🏹 Welcome to the Hunt.

_{Disclaimer: Nothing we publish should ever be construed as financial advice. We strive to be unbiased, but may have ownership interests in projects mentioned. DYOR.}

Today marks the first edition of Sending Alpha’s weekly newsletter 🥳❕ Let’s get straight to it.

📬 Today’s Send

📈 Market Movements (Apr 13-20)

$28,844 BTC (-6.90% 7D)
$1,926 ETH (-3.22% 7D)
BTC Dominance 47.38%

📜 Stories of the Week

It’s been yet another huge week in crypto land. Here’s the top stories unfolding right now.

1. Shapella’s First Week

2. Regulatory Headwinds

3. Everything Else

   1. The Return of FTX?

   2. Hacks

   3. Chains, dApps and Governance

   4. Narratives gathering steam
      

🌐 SHAPELLA’S FIRST WEEK 

A smooth landing for the upgrade.

For those who’ve been MIA, Ethereum’s Shapella Upgrade went live on April 13, combining changes to Ethereum’s execution layer (Shanghai), consensus layer (Capella), and the Engine API. This upgrade enables stakers to withdraw both their staked ETH and any accrued staking rewards.

Prior to the much-anticipated upgrade, selloff concerns were abound. One week on, how has Shapella unfolded?

Well, it appears that the upgrade itself was a massive success, and so far concerns about mass outflows were overblown.

Immediately after Shapella there was a large outflow of ETH withdrawals, mostly coming from providers of liquid staking options like Lido (25% of ETH withdrawals), Binance, Huobi, and Kraken (whose exit is a result of the SEC’s order to end its staking service). For the rest of the week though, this withdrawal activity significantly slowed, and we actually saw net positive inflows.

Hold off popping the champagne though - today we are seeing another large spike in withdrawals. As you can see in the chart below, this time the majority of withdrawals are for Principal balances, not just Rewards.

The ongoing Shapella withdrawal situation is being well-covered by our peers. For further analysis, I recommend checking out:

_{10 charts that tell the story of Ethereum withdrawals - crv.mktcap.eth (Apr 18)
Review of Ethereum’s ‘Shapella’ Upgrade - Coin Metric’s State of the Network (Apr 18)
Round Tripping - Page One (Apr 19)}

🔐 REGULATORY HEADWINDS

SEC playing aggressive, Gensler in the hot seat, and a new Stablecoin bill.

Ahhhhhh I’m protectinggg 🤡 

On April 18 the SEC charged crypto exchange Bittrex with operating an unregistered securities exchange. Bittrex has announced they will be shutting down its US operations at the end of the April - it’s uncertain whether the agency will continue to take legal action. This lack of regulatory clarity has Brian Armstrong responding that “anything is on the table", including relocating out of the U.S. 😬 

In the same filing, the SEC explicitly called $ALGO a security. Hilariously, Gary once spruced Algorand as a “great technology”. Hopefully none of you listened, as ALGO is down 95% since Gazza’s shill at $100 💀 

In a truly ironic self-own, this clear 3rd party endorsement far exceeds what the FTC requires as needing proper disclosures.

_{We would like to take this opportunity to formally go on the record - If we like, tag, or pin your project, it is NOT an endorsement. It was probably Alfy stepping on our keyboard.}

Furthermore, in the April 18 hearing before the House Financial Services Committee, the SEC Chair admitted to having NEVER OWNED CRYPTO, nor having transacted ONCE on-chain! How can you possibly regulate a technology you’ve never even used?? 🤡🤡🤡

When pressed whether he believes ETH is a security or a commodity, Gazza was dodging the questions like he was Neo dodging bullets. Under the pressure however, his responses suggested he does consider it to be a security. Check it out for yourself.

For all this fuckery, Karmic justice has rightly landed Gensler in the hotseat. Warren Davidson (my new hero) GRILLED the SEC Chair irl, advocating he be fired from his post. Davidson was scathing in his condemnation, expressing what many of us feel about the SEC’s unnecessary meddling. Take a moment to enjoy some catharsis, basking in the glory of this roast.

Reconvening the next day, Members of the Committee turned their attention towards stablecoins, picking up where they left off on regulation pushed back last year. The draft stablecoin bill is the first major piece of crypto legislation in 2023, which Maxine Waters (D-CA) acknowledges has lawmakers “starting from scratch”.

In the aftermath of UST’s major blowup last year, and the more recent USDC de-peg following the bank run on SVB, the bill proposes a moratorium on stablecoins backed by other cryptocurrencies, a request to study a central bank digital currency (CBDC), as well as providing definitions and requirements for payment stablecoin issuers.

🧠 EVERYTHING ELSE

FTX, hacks, project updates, and hot narratives.

The return of FTX?

Hacks

PLEASE STAY SAFU EVERYONE 🙏

Chains, dApps and Governance

Narratives gathering steam

🕵️‍♂️ The Weekly Raid by DeFi Raiders

Renegade is building on-chain darkpools. An end-to-end encrypted exchange that leverages multi-party computation and zero-knowledge proofs. They’ve raised a seed round that was co-led by Dragonfly and AngelList co-founder Naval Ravikant, who was also an early investor in such companies as Uber, Foursquare, Twitter, and Notion.

