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Illustration by Mitchell Preffer for Decrypt
We’ve reached the end of the first month of January, and the crypto markets have been topsy-turvy in the new year, to say the least.
The first week of 2022 was really quite bad. Week two showed some promise. In the third week, Bitcoin and Ethereum crashed to their lowest prices since last summer. The past week has looked like the start of a full recovery, but you can never be sure with crypto.
Thank goodness then for Crypto Twitter, an endless source of diversion. This week two of our regulars returned: Tesla CEO Elon Musk and El Salvador President Nayib Bukele. Read on to find out how many pots they stirred this week.
OpenSea’s nightmarish week
This week saw widespread panic among OpenSea users when an exploit allowed people to buy high-priced NFTs like Bored Apes at well below the floor price thanks to old inactive listings that users hadn’t cancelled (either because they didn’t want to pay the gas fees to cancel or, in more cases, had no idea the old listings remained active).
OpenSea has framed the issue as “not an exploit or a bug,” but an issue caused by “the nature of the blockchain,” but whatever the company wants to call it, OpenSea clearly acknowledged it’s a problem by refunding $1.8 million in Ethereum to affected users.
Suffice to say, the exploit was widely discussed on Twitter. NFT creator @0xHustler was the first to alert the NFT crowd: “Everyone head to http://orders.rarible.com and make sure all of your old listings are cancelled. There is currently an exploit on @opensea letting someone buy your NFTs for old listing prices. This is happening right now!!”
On Tuesday, OpenSea rapidly deployed a new listings manager enabling users to review both active and inactive listings and cancel inactive ones through a one-click option.
By Thursday, OpenSea sent an email to all users with “inactive listings” on their accounts. It called on users to “please act urgently to cancel all affected listings.” NFT collector @dingalingts quickly cautioned that OpenSea’s advice actually made the exploit worse.
NFT artist and collector @swolfchan was one of the unlucky few who followed OpenSea’s advice. He cancelled a 15 ETH Mutant Ape Yacht Club listing and ended up unwittingly triggering a 6 ETH listing. A 9 ETH difference at today’s price is about $23.5k.
And of course, in the NFT world, intangible as it may be, these assets have a lot of sentimental value for users. BeetsDAO co-founder Jordan Garbis tweeted his devastation: “This kind of robbery hits home for reasons more than money. The @BoredApeYC that was taken from me on @opensea was part of the identity that I built. Was paired with an M1 and M2 mutant in a set I was never going to break. I haven’t slept all night.” (Garbis changed his profile picture to the Ape he previously owned, wearing a “Lost Ape” hoodie made by niftytailor.)
Elon, Ronald, DOGE, and Grimace
Tesla CEO and Dogecoin army general Elon Musk began a chain of events that made a select few meme coin traders profits of over 285,000% in the space of a few hours. The match that lit the fuse was somewhat innocuous: “I will eat a happy meal on tv if @McDonalds accepts Dogecoin.”
But McDonald’s responded. The fast food giant’s reply was equally harmless: “only if @tesla accepts grimacecoin.” Grimace, of course, is the name of the purple thing (what is he, exactly?) in McDonald’s mascot gang.
What happened next? At this point it’s become the norm: several blockchain-savvy folks immediately minted cryptocurrencies with the name “Grimace,” nearly ten of which were on Binance Smart Chain, and they mooned.
As Decrypt’s Liam Kelly noted, GrimaceCoin (on BSC) rose 190,000%, while a plucky lowercase alternative “grimacecoin” (on Polygon) managed a rally of 898%.
Bukele laughs as economic groups warn
El Salvador’s Bitcoin-pumping president Nayib Bukele is a permanent fixture in this roundup. This week, yet another major financial entity shunned Bukele’s grand Bitcoin experiment. He responded in kind.
Last week, it was Moody’s, the credit ratings agency. After Investing.com tweeted that Moody’s had downgraded El Salvador’s rating due to its Bitcoin buying, Bukele blasted: “BREAKING: EL SALVADOR DGAF.” It turned out the Investing.com tweet was wrong, and Moody’s had not changed its rating on El Salvador.
But on Tuesday, the International Monetary Fund (IMF) cautioned El Salvador to stop using Bitcoin as legal tender—and that was not fake news. While the country’s economy is shrinking, public debt is mounting, and using Bitcoin “entails large risks” that could halt the country’s recovery, the IMF said.
Bukele responded with a Simpsons meme, laughing it off.
Diem is dead
This was the week the Diem dream died. Meta (formerly Facebook) has apparently given up on its stablecoin Diem (formerly Libra) and is selling off Diem’s assets to Silvergate (whatever assets there are), according to the WSJ.
The “borderless global currency” that Facebook announced back in June 2019 was supposed to be backed by the “Libra Reserve” – a basket of “low-volatility assets like bank deposits and government securities, in currencies from stable and reputable central banks,” according to a spokesperson at the time.
It’s widely speculated that the cause of death was pushback from regulators and politicians, who were hostile to a Facebook cryptocurrency from the beginning. Regardless of the reason, the announcement of Diem’s death prompted predictable victory laps by crypto advocates and non-crypto folks alike who were never very enthused by the idea of a Facebook stablecoin. Crypto trader and developer Junko Suzuki was particularly cynical:
“The USA cared more about Facebook Libra / Diem Stablecoin than it would ever feared [sic] Bitcoin. The US government gives zero F’cks about El Salvador making it legal tender than FB trying to onboard 4 Billion users to cryptocurrency.Why don’t the North Koreans make it legal tender?”
Stephen Diehl, a programmer and vocal no-coiner, had a similar response. He called the project “an outright assault on the rules based international order and led by one of the most evil people on the planet.”
Karel Lannoo, CEO for the Centre for European Policy Studies, says he warned Facebook execs that Diem “would fall apart as soon as FB realised the complexity of dealing with >180 different regulatory regimes for money transfers.”
Expect more tweets in the week to come about joke token prices and lost Apes—and more chirping from the likes of Musk and Bukele.