GM,

In last week’s issue (PP 17), we covered the essentials around Minimum Viable Products (MVP): a product in the early-stage phase that’s developed enough to collect user feedback and provide the direction for further development.

This week, we will cover the stage after MVP, the Minimum Marketable Product (MMP). MMP is the stage where a product is polished enough that a company can effectively market it, and there’s value in investing in solid marketing efforts to continue its development.

At the MMP stage, the product is value-adding to pay-tiered customers, partners, and collaborators. This is not to say that an MVP cannot be such, but an MMP is more so. This is usually accomplished by providing utilities and features that benefit users in a way that levels up their experience, or is unique enough beyond anything else available in the market.

We will be launching the Grey Market (GM) at a standard closer to an MMP, that will benefit all our stakeholders. We will need your help, as well as from our partners and collaborators, to create a GM experience that is seamless and something the space has never seen before.

GM will be web3’s go-to place to find amazing real-world products available from merchants & sellers that believe in our web3 future.

Tech Terminal

• A review of the backend and frontend code for purchasing journeys is completed.
  
• We've been adding test cases to our smart contracts. To ensure maximum security for the smart contracts that will govern the Grey Market (GM), they've been undergoing heavy testing by our team.
  
• We've finalized a Whitebox patch this week, including a History Page, the ability to set nominated WL wallet and Discord ID on a wallet address level, and the ability to tweet Whitebox winnings retrospectively.

Market Matters

Hello, and welcome back! We have many matters concerning the markets to talk about. Where shall we begin? Before approaching the elephant in the room, let’s briefly look at last week's PMI report and the remainder of the jobs market data.

The Institute of Supply Management’s PMI report, which signals industry expansion or contraction, came in slightly lower than expected, showing slower growth than the previous month but is still on the expansion side of the scale.

The crypto markets responded well to the news on Thursday because although the numbers are higher than the baseline, the slowed expansion growth of business conditions such as employment and production could be contracting, which would have a positive long-term effect on inflation due to decreased demand and spending.

On Friday, we received the monthly Jobs reports for Non-Farm Payroll, Average Hourly Earnings, and Unemployment Rate, all of which came in higher than projected. The Non-Farm Payroll data came in much higher than expected, showcasing a 261k increase in employed people, not including the farming industry, compared to the projected 197k. However, on the bright side, it was lower than the 315k statistic from the previous month.

The Average Hourly Earnings came in a tad higher at 0.4% than the 0.3% increase expected by market analysts showing an increase in the price businesses pay employees for labor. Lastly, the Unemployment Rate also increased to 3.7%, 0.1% higher than projected. With both increases in the payroll data, hourly earnings, and the increase in unemployment rates, the markets had mixed feelings as no clear picture was painted with the conflicting data.

The FED is looking for increased unemployment rates. Still, they also seek a decrease in hourly wages and payroll numbers because this would showcase across the board that the jobs markets are slowing and their policy is working, ultimately helping in the battle against inflation.

Entering the second week of November, the crypto space was met with alarming news. As most who are active in the space have seen this week, there has been a bit of drama between two of the largest crypto exchanges, Binance and FTX. Even if you need to get up to date on the news, you may have noticed that a majority of your crypto investments took quite a steep dive this week.

This week’s drop resulted from a back-and-forth between the two billionaires over the weekend, leading into this week, between the CEO of Binance, Changpeng Zhao, commonly known as CZ, and the CEO of the FTX exchange, Sam Bankman-Fried, also known as SBF.

Let’s preface this current situation where the initial conflict began over the summer of 2021 when Binance’s CZ parted ways with a $2.1 billion stake in the FTX exchange’s native token, FTT. With SBF seeking industry regulation from lawmakers, CZ has a different view on the future of the crypto space, thus beginning the difference in opinions.

Fast forward to this week when a report surfaced showing the books from Alameda Research, a separate private equity firm from FTX but founded by SBF, which showed some troubling numbers. The Alameda balance sheet, long story short, showed a massive $2.1 billion collateral exposure to the FTT token, which was created by FTX and not necessarily backed by anything.

