As pointed out by blockchain investigator ZachXBT, the blacklisted USDT tokens were made up of $3.9 million USDT on Avalanche (AVAX) and $27.5 million USDT on Solana (SOL). FTX meltdown/ransack being tracked in real-time on Twitter— Elon Musk (@elonmusk) November 12, 2022Billionaire entrepreneur Elon Musk, who recently purchased Twitter in hopes of unleashing the platform’s full potential, acknowledged Twitter’s contribution in tracking down the FTX developments in real time.Elon Musk takes a dig at FTX CEO Sam Bankman-Fried. Source: TwitterBy blacklisting the alleged stolen USDT token, Tether disarmed hackers from siphoning the assets to another account or exchanging them for other cryptocurrencies. As part of the remediation, Tether can burn the blacklisted USDT and reissue equal amounts of the asset to the original owner.However, the hacker also stole numerous other crypto assets, including Ethereum (ETH) Chainlink (LINK) and USDP, which is yet to see intervention from respective ecosystems.Related: FTX-Binance standoff highlights the need for clear rules — Sen. LummisOver the past few days, major crypto exchanges, including Binance, OKX, Kucoin and Crypto.com, committed to sharing their proof of reserve to regain investor confidence. Taking the lead in this drive, Bitfinex CTO Paolo Ardoino shared 135 cold and hot wallet addresses revealing Bitfinex’s proof of reserves.1/Proof of reserves for @bitfinexHere is the list of the main Bitfinex walletshttps://t.co/TaS7Vy9qfPFinex holds:- 204338.17967717 BTC (among top bitcoin holders)- 2018.5 L-BTC (Liquid)- ~1000 BTC on LN ⚡️- 1225600 ETH (among top ethereum holders)…— Paolo Ardoino (@paoloardoino) November 11, 2022

While the move was well-received by investors, few members of the community pointed out the lack of Bitfinex’s liability figures, which makes the data incomplete for review.

Bitfinex CTO releases proof of reserves amid FTX bankruptcy fiasco

The fall of major crypto ecosystems — such as FTX and Terra (LUNA) — this year highlighted the importance of transparency around the true reserves held by crypto exchanges and businesses. Amid the ongoing fear, uncertainty and doubt (FUD) across the crypto space, crypto exchange Bitfinex revealed its proof of reserves to the general public.Over the past few days, major crypto exchanges, including Binance, OKX, Kucoin and Crypto.com, committed to sharing their proof of reserve to regain investor confidence. Walking the talk, Bitfinex CTO Paolo Ardoino shared the list of the main Bitfinex wallets, last updated on November 11.GitHub repository containing Bitfinex proof of reserves. Source: GitHubAs shown above, Ardoino shared Bitfinex’s proof of reserves on GitHub, wherein he listed a total of 135 cold and hot wallet addresses. Sparing users the trouble of going through the addresses, he listed down some of the company’s significant holdings, which included 204338.17967717 BTC and 1225600 ETH among top holders.1/Proof of reserves for @bitfinexHere is the list of the main Bitfinex walletshttps://t.co/TaS7Vy9qfPFinex holds:- 204338.17967717 BTC (among top bitcoin holders)- 2018.5 L-BTC (Liquid)- ~1000 BTC on LN ⚡️- 1225600 ETH (among top ethereum holders)…— Paolo Ardoino (@paoloardoino) November 11, 2022Bitfinex developed an open-source library called Antani back in June 2018, which was aimed at providing transparency around proof of solvency, custody and off-chain delegated proof of vote. While overlooked in the past, Ardoino confirmed Bitfinex’s plans to revive the system that would allow users to verify their balances without compromising privacy.Goals set by Bitfinex’s open-source library,  Antani. Source: Antani white paperAntani’s whitepaper suggest that users will be able to verify their balances cryptographically, allowing Bitfinex users to confirm the existence of their funds and eradicate depegging risks.While the revelation saw a warm welcome from the community, members pointed out that the data is incomplete as the information excludes Bitfinex’s liability figures.Related: OKX, Kucoin say proof of reserves will be ready in a monthAs a result of the massive outflows from crypto exchanges amid the FTX bloodbath, hardware-based cryptocurrency wallet provider Ledger suffered from a temporary server outage. “​​​​After the FTX earthquake, there’s a massive outflow from exchanges to Ledger security and self-sovereignty solutions,” reasoned Ledger CTO Charles Guillemet while revealing that the systems were back running soon after.