🐦 Twitter ; 🟪 Discord ; 🌐 Website

Laso Finance has built a US Dollar-denominated Visa debit card that doesn’t require KYC. They’re brand new, and have issued 137 cards with $246K total volume at time of writing. There’s a 6.8% fee to deposit, but no gas fees or usage fees on the card.

🐦 Twitter ; ✉ Telegram ; 🌐 Website

Permissive Labs is building an account abstraction layer based on EIP 4337 for permission-based authorization on the blockchain that will function similarly to web2 authorization infrastructure. They’ve built a user interface that allows services or users to create permission sets and solicit authorization from users by sending them a URL.

🐦 Twitter ; 🟪 Discord ; 🌐 Website

More Degen plays:

🐦 Cycle Swap: Concentrated liquidity AMM (3,3) on zkSync

🐦 Nitro Finance: DEX & Money Market Fusion

🐦 Knight DAO: Hybrid project on ARB

🐦 Gambit Trade: Decentralized Leverage Trading on zkSync

💎 OnlyAlpha™ Weekly Gems

Our Alpha Scraping bot finds hundreds of projects per week. OG Hunter of the Alpha, Snake Chain, thanklessly sifts through these to provide you with some of the best 🙏

@mayfairfund: DEX-traded fund perps (long/short narratives)

@0xaconomy: RWA backed dex

@LED_money: Innovative stable coin pegged to the price of energy

@buildonbeam: Merit circles gaming chain built on Avax

👥 Community Updates

📢 Hunting Alpha x Alfa DAO x IMGNai ETHcc event

🥳 We’re excited to announce that Hunting Alpha will be co-hosting a private event at ETHcc Paris, alongside our friends at Alfa DAO and IMGNai.

💪 Community Alpha

🗝 Alpha Key, Founder of Poolsharks Labs:

👀 “arbitrum testnet coming soon”

🐼 Metapanda announces Endangered Labs’ ReGenesis

🚬 Vulcan shares his deep-dive research on Trader Joe ($JOE) 👇👇👇

Subli drops a new edition of The Optimistic Newsletter, covering everything DeFi on Optimism and the OP Superchain 🔴🔴🔴

🎙 Hunting for Alpha Recap

🐸 Artemis has been a busy frog. With tax season up on us, last week he hosted Crypto Tax Calculator for an enlightening discussion on all things tax, and the week before interviewed Dimitar from IPOR Labs to discuss POWER tokens.

Click below to listen to the full Crypto Tax Calculator episode 👇

SUMMARY

• Proper tax planning and compliance can help crypto investors avoid potential legal and financial repercussions in the future. Crypto taxation can be complex, and while CTC can provide valuable information and insights, it's important to seek the advice of a tax professional for specific guidance on individual tax situations.
  

• CTC is a valuable tool for investors to accurately calculate their tax liabilities and stay compliant with tax laws. Creating an entity or shell company can also help mitigate tax liabilities.
  

• Jurisdictions such as The Bahamas and Portugal offer tax advantages for crypto investors, but it's important to be aware of exit taxes and other regulations.
  

• Crypto investors should keep accurate records of all trades and transactions, as well as any expenses related to their investments. Even if a token you’re holding has become worthless, it's still important to consider selling it for zero to realize a capital loss.

• CTC offers both a web-based and mobile app version of their tool, with various features including the ability to connect with popular exchanges and generate tax reports. The tool is constantly updated to ensure compliance with changing tax laws and regulations.

Click above for the full IPOR episode ☝

SUMMARY

• IPOR is a groundbreaking DeFi protocol that introduces interest rate swaps to the Ethereum platform, enabling users to exchange fixed and variable interest rates on loans. IPOR employs a combination of smart contract expertise and liquidity provision to enable decentralized interest rate swaps, a financial instrument previously limited to TradFi.
  

• The POWER token plays a crucial role in IPOR's protocol by incentivizing liquidity provision and acting as a governance token, promoting long-term stability and success.
  

• Tokenomics plays a vital role in the DeFi ecosystem, with well-designed tokens significantly impacting a protocol's success and the importance of carefully considering incentives and governance structures. The founder advises fellow innovators to be deliberate in their token design and to seek guidance from seasoned token economists to maximize their protocol's chances of success.
  

• The protocol is designed to cater to small and medium-sized retail investors, making it accessible to a broader range of participants in the DeFi ecosystem.

• IPOR is in its early stages, with a wealth of growth opportunities focusing on providing liquidity to credit markets, an area currently underserved in the DeFi space. IPOR's unique approach to providing liquidity to credit markets and its innovative POWER token design make it a DeFi project worth keeping an eye on.

Thankyou for reading the first edition of Sending Alpha!

Here’s to the beginning of a special journey 🥂

Se