It’s clear that funding product and development initiatives was a major point of emphasis throughout 2022.

State of DAO Funding

Different shapes of combined curve can achieve different goals for token distribution in governance.

When it comes to token-based governance, there are many different ways of dispersing tokens and placing them in the hands of the community and relevant stakeholders. These methods can vary across airdrops, liquidity mining, novel auction mechanisms, or a combination of the aforementioned. In this article, a less often mentioned method will be examined, as well as various augmentations that can be made to tighten alignment across stakeholders as much as possible.
The DAOs of today face many issues. Chief among them is the omnipresent issue of voter apathy, something anyone who is an active contributor to a DAO knows only too keenly. That is not necessarily to say that each address that holds a specific token must engage and debate each meticulous detail; not everyone has the same incentives when engaging within a community and many cooks can spoil the broth (as well as taking an extra long time to make the broth in the first place).
Another common issue is that one commonly used distribution method, liquidity mining, puts tokens into the hands of mercenary addresses that are not necessarily interested in governance of the product or underlying cause, and attempt to dump their tokens on others &ndash; lest others dump their tokens on them. In the ruthless PvP world of DeFi you are either a dumper or a dumpee.
People providing liquidity to your token, as well as engaging in selling behaviour are not necessarily bad per se, it is normal behaviour and even to be encouraged at times. The drawback of this is that the profits of the farmers come at the expense of the mission-aligned community and the DAO treasury itself. We can observe this in the subsequent dumping of tokens following the launch of yield farms, as evidenced in this&nbsp;<a href="https://chaindebrief.com/why-do-defi-yield-farms-dump/">article</a>.
There exist methods of quantifying contributions and awarding tokens more equitably to those that have invested time and effort, however these loyal holders often get dumped on by the speculators and the farmers. An intuitive solution to this would be to create vesting schedules for farmers and early buyers who are not early DAO members &ndash; the drawback to this though would be that the contributors would not really profit by selling their tokens due to less liquidity provided due to lockups, and less demand for the token. Furthermore, vesting does not necessarily reduce selling pressure, it just disperses it on a timeline.
Unfortunately, there is no perfect way of launching your governance token. What does exist however, are different approaches that can mitigate certain risks, depending on the exact goals and requirements of your token launch.
An often overlooked method of token distribution is the use of a bonding curve for the minting and burning of said tokens. For those of you unfamiliar with bonding curves, here is a quick primer.
Bonding Curves: Fixed Relationships
Bonding Curves are essentially a way of ossifying the relationship between price and supply. An even simpler way of saying this is: as the supply of tokens changes by X, the price changes by Y &ndash; where Y can be either a fixed value or a percentage.
This is similar to the way an AMM works, except no liquidity is needed to seed the pool as ETH or stable coins can be deposited into the curve in order to mint tokens on demand (as opposed to needing liquidity in the pool to facilitate the swap).
For example, we have a bonding curve where no tokens have been created yet, and the price increases and decreases by &lsquo;1 ETH&rsquo; with each mint/burn. The starting price to mint the first token is 1 ETH.
&nbsp;
<figure class="wp-block-image is-resized"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://lh6.googleusercontent.com/2bEC0hoINhpE-jw4iJwsPYZZ2aQCWu8lPAQGq_JEb1vDyPPEHP9UN8B8Y-kUY669-M70i6w_nvVTQUyL7YIMW6lQ1yKB8zGRyPdUQM573E4mtt496hM4FEsg5Jv_0zbdWe1MXmuLctD8yVdArH8n7Xo" alt="" width="426" height="303" /></figure>
Along comes Bob. He puts 1 ETH into the bonding curve and receives one token in return. This moves our point along the curve, increasing both X and Y to 1 and Y. The price to mint the next token is now 2 ETH.
Alice likes the look of this token Bob has minted and wants in on the action. She mints the next token for 2 ETH, and then another after that, which is now priced at 3 ETH. Overall, Alice has deposited 5 ETH into the curve and received 2 tokens in return.
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&nbsp;
<figure class="wp-block-image is-resized"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://lh5.googleusercontent.com/zvNnG6gEePI3EDyt8m8Jb659GPKEm6_AUjucsxnG6zmECloD0nj12DUvVi6kdC7hvOvNPYUvJkkWWZBEgWv8s_RB_WVhF6qUEYbEGAGIkC4TEya06-ey4aId476ETgzVsoIR9dk8fooLYJLUD7RjFJ4" alt="" width="432" height="307" loading="lazy" /></figure>
