And that’s a wrap folks!
2022 gave us everything from unimaginable levels of fraud, insider trading, political payoffs, multiple trillion-dollar dumps the weirdest love story we’d all like to forget AND a few green candles from excitable bulls being used as exit liquidity.
Let’s take a trip down memory lane as we dig into the $3.2bn+ worth of rugs, take a look at who pump ‘n’ dumped the markets and a few ideas of what to watch out for in 2023.
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🦧 Our Achievements at blocmates – From interviewing industry thought leaders to traveling the world to the biggest expos. We did a lot in 2022!
🔥 2022’s Biggest Rugs – Woops! a look at the $3.25bn stolen through rugs, bugs, and internet thugs.
🗞 Who Pump ‘n’ Dumped the Markets – Featuring J Powell, Pelosi, Cramer, 3AC, Do Kwon and of course SBF and his goon squad.
🛡 The Charts we Watched – The power of the $DXY, is the $SPX in for a final bonk? The $ETH merge ft Vitaliks aubergine and of course $ADA for the culture.
🎧 What to watch for in ‘23 – Ideas and real talk of what’s to come including Mass Adoption (doesn’t happen), Defi Baby!, and the Memeable Microcaps win again.
🦧 What We Achieved At blocmates
‘22 has been a big year for us as we got rugged harder than ever by bighotmumma69, spent countless hours lurking in discord, larping on Twitter and falling for the TikTok algo.
Apart from that, it’s been one of our best years.
Here are a few of the highlights:
In July we launched this very newsletter
Podcasted with top traders, thought leaders and up and coming projects
Secured partnerships alongside some of the best giga brain minds
Jedi and Dan traveled to London for Zebu Live and Lisbon for Solana Breakpoint to get free Tshirts.
Whilst Grant enjoyed 90-degree humidity at Token2049 in Singapore
That really is only the beginning as over the last 2 months we have been hard at work in the goblin cave working on a few internal projects ready for Q1 ‘23.
PS. If you want to help shape and be part of the next leg of blocmates it would be appreciated if you could take some time to give honest feedback to these 11 quick fire questions as your opinion matters.
🔥 2022’s Biggest Rugs
2022 was the year of rugs, bugs and internet thugs.
With over $3,237,650,000 being rooted, tooted and looted through bridge exploits, insider jobs, oracle attacks, DNS spoofing, and private key compromises which only took us to the end of Q1.
With that in mind let’s take a walk down memory lane to remember the 3 BIGGEST rugs we saw in 2022 (excluding FTX because…well…SBF gets too much airtime!)
1) Axie Inifities Ronin Bridge Hack – $625m
The thought of hacking the home of those adorable little bouncy cat-looking puffer fish creatures is unimaginable.
But in March ‘22 a crew of hackers known as the “Lazarus Group” decided to do the unimaginable and invade the Axies home and raid the Ronin bridge. The crew looted over 173,600 Ether and $25.5 million USDC for a combined total of $625m (yikes!)
The Ronin bridge allows Axie players to move their crypto assets to and from the Ronin side chain where hackers managed to get hold of 5 of the 9 private keys held by transaction validators for Ronin Network’s cross-chain bridge.
And as it is crypto, once in, the group looted, washed, mixed, and then laundered the funds into thin air.
The largest-ever crypto hack measured in fiat dollars came after hackers gained control over a majority of the cryptographic keys securing the play-to-earn game’s cross-chain bridge.
2) The Binance Bridge – $570m
Back in October, the industry-leading centralised crypto exchange had its very own cross-chain bridge exploited.
Yes, the big cheese of crypto and the BIGGEST player in the game got hacked.
There was a whooping $570m up for grabs as the hackers issued themselves 2m BNB tokens through the BSC token hub but only managed to get away with $137m as the BSC validators sprung into action to shut down their movements before the full $570m magically disappeared.
The attackers didn’t seem like regular degen hackers but a group of sophisticated apes who were looking for a Twitter flex and bragging rights by exploiting the industri’s giant.
The usual playbook has been to exploit a bridge and then wash through exchanges or Tornado Cash. But this crew of sophisticated apes used protocols like Venus, Geist and Trader Joe to use BNB as collateral and borrow a variety of stables or Ethereum before sending the tokens to burner addresses and making off with the loot.
– Hacker exploited a bug in the cross-chain bridge, BSC Token Hub.
