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BASE, BALD and $58M 👀
$58 million deposits and rug pullers on the loose on Base, thanks to BALD. Staking rewards are now taxable. Tether has $850 million. Ron DeSantis to end war on Bitcoin. How to exploit the exploiters?
Doctors are in trouble too?
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Coinbase's Base project witnessed a 24-hour meme coin frenzy.
The layer 2 blockchain was flooded with $58 million in deposits as a new meme coin shot up a mind-blowing 2,900-fold in just 14 hours after launch.
Amidst the frenzy, some cheeky rug pullers snuck in and launched 29 scams on Base. One of them slyly bridged $103,000 to Base, pulled off the heists, and vanished with over $1 million in their pocket.
All this brought in $58 million in crypto deposits to Base.
Now, Base hasn't even launched its public mainnet yet - reportedly planned for August. And developers can bridge Ethereum from the mainnet using a Portal Proxy Contract. The amount of Ethereum bridged to Base spiked significantly, reaching $54 million in a single day.
There were winners too - Trader Turns $500 to Million-Dollar Fortune
Now what caused all this madness? something called BALD.
The mysterious BALD meme coin, playfully named after Coinbase CEO Brian Armstrong's baldness, surged by thousands of percent, reaching a peak of $0.09 on July 31.
The party didn't last long. The anonymous developer pulled a significant amount of liquidity. Losses estimated at $23 million.
Yes, a rug pull.
Coinbase took action by rolling back its layer-2 blockchain to the Genesis block. BALD prices plummeted by 93% within 24 hours, causing the meme coin craze to fizzle out.
At first, some believed that the coin may have been created by someone associated with Coinbase, and rumours linking Coinbase CEO Brian Armstrong to the coin have further fuelled its popularity.
Then, ALL eyes on SBF
Blockchain sleuths are on the case, and their investigation points to none other than Sam Bankman-Fried, the disgraced former FTX CEO.
Despite being under house arrest with limited internet access, suspicions arise due to wallet addresses linked to SBF and phrases similar to his Twitter posts.
See what Adam Cohran has to say:
The alleged BALD developer wallet has a curious history, receiving deposits from FTX and Alameda over two years and holding a staggering 12,331 ETH, valued at about $22 million. And another wallet associated with BALD was linked to a past crypto catastrophe involving Terra USD.
Bankman-Fried has been battling legal troubles, facing eight counts of conspiracy and fraud after the collapse of FTX. Prosecutors are fed up with his antics and have requested the revocation of his massive $250 million bond.
LeetSwap pauses trading
Decentralised exchange LeetSwap, operating on Coinbase's Base network, has temporarily halted trading, citing potential concerns of an exploit. The exchange noticed signs of compromised liquidity pools and decided to investigate further. LeetSwap is collaborating with on-chain security experts to recover the locked liquidity.
The attacker likely used an exposed smart contract function to increase the price of a token, allowing them to drain wrapped Ether (ETH) from LeetSwap's liquidity pools.
TTD IRS 🚨
The IRS has officially decided that crypto staking rewards are now taxable income in the good ol' US of A. Stakers will be required to pay taxes on their staking rewards, as the IRS considers them gross income.
They even published a document called "Revenue Ruling of 2023-14" where they explain it all. Basically, if you're staking on a proof-of-stake blockchain and get some extra crypto as rewards, that's gonna be included in your gross income for the year you actually get your hands on those rewards.
“If a cash-method taxpayer stakes cryptocurrency native to a proof-of-stake blockchain and receives additional units of cryptocurrency as rewards when validation occurs, the fair market value of the validation rewards received is included in the taxpayer’s gross income in the taxable year in which the taxpayer gains dominion and control over the validation rewards.”
Staking is a big part of many portfolios, and lots of people stake on multiple networks, making it even more complicated to figure out the tax stuff for crypto enthusiasts.
Remember that lawsuit against the IRS? Yeah, Consensys was backing it. The lawsuit was about taxing staked crypto, and a couple from Tennessee was trying to get back their federal income taxes.
