I think I found the shares…

CategoriesGamestop., Issue Dec'22

The oneiric u/onceuponanutt wrote the below.

What a fiasco in my assco!

I’ve been pretty active over the past 2 weeks with a few posts and a bunch of comments as I’m extremely interested in the developments surrounding FTX/crypto and how they pertain to GameStop.

Here are my 3 most recent posts;

Clarity on existing GameStop tokens

Something may have just snapped in the crypto world

Debunking the front page post “THE GME TOKEN WAS A BACKDOOR BAILOUT OF SHORTS”

For the sake of clairty (and my sanity) I’m going to consolidate everything into this post, with a little extra to make sure everything can be found and understood.

Here’s a legend for reference;

  1. My opinions

    1. FTX scheme

    2. CeFi vs DeFi

  2. Crypto basics recap

    1. Ethereum basics

    2. Etherscan

    3. NFTS

      1. Nefarious NFTs

  3. Tokenized GameStop stocks

    1. Etherscan charts for GME tokens

    2. Uniswap

    3. Why do I THINK these COULD BE related?

  4. FTX Futures 1230

  5. Serum

  6. Jump Trading

  7. Perpetual Crypto Futures

    1. Synthetix

      1. Inverse Synthetics

    2. Kwenta

    3. Chainlink Orancles

  8. TL,DRS

1 – My opinions
1a – FTX Scheme

Two weeks ago, FTX’s “balance sheet” was leaked. It was actually just a screenshot of an Excel document, which mYsTeRiOuSlY dropped almost immediately after bankruptcy rumors began. I wasn’t a fan of how it was immediately taken as fact, in both this sub and MSM, but that’s a discussion for another time.

Regardless of whether or not this “document” was or is legitimate, it seemed to me that no one questioned where this document came from.

Who leaked it? Why?

This singular screenshot circulated the web and caused absolute carnage across multiple platforms. I’ll tell you why I think it was leaked, and I strongly believe it wasn’t by accident. Whether it’s real/accurate or not, it was ‘leaked’ on purpose to a) generate fear, b) capitalize on existing market panic and 3) cause an immediate and intense emotional response that “FTX DID THIS!

It presents a singular enemy; incompetent SBF and his criminal FTX. It is a shift of blame.

Take a breath and think. SBF, the man who was already the head of a $16B crypto empire, who was absolutely stumped by Erik Voorhees when asked (marked to 1:24:27, watch until 1:40:00 but I recommend watching it all), very recently mind you, about basic Defi concepts, Constance Wang, the 28-year-old ex-Credit Suisse analyst and COO of FTX, and Caroline Ellison, the 28-year-old CEO of Alameda Hedge Fund, all created an intricately complex, international criminal crypto empire?

No, ya, no.

In my opinion, FTX was not directly doing the shorting or the crime, FTX was used, directly and/or indirectly, to create the synthetic liquidity needed by existing shorts to continue to short GME and others, and it was created behind the scenes by those same entities.

FTX is the scapegoatSBF is the fall guy.

1b – CeFi vs DeFi

“Centralized” does not always mean bad. Nowadays it does because there are many criminal centralized entities, but the ideology is not evil.

GameStop NFT Marketplace/Wallet are centralized projects, but they’re built on top of a decentralized protocol. They can delist items, ban creators, filter content, etc., but they can’t remove your ownership of your assets. It is a healthy combination of the two.

Centralized options for crypto should absolutely exist. Maybe some people want to trade. Maybe some people want to collect profits from staking. Maybe people don’t want the responsibility of managing their private keys.

I am not advocating for centralization, my only point is that there is always risk.

If your goal is to hodl your crypto, then yes, self-custodial is 100% the way. Not your keys, not your coins.

What we need to abolish is leveraged trading, excessive fractional reserve banking, trading of customers’ funds (theft), etc.

2 Crypto basics recap

coin is a crypto asset native to its own blockchain. Ether is the coin for Ethereum. BTC is the coin for Bitcoin. ADA is the coin for Cardano.

token is a crypto asset that is not native to a blockchain, it is built ontop of existing networks. All smart contracts are tokens, even stablecoins are technically tokens as they are built on the ERC20 protocol, despite having ‘coin’ in their name.