FTX funds on the move: bankruptcy proceedings, insider threat or a hack?

The recent tensions between the two major crypto exchanges FTX and Binance, which was accompanied by a massive selloff of FTX Token (FTT), resulted in the collapse of roughly 130 companies linked to FTX Group — including FTX Trading, FTX US, West Realm Shires Services, and Alameda Research. Following the resignation of FTX CEO Sam Bankman-Fried and the revelation of the company’s intent to file for Chapter 11 bankruptcy, on-chain data hinted at the commencement of bankruptcy proceedings as multiple FTX wallets were found transferring funds over to a common Ethereum (ETH) wallet address.The wallet address in question received funds from various international and U.S.-based wallets linked to FTX, which amassed over 83,878.63 ETH (worth over $105.3 million) in just two hours starting at 9:20 PM ET on Nov. 11 and continued to see an influx of funds at the time of writing.With all eyes on FTX, the late-night fund transfers on a Friday night raised questions about the company’s intent. While some blockchain investigators saw it as the start of the bankruptcy process, speculations around ill-intent or an external hack surfaced across the crypto ecosystem.Or Sam wants to make it all back in one trade pic.twitter.com/p38fQ516Gv— Steven (@Dogetoshi) November 12, 2022The wallet owner was found swapping $26 million Tether (USDT) to DAI via 1inclh while approving USDP — a Paxos-issued stablecoin — for trade on CoW Protocol. As the situation unfolds, the wallet also approved transfers and sales of other cryptocurrencies, including Chainlink (LINK), cUSDT and stETH.The funds coming from FTX wallets were later moved to new addresses, out of which one of them was labeled as FTX on Etherscan, as pointed out by blockchain investigator PeckShield. A subsequent investigation also confirmed that 8,000 ETH was wormholed from Solana to one of the new addresses within the last hour.The involvement of a hacker, at this time, seems unlikely as they typically would have moved funds from FTX’s wallet to their own wallets. However, many pointed out the possible involvement of an insider. Until the dust settles, the community continues to monitor the movement of funds. However, investors are advised to avoid speculations until confirmed reports set in. FTX has not yet responded to Cointelegraph’s request for comment. Related: FTX’s ongoing saga: Everything that’s happened until nowAdding to investor’s concerns, FTX sources told Reuters that between $1 billion and $2 billion of client money is unaccounted for in the company’s spreadsheet. The unconfirmed report also suggests that SBF secretly moved $10 billion in funds to Alameda Research while pointing out that the whereabouts of missing funds remain unknown.