Once CZ became aware of the report, he took to Twitter to announce his concerns and stated that Binance planned to sell all its FTT holdings. With concerns of potential insolvency and the market still fresh from the collapse of Terra Luna this year, his reasoning can’t be argued with.

These publicly visible CZ tweets sparked the beginning of a large selloff across the crypto space, with around $250 billion leaving the market, around a 25% drop.

With Binance, the largest crypto exchange, based on traded volume, and FTX being the second largest many speculate that CZ intentionally exposed the FTX liquidity crunch to eliminate a competitor. However, CZ eventually denied these claims stating the collapse of FTX doesn’t benefit the space in any way. SBF quickly came to FTX’s defense and denied the rumors, claiming everything to be fine.

A day later, on Tuesday, CZ again took to Twitter to announce that Binance had signed a non-binding contract with the intent to fully acquire FTX after doing their due diligence. On Wednesday, CZ announced that Binance had decided not to pursue the acquisition stating concerns over news reports regarding potential mishandled customer funds and newly alleged US agency investigations.

It had also been reported that many staff at FTX hadn't heard from nor seen SBF since Tuesday, with some theories surfacing that he could now be on the run, but as of Thursday morning, he resurfaced with a lengthy Twitter thread explaining his side of the story.

At the time of writing, FTX had halted all non-fiat customer withdrawals, and the exchange has stated it may need to file for bankruptcy if an emergency funding bailout isn’t obtained. Late Wednesday night, Tron founder Justin Sun, creator of the TRX token, turned up as a potential savior of FTX customers offering a potential way forward, stating “We will do everything we can to protect our users, including exchanging all TRX, BTT, JST, SUN, HT on the FTX platform at a 1:1 ratio” so this is something to monitor moving forward.

With the FTX fiasco being a fluid and ongoing situation, we are sorrowful for the many impacted by this. We hope for the best both for the platform users and the crypto space as a whole moving forward in these difficult and stressful times.

This week, Solana was also on watch by many investors as over 50 million of the coin’s supply, representing about 15% of the total supply, was set to be unstaked from network validators on Thursday, amounting to a potential $900 million sell-off speculation, although there were no new developments at the time of writing this article.

Throughout this entire debacle between Binance and FTX and other crypto-related drama, the US Midterm elections took place, which may have also caused some of the market sell-off as markets tend to get propped up beforehand to give the illusion that the economy is strong. Thursday brought a big relief bounce to the markets with a good CPI report coming in at 7.7%, lower than the expected 7.9%, which is a great sign that inflation is continuing to cool off.

This decrease in inflation indicates that the FED policy is doing what they intend it to do. We look ahead, and with the markets being forward-thinking, it is wise to continue monitoring all relevant data that could signal the eventual speculated FED pivot.

Wild Web3

FTX’s Collapse: The Good, The Bad, And The Ugly

FTX, one of the largest cryptocurrency exchanges, is insolvent and spreading waves of contagion throughout the market. The exchange has halted the withdrawal of funds as they do not have enough in their treasury to service the requests.

Earlier this year, SBF was the crypto market’s white knight by acquiring beleaguered Voyager and extending a line of credit to Blockfi, both crypto lending platforms. SBF also swooped in to acquire assets from the fallen 3 Arrows Capital (3AC) in the wake of Terra Luna’s bank run.

The lives of small investors and large institutions alike were severely impacted by the fraudulent recklessness of Sam Bankman-Fried’s (SBF) actions in allegedly using customers’ funds to keep Alameda Research afloat. Alameda Research is SBF’s trading arm, mainly backed by FTT, a token created by FTX.

This means the trading arm is not truly backed by assets but rather by a token issued by the exchange. Another key asset in the treasury is Solana (SOL), as SMB is an early investor, which leads to speculation on how this could negatively impact the chain.