2a – Ethereum basics

Ether is the native coin of Ethereum. When someone says they own X amount of Eth, they mean Ether, not Ethereum.

Ethereum is a decentralized, open-source blockchain with smart contract functionality.

Smart contracts are programs that will automatically execute when certain conditions are met. If Bob puts $5 into the box and Susan puts a walnut into the box, the box gives Bob the walnut and Susan the $5. If Bob puts in $5 and Susan puts in a peanut, nothing happens. If Bob puts $2 in and Susan puts in a walnut, nothing happens.

Ethereum wallets are applications that let you interact with your Ethereum account. The GameStop wallet is an Ethereum wallet, and is not an Ethereum account in itself. It gives you access to your Ethereum account. You can use the same seed phrase to access the Ethereum account you generated from the GameStop Wallet on another Ethereum wallet, like MetaMask for isntance. If the GameStop wallet disappears overnight, your assets are safe because they are not in/on the GameStop wallet. They are in your Ethereum account. You can always find another Ethereum wallet to access your assets.

To reiterate, if you use your seed phrase on multiple Ethereum wallets, you will have access to the exact same assets. It is like logging into the same email from different browsers.

Every Ethereum account is a distinct alphanumeric crypto identifier that contains 42 hexadecimal characters that start with 0x and is followed by a series of 40 random characters.

2b – Etherscan

Etherscan is a block explorer for Ethereum. It allows you to freely search and browse any Ethereum transaction or block. Ever. For every single transaction, it will always include every active participant, every value of every asset denoted in both $ and Eth, both at the time of the transaction and the current exchange rate, every coin/token involved, the exact block on which a transaction was minted, the exact time a transaction was verified, etc.

Everything regarding every transaction is recorded. If something happened on Ethereum, you can verify this basic information. Always.

For instance, in my recent ‘debunking’ post, the OOP claimed that 1 wGME = $100k. Well, we have the token name, and we have the $ value they claim. We can check this.

Go to Etherscan, type in the token in question in the search bar, in this case ‘Wrapped GameStop

r/Superstonk - I think I found the shares...

This is the ‘Wrapped Gamestop’ token page. Txn = transaction

r/Superstonk - I think I found the shares...

Opening up the first transaction, labeled #1 in the first screenshot, you can see that 0.001 WETH, worth $1.13, was swapped via Uniswap for a very small portion of wGME. There is no $ value for wGME because the total value for wGME is 0…

r/Superstonk - I think I found the shares...

…as per the contract details, labeled #2 in the first screenshot.

Is the fact that this token has a supply of 10M yet a value of $0 sus? Absolutely. However using this basic info we have been able to detemine that the statement that 1 of these tokens was equal to $100k is verifiably false.

2c – NFTs

NFTs simply mean a unique blockchain item. Don’t think of them as a product, think of them as a barcode. That’s it. If someone says “I’m going to buy a barcode.” You should be as confused as if they had said “I’m going to buy a barcode.

It’s not the barcode’s fault if you don’t like the product it’s attached to.

Barcodes are virtually (no pun intended) irrelevant to the average consumer, and are instrumental in logistics and operations for the business. NFTs will adpot a similar stance in regards to gaming and eventually finance.

2c.1 – Nefarious NFTs

There also seems to be a growing concern about ‘scam NFTs’, notably the Runic Glory NFT showing up in people’s wallets, that can supposedly enable hidden nefarious code that supposedly have the ability to drain your wallet upon sending it. I’m 99.9% certain this is not possible.

When you have an asset in your Ethereum account, you cannot delete it in the conventional sense. By definition everythigng is immutable, so you can’t not have something in your wallet/account until it interacts with something else. To complete this action you must ‘burn’ it by sending it to 0x0000000000000000000000000000000000000000. This account can never be accessed, as per the code, so anything sent here is the Ethereum black hole.

