Crypto.com Preliminary Audit Shows 20% of Its Assets Are In Shiba Inu Coin (coindesk.com) 23
An anonymous reader quotes a report from CoinDesk: The swift collapse of the FTX crypto exchange has sparked an industry push among big rivals to publish proof of their reserves as a means to provide transparency into the assets on their platforms. With those efforts just getting underway, one firm, Crypto.com, has taken the proactive step of providing a preliminary set of disclosures -- sharing wallet addresses with the blockchain analysis firm Nansen to create a dashboard of nearly $3 billion of reserves and other assets. What that shows is just how heavily the mix of assets is skewed toward a meme-y token called shiba inu (SHIB), a digital asset built atop the Ethereum blockchain that was largely inspired by the joke token dogecoin (DOGE).
Like DOGE -- a key staple of billionaire Elon Musk's crypto schtick on Twitter -- the SHIB token is a highly volatile cryptocurrency whose primary use case is often considered to be speculation itself; it's traded for fast profits and yuks. Of the $2.88 billion in total assets in the wallets, roughly $558 million, or about 20%, are in SHIB. The holding ranks second only to the $872 million of bitcoin (BTC), the largest cryptocurrency by market value, which represents 31%. The amount exceeds the $487 million in ether (ETH), the second-biggest cryptocurrency, and dwarfs the $1.5 million in dogecoin (DOGE), Nansen data suggests. Crypto.com's large holding of SHIB is a "reflection of user interest/activity," Nansen data journalist Martin Lee told CoinDesk.
"In an ideal world, we'd want the best assets to be worth the most, but SHIB and DOGE both have extremely high market caps," he said. So it's "not super surprising that retail-heavy exchanges will have a higher concentration of such tokens. And regardless, as an exchange, your main source of revenue would likely be trading fees, so whether it's meme coins or more fundamentally sound assets, your business model is intact."
Further reading: Binance's CZ Slams Reports Binance's Reserves Are Full of Its Own Tokens
Like DOGE -- a key staple of billionaire Elon Musk's crypto schtick on Twitter -- the SHIB token is a highly volatile cryptocurrency whose primary use case is often considered to be speculation itself; it's traded for fast profits and yuks. Of the $2.88 billion in total assets in the wallets, roughly $558 million, or about 20%, are in SHIB. The holding ranks second only to the $872 million of bitcoin (BTC), the largest cryptocurrency by market value, which represents 31%. The amount exceeds the $487 million in ether (ETH), the second-biggest cryptocurrency, and dwarfs the $1.5 million in dogecoin (DOGE), Nansen data suggests. Crypto.com's large holding of SHIB is a "reflection of user interest/activity," Nansen data journalist Martin Lee told CoinDesk.
"In an ideal world, we'd want the best assets to be worth the most, but SHIB and DOGE both have extremely high market caps," he said. So it's "not super surprising that retail-heavy exchanges will have a higher concentration of such tokens. And regardless, as an exchange, your main source of revenue would likely be trading fees, so whether it's meme coins or more fundamentally sound assets, your business model is intact."
Further reading: Binance's CZ Slams Reports Binance's Reserves Are Full of Its Own Tokens
So all crap? (Score:4, Insightful)
Figures. Only really stupid people will see imaginary value as "reserves".
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In fact, Shiba Inu is a breed of dog. So the coin is a joke based on another joke currency, the doge coin. Is there any hope for millennials whatever?
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Which millenial pissed in your cornflakes today?
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I invested $200 in dogecoin based on the idea that Elon Musk running his mouth was going to cause it to rise. I was wrong and my "investment" currently sits at $44.40. I'm Gen X, and just as perfectly capable of being dumb as any Millennial. The kids are alright. Shush. :P
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If their clients have a lot of Shiba Inu coins, it makes sense for them to have plenty of reserves for those. Otherwise, what are they going to do if the clients suddenly want to withdraw all their Shiba Inu? Buy them on the open market and drive up the price? Also, trading fees are often paid in crypto as well so they would accumulate a fair bit of Shiba Inu that way. And it's quite likely that the initial value of that position was a lot less but it just blew up in value and they then decided to keep it i
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Still, I wouldn't be all that eager to invest my life savings into a crypto exchange that has 20% of its assets tied up in dog money. ..and it's not even the GOOD dog money, it's a ripoff clone of the original dog money.
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Still, I wouldn't be all that eager to invest my life savings into a crypto exchange that has 20% of its assets tied up in dog money
It shouldn't matter either way. If the dog money turns out to be a volatile asset, then that means more trading which is good for exchanges (more trading fees). Profitability mainly depends on trading activity plus platform stability, also.. In not being hacked or having your customers hacked which insider fraud is a special case of - E.G. The FTX exchange seemed
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Re:So all crap? (Score:5, Informative)
A proper exchange Does not take a position on the future worth of individual coins they are holding for their customers. In other words: If your customers are holding Bitcoins on your exchange, then Only Bitcoins, not US Dollars or other coins can be considered reserves towards meeting those obligations.
They ARE reserves So long as their customer balances are denominated in those coins AND they possess equal or more coins than the total sum of customer balances Per coin type
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I think you have no idea how reserves work.
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Crap is a bit of an understatement.
Shiba Inu Coin is a knock off of joke currency Dogecoin. It's a confusingly similar name* scam of a joke that got boosted by Elon Musk.
* Doge is a meme with a Shiba Inu** dog in it.
** Inu is Japanese for dog, so it's actually just a Shiba dog but someone got confused with the translation way back and in English it became Shiba Dog Dog.
Reserves? (Score:4, Insightful)
Speculation, not reserves (Score:2)
Um, ok (Score:2)
It's like doing a news story about what I do with my rupees in Zelda BOTW.
Imaginary news about imaginary money.
Re: Um, ok (Score:2)
I would argue that your BOTW rupees have more value. You can trade them in-game for a large variety of items and food, and at least you're having fun when you mine them. Sure, you can't trade your rupees with friends or use them as currency in real life, but let's face it, you can't /really/ do do that with your SHIBA either...
Someone create turtle coin. (Score:5, Funny)
welcome to virtual world with virtual reserves (Score:2)
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Obviously, most of it is in "secure" crypto assets like Luna or Dogecoin... or some other generic equivalent of it.
Another scam, no surprise Crypto.com next ? (Score:2)