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November 4, 2022

🥛Is Instagram the next big NFT marketplace? 👀

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Now let's get into the good stuff for today:

  • Is Instagram the next big NFT marketplace?

  • Battle of the CEXs

  • Funding Friday

  • Meme of the Day

IS INSTAGRAM THE NEXT BIG NFT MARKETPLACE?

NFTs. You either 🎵hate it or love it🎵

But you know who’s been loving it lately? Instagram.

And soon users will be able to create, mint, buy & sell NFTs directly on the Gram.

Here are the 5 things you need to know:

  • Instagram will start with NFTs on the Polygon blockchain. Polygon's token, $MATIC, is up 22% since the news hit

  • Instagram will use Arweave (decentralized data storage protocol) to store the NFTs. Arweave’s token, $AR, is up 59% since yesterday

  • Creators can set their own royalties. It can range from 5% to 25% for each sale

  • Instagram won't take a cut of NFT sales until 2024. Sound too good to be true? It is. There’s still a 30% app store fee thanks to Apple

  • The NFT tools will slowly be rolled out to 13 creators first. Here’s a sneak peek of what it could look like 👀

Boom! Just like that, Instagram is in the NFT Marketplace War. And it could be bad news for other marketplaces.

Zuck is known for ruthlessly cloning his competitors.

TikTok → Instagram reels

Snapchat → Instagram stories

Now he’s got his eyes set on NFTs. Will OpenSea, Magic Eden, and other marketplaces soon join the “I Got Zucked” club?

Only time will tell.

BATTLE OF THE CEXES

People love SEX CEX.

Centralized exchanges.

And it was an eventful week for 3 of the biggest centralized exchanges out there – Binance, Coinbase, and FTX.

So we’re coming at ya with an update on the Battle of the CEXs.

BINANCE

Binance is the largest exchange in the world. And they’ve been on fire.

  • Binance & Twitter are BFFs now. Binance has a $500m stake in Twitter and is in charge of creating new crypto features

  • BUSD (Binance’s stablecoin) has a ~20% market share for stablecoins

  • Has one of the most active venture funds. Binance has invested $300m+ into companies this year (2x as much as last year)

And in an interview this week, CZ mentioned they have $1b ready to deploy into acquisitions. That’s right, 1 BILLION dollars.

CZ says the bear market is the perfect time to go shopping. And they aren’t eyeing just any ol’ acquisition either. 

Binance could buy a bank 👀

The goal? To be the bridge between TradFi & crypto.

COINBASE

Coinbase is the king of centralized exchanges in the U.S.

Yesterday, they had their Q3 earnings report. (**Spoiler alert: it wasn’t pretty**)

  • Transaction revenue dropped 44% from Q2

  • Monthly transacting users (MTUs) fell from 9m –> 8.5m

  • Suffered a $545m loss during Q3

But it wasn’t all Bad News Bears for Coinbase. There were 2 good things:

1/ Interest revenue jumped 213% in Q3 (from $32.5m –> $101.8m). Coinbase collects interest payments on USDC stablecoin reserves and its been very profitable so far

2/ ~25% of the 100 largest hedge funds have chosen to onboard with Coinbase

So even though Q3 was rough, there are still some positive signs.

FTX

FTX is the underdog of centralized exchanges. But lately, they've been on the hot seat. 

They’re being investigated by the state of Texas and SBF's (the CEO) views on crypto regulation have turned him from crypto hero → villain in the blink of an eye.

This week, there was more drama. CoinDesk released a report about Alameda Research's finances. Alameda is FTX’s sister trading firm.

Now, FTX & Alameda are technically different companies. But tomato, tomahto. Most people in crypto will tell you the brother & sister companies are a little too close.

Alameda's balance sheet tells a similar story. According to the report, Alameda has a total of $14.6b in assets.

41% (~$6b worth) of those holdings are made up of FTT… aka FTX's token.

It looks like Alameda also has a lot of leverage backed by illiquid tokens. A recipe for disaster.

Now people are questioning whether or not they could be the next company to go into financial trouble.

All eyes are on Alameda & FTX.

TODAY'S EDITION IS BROUGHT TO YOU BY TECHCRUNCH

Looking to stay warm during Crypto Winter? I got just the perfect place for you.

Miami, baby! Nothing but beaches, palm trees, and [overpriced] Piña Coladas. And next month there’s a special treat…

TechCrunch is running TC Sessions: Crypto on November 17.

Check out the hottest up-and-coming startups exhibiting at the show, and connect with some of the sharpest minds in crypto.

It’s gonna be jam-packed with crypto's top movers and shakers like:

  • Amy Wu (FTX) – “Bringing Crypto to the Crowds”

  • Flori Marquez (BlockFi), John Wu (Ava Labs) and Nikil Viswanathan (Alchemy) – “Fundraising in a Crypto Winter”

  • Katherine Dowling (Bitwise) and Justin Slaughter (Paradigm) – “Is Crypto Regulation Ready”

And guess what? Milk Road readers can claim a special 30% discount on a General Admission pass by registering here.

FUNDING FRIDAY

Each Friday we give you a rundown of Web3 companies that got funded during the week.

This week, we saw ~$85m get invested into crypto companies & funds. Here’s who got the money:

NiftyApes got $4.2m to build an NFT lending protocol.

Token Flow got $12m to let people look up any event, transaction, or balance in a blockchain's history. Since The Land Before Time.

Centrifuge got $4m to bring assets like invoices, real estate, and royalties to DeFi. Borrowers can finance their real-world assets without banks or other intermediaries.

ZebraLabs got $5m to create celebrity avatars in the metaverse. The Milk Man is coming to a metaverse near you…

If you wanna check out the complete database of companies that raised money in 2022, we got 'em for you right here.

MEME OF THE DAY

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That's a wrap for this week. Stay thirsty & see ya next week!

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A ROADERS REVIEW

VITALIK PIC OF THE DAY

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.