The only instances I’ve been able to find is nefarious code in crypto marketplaces themselves, such as Rarible, where a security flaw allowed hackers to steal digital assets and transfer them directly into their wallets. The problem stemmed from the intrinsic risk on the “setApprovalForAll” function that is part of the NFT EIP-721 standard, which gave complete control of NFT assets to someone else.

I find it highly unlikely that simple transfer functions through the GameStop Wallet interface would allow this to happen.

In short, GameStop has your back, and you should be fine when only using internal UIs. But if you want to play is safe, just leave them alone/hide them.

3 – Tokenized GameStop stocks

There are at least 5 6 7 separate “GameStop” related Ethereum tokens currently in existence, note that they are spelling and case sensitive;

  1. Gamestop

    1. This contract was created by the same address listed on the original GameStop NFT parking page with the GameBoy.

    2. No activity after being minted May 25 2021.

    3. This wallet currently holds 69,420.69 GameStop (#3) and 6M GME coin (#6, also 50% of the supply)?

  2. GameStop.Finance

    1. A private project made by whirlstrirltbirlts degens, or so they say.

    2. Max supply 1M. 1031 holders. Minted Jan 30 2021.

    3. Uniswap V2: GME 8

  3. GameStop

    1. Max supply of 69,420,000. 81 holders. Minted June 27 2021.

    2. Uniswap V3: GME 2

  4. Wrapped GameStop

    1. Max supply 10 million. 207 holders. Not minted, first transfer involving Serum Deployer (SBF’s project) Jan 26 2021.

    2. Direct interaction with Alameda Research on Jan 27 2021.

    3. Most recent transaction Sept 18 2021.

    4. 4 batches of 2.5M tokens were transferred on Jan 26 2021, distributed and swapped by many people.

    5. A wrapped token on Ethereum means it was minted on another blockchain. I believe it’s from Solana as that’s where Serum operates, but could be wrong.

    6. Uniswap V2: GME 2

  5. GME Token

    1. What’s odd is that the same address is swapping way more coins via Uniswap V2 than the max total supply for multiple coins, though the total Ether balance for this address is 4.9 Eth. Each of these coins have the same max total supply of 10 quadrillion (1015) yet there are token swaps via Uniswap in the sextillions (1021). That’s 1 million times more.

      1. GME Token, max total supply 1 quadrillion, transaction for 4.3 sextillion

      2. SUZAKU INU, max total supply 1 quadrillion, transaction for 6.4 sextillion

      3. SAM FTX Token, max total supply 1 quadrillion, transaction for 4.7 sextillion

      4. Dahmer, max total supply 1 quadrillion, transaction for 8.9 sextillion

      5. Pepemon, max total qupply 1 quadrillion, transaction for 5.9 sextillion

    2. Uniswap V2: 23

  6. GME coin

    1. Supply 12M. 21 holders.

    2. Minted May 27 2021. Last transfer July 10 2021.

    3. Uniswap V3: GME 3

  7. GameStop Token

    1. Max supply 100,500. 5 Holders. Minted Jan 26 2021.

    2. Uniswap V2: GME

3a – Etherscan charts for GME tokens

GameStop.Finance chart;

r/Superstonk - I think I found the shares...
  1. GameStop chart;

r/Superstonk - I think I found the shares...

Wrapped Gamestop chart;

r/Superstonk - I think I found the shares...
  1. GME Token chart;

r/Superstonk - I think I found the shares...
  1. GME coin chart;

r/Superstonk - I think I found the shares...
3b – Uniswap

Uniswap is a cryptocurrency exchange which uses a decentralized network protocol. Uniswap is also the name of the company that initially built the Uniswap protocol. The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts.

Uniswap runs on two smart contracts; an “Exchange” contract and a “Factory” contract. These are automatic computer programs that are designed to perform specific functions when certain conditions are met. In this instance, the factory smart contract is used to add new tokens to the platform and the exchange contract facilitates all token swaps, or “trades.”

Any ERC20-based token can be swapped with another on the updated Uniswap v.2 platform.

3c – Why do I THINK these COULD BE related?

