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  • 😰 YIKES! CoinDCX's CeFi self-custody

😰 YIKES! CoinDCX's CeFi self-custody

PLUS: This blockchain is down 97%

AuthorAuthor

Aakash Athawasya & Arvind Krishna
November 20, 2022

Gm, this is the doodhwala, the crypto newsletter that’s full of good vibes, no fake-hype, and for you, we’re the right type. 😉

Let’s get into it:

  • All about CoinDCX’s self-custody

  • This VC just got wrecked by FTX

  • Lassi and Lists: Is Solana so dead?

  • Milky Meme Of The Day

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All about CoinDCX’s self-custody

CoinDCX is tryna go down the self-custody route.

This is one of those weird moments that make your eyebrows go up before you say, “Oh that’s weird, but cool I guess.”

YOU’RE DOING IT RIGHT NOW, AREN’T YOU?

CoinDCX is a centralized crypto exchange with:

  • $700k daily trading volume

  • valued at $2 billion+

  • 13 million users

But now they wanna get into DeFi and self-custody.

And they’re even doing the cringest thing a tech company can do, they're setting up a “war room” for this:

If a “war room” is a bunch of Indian dudes with laptops, I think Elon did the same this weekend at the Twitter HQ

(btw guess what they were reviewing 👀)

How is CoinDCX doing this?

They’re bringing CeFi to DeFi through Okto, a self-custody wallet.

Okto is an app that the exchange has created themselves, it’s like Coinbase with Coinbase Wallet, and Binance with Trust Wallet (acquisition tho!).

But it’s not a third-party app, it's straight outta CoinDCX.

And because it's outta a centralzied exchange, we had to take a close look at it. Because central exchanges play a lot of PR-stunts.

Is it secure tho?

CoinDCX claims to use something called something called MPC to keep the funds safe:

MPC → Milky Power Crew

MPC → Multi-Party Computation.

I really don’t know what it means, so here’s what google says:

Multi-party computation (MPC) is a cryptographic tool allowing multiple parties to make calculations using combined data, without revealing individual input. Under an MPC system, a user’s private keys are split during storage and come together only when signing a txn.

It’s kinda like when you get a packet of Oreos and you don’t wanna share it with your little brother. So, you hide a few in several parts of the house and he never finds the entire stash. 😈

MPC looks legit ✅ but Okto's MPC doesn't ❌

Okto claims that if a user loses their private key, the app can "assist in the recovery process," through their customer support team.

Like wtf? If the app and the exchange has access to the private keys or the recovery process, who holds the keys then? The user 🤡 or the exchange 👺?

Pro-tip: If anyone DMs you saying they're from an exchange or wallet's customer support them, BLOCK ❌ them.

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Wanna hang out with the coolest web3 folks in town?

Join your friendly neighborhood doodhwalas🥛for #FILBangalore 🚀

Here’s the super exciting lineup for this event and it’ll surely keep you on your toes:

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So register here for #FILBangalore and come out to Sheraton Grand in Whitefield, Bangalore on November 29th & 30th! 🥛

The event is invite-based only and slots are filling up soon.

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This VC just got wrecked by FTX

Sino Global Capital, the VC firm led by the Aamir Khan’s biggest fan, Matty Graham, seems to be doing…not so well.

The FTX heartbreak has hit them PRETTY hard.

They might be very close to removing their WhatsApp pic and changing their status to a heartbreak quote like “A broken heart is also an open heart.” 💔

Deep. But you know how breakups work. 🤷‍♂️

So what’s goin’ on?

Sino Global Capital (SGC) had a lot of direct and indirect exposure to the FTX collapse.

In their recent update, the direct exposure is apparently confined to just “mid-seven figures”.

That's in dollars! 😱 No biggie? 😅

But the question is more about their indirect exposure. 🤨

Indirect exposure is portfolio projects that had a huge "reliance" on FTX.

The biggest indirect exposure they have is Tanmay Bhat’s favv blockchain, Solana. 🥲

SGC is onboard the sinking Solanic.

FTX had huge investments in Solana. SGC also had huge investments in Solana.

An SGC slide deck was leaked recently and you can see it all!

Oh and guess who they were partnering with to raise capital?

F-T-X.

They were collabing to raise $200 million of capital to invest in projects.

And by January, this duo had already raised ~$90 million.

SGC has invested heavily in Solana ecosystem projects like:

  • Serum

  • Pyth

  • Jet Protoco!

And many more!

And almost all of them are down more than 80% since the FTX debacle.

Sino had 42% of their allocations into Solana projects! 🤯

Talk about not diversifying your investments! 😅

SBF had also invested in this fund indirectly through Alameda Research. 🤦‍♂️

So what happens now?

Sino did put out a “business as usual” update last week but it’s kinda hard to see that.

Its possible they might have liquidated some of their investments to reduce exposure.

But given the market is DOWN ONLY, they might not have made any good returns.

And also, to liquidate, they need someone on the other end to buy these tokens.

With this crazy market decline, not really sure who would wanna buy these tokens off of them. 😅

But hopefully, Matty can wrestle his way out of this just like Aamir Khan in favourite movie, Dangal. 🤷‍♂️

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Lassi and Lists: Is Solana so dead?

At the start of the year, Solana’s total value locked was $6.6 billion, this was higher than:

🟣 Polygon: $5 billion🔵 Arbitrum: $1.6 billion🔴 Optimism: $0.35 billion

Now, the Ethereum L2s have 🚀 past Solana.

Solana’s TVL has crashed by 96% in 2022 and it’s not even in the top 10 chains. 🤯

The only thing that can crash worse than Solana is _______ from the FIFA World Cup.

Reply to this email with which team you think will get kicked outa the group stages. 😉

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Milky Meme of the Day

If you want more doodh then, be sure to follow our Twitter (@DoodhwalaDaily)

That’s all for today bhaiyo aur bheno! Naale Sigona!

Yo! Our legal and financial advisors (aka our good ol’ conscience) have asked us to add this boring disclaimer.

None of what you read here is financial advice. We aren’t here to get you to buy or sell a crypto. We’re only here to tell you what’s up in crypto today and make you laugh. So, if you screwed up on a trade, that’s on you G. Stay safe in the markets.