Bob sees that the price has increased, and decides to cash in his token for a profit. Since the price is now at 3 ETH, Bob can deposit his token back in the curve and redeem 3 ETH, therefore pushing the point backwards along the curve and the price decreases to 2 ETH.
This is the essence of a simple bonding curve. It gets interesting once we start to experiment with the shape of the curve itself. What if the price increases by 10%? What if it changes by 0.5 ETH until a supply of 100 tokens is reached, at which point the curve flattens out and only moves by 1% with every mint and burn? What if the curve is a certain shape but changes once certain product milestones are met as confirmed by some oracle? A curve like this could be used to reward early believers who minted tokens when risk was higher, and after the product is more established the product can change, becoming more steep.
The possibilities here are endless, your curve can be a myriad of shapes. It can look like this:
<figure class="wp-block-image"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://lh3.googleusercontent.com/Es-_F0Me2JlRks8gBGGTNzAD6Ihh2p_g_G6gllUm-V20N-xX4l7XfhMdjoAb5WGMDEyptnN08RtJEm-4tQCy0oaYNHRUVCsUYMkXRb6LjxY5SfqHqNJHhVXN_X9zmDU2hq9qfRkSl4a5liuiKolA2k8" alt="" /></figure>
Or This:
<figure class="wp-block-image"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://lh5.googleusercontent.com/Hvbpxh_Fm9VGOto6tWzaNjWsgYx7uO7DFIb7uRi7Czqb2SBJrz-jadRQ5JYrK41ItdZ-rQLXQ180gDdKHgP6aaa3A3Y6sBeUe9W6RqqB-Fcra7rLqelhQW2mAGKk5cJ_nkJp4bN-Bwau5bdHJD9pTD0" alt="" /></figure>
Or even this:
<figure class="wp-block-image"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://lh5.googleusercontent.com/nG9Q0cnenl8n1UTMxonk4vxea6WDCXfGYxDf4uvN1z-MPqBlmnLG_OESh1kNyPOaaXHqB4wyq6FEAbI9IlkT2W04TYAEyV_uSn9FsC6vW4vzmnnV7alWPMMYWpCeanUh85EpOdJYS9YI9rIVRxf_2BI" alt="" /></figure>
Another option is to have different curves for the buying (minting) and the selling (burning), where selling at X is slightly more expensive than buying at X. This delta can either be retained and sent to the treasury, or retained by the graph to grant even higher redemptions for each token sold back into the curve.
<figure class="wp-block-image"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://lh3.googleusercontent.com/htGn6ccPTC7H0y2lLnTHlkH3sS1pBqZ5tff8ia19G9hMlepPnbNgXLsj8J0QZkpyNBiaQ8rBO5uX0evOfBakk2oWJgEC5pkIvtHkgj3NNrxI_j7uxHldfQ7XWSYpwwWv2lTX7bVux-jNwRNRHmbxhzA" alt="" /></figure>
<div class="wp-block-spacer" aria-hidden="true">&nbsp;</div>
Other Types of Bonding Curves
Other more sophisticated types of bonding curves exist, two of which stand out. One of them is an&nbsp;<a href="https://medium.com/commonsstack/deep-dive-augmented-bonding-curves-b5ca4fad4436">Augmented Bonding Curve</a>&nbsp;which was introduced by the&nbsp;<a href="https://commonsstack.org/">Commons Stack.</a>
<figure class="wp-block-image is-resized" style="text-align: center;"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://lh6.googleusercontent.com/DhI_1EcPucm4Krgfx-4CzwqEkZt9i8V0tazSCl-DPhARtH0H8ntClmVtDcyuKHZHqn9UkeLLBeSu8cIwXlWdMTcKvZo3YO7Z7ZbQiWK5MVaqq4ffcZDbOmLMpjluxEwtVRByi2KUVR4lt4PO6iUrJQk" alt="" width="569" height="387" loading="lazy" />
<figcaption class="wp-element-caption"><a href="https://medium.com/commonsstack/deep-dive-augmented-bonding-curves-b5ca4fad4436">Source: Commons Stack Medium</a></figcaption>
</figure>
This is a vanilla bonding curve (as described above) with some interesting additions. One of them is the &lsquo;hatching period&rsquo; &ndash; a pre-mint phase where early investors can deposit funds in order to receive tokens and make an early contribution. Some of the funds are directed to the curve itself, and some are directed to a treasury which can be used for capital allocation outside the bonding curve for the furtherment of a cause/product. In addition to this there is a vesting schedule for tokens awarded to &lsquo;hatchers&rsquo; during the initial phase, and an exit tax where sellers pay a small fee which is redirected to the curve. Commons Stack even provides a&nbsp;<a href="https://commonsstack.org/abc#simulation">simulator</a>&nbsp;you can use on the website. It was conceived as an effective way of funding public goods.
Another variation is the&nbsp;<a href="https://www.paradigm.xyz/2022/08/vrgda">Variable Rate Gradual Dutch Auction (VRGDA)</a>&nbsp;as coined by Paradigm. In essence, it is a bonding curve that also takes into account a time element. To illustrate, we have a bonding curve from which we wish to disperse 10 tokens in the first two days. If less than 10 have been minted in this period, the price (Y) decreases according to a preset formula in order to incentivise an acceleration in minting. This works the other way as well, where price can increase if actual minting exceeds target minting. A more full explanation with examples can be found in&nbsp;<a href="https://www.paradigm.xyz/2022/08/vrgda">the article.</a>
In sum, bonding curves are a powerful way of aligning DAO stakeholders. Understanding the different kinds of bonding curves an how they work helps set the stage for a broader discussion &lsquo;SuperPowered Tokens&rsquo; and how they can incentivise tighter alignment among DAO stakeholders.