Worldwide Webb founder explains the role interoperability will play in Web3

On Nov. 11, NFT Steez, a bi-weekly Twitter Spaces hosted by Alyssa Expósito and Ray Salmond, met with Thomas Webb, the founder of the interoperable avatar game Worldwide Webb, to discuss the integration of interoperability in Web3 and the Metaverse. By definition, interoperability is a feature of Web3 whereby a product or system can work seamlessly across platforms with other products or services. Webb defines interoperability simply as “creating a token— a nonfungible token (NFT)” since, at its most basic level, no one can control it besides the creator.But how does interoperability function presently in Web3, and what is its potential impact? Executing interoperability the “right” way When discussing how interoperable applications can create a profound impact, Webb described the creativity he has seen from NFT communities and brands.Whether it comes from “creating a product, creating ideas, or creating experiences,” Webb believes that enabling the creation of intellectual property (IP) allows users to display their loyalty and in other ways, their achievement.Interoperability also seems to function in tandem with token-gated experiences, according to Webb. In essence, users can get closer to authentic experiences by using the token they hold as an access pass to attend events and receive perks.This integration enables brands to cross-collaborate, reach their users and create a proliferation of value, or as Webb says, “infinite value.” Related: NFT Steez and Lukso co-founder explore the implications of digital self-sovereignty in Web3Interoperability applications across sectors “Interoperability could be the backbone of everything,” stated Webb when asked about the sectors interoperability could seep into. For Webb, the more transparent and data-driven platforms can be, will yield more collaboration and engagement across tech companies. Ultimately, Webb believes that e-commerce, creative experiences and even concepts like identity and self-sovereignty will be impacted by the concept of interoperability.However, even with interoperability as a cornerstone of Web3, Webb did express the inevitability of risk and challenges associated with creating a standard that suits all countries. According to Webb, the presence of centralized regulatory bodies could continue to inhibit experimentation and growth. To hear more from the conversation, tune in and listen to the full episode of NFT Steez and make sure to mark your calendar for the next episode on Dec. 2 at 12 pm EST.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

FTX US suspends withdrawals, according to on-chain data

Following an announcement on Nov. 10 that FTX US may halt trading on its platform, on-chain data suggests that the platform has paused withdrawals from the United States-based platform on Nov. 11.The original announcement on Nov. 10 cautioned users to “please close down any positions” while maintaining that its users would still be able to make withdrawals, as that will remain open.Although the FTX CEO Sam Bankman-Fried, also known as SBF, remained insistent that FTX US was fine and had been unaffected by FTX liquidity issues, it appears things may have spiraled rapidly, as FTX US was included in a Chapter 11 bankruptcy filing in the United States.On Nov. 10, Bankman-Fried assured FTX US users in an apology that “FTX US, the US based exchange that accepts Americans, was not financially impacted by this shitshow.” He added that the platform was “100% liquid” and that “every user could fully withdraw (modulo gas fees etc).”19) A few other assorted comments:This was about FTX International. FTX US, the US based exchange that accepts Americans, was not financially impacted by this shitshow.It’s 100% liquid. Every user could fully withdraw (modulo gas fees etc).Updates on its future coming.— SBF (@SBF_FTX) November 10, 2022To recap, FTX International’s liquidity issues were triggered within the last seven days when Binance CEO Changpeng “CZ” Zhao announced that Binance would liquidate the entirety of its FTX Token (FTT) holdings. CZ’s announcement inadvertently caused a bank run whereby FTX’s users attempted to withdraw funds only to discover that the exchange didn’t have enough liquidity on hand to meet the demand.Since then, Bankman-Fried has resigned from his position as FTX CEO but will “remain to assist in an orderly transition” before being succeeded by John Ray.Related: FTX crisis likely to spark domino effect, macro analyst explainsFTX’s imminent collapse has invited much scrutiny of the crypto industry. Many global lawmakers and others are suggesting additional regulations for crypto firms, especially since FTX is the latest in a string of crypto-related bankruptcy filings in 2022.

