Dispatch #121: 2023 Gets Bonked

Jan 06, 2023 3 min read

Dispatch

In this patch of your weekly Dispatch:

The latest meme coin revives Solana’s animal spirits
SBF pleads “not guilty”
Bankruptcies and bailouts in Bitcoin mining

The Big Idea

Dog Coins Won’t Quit

As our end of year coverage made clear, 2022 ended up being a mixed year for crypto. Those who would survive the inevitable fallout in 2023, we argued, would be strong projects that have the grit for different times. Given that, it makes perfect sense that the first week of the year’s breakout project was….another dog coin!?

Meet Bonk. Bonk is..yep..another Shiba Inu-themed coin. Some are calling it Solana’s answer to Shib. The token was issued on Christmas and airdropped to Solana NFT holders, leading to not only hype but trading volume. The price of the token is up over 2,000% this week and a number of Solana projects have also integrated BONK as a payments token.

On the one hand, it would be easy to be cynical about what seems like yet another meme token. On the other, Bonk is a nice sign of life and shot of adrenaline for the beleaguered Solana community which has been reeling due to its association with disgraced former FTX head SBF.

Even beyond that, Bonk is showing that the community can still have fun. Real Vision Crypto host Elaine Ly wrote “No idea what $BONK is but I'm glad $SOL dipped so I can experiment with its usability. The speed and low fees make these transactions fun.” That’s the spirit!

The Latest In…

The FTX Saga

Here are the quick hits from the past couple of weeks:

On Dec 21, SDNY revealed that Gary Wang and Caroline Ellison had pleaded guilty to fraud charges and were cooperating with authorities.
The next day, SBF was released on $250M bond, collateralized with his parents' house and contributions from two other parties his lawyers have so far successfully petitioned to keep anonymous.
Over the holidays, around $1.7M in crypto in Alameda wallets – including some $700k in wallets associated with SBF – moved, although SBF has denied having any access.
On Jan 3, SBF plead “not guilty.” His trial is set to begin on October 2, 2023.

In other words, get ready for a looong, drawn-out process.

The Latest In…

Bitcoin Mining

The combination of high electricity costs, depressed Bitcoin prices, and significant competition has ravaged the mining industry, leading to a string of bankruptcies and bailouts. Last month, Bitcoin’s largest miner by computing power, Core Scientific, filed for bankruptcy. As part of that, BlackRock committed $17M to the restructuring process. Argo narrowly avoided a similar fate through a $100M deal with Galaxy Digital. Notably, however, Bitcoin’s hashrate – which is how much computational power is directed toward securing the network – has been holding steadfast and even hit an ATH in November. For many, including us, this is a telltale sign of the long-term success of the network.

The Week’s Most Interesting Data Story

Solana NFT Volumes Speak Volumes

To put a bit of a fine point on the fact that Solana NFT communities (like those playing with Bonk) are some of the more resilient in this bear market, check out this chart of daily NFT volumes in SOL. Now of course, the important caveat is that in USD terms, SOL is way down so this doesn’t suggest that there is more happening than there was last year. But it does show that Solana NFT communities seem to be staying strong and building.