How can bonding curves help align DAO stakeholders?

In this article, we discuss a valuation framework for Decentralized Autonomous Organizations (DAOs).

A Framework for DAO Token Valuation

Turkey’s central bank announced today that it had completed the first set of tests for its long-planned digital currency. 
The Central Bank of the Republic of Turkey (CBRT) said that it plans ...

Turkey’s central bank announced today that it had completed the first set of tests for its long-planned digital currency. 
The Central Bank of the Republic of Turkey (CBRT) <a href="https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN/Main+Menu/Announcements/Press+Releases/2022/ANO2022-55" data-wpel-link="external" rel="nofollow external noopener">said</a> that it plans to continue running tests for its digital lira next year.
“The CBRT will continue to run the limited, closed-circuit pilot tests with technology stakeholders in the first quarter of 2023,” the statement read. “Findings obtained from these tests will be shared with the public via a comprehensive evaluation report.”
Upcoming phases will explore “the use of distributed ledger technologies in payment systems and the integration of these technologies with instant payment systems,” the announcement read.
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Turkey’s central bank has been working on its own <a href="https://decrypt.co/resources/what-are-central-bank-digital-currencies-cbdcs" data-wpel-link="internal">CBDC</a>—a digital version of a state’s fiat currency—for years. CBDCs are digital assets backed by a central bank, and are very different from the likes of Bitcoin and Ethereum. This is because they are centralized: a central power—the government or central bank—controls them. 
Bitcoin and many other digital assets are decentralized: no one entity controls them and their ledger of transactions is maintained and checked by a distributed network of validators.
<div class="embedded-post" data-id="115439" data-post-title="Japan Kicks Off Central Bank Digital Currency Experiment" data-post-type="post" data-post-orientation="horizontal"><a href="https://wp.decrypt.co/115439/japan-kicks-off-central-bank-digital-currency-experiment/" data-wpel-link="internal">Japan Kicks Off Central Bank Digital Currency Experiment</a></div>
Countries around the world are in different stages of researching and releasing CBDCs. Last month, <a href="https://decrypt.co/115439/japan-kicks-off-central-bank-digital-currency-experiment" data-wpel-link="internal">news surfaced</a> that Japan’s central bank was planning a CBDC experiment with the country’s megabanks. Meanwhile, the Reserve Bank of India has <a href="https://decrypt.co/111542/india-will-soon-test-an-e-rupee-digital-currency" data-wpel-link="internal">proposed</a> a phased pilot of its version of a digital rupee.
China is by far the furthest ahead of the major economies: citizens can <a href="https://decrypt.co/98315/the-beijing-olympics-was-the-coming-out-party-for-chinas-digital-yuan-what-comes-next" data-wpel-link="internal">already spend</a> the digital yuan.
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Turkey makes for an interesting case study because the country’s money is one of the worst performing emerging market currencies: this year it lost 29% of its value. Because of this, citizens are interested in digital assets like Bitcoin. 
Back in 2020, Ali Babacan, a founding member of DEVA, Turkey’s opposition party, <a href="https://decrypt.co/52697/turkey-central-bank-digital-currency" data-wpel-link="internal">told</a> Decrypt that a digital lira would not solve the country’s economic woes. 
Despite many countries around the world being in varying states of progress with CBDCs, privacy advocates have criticized the idea of the assets—claiming they could allow the state to snoop on and control citizens’ spending.
<div class="video-unit" data-video-id="BW49Ik6c"><iframe src="https://content.jwplatform.com/players/BW49Ik6c.html" width="640" height="360" frameborder="0" scrolling="auto"></iframe></div>
Crypto exchange ShapeShift’s founder Erik Voorhees <a href="https://decrypt.co/92129/shapeshift-erik-voorhees-cbdc-orwellian-spy-surveillance-nightmare" data-wpel-link="internal">told</a> Decrypt in February that the assets were an “Orwellian spy surveillance nightmare.”
For its part, Turkish officials say “digital identification is of critical importance for the project.”

Turkey Pushes Ahead With Digital Lira

Wallets linked to Alameda Research, FTX founder Sam Bankman-Fried’s collapsed trading firm, continue to shuffle around crypto funds and are using coin mixers to obscure transactions, blockchai...