3 key crypto price events to watch in the wake of the FTX and Alameda debacle

Up until the start of this week, Bitcoin (BTC) had been demonstrating record-low volatility, and this gave altcoins enough latitude to paint some nice technical setups. At the same time, on-chain data and technical analysis were beginning to suggest that BTC was midway through carving out a bottom, and many analysts believed that brighter days lay ahead. Fast forward to the present, and the volatility spike the market received actually turned out to be a black swan event. As you already know, FTX is kaput. Alameda Research is kaput. BlockFi has put a stop to withdrawals, citing an inability to “operate as usual,” so it’s “pausing client withdrawals as allowed under our Terms,” suggesting that the company is also kaput.The contagion is spreading, and the shrapnel from this Krakatoa-level event is bound to ripple throughout the entire crypto ecosystem. At this time, it’s difficult to make a confident short-term investment thesis for assets by simply looking at the chart, and the best thing unsure investors can do is either stick to a time-tested plan or do nothing. The most likely short-term outcome is volatility will remain high, and crypto prices will continue to whipsaw for a while.Nobody is comfortable focusing on the potential negative outcomes that lie ahead for the crypto sector and cryptocurrency prices, but it’s every investor’s responsibility to consider the absolute worst outcomes and have a contingency plan in place. That way you don’t freak out when shit really hits the fan. Here are a few things to keep an eye on over the coming days. USDT/USD vs. USDC/USD During high volatility events, stablecoins sometimes break their peg with the dollar. If there’s some wild FUD about Bitcoin being banned, hacked or dying, stablecoins prices sometimes rise above $1.00 as traders seek shelter in assets fixed to the dollar. During crypto black swan events, sometimes Tether (USDT) loses its dollar peg. It’s happened a number of times in the past, and usually, once the smoke clears it regains the 1:1 peg. On Nov. 9, USDT/USD broke below its dollar peg, dipping as low as $0.97 at one point, according to data from TradingView and Coinbase. While USDT dipped below its peg, USD Coin’s (USDC) value spiked to $1.01. USDT/USD peg. Source: TradingViewWhile we won’t explore the unconfirmed reasons why there was dislocation between the two, the unsubstantiated rumors related to Tether and Alameda Research can easily be found on Twitter. What’s important to note here is that panic can easily be triggered by false information, rumors and lies, so it doesn’t matter if the rumors about Alameda/Tether are completely false. If it spreads on social media and spooks investors, they’re going to act and in this case; many will or are in the process of flipping their USDT to USDC, BTC or other stablecoins. Similar behavior was seen during the Terra and Celsius implosion. On May 12, USDC’s price spiked from $1.00 to $1.06–$1.19, according to data from TradingView and KuCoin. On the same day, USDT’s value briefly dropped to $0.98 and $0.94. USDC/USD peg. Source: TradingViewWhen the price is dislocated and there are spreads across exchanges, making stablecoin conversions becomes costly and the experience of swapping from one to the other or from an altcoin to stablecoin can become unpleasant. The USDT and USDC dollar peg is something worth keeping an eye on. Bitcoin price expectationsThe Nov. 8 sell-off finally pushed BTC’s price out of the 146-day range where the price fluctuated between $24,500 and $18,600. BTC/USDT 1-day chart. Source: TradingViewThis is a significant range break, and from the viewpoint of technical analysis, failure to recapture this range and increased selling could see the price slice through the volume profile gap to find support in the $11,000–$12,000 range. Unpleasant, yes, but that’s just the current reality. If Bitcoin is able to reclaim and hold the $18,000 handle, at least the price will back in its previous range, and that would be a good sign. A glance at the Ether (ETH) chart reflects a similar set-up where ETH dropped out of a 148-day range between $2,000 and $1,250, but the price has already reclaimed the previous range. ETH/USDT 1-day chart. Source: TradingViewBearish traders have a downside target in the $700 range, but it’s interesting to see how the price has rebounded to trade back around $1,250. Related: Genesis Trading reveals $175M of funds are locked in FTXThe market is searching for firmer footingA lot of crypto-focused companies and investment groups have exposure to FTX and Alameda research, which also means these same companies now have some holes in their own balance sheets. Companies with exposure to #FTX-Sequoia Capital – $213.5 million exposure -Galaxy Digital – $77 million exposure -Crypto.com – Less than $10 million -Amber Group – 10% funds -Kraken – exposure to 9000 FTT -Multicoin Capital – 10% funds-Selini Capital – 3% of their funds— Being Satoshi (@BeingSatoshi) November 10, 2022A handful of these crypto-native companies also hold significant-sized bags of assorted altcoins and decentralized finance (DeFi) tokens. To salvage the current losses, make good on their own loans, and meet their client obligations, it’s possible that a number of these BTC, altcoin and DeFi token stashes could find their way to being market sold on spot exchanges. Altcoins are already down badly, and some are relatively illiquid, meaning a sharp increase in selling could put strong downward pressure on price. Before buying what looks like once-in-a-life-time dips and cycle bottoms, investors should dig around and take a closer look at who are some of the majority holders of the token/project and remember that FTX’s multi-billion-dollar implosion is yet to be fully felt throughout the sector. Now is the time to research and do due diligence before making any investment in any cryptocurrency. This newsletter was written by Big Smokey, the author of The Humble Pontificator Substack and resident newsletter author at Cointelegraph. Each Friday, Big Smokey will write market insights, trending how-tos, analyses and early-bird research on potential emerging trends within the crypto market.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