They all have the same ticker ‘GME’. Also when you select ‘Trade in Uniswap’ from the Etherscan charts for all of these tokens, except for ‘Gamestop’, the swap ticker is also GME. Only GameStop.Finance GME has a unique icon, the others are the same ‘GME’ white letters on a grey background.

As per Uniswap at the time of writing this post;

  • 1 Eth = 16,793.26 GME (GameStop.Finance)

  • 1 Eth = 527,852.27 GME (GameStop)

  • 1 Eth = “insufficient liquidity for this trade” (Wrapped GameStop)

  • 1 Eth = 4,383,560,000,000,000,000,000 GME (GME Token)

  • 1 Eth = 23,913.84 GME (GME Coin)

We’ll come back to this.

4 – FTX Futures #1230

Full post linked in intro. Summary;

  • On Nov 11 FTX futures contract #1230 began increasing linearly in price from $795 at 8:10am EST and peaked at $52.6k by 1:15pm.

    • We can speculate on what happened here, but to me it looks like an algorithmic search for liquidity followed by manual intervention to maniupulate the price down to under $1k.

  • This is not GME tokenized stock. This is an FTX December futures tracker.

  • Collateral for FTX futures is in stablecoins (USDC, TUSD, USDP, BUSD).

  • FTX futures are stablecoin settled: you deposit stablecoins as collateral for all of the futures, and your PNL is settled in stablecoins.  This means that you get legitimate USD-based price exposure and settlement, without needing a bank account; you can also use the same base currency as collateral for all of the contracts, making it easy to shift your positions around.

  • This future contained 5 stonks, CanineCoin and FTX’s FTT coin. They’re listed in the screenshot below.

  • The following screenshot was taken Nov 17. The last data point on this chart is the end of Nov 11, but we can see that the market price showed $23,480.20.

Even though this futures contract was likely deslisted the day of the spike, Nov 11, this same price also populates when you enter qty 1 in a market order below. This price is not a glitch, it seems the chart was/is false.

Here is the same chart zoomed in on the tail end.

As you can see, there was a massive volume spike at 22:00 of around 40k and the price spiked from to somewhere around $50 to $1900 over the next 2 hours, settling by 22:10 with sporadic prices and volumes at a fixed price of $950.

If you recall, $950 was the highest pre-split option price for Jan 2023 leaps.

Post-split these turned into $237.50 strike options. Meaning the exercise price for those adjusted options is now $23,750only $280 (just over 1%) different from the current listed market price for these futures… That might be a coincidence or it might be a cohencidence.

These futures expire Dec 30 at 4pm EST. I’ll be watching then to see if anything changes.

5 – Serum

Serum is a decentralized exchange software built on the Solana Blockchain, where cryptocurrencies can be bought and sold by traders. The token is cross-listed as an ERC-20 token on Ethereum. Serum refers to both the Serum DEX and SRM, its utility token.

Serum is able to support smart contracts via Ethereum interoperability and on the Solana blockchain thanks to Solana’s Low-Level Virtual Machine, which works like the Ethereum Virtual Machine that supports smart contracts conducted on the Ethereum blockchain. The LLVM was created by the Solana team, not Serum, but it is a key advantage of SRM as a general-purpose cryptocurrency.

Basically, Serum is to Solana what Uniswap is to Ethereum.

And guess who built Serum…

Alameda bloody Research and FT bloody X

Serum received a “significant investment” from Jump Trading. The value was not disclosed, but here are the first Etherscan transactions from Jump Trading. The first 200 or so are littered with purchases of SRM, so the the ‘significant investment’ may not have been a not cash investment but bulk buying of their native token. Classic FTX.

6 – Jump Trading

Jump Trading LLC is a proprietary trading firm with a focus on algorithmic and high-frequency trading strategies. The firm has over 700 employees in Chicago, New York, Austin, London, Tel Aviv, Singapore, Shanghai, Bristol, Gurgaon, Gandhinagar, Sydney, Amsterdam, Hong Kong, and Paris and is active in futures, options, cryptocurrency, and equities markets worldwide.

The company is a member of the Principal Traders Group, an advisory group formed by the Futures Industry Association (FIA) to represent principal traders (i.e. independent proprietary trading firms that trade only on their own accounts).