Wallets linked to Alameda Research, FTX founder Sam Bankman-Fried’s collapsed trading firm, continue to shuffle around crypto funds and are using <a href="https://decrypt.co/resources/what-are-coin-mixers-tornado-cash-how-do-they-work" data-wpel-link="internal">coin mixers</a> to obscure transactions, blockchain analysts said Thursday. 
On Wednesday, the wallets were <a href="https://decrypt.co/118049/alameda-linked-addresses-begin-swapping-ethereum-erc-20-tokens-bitcoin" data-wpel-link="internal">spotted swapping</a> obscure tokens for <a href="https://decrypt.co/resources/what-is-bitcoin-four-minute-instant-guide-explainer" data-wpel-link="internal">Bitcoin</a> and <a href="https://decrypt.co/resources/what-is-ethereum-quickly-explained-four-minute-guide" data-wpel-link="internal">Ethereum</a>—the two largest cryptocurrencies by respective market cap—along with stablecoin <a href="https://decrypt.co/resources/what-is-tether-usdt-stablecoin" data-wpel-link="internal">Tether</a>. More than $1.7 million worth of crypto was traded, <a href="https://twitter.com/ArkhamIntel/status/1608204990581202946" data-wpel-link="internal">according</a> to Arkham Intelligence data. 
Furthermore, some of the funds are being put through <a href="https://decrypt.co/resources/what-are-coin-mixers-tornado-cash-how-do-they-work" data-wpel-link="internal">coin mixers</a>—apps which anonymize crypto transactions and hide their origins. And that effort to obscure the movement of coins is now continuing today.
<div class="embedded-post" data-id="118049" data-post-title="Alameda-Linked Addresses Begin Swapping Ethereum, ERC-20 Tokens for Bitcoin" data-post-type="post" data-post-orientation="horizontal"><a href="https://wp.decrypt.co/118049/alameda-linked-addresses-begin-swapping-ethereum-erc-20-tokens-bitcoin/" data-wpel-link="internal">Alameda-Linked Addresses Begin Swapping Ethereum, ERC-20 Tokens for Bitcoin</a></div>
Pseudonymous blockchain sleuth ZachXBT <a href="https://twitter.com/zachxbt/status/1608486608927432708?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1608486608927432708%7Ctwgr%5E93e4174a3223a2b0808181f792d589c0fd60ad94%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwp.decrypt.co%2Fwp-admin%2Fpost-new.php" data-wpel-link="internal">said</a> that the Bitcoin was put into <a href="https://decrypt.co/109019/trezor-and-wasabi-join-forces-to-make-bitcoin-more-private" data-wpel-link="internal">Wasabi</a>, a popular wallet that groups Bitcoin transactions together to conceal their origins. It isn’t currently clear who is behind the transactions, but <a href="https://twitter.com/zachxbt/status/1607916302584127489" data-wpel-link="internal">ZachXBT wrote</a> that it is unlikely that a liquidator would use tools like FixedFloat and ChangeNow to rapidly exchange funds.
Alameda Research is a trading firm that was founded by disgraced crypto mogul Sam Bankman-Fried, who is <a href="https://decrypt.co/117796/sam-bankman-fried-sent-home-on-250m-bail-after-first-court-appearance" data-wpel-link="internal">currently under house arrest</a> following his release on bond by United States officials last week. Bankman-Fried had been <a href="https://decrypt.co/117760/sbf-arrives-in-u-s-to-face-the-music-on-federal-fraud-charges" data-wpel-link="internal">extradited</a> from the Bahamas, where he spent several days in prison before being transferred to the U.S.
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
Update: First BTC that was received from the Alameda wallets was just deposited into Wasabi
127dc66668daebbad9ce0ee6d0c27bd4dd06c703c2ca2329914b4fb1fcbcca92 <a href="https://t.co/dNYp8AWUBD" data-wpel-link="internal">https://t.co/dNYp8AWUBD</a> <a href="https://t.co/lAqC3hVpgu" data-wpel-link="internal">pic.twitter.com/lAqC3hVpgu</a>
&mdash; ZachXBT (@zachxbt) <a href="https://twitter.com/zachxbt/status/1608486608927432708?ref_src=twsrc%5Etfw" data-wpel-link="internal">December 29, 2022</a></blockquote>
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Feds <a href="https://decrypt.co/117124/ftx-founder-sam-bankman-fried-criminal-charges" data-wpel-link="internal">hit</a> the former FTX boss with eight criminal charges this month—including money laundering and wire fraud—after his <a href="https://decrypt.co/114205/ftx-files-chapter-11-bankruptcy-sbf-steps-down-as-ceo" data-wpel-link="internal">crypto empire crumbled</a> in November. The U.S. Securities and Exchange Commission (SEC) also <a href="https://decrypt.co/117060/sam-bankman-fried-criminal-charges-justice-department-sec-conspiracy-wire-fraud" data-wpel-link="internal">filed charges against the FTX co-founder</a>, while the Commodity Futures Trading Commission (CFTC) <a href="https://decrypt.co/117125/cftc-suing-bankman-fried-ftx-alameda-violating-commodities-laws" data-wpel-link="internal">filed suit against him and his companies</a>.
It is alleged that Bankman-Fried used customer funds to make risky bets through Alameda Research, which ultimately wasn’t sustainable and led to a massive bankruptcy—and a lot of investors’ money to go up in smoke. Former Alameda CEO Caroline Ellison <a href="https://decrypt.co/117989/caroline-ellison-knew-that-it-was-wrong-implicates-sam-bankman-fried" data-wpel-link="internal">reportedly told a judge</a> that she aided in Bankman-Fried's schemes despite knowing that it was both wrong and illegal to do so.
There have been many mysterious movements of FTX-linked crypto funds since the exchange collapsed in November. On the night that the company filed for bankruptcy, hundreds of millions of dollars in digital assets <a href="https://decrypt.co/114269/hundreds-of-millions-of-dollars-drained-from-ftx-overnight-in-unauthorized-transfers" data-wpel-link="internal">flowed out</a> of the exchange.
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Sharp-eyed users may have noticed a number of interesting movements from Alameda wallets in the past 24 hours.
These wallets had been inactive for multiple weeks before they &#39;woke up&#39; last night.
Over $1M has been sent through crypto-mixers by Alameda wallets.
What gives? 👇 <a href="https://t.co/rUbqCMPjNX" data-wpel-link="internal">pic.twitter.com/rUbqCMPjNX</a>
&mdash; Arkham | Crypto Intelligence (@ArkhamIntel) <a href="https://twitter.com/ArkhamIntel/status/1608204990581202946?ref_src=twsrc%5Etfw" data-wpel-link="internal">December 28, 2022</a></blockquote>
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It still isn’t clear who took the funds, but James Bromley—counsel to FTX’s new management—said that a “substantial amount” of the exchange’s assets are missing or have been stolen. The U.S. Department of Justice is <a href="https://decrypt.co/118081/us-department-justice-investigating-mysterious-ftx-hack-report" data-wpel-link="internal">reportedly investigating</a> what happened to those funds, per a Bloomberg report this week.
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Coin mixers are popular with those who want increased privacy while handling digital assets, but they have also attracted negative attention for alleged ties to illicit activity. The U.S. Treasury Department <a href="https://decrypt.co/106986/treasury-blacklists-bans-tornado-cash-ethereum-mixer" data-wpel-link="internal">blacklisted</a> Ethereum coin mixer Tornado Cash in August, claiming that criminals were using the autonomous, decentralized service to launder money. 
According to the Treasury Department, North Korean state-sponsored hacking group Lazarus Group was among those that used Tornado Cash to launder stolen funds.

Alameda-Linked Funds on the Move Again via Coin Mixers

A new Bitcoin mining pool set to launch in 2023 is aiming to provide an eco-friendly alternative to the industry’s notoriously high carbon footprint, using carbon offsets to reduce its environ...