– 2m $BNB Tokens stolen ( $570m)
– Hacker used multiple Money Markets to provide collateral and take out stablecoin loans
3) Solana Wormhole Exploit – $326m
Oh Solana, ‘22 has been one big year-long rug for you with your TVL diminishing from $6.68bn down to peanuts, Magic Eden moving homes and the 8 builders who are left questioning themselves as to “why?!”
We kicked the year off with a simple GitHub error that allowed this space cadet to forge a legit signature for a transaction that granted them permission to freely mint 120,000 wETH which was later sucked into the Wormhole and out into a fresh burner wallet.
This hack could have been a lot more painful as this left the remaining ETH unbacked which, if not resolved FAST, could have seen protocols that use wETH as collateral to become insolvent…whoops!
Special thanks to Wormholes parent, Jump Trading who topped up the Ethereum stores to prevent the worst-case scenario.
🗞 Who Pump ‘n’ Dumped the Markets
What a year it has been for the market makers, the insider and the politicians that managed to scoop the bottom and ride to wave right exit and peak top right before inflation turned into a real thing and not transitory like they led us to believe.
Reminder, members of the Federal Reserve traded stocks that the Fed was buying in 2021 at the market’s bottom, before the bull rally.
This is where they sold – at the very market top – before the Fed raised rates and were cleared of wrongdoing.
The 2022 Pump ‘n’ Dumpers:
Fed Chair Jerome Powell, of course, had to feature at the top as the world economy and algo bots hinged on every word he said as they slice and diced your stop losses robbing you of your work to earn dollar bills.
On multiple occasions, J Powell wiped out trillions of dollars from the market with his 8-minute Jackson Hole speech being one of the fastest pump n dumps I’ve ever seen. Those 8 minutes led to the DOJ dumping over 1000 points and over $1.25 trillion completely wiped out from the markets.
Jim Cramer aka Jimmy Cool aka JIMMY C! The CNBC Mad Money presenter famous for giving useless advice continued to help people lose even more money throughout 2022 (along with a number of apologies) and in October Tuttle Capital Management filed to launch a Long Cramer ETF (LJIM) and Inverse Cramer ETF (SJIM).
We can’t promise you’ll make it back in 1 trade but the memeability is great.
House Speak Nancy Pelosi isn’t one to shy away from a few insider trades…no no no, in fact she has managed to build herself a portfolio of assets worth over $135m and has a monthly income of $1m.
Let’s not forget that in August Pelosi decided to defy Beijing and took flight to Taiwan to become the highest-ranking US official to visit in over 25 years resulting in escalated tensions between the US and China. As a result…the markets tanked. Thanks Nancy!
Do Kwon and his algorithmic stablecoin TerraUSD (UST) destroyed portfolios across the globe, wiping out approximately $60bn as UST lost its peg whilst panic sellers created a death spiral sending both Luna and UST to zero. If you were caught in this we hope you’ve recovered since!
3 Arrows Capital rekt markets shortly after the Luna UST collapse as Kyle Davies and Su Zhu lost close to half a billion in that 1 trade. This then took the once $10bn fund into a cascade of liquidations as these 2 degens played with too much leverage and go burnt before jet-setting off to warmer (non-extraditable) countries.
SBF and his goon squad. I think we all know what has happened here…
This meme pretty much sums it up as we could have also included the likes of Elon, Mario, Bitboy, Pomp, Crypto Larp and many other “influencers” who helped pump (but mainly dump) the markets.
CT, were you not entertained?!
🛡 The Charts We Watched
…and then rekt us! But we did it as a community which softens the blow.
The power of the $DXY
Ahhh the DXY, the chart that spurred fear into the heart of the world’s best traders and confused normies as we saw the strength of the US Dollar pump harder and faster than Arnie’s biceps in Pumping Iron as it surged close to 22% from the yearly open.
The $DXY shows the strength of the US dollar when compared to 6 other currencies pairings and early this year investors, institutes and degens fled to the safety of the dollar as the fear of recession continued to grow.
Was holding USD one of the best plays of the year?
$SPX, one final bonk?
What a year it’s been for the stock markets with the SPX dumping close to 30% to hit the yearly lows at 3,491 back in October.
Every single rally of hopium was met by savage bears as they bonked us back down to lower lows each time with the current downward movement not looking too healthy to finish the year off.
In 2022 the markets have lost over $9 Trillion dollars…which is more than the GDP of Germany, the UK and France combined.