The IRS isn't stopping with taxing staking rewards. They also ordered Kraken, the crypto exchange, to hand over user information for those who traded at least $20,000 worth of crypto. Kraken called it an "unjustified treasure hunt," but they couldn't stop it.
TTD Numbers 🔢
Tether, the issuer of the USDT stablecoin, just reported some Q2 numbers and they're all big.
Tether reported a Q2 profit of $850 million.
Their total excess reserves now stand at $3.3 billion.
Operational profits for April to June 2023 were over $1 billion, a 30% increase quarter over quarter.
Tether's USDT stablecoin has a market cap of $84 billion - now the world's largest by market cap.
85% of their investments are held in cash and cash equivalents.
Tether holds about $72.5 billion worth of U.S. Treasury Bills backing USDT.
They conducted a share buyback of $115 million and invested in energy-related initiatives.
Tether's consolidated total assets amount to at least $87 billion, with consolidated total liabilities of $83 billion (digital tokens issued).
“I am immensely proud of our most recent reserves attestation, reaffirming our unwavering commitment to transparency,” said Paolo Ardoino, CTO of Tether. “Transparency is not just a buzzword for us; it is the cornerstone of our philosophy. We believe that open communication and strong financials foster trust and reliability, and this is what the global community deserves especially in a year devastated by many failures across the banking and crypto industry”.
Florida governor and presidential candidate Ron DeSantis
“Biden's war on Bitcoin and cryptocurrency will come to an end when I become president.”
Florida Governor and potential presidential candidate Ron DeSantis this during a campaign stop in New Hampshire, DeSantis. He has pledged to put an end to the Biden administration's alleged attack on the crypto industry if he becomes president.
This Republican candidate has shown love for Bitcoin before, and he's not afraid to flaunt it. He even called out the administration's Central Bank Digital Currency (CBDC) plans, vowing to toss it straight into the trash can on day one of his presidency.
DeSantis signed a state-level legislation banning the issuance of a federal CBDC within Florida's borders. He sees CBDC as a tool for financial surveillance. Other presidential candidates like Francis Suarez and Robert Kennedy Jr. have also expressed their support for Bitcoin.
DeSantis had also joined the Twitter Spaces party with Elon Musk to spill the crypto beans even more. He insisted that citizens should have "every right to do Bitcoin."
DeSantis warned that if Biden gets re-elected, Bitcoin could be in for some serious rough patches. According to him, Bitcoin poses a threat to those in power, and they're trying to regulate it out of existence.
So, last Sunday, Curve Finance was hit by attackers who manipulated the price of tokens in liquidity pools, causing a loss of $52 million.
But guess what? A trading bot, the "MEV bot," swooped in to save the day! 🦸♂️
Exploiting the Exploiters
The bot ("c0ffeebabe.eth,") executed a strategic move within Curve's CRV-ETH liquidity pool, using flash loans from Balancer and Uniswap to capitalise on the price discrepancy between CRV tokens. This savvy maneuver yielded an impressive 2,879 Ethereum, worth about $5.4 million.
But "c0ffeebabe.eth," wasn't planning on going on a fancy vacation. Instead, it returned the funds to Curve Finance.
The bot's actions involved a series of intricate steps, showcasing its sophisticated arbitrage skills. The exploit turned what would have been a small gain into a massive $5.4 million payday.
After the heroic intervention, c0ffeebabe.eth used Internal Data Messages to communicate its intentions. It stated that the funds would be securely stored in a cold wallet with isolated private keys. The Curve team quickly identified the exploit and offered to refund the stolen funds.
Before this heroic act, c0ffeebabe.eth had already made around $29,000 in profit through various arbitrage transactions. This impressive history of successes didn't stop it from returning the significant haul from this exploit.
TTD Surfer 🏄
The SEC has charged Richard Heart, founder of Hex, for conducting unregistered securities offerings that raised over $1 billion.
Crypto tech startup Yuga Labs is set to acquire gaming and music company Roar Studios for its expertise in AI.
Binance Japan is set to launch in August and plans to list 34 tokens, the most among domestic exchanges.
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The Token Dispatch is a daily newsletter that takes you on a 4-5 minute drive through the wild west of the Crypto World. Daily in your email inbox @13:00 GMT. Almost always.