A new Bitcoin mining pool set to launch in 2023 is aiming to provide an eco-friendly alternative to the industry’s notoriously high carbon footprint, using carbon offsets to reduce its environmental impact and reward miners who use renewable energy.
British-owned <a href="https://www.pega-pool.com/" data-wpel-link="external" rel="nofollow external noopener">Pega Pool</a>, launching in Q1 2023, is opening its offering to Bitcoin mining clients regardless of their renewable energy usage—but will reward clients that mine using renewables with a 50% reduction in their pool fees, from 2% to 1%.
In addition, a portion of the pool fees from clients using non-renewable energy will be allocated to carbon offset schemes that plant trees to reduce the environmental impact of mining activities.
<h2>Bitcoin mining’s fossil fuel problem</h2>
The Bitcoin mining industry is facing <a href="https://decrypt.co/62402/truth-about-bitcoins-energy-consumption-carbon-footprint" data-wpel-link="internal">increased scrutiny</a> over its use of fossil fuels. According to a <a href="https://www.jbs.cam.ac.uk/insight/2022/a-deep-dive-into-bitcoin&#039;s-environmental-impact/" data-wpel-link="external" rel="nofollow external noopener">September 2022 study</a> by the Cambridge Centre for Alternative Finance, fossil fuels account for almost two-thirds (62.4%) of Bitcoin miners’ electricity mix.
Between 2020 and 2021, Bitcoin’s average emission intensity increased from (491.24 gCO2e/kWh) to (531.81 gCO2e/kWh), suggesting that the sustainability of the electricity mix has “deteriorated,” according to the study’s authors.
<div class="embedded-post" data-id="62402" data-post-title="The Hard Truth About Bitcoin's Energy Consumption" data-post-type="post" data-post-orientation="horizontal"><a href="https://wp.decrypt.co/62402/truth-about-bitcoins-energy-consumption-carbon-footprint/" data-wpel-link="internal">The Hard Truth About Bitcoin's Energy Consumption</a></div>
Bitcoin’s energy consumption and environmental impact has resulted in a global pushback from countries and companies. In May 2021, EV firm Tesla <a href="https://decrypt.co/70691/elon-musk-tesla-has-stopped-accepting-bitcoin" data-wpel-link="internal">abandoned</a> plans to accept payment for its products in Bitcoin, with CEO Elon Musk highlighting his concern over the “rapidly increasing use of fossil fuels for Bitcoin mining.” The following month, China <a href="https://decrypt.co/74187/chinas-2021-bitcoin-crackdown-what-you-need-know" data-wpel-link="internal">cracked down</a> on Bitcoin mining, citing its commitment to "<a href="https://www.carbonfootprint.com/carbonneutrality.html" data-wpel-link="internal">carbon neutrality</a>" at the United Nations General Assembly in 2020.
That’s served to drive awareness and take-up of sustainable Bitcoin mining, with some advocates arguing that Bitcoin could actually help to <a href="https://decrypt.co/90671/bitcoin-mining-renewable-energy-foundry" data-wpel-link="internal">accelerate</a> the transition to renewables.
<h2>Crunch time</h2>
With the crypto market facing a prolonged slump, Bitcoin miners are <a href="https://decrypt.co/106267/what-bitcoin-miners-are-doing-survive-bear-market" data-wpel-link="internal">feeling the squeeze</a> in their profit margins as <a href="https://decrypt.co/111565/bitcoin-mining-difficulty-jumps-14-hitting-all-time-high" data-wpel-link="internal">Bitcoin mining difficulty has soared</a> and the cryptocurrency’s price has plummeted.
That’s left Bitcoin miners hunting for cost-effective options that offer a stable income stream; something that Pega Pool is seeking to address with reduced pool fees for miners.
<div class="price-graph" data-date-range=1y data-id=6076 data-type=></div>
Clients that join Pega Pool’s early access waiting list will receive a permanent 50% reduction in pool fees, while clients that are accepted for beta testing will see 0% pool fees during the beta stage and a permanent pool fee of 0.5% post-launch. The pool also operates using a competitive pay per share plus (PPS+) revenue model.
Although the only clients currently mining with Pega Pool is its sister company Pega Mining and a handful of beta testers, it’s already the 13th largest pool in the world by hashrate, according to <a href="https://explorer.btc.com/pools" data-wpel-link="internal">BTC.com</a>; with miners redoubling their focus on sustainability and stable profits in the midst of the current bear market, its share looks likely to grow.

Pega Pool Aims to Make Bitcoin Mining Eco-Friendly With Carbon Offsets

A group of customers who filed a lawsuit against Coinbase is now withholding their account information, shutting down efforts to move the case to arbitration. 
The class action lawsuit concern...

