Welcome to Empire

Hosting the Empire podcast is one of the highlights of my job. 

Santiago and I get to speak with the most interesting people in our industry about the projects that will shape our world. We debate, we banter, we ramble, we laugh, and hopefully through it all, we move a bit closer to both predicting the future and finding the truth. 

The Empire podcast launched in March 2021. Eight months later, Santiago joined me as co-host. We’ve built one of the largest podcasts in the industry, with tens of thousands of listeners per episode.

But recently I couldn’t help but feel that something is missing. We interview guests on Tuesdays and share our thoughts during our Friday roundups. We tweet. But there’s more than can be done to move the information space forward. 

That’s why we’re launching the Empire newsletter. It’s a daily morning newsletter that provides everything you need to know to start your day. You’ll find unique takes on news stories, important data points we’re tracking, and more. 

We’ve partnered with the phenomenal writers on our Blockworks news team: David Canellis, Casey Wagner and Katherine Ross. You can’t find a better team. They’ll write daily and Santiago and I will add our opinions and takes along the way. 

We’re glad you’re here. 

– Jason, Blockworks co-founder and Empire host

🐶 Airdrops don’t get better than BONK

They say bitcoin was immaculately conceived. The same goes for BONK.

A holy reading of bitcoin’s genesis would focus on its absent premine. In the earliest days, acquiring bitcoin meant actually mining it yourself. The first exchanges sold BTC for the cost of the electricity spent and there was no early-access initial coin offering, so no ultra-cheap price just for venture capital. 

All important things for a global currency turned world reserve asset. Not so much for memecoins. But that shouldn’t make BONK any less special.

BONK is by far the best performing airdrop token in crypto history, as it stands. It's up more than 8,100% since its airdrop on Christmas Day 2022 and topped out about 12,000% up when it reached all-time high two weeks back.

Airdrop tokens come in all sorts, with different kinds of distributions, which makes direct comparisons difficult. Some have airdropped only a few percent of their total supplies, like celestia (TIA) and aptos (APT), while others including uniswap (UNI), jupiter (JUP) and pyth (PYTH) have sent out much more.

BONK’s showrunners, meanwhile, airdropped half of its supply to the Solana ecosystem in some of the darkest days in crypto after the FTX debacle. Bankman-Fried was famously one of Solana’s loudest backers, and according to BONK, “at the end of 2022, Solana needed some fun and excitement back to be injected back into the network, and what’s more fun than a free community airdrop!”

Airdrops are also often staggered across a longer period of time, so it’s unclear exactly when one should start tracking its growth as “an airdrop token.” This could skew in BONK’s favor, considering it started trading days after it was airdropped.

Whether it’s apples to oranges or bananas, BONK has easily beaten 45 other cryptocurrencies that have been airdropped over the past four years when tracking returns from their first recorded trade price.

BONK’s current returns are nearly 17 times greater than runner-up TIA, up 470%, and even further ahead of worldcoin (WLD), arkham (ARKM), zetachain (ZETA), pyth and optimism (OP), which have all more than tripled in price.

Another memecoin, arbdoge ai (AIDOGE), seemingly hoped to replicate BONK’s miracle conception by putting up its entire supply to be claimed by anyone who was eligible for the arbitrum (ARB) airdrop last March. 

AIDOGE is the third-best performing airdrop token analyzed, having gained 440%, which is perhaps unsurprisingly more than ARB itself, which has only managed 22.5% and at most 77%.

Uniswap, regarded as the biggest airdrop in crypto history in terms of value distributed, is arguably more successful than BONK going by valuations alone, considering its cap is 10 times bigger. 

But when it comes to number-go-up technology, it turns out BONK has it beat in spades.

— David Canellis

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☎️ Binance calls in the grownups 

As it undertakes a massive rebrand, Binance has quietly built out its first board of directors, including three outside hires. 

Binance CEO Richard Teng and founding employees Heina Chen, Jinkai He and Lilai Wang form the internal membership. Gabriel Abed, former ambassador of Barbados to the United Arab Emirates, is the first chairman. Gojo & Co managing partner Arnaud Ventura and Bayview Acquisition Corp. CEO Xin Wang are the other outside members.

Chen, according to the SEC’s complaint against Binance last summer, apparently controlled the exchange’s bank accounts. The SEC claims former CEO Changpeng Zhao, known as CZ, created a secret company in Switzerland to artificially pump crypto asset volumes. Chen was the signatory on these accounts, the SEC alleges. 

