Dear Finbloxers,
We're happy to provide our Transparency Report, which is designed to bring some peace of mind to our users so that they know where their funds are being deployed. The allocations presented below are subject to change depending on strategy performance, future yield projections, and the evolution of the customer deposit mix.
Markets
Since our last edition, crypto prices have remained at or near their all-time highs with some temporary dips along the way for the top market cap cryptos. Imminent Alt-season has been hoped for but doesn’t seem to have broadly arrived yet with the exception of some hyped AI project tokens that started trending last year. The biggest event was the Bitcoin mining reward halving in April. Predictions for big price increases following the halving haven’t materialized.
BTC halving: Four years since the last halving, the 4th mining fee reduction happened on April 20. Mining fees per block got chopped from 6.25 to 3.125 per block. This means less supply of BTC into the market and reduced revenue for miners, giving equal BTC prices. The halving has traditionally been succeeded by large BTC price increases though the impact can be months or even years later.
ETH spot ETF: On May 22, the SEC approved 8 spot ETH ETFs, four months after the spot BTC ETF approvals.We won’t see an actual ETF for some more time as each funds S-1 must be filed, reviewed and approved by the SEC.
Celsius distribution:
SBF FTX sentencing & recovery rates:SBF was sentenced to 25 years in prison in late March. The size of the fraud, perjury by SBF and his lack of significant remorse all played into the long sentence. Meanwhile, FTX bankruptcy creditors are expecting to receive a full recovery of their assets, albeit based on prices at the time of the bankruptcy filing in Nov 2022.
New project funding & token sales: Since the crypto bull market started in later 2023, new protocols have been raising funds through VCs, IDOs and other methods. Current levels are still far being historical highs but we can expect this trend to continue while the market is growing. AIrdrops by various projects are also hot.
Solana activity: Meme coin activity on Solana has exploded and caused Solana to lead the market in transactions completed on-chain.
Uniswap governance proposal: Uniswap has a protocol proposal that would change how fees are paid. The proposal is to change the protocol so that some portion of the fees generated by the project will be paid to UNI token holders. This has caught the attention of the SEC, which sent a Well’s notice (not good) and UNI token holders. This may be one of the biggest events in Defi should it move forward.
Trading volume: April saw a doubling of crypto trading volume vs March and the highest volume since late 2021. This was short lived as April volume dropped to previous levels.
Security reminder: Never give out your seed phrase or passwords for any reason to any project.
Yield Changes for March 2024
BNB 0% increased to 1.5%
SHIB & SLP decreased to 0%
DeFi Allocation Increase & Risks
We’ve made no material changes to our allocations between Defi and CeDefi/CEX exposure. All current customer assets remain in DeFi protocols/projects or self-custody wallets. Defi remains at risk of protocol and smart contract exploits.
Target Allocations
We did not make any significant changes to our allocations.
Our target allocations for customer assets that were initially set in July 2022 and updated in November 2022 have not changed:
DeFi protocols: 40-90%
Centralized exchange (CEX): 0-5% (used for temporary asset bridging between networks, i.e. USDC_ETH → USDC_POLY and vice versa)
Self custody: 5-15%
CeFi platforms: 0%
As of the end of May, our allocations are as follows:
DeFi protocols: 50.2%
Centralized exchange (CEX): 0%
Self custody: 49.8%
CeFi platforms: 0%
We believe in providing transparency to our users on the company's activities and aim to increase our users’ view of where their coins and tokens are and how they are performing. As always, we'd love to hear more feedback about the types of info you want.
All the best,
The Finblox Team