A group of customers who filed a lawsuit against Coinbase is now withholding their account information, shutting down efforts to move the case to arbitration. 
The class action lawsuit concerned alleged cybersecurity failures on the part of Coinbase and seeks to compensate customers who allegedly had their accounts breached and “incurred losses arising from the unauthorized transfer of assets.”
In <a href="https://storage.courtlistener.com/recap/gov.uscourts.gand.306368/gov.uscourts.gand.306368.1.0.pdf" data-wpel-link="external" rel="nofollow external noopener">the filing</a>, the plaintiff alleged he had $6,000 of cryptocurrency drained from his wallet to an address he had never interacted with before. It adds that Coinbase allowed the hackers who breached his account to withdraw $1,000 from his bank account.
After contacting his bank, the transaction was reversed, but Coinbase then locked his account, labeling it with a negative account balance. The crypto firm later retrieved the $1,000 that the hackers stole from the plaintiff. 
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The lawsuit, filed in the U.S. District Court for the Northern District of Georgia, alleges that “contrary to its representations,” Coinbase does not use “standard practices” to protect its users' accounts. 
In addition, the lawsuit claims that Coinbase “improperly and unreasonably” stops consumers from accessing their accounts and funds, either for extended periods of time or permanently.
The lawsuit also pokes holes in Coinbase’s dispute resolution process, pointing to “cumbersome conditions” that must be met before arbitration can be reached, claiming it “systematically fails” to honor the promises of its User Agreement regarding dispute resolution. 
Though handling legal disputes by arbitration can be cheaper than using federal courts, there is also a significantly lower level of transparency as well as different standards for evidence. 
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<h2>Coinbase in court</h2>
Coinbase has attempted to keep multiple cases out of federal courts in recent months with limited degrees of success.
Earlier this month, the U.S. Appeals Court decided that Coinbase could not force customers impacted by the Dogecoin sweepstakes run by the exchange <a href="https://www.supremecourt.gov/DocketPDF/22/22-105/249129/20221205201552043_Coinbase%20Letter%20re%20CA9%20Oral%20Argument%2012-5-22%20Final.pdf" data-wpel-link="external" rel="nofollow external noopener">to seek private arbitration</a>.
The incident concerns a June 2021 promotion that offered users the chance <a href="https://www.classaction.org/media/suski-v-coinbase-global-inc-et-al.pdf" data-wpel-link="external" rel="nofollow external noopener">to win $1.2 million in the canine </a>meme coin.
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The news comes as Coinbase stock hit another all-time low this week, hitting just $32.40 per share earlier this week, a roughly <a href="https://www.google.com/finance/quote/COIN:NASDAQ?hl=en&amp;window=5Y" data-wpel-link="internal">90% decline</a> from its all-time peak.

Coinbase Customers Block Attempts to Move Lawsuit to Arbitration

Bankrupt crypto lender Celsius will file a petition requesting an extension of the deadline for users to submit their claims in the ongoing bankruptcy proceedings by another month.
“Celsius is...

Bankrupt crypto lender Celsius will file a petition requesting an extension of the deadline for users to submit their claims in the ongoing bankruptcy proceedings by another month.
“Celsius is preparing to file a motion later this week requesting an extension of the bar date, which is the deadline to file a claim, from January 3, 2023, until early February,” the company <a href="https://twitter.com/CelsiusNetwork/status/1608285816933031936?s=20&amp;t=QxjhxkNCUezsAaPtQx0x7Q" data-wpel-link="internal">said</a> late on Wednesday.
The firm said the extension is needed “to provide account holders with additional time to file any proofs of claim.”
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Our goal is to provide account holders with additional time to file any proofs of claim.
&mdash; Celsius (@CelsiusNetwork) <a href="https://twitter.com/CelsiusNetwork/status/1608285818694651904?ref_src=twsrc%5Etfw" data-wpel-link="internal">December 29, 2022</a></blockquote>
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The company <a href="https://twitter.com/CelsiusNetwork/status/1608285820326219778" target="_blank" rel="noopener" data-wpel-link="internal">added</a> the motion is scheduled to be heard by the bankruptcy court on January 10, 2023, with the current claims deadline set for the same date.
Celsius’ creditors, who believe they are entitled to the return of funds, have filed <a href="https://cases.stretto.com/Celsius/claims/" target="_blank" rel="noopener nofollow external" data-wpel-link="external">more than 17,200 claims</a> as of today, according to the firm’s claims agent Stretto.
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<h2>Celsius’ legal fees mount</h2>
Earlier this month, the U.S. bankruptcy judge responsible for the Celsius case <a href="https://decrypt.co/116732/bankruptcy-judge-orders-celsius-return-44m-cryptocurrencies" target="_blank" rel="noopener" data-wpel-link="internal">ordered</a> the bankrupt crypto lender to return around $44 million worth of cryptocurrencies to customers of Celsius’ Custody and Withhold accounts.
These accounts effectively acted as crypto wallets, never touching the firm’s interest-bearing lending service.
<div class="embedded-post" data-id="116732" data-post-title="Bankruptcy Judge Orders Celsius to Return $44M in Cryptocurrencies" data-post-type="post" data-post-orientation="horizontal"><a href="https://wp.decrypt.co/116732/bankruptcy-judge-orders-celsius-return-44m-cryptocurrencies/" data-wpel-link="internal">Bankruptcy Judge Orders Celsius to Return $44M in Cryptocurrencies</a></div>
A possible extension of the deadline for Celsius’ customers to submit their claims is likely to anger many of the firm’s customers after it was recently <a href="https://www.bloomberg.com/news/articles/2022-12-16/bankrupt-celsius-advisers-lawyers-seek-52-million-in-fees" target="_blank" rel="noopener" data-wpel-link="internal">reported</a> that lawyers and other advisers in the Celsius case had also been seeking nearly $53 million in legal fees for their services in just four months since the firm <a href="https://decrypt.co/105076/troubled-crypto-lending-platform-celsius-files-for-bankruptcy" target="_blank" rel="noopener" data-wpel-link="internal">filed for bankruptcy</a>.
One such law firm, Kirkland &amp; Ellis, billed almost $20 million for its services from July through October, followed by White &amp; Case LLP, which represents the unsecured creditors' committee, with a $10.2 million bill.
Other notable advisors in the Celsius case include Alvarez &amp; Marsal North America LLC and M3 Advisory Partners LLP, who sought $6.5 million and $4 million for their services, respectively.