The first nail in the coffin was delivered by Binance’s founder, Changpeng Zhao (CZ), in a tweet that says Binance, a leading crypto exchange, is liquidating all its FTT tokens. This led to fear in the market, triggering a bank run, where people started withdrawing their funds from FTX at a rate the exchange could not keep up with. Binance eventually extended an olive branch to take over FTX, but pulled out from the deal after reviewing FTX’s books as part of its due diligence.

Being a once credible centralized exchange with prominent investors, some treated FTX like a digital bank to store their crypto funds, while others kept their funds there for ease of trading. No one predicted this Armageddon coming.

Our hearts and prayers go to those affected by this madness. This saddening event also reminds us that unless we hold custody of our assets, we could get in the crossfires of a black swan event through no fault of our own. The adage goes, “Not your keys. Not your crypto”.

Opensea Back-Pedalling On Optional Creator Royalties

With competitors taking a stance on having optional or zero creator royalties, Opensea (OS) is stuck in a hard place to find a competitive advantage unless they follow suit. However, after seeking the community’s feedback which leads to an outcry from creators, Opensea has decided to continue enforcing creator royalties for both new and old collections.

Opensea recently launched an on-chain solution allowing creators to enforce royalties for new collections on the platform. It does so by blacklisting the address used by its competitors. OS also floated the idea of allowing for optional creator fees.

The optional creator fee announcement was met with intense backlash from the creators, and the voices were strong enough to have OS back-pedal on its idea of allowing optional to zero royalties. It was pointed out that many artists came into the NFT space because of secondary royalties that were only possible because of NFTs and that marketplaces should not be able to dictate for it to be optional.

Kids In India Dipping Their Toes Into NFTs

STEM Metaverse, an experiential learning platform for students in India, has created an in-house blockchain-enabled NFT platform. The platform will be launched at the Kukdukoo Art Festival and is labeled as the first NFT platform for kids to show off their artistic talents. The two-day family festival will be held at Noida Stadium from the 12th to the 13th of November.

Kids can use the platform securely upload and sell their NFTs to earn virtual currency that they can use to redeem educational products, courses, and content within the STEM Metaverse. The kids are encouraged to upload the art they created during activities at the festival.

The aim behind the initiative is to expose kids to NFTs while providing a safe space for them to upload their work. Sites like Opensea and other NFT platforms could be a bit too much for the kids to handle, and STEM Metaverse serves as a safe space for them to explore NFTs.

Ghosts Are Now Loanable

If you have been keeping tabs on our Twitter, you would have probably noticed a tweet put out a few days ago on PxN x X2Y2 loan feature. Firstly, let’s dive into X2Y2’s loan feature, whereby you can use your Ghost NFTs as collateral in P2P lending with 0% transaction fees.

About X2Y2

X2Y2  was launched in January 2022 and like Opensea, it is a secondary marketplace for you to purchase your favorite NFT collections. The unique aspect of X2Y2? There are no trading fees incurred when you sell an NFT. This attracted many users who were frustrated with Opensea to use it, making it one of the most prominent secondary marketplaces.

NFT LOAN

Introduced fairly recently, the arrival of the peer-to-peer (P2P) loan system allows users to get loans in ETH while utilizing their NFTs as collateral. How it works:

1. NFTs being used as collateral has to be in the curated list of projects. Yes, we’re sorry but that rug project of yours cannot be used as collateral. To date, there are only a handful of projects on the list, to name a few; BAYC, MAYC, Moonbirds, Azuki, CloneX, and of course the latest addition, PxN
2. The NFT must not be flagged as stolen or removed on X2Y2 or other secondary marketplaces
3. There have to be valid loan offers, indicating that there are a few peers who are in favor of lending ETH tokens for the NFTs

The purpose of the curated list is to ensure that the asset prices are not too volatile. According to X2Y2, more collections will be added over time. Let’s now move on to how you could borrow and lend ETH on the marketplace. 

