Second DappRadar, the day after the crash Silicon Valley Bankthe number of active non-functional token (NFT) traders fell to its lowest level since November 2021, hitting collections as Crypto Punks and the Bored Ape Yacht Club. Let’s see what happened.
CryptoPunks Non-Fungible Tokens Recovery attempt
On Saturday, a day after the Federal Deposit Insurance Corp took control of the company Silicon Valley Bankthey were just there 12,000 active NFT tradersa number not seen since November 2021, according to DappRadar.
Individual exchanges that day NFT there were 33,112 of them, the lowest daily total of the year so far. Since the beginning of March, trading volume for non-fungible tokens is down 51%, with sales down about 16%, he says DappRadar.
However, not all collections of non-fungible tokens were affected equally. In fact, NFT publisher Yuga Labs’ projects, incl Bored Ape Yacht Club AND Crypto Punkssaw their floor prices drop slightly on Saturday, but prices recovered quickly.
One Twitter user compared CryptoPunks to USDCclaims to be more stable than the stablecoin, which lost its peg to the US dollar after the collapse of Silicon Valley Bank.
Specifically, the bank failed after selling large chunks of its holdings at a loss to deal with a deluge of customer withdrawal requests. Sara Gherghelasresearch analyst at DappRadar, said Yuga Labs’ success has been fueled by its investment in CryptoPunks and its ability to build a community.
While the company said it has limited exposure to Silicon Valley Bank, its token holders did not make any big changes on the news. Gherghelas said in this regard:
“They have a very clear roadmap, the team is visible and they have decided to do a good project after the monkey ecosystem. They keep building. They show that if you are part of their community, they have so many benefits and advantages.”
SVB drags some NFT collections: let’s see which ones
However, not all collections survived the fall of Silicon Valley Bank unscathed. Shortly after the release of the report, on March 10, evidencethe NFT collective behind the popular collection Moon birds, shared on Twitter that the company had invested some funds in Silicon Valley Bank, sparking uncertainty among holders. How to write:
“PROOF Team Statement Regarding SVB: Many of you saw the headlines this morning about the closing of the Silicon Valley bank. For us, the most important thing is to proactively and transparently communicate with our community.”
The proof continues again Twitter:
2/5: In the spirit of transparency, here’s everything we know about the SVB situation:
Evidence holds cash at SVB, however…
Fortunately, we have diversified our assets across ETH, stablecoins and fiats – so we will be fine financially and operationally.
— PROOF (????,????) (@proof_xyz) March 10, 2023
“In the spirit of transparency, here’s everything we know about the SVB situation: Proof is holding cash with SVB, however… Fortunately, we’ve diversified our assets between ETH, stablecoins, and fiat, so everything will be fine financially and operationally.”
Over the weekend, Moonbirds lost about 18% of its value, according to DappRadar. A large holder sold 500 Moonbirds on Saturday, suffering losses between 9% and 33% for a total of over 700 ETH, or approx. 1.1 million dollars.
Gherghelas said that while news of Proof’s exposure to Silicon Valley Bank added to uncertainty in the project, holders were encouraged to sell due to the company’s shortcomings in recent months.
After the cancellation of the Proof of Conference scheduled for May, the community remained uncertain about the company’s ability to deliver on its promises. In fact, Gherghelas concluded:
“People, users and consumers are becoming more selective and they don’t want the hype, they want the benefits, the benefits and the utility behind this collection of NFTs.”
What is the exposure of CryptoPunks non-fungible tokens to SVB?
As we already know, Friday’s fallout from Silicon Valley Bank (SVB) sent shockwaves throughout the crypto and tech industry, leaving many firms uncertain about their financial position.
However, the co-founder Yuga Labs, gargoyle, assured the community that their action would have no impact on their business. In a recent statement, Garga gave Yuga Labs investors some much-needed relief.
According to Garg, Yuga Labs has “super limited exposure” in the defunct bank. That means the company’s finances they will not be affected significantly from the fallout. Garga also acknowledged that other crypto and tech companies may not be so lucky.
On the other hand, Yuga Labs has already proven to be proactive in protecting its finances. During a relapse FTP extension in November 2022 co-founder Gordon Goner assured the community that the company’s money was safe.
According to him, the funds were held in Coinbase Custody, bank accounts and treasury bills. Goner also revealed that the company had moved its money out of FTX.us before the crash. This demonstrated Yuga Labs’ commitment to financial security and risk mitigation.
Author: Alessia Pannone