The $ETH merge ft Vitaliks Aubergine
Oh Ethereum you had one of the biggest network upgrades in history that will go down inhistroy as it was flawless. As devs executed it to perfection the whales dumped their bags and shortly after Vitalik managed to spur on a mini bear market rally as he showcased off his aubergine.
Ethereum has dumped close to 80% from the yearly open and whilst it’s performed fairly well against Bitcoin it has consistently been bonked down. With a pre-merge bonk, a post merge bonk and finally SBF bonked it hard and fast.
It looks like we will be finishing the year stuck in this $1,100-$1,300 range which completely invalidates my original idea of a bullish EOY rally sending it back to $2,700…oh the memories!
This ones for the culture as Carbongo is down over 85% from the yearly high in January as it edges closer and closer to zero.
🤝 A Quick Word
and a quick word from our super awesome sponsors who help us make this all possible
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🎧 What to watch for in ‘23
Ahhhh predictions of what’s to come…that ole chestnut…well safe to say that any and every prediction that was put forward in December ‘21 probably didn’t workout because how could anyone predict the scandal, the fraud and the love stories that happened this year.
But never the less here are some ideas and real talk that might inspire some hopium.
Mass adoption. It doesn’t happen next year. Period.
However, we may see progress towards it as trustlessness becomes trusted, as VC funds start deploying and as devs stop leaving the back doors open to major hacks and exploits. I mean would you trust something that has had $6bn + stolen from it over the last few years? Probably…that’s why we are still here but normies on the other hand still remember the pain of the scammy gamefi bullrun.
In my opinion mass adoption occurs like it did when e-commerce created the trust consumers needed to carelessly enter their credit card details into random websites to enjoy the fruits of internet shopping. Web3 needs to become a place of trusted trustlessness.
Defi baby! SBF showcased the failings of centralisation and the importance of what decentralisation once stood for. Heading into 2023 we will likely see better, smarter, safer infrastructure being built along with much-needed regulatory backing which right now is heavily holding us back.
DeFi protocols that are safe, simple to use and generate sustained returns over time will come out on top. Not in an “OMG I JUST PULLED A 100X” way but in a way that shows a use case that tradfi can comfortably come back into.
UI/UX HAS to improve and dev teams need to focus on making protocols feel like CeFi but work like DeFi because some platforms out there require 5 years of experience playing Minecraft to be able to access the various dungeons to acquire the vaults leading to that juicy real yield.
NFT usecase usefulness. Look, I get it…having an avatar that’s iconic for Twitter and gives you an identity as part of a community is cool. But justifying 7 figures for a jpeg..come on! I believe the tech behind NFT’s will start to show its usefulness with the art and antiques world benefitting the most as undeniable proof of ownership and digital identity.
Gamefi does nothing special. GTA 6 has been “in the making” longer than the Aribtrum airdrop which is my case in point. Creating a triple-A game takes a very long time and I still don’t see why you need it on the blockchain. Proof of ownership of your gamer profile isn’t enough to make me believe it’s worth it because every character I have played I have internally owned and then forgotten as I left for another title.
Memeable microcaps win again because the game of crypto is just that. It is a PvP gambling platform that puts degen against degen in the ultimate battle royale of rekt to riches back to rekt again. We’ll see another year of memes creating astronomical wealth as the fantasy of turning $69 into $420k still exists. Just look at the wealth OHM created for some compared to a “big tech top 100 coin” (I use this lightly here) like ADA, DOT or even LINK.
To break it down we are looking at another year of memes creating life-changing wealth in a PvP environment where builders are re-building the foundational infrastructure to allow for “smart money” to come back into the market, tradfi markets included. Without the right tech in a tech-facing industry, not a lot is going to change.
If there is one thing that 2022 has shown us is that regulation is needed but also the right kind of regulation that compliments the industry and doesn’t just line the pockets of politicians and insider traders.
Another area of consideration is having the right educational process for both corporations and normies to brainlessly sign up and deploy capital like you would when registering for your 5th credit card. That’s how simple the onboarding process needs to be.
2022, what a year that was. Crypto being crypto 2023 will be full of even more stomach-wrenching capitulations, generational wealth opportunities and crypto Twitter larp that makes you cringe all whilst the big dramas of this year get soon forgotten .
From Grant, Jedi and I we wish you all good health and a very Happy New Year! We’ll see you on the other side for more rugs, bugs, and internet thugs!
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