BORROWING ETH

When borrowing ETH, you have to first accept a loan offer. By doing so, you have to agree to the terms and conditions. A loan offer that is put in place will:

1. Send you the amount of ETH as per accepted on the offer
2. Require you to repay the loan (amount borrowed + interest) before the repayment date.
3. Lock your NFT in the contract as collateral until you repay your loan
4. Enable lenders to receive the NFT being put up for collateral should you fail to repay the loan by the due date

There are two different types of loan offers that can be accepted.

1. Collection offers that apply to all items of that particular collection. By owning any part of the collection, you are entitled to accept the loan
2. Item offers on a single item. Only the owner of the item will be able to accept the loan

LENDING ETH

To start lending ETH, you will be required to put out a loan offer. This allows you to either place an offer for an individual NFT or across an entire collection. By putting out a loan offer, it entails the following details:

1. Loan value. The amount of ETH you want to lend out
2. Repayment value. The amount of ETH the borrower has to repay you, initial amount + interest. 
3. Duration. The amount of time given for the repayment. Annual Percentage Rate (APR). This would be used to calculate how much interest would be accumulated on the loan. 
4. Expiry. How long the offer would be valid before it expires. 

Borrowers would be able to accept the loan offer at any time before the expiration time to establish a loan with you. As mentioned above, only a set number of collections are available for loan offers at the moment. 

CONCLUSION

If you feel comfortable with borrowing or lending ETH, X2Y2 offers 0% platform fees for both borrowers and lenders. As always, check that you are on the official site and stay safe when conducting the transactions.

Phantom Files: 20

Ever since The Fallout, Phantom 20 has been supplying meals to her regiment. She had limited ingredients to choose from but wanted to keep the troops happy. The regiment is infamous for its unique peanut butter and pickle rations. Plortis and Pineapple were invited to visit her base to learn more about this cuisine. They gladly accepted.

1. Why did you name yourself Baerin?

I made my name back in 2012 when I played a lot of League of Legends, so my name originated from a monster called “Baron”.

2. What is your favorite weird food combination?

You know the answer to this. Peanut butter and pickle sandwich of course!

3. What’s your favorite game to play?

I’d say my main game is currently Valorant.

4. Where do you want to go on vacation?

Japan has always been on my bucket list!

5. What is your favorite anime?

Tough question, but the top 3 most notable ones are probably Hunter x Hunter, Tokyo Ghoul, and Full Metal Alchemist: Brotherhood.

6. What is a skill you want to get better at?

Programming/Coding.

7. What is a hot take that you have?

Pickles go with everything.

8. Who do you look up to in this space?

I don’t necessarily look up to a lot of people, but I have a lot of respect for those that have committed their livelihood to web3.

9. What is a favorite PxN moment of yours?

The slums during pre-mint days. I don’t have a specific moment but I absolutely loved how everyone was so comfortable with being themselves.

10. Give us some hints for your Phantom!

Blonde babe with a gun?

11. What made you want to start streaming?

There was a period of time when I didn’t have a lot of gaming friends so I was a bit lonely and decided to make some streaming friends.

12. When was the last time you had a peanut butter and pickle sandwich?

Last week >:v)

13. What is one thing you still have from your childhood?

I actually have a decent amount of stuff… I have a lot of stuffed animals and even some clothing back from elementary school.

14. What is your favorite movie?

Inception

15. What is something you’ve always wanted to try but you’ve been too scared to do?

Jumping off a mountain with only a flying squirrel suit? (Not sure what it’s called)

16. What is one goal you are determined to achieve in your lifetime?

Go MIA for 6 months and just travel the world.

17. What's your idea of a perfect road trip?

Buc-ees. It’s a popular gas station the size of 20 regular gas stations. They’re usually located in more rural areas, so the only justification for visiting would be for a road trip. Doesn’t matter where I go as long as Buc-ees is one of the stops.

18. What do you do to relax?

Lay in bed and cry.

19. Dogs or Cat?

Dogs

20. What are 3 things you cannot live without?

1) Internet
2) My dog
3) My bed