‘Need to update my LinkedIn’ — FTX Ventures head resigns: Report

Amy Wu, an investor in FTX and the head of the firm’s venture capital arm, FTX Ventures, has reportedly resigned her position.According to a Nov. 11 report from The Information, Wu resigned as head of FTX Ventures following the announcement FTX would be moving forward with bankruptcy proceedings in the United States. According to her LinkedIn profile, Wu had been based at FTX Venture’s offices in The Bahamas since January.FTX Ventures’ website along with that of Alameda Research went dark on Nov. 9 amid its parent company’s liquidity crisis and deal with Binance falling apart. Wu said on Twitter at the time that she was learning about events affecting the company at the same time as everyone else through social media, and suggested she would update her LinkedIn profile for new job opportunities.Truth. Need to update my linkedin— Amy Wu (@amytongwu) November 9, 2022Wu’s resignation followed the news 134 companies associated with the FTX Group — including FTX Trading, FTX US and Alameda Research — would be filing for bankruptcy under Chapter 11 in the District of Delaware. Sam Bankman-Fried resigned as CEO in the same announcement, but said “this doesn’t necessarily have to mean the end for the companies.”Related: FTX US resigns from the Crypto Council for InnovationAs a $2-billion venture capital fund aimed at investments in Web3 projects, FTX Ventures backed projects including LayerZero Labs and purchased a 30% stake in SkyBridge Capital. In August, the firm reportedly absorbed the venture capital operations of Alameda Research amid the crypto bear market. Wu said at the time the two firms were still running at “arm’s length.”

MakerDAO Risk Core Unit makes urgent parameter change request in light of recent market events

The MakerDAO Risk Core Unit, a key group within the MakerDAO governance system, submitted an urgent request today to change collateral parameters for the DAOs stablecoin, DAI.Primoz, a member of the Risk Core Unit team, posted the request to the MakerDAO Forum.“In light of recent events in the crypto ecosystem and surrounding uncertainty regarding financial stability and asset liquidity of various entities and their possible relations with token governed protocols, we are proposing following temporary emergency measures”The message proposed that the debt ceiling for MATIC, LINK, YFI, renBTC vaults should be reduced by the following amounts:MATIC: From 20M to 10M (50%)LINK: From 25M to 5M (80%)YFI: From 10M to 3M (70%)renBTC: From 10M to 0 (100%)A separate, earlier proposal also suggested that the debt ceiling for MANA be lowered from 10M to 3M.If the proposal passes, it will reduce the amount of coins that can be used as collateral to mint new DAI. Some of the coins on this list are so close to the new debt ceiling that they will immediately hit it or be close to hitting it should the proposal pass. For example, there is currently $14.2M worth of MATIC backing DAI, but the proposal would lower the debt ceiling for MATIC to $10 million. This would mean that users would no longer be able to mint new DAI by depositing MATIC.In the proposal, Primoz sought to calm users and express that the changes may only be temporary:“When the situation becomes clearer and the environment less risky, we (@Risk-Core-Unit) or either MOMC will propose further parameter changes to adjust parameters based on the future state. While we do not necessarily want current positions to unwind, we want to limit further possible exposure.”Over the past few days, the crypto community has been rocked by news that FTX, the world’s third-largest crypto exchange by volume, did not have enough liquidity to handle all customer withdrawals. This event started a contagion that has spread through the crypto market, leading many coins to have huge losses.MakerDAO has turned out to be the latest victim of this contagion. As the value of collateral backing DAI has fallen, debt levels have risen too high for the comfort of the Risk Core Unit team. This may lead to lower debt ceilings and increasing frustration for borrowers who wish to mint new DAI.

