Day: May 8, 2024

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Injective, a blockchain platform originally built on Cosmos technology, experienced a meteoric rise with its INJ token escalating thirty-three times in value during 2023, only to face a sharp decline this year. In a strategic pivot, Injective is now set to broaden its scope by launching a layer-3 network within the Ethereum ecosystem, leveraging Arbitrum’s technology.

The new layer, named “inEVM,” is designed to be compatible with the Ethereum Virtual Machine  and aims to bridge three major blockchain networks: Ethereum, Cosmos, and Solana. The inEVM will utilize Arbitrum’s Orbit toolkit, which enables developers to create customizable chains while ensuring interoperability across different ecosystems.

This expansion could potentially rejuvenate interest in the INJ token, which outshone most of its peers last year, achieving a peak market capitalization exceeding $4 billion. Despite the general uptick in the crypto markets in 2024, with the CoinDesk 20 index climbing 25%, INJ has seen a nearly 30% decrease in its value.

According to Injective Labs, this initiative will not only facilitate the development within the Ethereum layer-2 space but also maintain Injective’s attributes of high speed and low transaction costs. Additionally, operations on the inEVM network will support the Injective ecosystem’s tokenomics through a mechanism that regularly burns a portion of all protocol fees.

Eric Chen, co-founder of Injective Labs, emphasized in a press release that the integration with Arbitrum is pivotal for enhancing blockchain networks and infrastructure. He highlighted the importance of interoperability in bridging the gaps among leading layer-1 platforms, thereby enabling a more fluid exchange of assets and liquidity across various blockchain ecosystems.

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FTX has announced that almost all its customers will be reimbursed, just under two years after the cryptocurrency exchange’s dramatic failure. In a recent court filing, FTX disclosed it owes creditors approximately $11.2 billion, but has between $14.5 billion and $16.3 billion available for distribution.

According to the documents submitted to the U.S. Bankruptcy Court for the District of Delaware, the plan not only covers full claims but also includes supplemental interest payments at a rate of 9%, assuming residual funds are available. This partial compensation might offer little solace to investors who suffered significant losses during the exchange’s collapse. When FTX filed for bankruptcy in November 2022, Bitcoin was valued at around $16,080. Since then, the price of Bitcoin has escalated to approximately $62,675, representing a substantial potential loss for those who might have retained their cryptocurrency investments.

Under the proposed plan, customers and creditors with claims up to $50,000 are set to receive about 118% of their claim value, covering nearly 98% of FTX customers. The ability to settle these claims comes from the successful liquidation of assets primarily associated with Alameda Research or FTX Ventures, as well as through litigation claims.

At its peak, FTX was the third-largest global cryptocurrency exchange. Its rapid downfall began with a financial crisis akin to a bank run, leading to bankruptcy filings in November 2022. Following the collapse, FTX’s founder and CEO Sam Bankman-Fried stepped down and was later sentenced to 25 years in prison in March for his role in the massive fraud at FTX.

The aftermath of the scandal also brought down several high-profile endorsements, including those from celebrities like Tom Brady and Stephen Curry. John Ray III, known for his work in the Enron bankruptcy, has since taken over as CEO of FTX, announcing plans to potentially revive the FTX.com exchange amidst exploring other strategic options.

Despite the controversy, FTX’s new management remains optimistic, with Ray expressing satisfaction over the proposed chapter 11 plan that would fully satisfy non-governmental creditor claims with additional interest.

Meanwhile, the saga of crypto mismanagement extends to Binance, the largest cryptocurrency exchange, whose former CEO Changpeng Zhao was recently sentenced to prison for allowing illicit activities through the platform. Binance had considered purchasing FTX just before its 2022 collapse but withdrew amid emerging financial issues.

The bankruptcy court is scheduled to review the FTX asset distribution plan on June 25, potentially turning a new page for the beleaguered exchange.

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