Bankrupt Celsius Seeks to Extend Claims Deadline for Burned Users

A group of traders last week said that $22 million worth of crypto had been stolen through compromised API keys from the trading platform 3Commas. On Wednesday, 3Commas admitted it was the sou...

A group of traders last week said that <a href="https://decrypt.co/117826/3commas-api-dispute-highlights-risks-of-algorithmic-trading" data-wpel-link="internal">$22 million worth of crypto had been stolen</a> through compromised API keys from the trading platform 3Commas. On Wednesday, 3Commas admitted it was the source of that API leak. 
The announcement came after an anonymous Twitter user obtained around 100,000 API keys belonging to 3Commas users and published it online. 
3Commas had initially insisted there was no security issue on its end, and co-founder Yuriy Sorokin repeatedly suggested on Twitter that a phishing attack caused users to give up their data. 
But on Wednesday, Sorokin tweeted: “We saw the hacker’s message and can confirm that the data in the files is true... We are sorry that this has gotten so far and will continue to be transparent in our communications around the situation."
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1. Statement from 3Commas:
We saw the hacker’s message and can confirm that the data in the files is true. As an immediate action, we have asked that Binance, Kucoin, and other supported exchanges revoke all the keys that were connected to 3Commas.
&mdash; Yuriy Sorokin (@YS_3Commas) <a href="https://twitter.com/YS_3Commas/status/1608202390121111552?ref_src=twsrc%5Etfw" data-wpel-link="internal">December 28, 2022</a></blockquote>
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3Commas is a platform that lets users link multiple crypto exchange accounts—such as those kept on Binance—to automated trading software. This is all done via APIs (application programming interfaces), the standardized mechanisms that enable separate software components to communicate with each other and perform tasks. The idea is that humans don’t have to do the hard work of thinking about their trades. Instead, it's all done instantly and automatically via code. 
Until the wrong people get access to the APIs.
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Blockchain sleuth <a href="https://twitter.com/ZachXBT" data-wpel-link="internal">@ZachXBT</a> previously said on Twitter that he had verified a group of 44 victims who lost a total of $14.8 million through API keys stolen from 3Commas.
In response, Sorokin tweeted that “If you are a victim, then it means that somehow your keys were leaked,” but "not from 3Commas." If the leaked API keys had been from 3Commas, "you would've seen millions of cases, not a hundred," he reasoned.
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If you are a victim - then it means that somehow your keys were leaked. Not from 3Commas, as otherwise, you would&#39;ve seen millions of cases, not a hundred. browser extensions, stealers, and all kinds of malware are out there.
&mdash; Yuriy Sorokin (@YS_3Commas) <a href="https://twitter.com/YS_3Commas/status/1606209078241263617?ref_src=twsrc%5Etfw" data-wpel-link="internal">December 23, 2022</a></blockquote>
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In a <a href="https://twitter.com/ys_3commas/status/1606186597506064386?s=61&amp;t=Rl5ewU2n8fvhBr596o81-w" data-wpel-link="internal">separate thread</a>, he blasted “incompetency from big media sources” and questioned the validity of a crowdsourced spreadsheet of compromised accounts. “Pay attention that the majority of the users reporting losses didn't even open a support ticket with the exchange, and didn't go to the police,” Sorokin tweeted. “How was this information verified?”
Again he <a href="https://twitter.com/ys_3commas/status/1606189816151912453?s=61&amp;t=Rl5ewU2n8fvhBr596o81-w" data-wpel-link="internal">asserted</a> that there were too few incidents for it to have been a 3Commas exploit. “There are over 1 [million] keys connected to 3Commas, with ~100 users reporting issues with their accounts,” Sorokin tweeted. “Why would that happen if [database] was leaked?”
<div class="embedded-post" data-id="117826" data-post-title="3Commas API Dispute Highlights Risks of Algorithmic Trading" data-post-type="post" data-post-orientation="horizontal"><a href="https://wp.decrypt.co/117826/3commas-api-dispute-highlights-risks-of-algorithmic-trading/" data-wpel-link="internal">3Commas API Dispute Highlights Risks of Algorithmic Trading</a></div>
Today, a vindicated ZachXBT tweeted that “for weeks [3Commas] have been blaming its users and accepting zero responsibility.” 
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4/ 3Commas finally acknowledged the leak but the damage had already been done. For weeks they have been blaming its users and accepting zero responsibility.
Make sure to never give incompetent clowns like <a href="https://twitter.com/3commas_io?ref_src=twsrc%5Etfw" data-wpel-link="internal">@3commas_io</a> your business ever again. <a href="https://t.co/LyNvar7LST" data-wpel-link="internal">https://t.co/LyNvar7LST</a> <a href="https://t.co/RkS6ZgCZEN" data-wpel-link="internal">pic.twitter.com/RkS6ZgCZEN</a>
&mdash; ZachXBT (@zachxbt) <a href="https://twitter.com/zachxbt/status/1608248017492086785?ref_src=twsrc%5Etfw" data-wpel-link="internal">December 28, 2022</a></blockquote>
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“You kept lying and saying this was our fault instead of taking responsibility and prevented further exploits,” added <a href="https://twitter.com/coinmamba/status/1608205353228931073?s=61&amp;t=-OkLo_QVFEn1oKGeQvYcTw" data-wpel-link="internal">@CoinMamba</a>, another 3Commas user who said he lost funds. “Are you going to refund the users now?”
This isn't the first time 3Commas and its API handling came under scrutiny. About a month before FTX filed for bankruptcy, Sam Bankman-Fried agreed to refund $6 million to customers affected by what was described as a <a href="https://decrypt.co/112720/sam-bankman-fried-refund-ftx-phishing-victims-6-million" data-wpel-link="internal">phishing scam</a> involving 3Commas.
On Wednesday, Binance CEO Changpeng Zhao tweeted that he was “reasonably sure” there were “widespread API key leaks” from 3Commas. 
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I am reasonably sure there are wide spread API key leaks from 3Commas. If you have ever put an API key in 3Commas (from any exchange), please disable it immediately.
Stay <a href="https://twitter.com/hashtag/SAFU?src=hash&amp;ref_src=twsrc%5Etfw" data-wpel-link="internal">#SAFU</a>.
&mdash; CZ 🔶 Binance (@cz_binance) <a href="https://twitter.com/cz_binance/status/1608182790540902407?ref_src=twsrc%5Etfw" data-wpel-link="internal">December 28, 2022</a></blockquote>
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CZ added that users should disable their API keys in 3Commas. This is what 3Commas is now recommending as well.
“As an immediate action, we have asked that Binance, Kucoin, and other supported exchanges revoke all the keys that were connected to 3Commas,” Sorokin tweeted.
3Commas has not responded to a request for further comment from Decrypt.