Dogecoin is on the cutting edge of future assets

Attention is the lifeblood of Dogecoin (DOGE) and other memecoins. Much like earnings drive the price of corporate shares, the size and quality of attention captured by memecoins drive their price action.Successful crypto traders understand that DOGE and its kin are not just chips in the “great shitcoin casino” but are, in fact, tradable derivatives of human attention. They are tradable assets backed by zeitgeists.Trading memecoins isn’t just about spinning the wheel but about weighing the coin’s valuation against the amount of attention it’s receiving. As crypto influencer Cobie said, “Smart traders start selling as ownership and valuation have caught up with attention.”This means that human attention is being viewed increasingly as one of the scarcest commodities in the world, which is true. In fact, we’ve known this for so long that it’s now a cliche to talk about the “attention economy.”Related: 90% of GameFi projects are ruining the industry’s reputationIn the 2000s, Web2 companies like Facebook and Snapchat learned to monetize attention. They created apps that captured people’s attention and tracked their behaviors, which allowed them to farm and sell attention to advertisers.I know this might sound like undergraduate hooey, but as our economic system changes and evolves, it’s only natural that the types of things we value should expand. If human attention is powerful enough to drive the bottom line of huge companies like Meta and Google, then why not trade it directly? Memecoins are a way of valuing and trading the attention commodity in a decentralized manner. Using blockchains and automated market makers, anyone can trade on people’s attention and enthusiasm.Remember when Joe Rogan got into hot water earlier this year about comments he made on his popular The Joe Rogan Experience podcast? Within 24 hours, maybe a dozen Rogan-themed memecoins were launched, with one, Marshall Rogan Inu (MRI), surpassing a $50 million market capitalization.How could the market cap get so high? Well, at that moment, MRI was the top trending coin across trading platforms like DEX Screener, it was blowing up on Twitter, and it had sponsored a mixed martial arts fighter. Its valuation had to catch up with the amount of hype surrounding the project.Or take DOGE, which pumped following Elon Musk’s Twitter takeover. The higher valuation was not only due to the rational, if risky, play that Musk might integrate the crypto token into Twitter in the future, but it was also a function of crypto traders betting that Musk’s tweets would drive attention to DOGE and increase its price. Unlike small memecoins that live and die on how much interest there is in the story, memecoin stalwarts like Shuba Inu (SHIB) and Dogecoin also have fundamentals contributing to their value. Indeed, DOGE’s market cap is currently over $16 billion, and it’s one of the largest proof-of-work blockchains following Ethereum’s switch to proof-of-stake in September. DOGE’s valuation is therefore based on its fundamentals plus attention, whereas memecoins like Will Smith Inu (WSI), which pumped after Will Smith slapped Chris Rock at the Oscars, are valued only on attention and are forgotten when the news cycle moves on.Related: Throw your Bored Apes in the trashWhile it’s easy to dismiss all this as meaningless gambling — and I don’t deny the speculative aspect — that would miss the change underneath the hood. Memecoins aren’t based on random dice rolls — they track the human attention commodity. Given the headwinds faced by the world economy, the creation of new means of speculation and investing is not surprising. Our economies are in danger of grinding to a halt due to declining productivity and scarcer natural resources.In the future, we will see an uptick in ephemeral aspects of culture becoming tradable commodities. Fractionalized music albums and intellectual property rights are on the way, and thanks to memecoins, people can now trade derivatives based on jokes and tabloid scandals.The massive market cap of DOGE and the constant parade of microcap memecoins show that our concept of value is shifting from real-world commodities that come out of the ground to the ephemeral qualities that produce culture. And remember, if everyone decides something is valuable, it might well be.Nathan Thompson is the lead tech writer for Bybit. He spent ten years as a freelance journalist mostly covering Southeast Asia before turning to crypto during the Covid-19 lockdowns. He holds joint honors in communication and philosophy from Cardiff University.This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.