Chen is clearly inner-circle level at Binance, but an interesting choice for an inaugural board member. 

CZ, who in November pleaded guilty to violating the Bank Secrecy Act, is scheduled to be sentenced later this month. While the charges carry a maximum penalty of ten years in prison, his cooperation should mean he serves only around a year and a half. 

Speaking of the SEC, the securities regulator was notably absent from Binance’s $4 billion settlement with the DOJ and CFTC last year. The SEC claims Binance co-mingled funds, a la FTX, but, of course, without the billions of dollars of theft. 

It does make you wonder, though. If the SEC had the evidence, why not hand it over to the DOJ and add some criminal charges related to these allegations? They probably tried. But a civil suit is still helpful in sending a message to crypto exchanges, and Gary Gensler seems to have no shortage of counsel. 

So, the SEC’s civil suit against the exchange — which appears eerily similar to the case they brought against Coinbase just one day after announcing the Binance charges — continues. 

Binance presented oral arguments  in January as part of its motion to dismiss the SEC’s case. But a full dismissal seems incredibly unlikely, given Coinbase had little success with a similar strategy.

— Casey Wagner

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⌛ No ETH ETF for you…yet

Ether ETFs may be off the table for now, despite favorable analysis.

Bitwise, which filed for an ETH ETF last week, included a correlation analysis in its 19b-4 that favored Ether ETFs. The analysis was the “most accurate illustration of current ETH spot/CME correlation” from a potential issuer, said Scott Johnsson, general partner at Van Buren Capital.

But how does this affect the odds of a spot ether ETF approval? 

In a research note last week, Bloomberg Intelligence analyst James Seyffart said that his team found lower numbers and believed that the Securities and Exchange Commission could lean on the numbers to issue a denial in May.

Seyffart told Blockworks the correlation analysis “is still slightly lower than bitcoin but improving” which could postpone ether ETFs to 2025, “possibly late 2024.”

The SEC has three options, he said. Staff could approve the ETFs in May, then the next option would rely on “bureaucratic reasoning like the correlations.” This means the SEC “kind of kicks the can down the road.”

“So correlations, in my view, is the most likely way that they'll do that based on the approval order they gave for the spot bitcoin ETF,” Seyffart said.

The final option is the “nuclear” one, Seyffart said, and would see the SEC declare ETH a security, which would delay a potential ETF — though it wouldn’t take an ETF off the table entirely.

The Bloomberg team is leaning towards scenario two, putting minimal odds on a spot ETH ETF approval this May. But the odds — and the correlation analysis — improve next year. 

This means that bitcoin ETFs have the chance to continue maturing and prove the strength of the analysis. Already, Seyffart said, the correlation between the futures and spot markets became stronger post-launch.

However, it’s looking like the market will have to wait roughly a year for a spot ether ETF — unless the SEC has some surprises up its sleeve. 

— Katherine Ross

Welcome to The Works 👋 Your daily slice of crypto (and not-so-crypto) from around the Web.

• Elizabeth Warren has drawn yet another crypto-friendly opponent in her Massachusetts Senate race, per the Boston Globe. 

• Crypto April Fool’s jokes are a dime a dozen, but Anatoly Yakovenko’s BunkerCoin proposal earned a smile from us. 

• Some M&A news this morning: GoldenTree sold its digital asset subsidiary to Republic, Bloomberg reports. 

• WIRED profiled Thodex founder and alleged crypto scammer Faruk Özer, who is now serving a 11,196-year prison sentence in Turkey. 

• The US and UK governments have inked a deal on artificial intelligence safety, according to Reuters.

Bitcoin Cash is now less than 200 blocks (about a day and a half) from its own halving. And a ceremonial pump and dump seems to be underway.

BCH’s bitcoin ratio has nearly doubled in the past two weeks leading up to the event, now back to where it was last June. The chain itself has seen growth in its hashrate but it’s still recording fewer transactions per day than Litecoin and Dogecoin.

Litecoin — while not a direct hard fork of Bitcoin — also went through its own halving rollercoaster, as is tradition. LTC roughly doubled in the months leading up to its halving last August before giving it all up in the days directly following. 

And they say crypto has no culture.

— David Canellis