3Commas Admits It Was Source of API Leak That Led to Hacks

The United States Department of Justice is investigating the hundreds of millions of dollars’ worth of cryptocurrency taken in unauthorized transactions from collapsed exchange FTX, according ...

The United States Department of Justice is investigating the hundreds of millions of dollars’ worth of cryptocurrency taken in unauthorized transactions from collapsed exchange FTX, according to a report on Tuesday.
FTX was <a href="https://decrypt.co/114269/hundreds-of-millions-of-dollars-drained-from-ftx-overnight-in-unauthorized-transfers" data-wpel-link="internal">hit with a mystery attack</a> on November 11, shortly after it <a href="https://decrypt.co/114205/ftx-files-chapter-11-bankruptcy-sbf-steps-down-as-ceo" data-wpel-link="internal">filed for Chapter 11 bankruptcy</a>, adding a surprise twist to the saga around the exchange and its outspoken founder, Sam Bankman-Fried (SBF). The funds were then moved around to other exchanges and converted into different cryptocurrencies.
Now, federal prosecutors are tracking the assets—and have managed to freeze some, Bloomberg first <a href="https://www.bloomberg.com/news/articles/2022-12-27/us-probes-how-372-million-vanished-in-hack-after-ftx-bankruptcy" data-wpel-link="internal">reported</a> Tuesday, citing a person familiar with the case. However, the amount of funds frozen are described as a "fraction" of the overall amount.
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Blockchain analysts claim that about $650 million worth of cryptocurrency left the Bahamas-based digital asset exchange in the hack, making it <a href="https://decrypt.co/117695/year-of-the-hacks-biggest-exploits-and-hacks-of-2022" data-wpel-link="internal">one of the largest crypto attacks</a> of 2022. However, FTX's <a href="https://pacer-documents.s3.amazonaws.com/33/188450/042020648197.pdf" data-wpel-link="internal">bankruptcy filing</a> notes that "at least $372 million" was stolen, suggesting some discrepancy in the accounting of the missing funds.
Blockchain analysis firm Chainalysis confirmed to Decrypt last week that although Bahamian authorities did access FTX funds after its filing, as some news reports previously claimed, hackers indeed pilfered $650 million worth of funds at the time of the November attack.
<div class="embedded-post" data-id="117814" data-post-title="Who Will Pay Sam Bankman-Fried's $250 Million Bond?" data-post-type="post" data-post-orientation="horizontal"><a href="https://wp.decrypt.co/117814/how-sam-bankman-frieds-250-million-bond-works/" data-wpel-link="internal">Who Will Pay Sam Bankman-Fried's $250 Million Bond?</a></div>
At the collapsed exchange’s first court hearing, James Bromley—counsel to FTX’s new management—said that a “substantial amount” of the exchange’s assets are missing or have been stolen.
Feds <a href="https://decrypt.co/117124/ftx-founder-sam-bankman-fried-criminal-charges" data-wpel-link="internal">hit</a> FTX co-founder and former CEO Bankman-Fried with eight criminal charges earlier this month, including money laundering and wire fraud. The DOJ investigation does not relate to those charges, and Bankman-Fried previously hinted before his arrest that the unauthorized transactions may have been an inside job performed by a disgruntled employee.
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FTX <a href="https://decrypt.co/114246/rise-fall-sam-bankman-fried-ftx" data-wpel-link="internal">quickly collapsed</a> last month after it became clear that the company did not have sufficient funds to back customers’ assets. This was because Alameda Research, a sister company also founded by Bankman-Fried, had the ability to use FTX customer assets for its own means and without oversight, <a href="https://decrypt.co/117021/grossly-inexperienced-unsophisticated-ftx-collapse" data-wpel-link="internal">according to newly appointed FTX CEO</a> John J. Ray III.
Bankman-Fried was last week <a href="https://decrypt.co/117796/sam-bankman-fried-sent-home-on-250m-bail-after-first-court-appearance" data-wpel-link="internal">released</a> to his parents’ home on a $250 million pre-trial bond after being <a href="https://decrypt.co/117760/sbf-arrives-in-u-s-to-face-the-music-on-federal-fraud-charges" data-wpel-link="internal">extradited to the U.S.</a> from the Bahamas.

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