Following the 2010 flash crash, Disomma, Gurinas, and COO Matt Schrecengost met with CFTC chairman Gary Gensler to discuss the definition of spoofing as a disruptive trade practice as well as transparency and access to SEFs. This meeting contributed to regulatory efforts to implement new market rules stemming from the Dodd–Frank Act.

7 – Perpetual Futures

In finance, a futures contract is a standardized legal contract between two parties to buy or sell something at a predetermined price for delivery at a specified time in the future.

No matter what the price is, I will buy X amount of oil from you for $75 next Friday.

perpetual futures contract, also known as a perpetual swap, is agreement to buy or sell an asset without a fixed expiry or settlement time. Traders can hold a position perpetually as long as the margin is sufficient.

No matter what the price is, or the time, I will buy X amount of oil from you for $75.”

Perpetual futures are cash-settled, and differ from regular futures in that they lack a pre-specified delivery date, and can thus be held indefinitely without the need to roll over contracts as they approach expiration. Payments are periodically exchanged between holders of the two sides of the contracts, long and short, with the direction and magnitude of the settlement based on the difference between the contract price and that of the underlying asset, as well as, if applicable, the difference in leverage between the two sides.

As the price of perpetual contract is close to spot price, PnL of perpetual contract trading is close to levered spot trading. You can see the funding as a proxy of interest paid to banks, while the funding rate is more frequently adjusted than bank interest, and sometimes you even earn funding than paying it.

Essentially, perpetual contracts can be traded continuously forever. Traders don’t need to worry about any approaching expiry date or contango structure upon future roll-over. In that sense, perpetual contract trading is more flexible and more active than single futures contract in the crypto market.

7a – Synthetix

Looking through the Etherscan transactions for Serum and Jump Trading, I came across a new name – Synthetix.

Synthetix is an Ethereum-based protocol, enabling the creation of synthetic assets. Analogous to derivatives in legacy finance, synthetic assets are financial instruments in the form of ERC-20 smart contracts known as “Synths,” which track and provide the returns of another asset without requiring you to hold that asset. You can trade Synths, which range from cryptocurrencies, indexes, derivatives inverses, and real-world assets like gold, on Kwenta, Synthetix’s decentralized exchange (DEX). Synthetix’s native token, the Synthetix Network Token (SNX), is used to provide collateral against Synths that are issued.

In the Synth ecosystem, you enter into a swap agreement with no direct counterparty, the counterparty on each trade is the overall liquidity of the entire system.

Synths use decentralized oracles, which are smart contract-based price discovery protocols, to track the prices of the assets represented, allowing you to hold and exchange Synths as if you actually own the underlying assets. In this manner, Synths provide exposure to assets that are normally inaccessible to the average crypto investor — gold and silver, for example — and lets you trade them quickly and efficiently. Synths are different from tokenized commodities, such as Paxos’ PAX Gold (PAXG), which is backed by gold bars. Owning PAXG means that you own the underlying gold and that Paxos holds it for you, whereas owning Synthetix’s sXAU means that you do not own the underlying asset — you merely have exposure to the price of gold.

How fucking convenient.

Also, SEO much?

7a.1 – Inverse Synthetics

Users can also bet the other way; they can short with Synthetic assets, known as Inverse Synths, denoted ‘iXXX’. The price of these assets increase when the price of the underlying assets drops.

Synthetix also offers an incentive staking mechanism, which rewards users for staking Synths to provide liquidity and stability to the ecosystem. Users purchase SNX and lock them up to create Synths. 100M SNX tokens were made in 2018. There are currently about 306M in supply

When you mint Syths, you also claim a portion of the platform’s total debt pool, which represents the total value of all Synths in the sytem.

Here is a video from YT channel Coin Bureau for additional info, it’s a good source of info for all things crypto.

7b – Kwenta

Kwenta is a decentralized trading platform powered by the Synthetix protocol. Kwenta enables its users to trade crypto perpetual futures contracts from several popular crypto assets having deep liquidity and offers up to 25x leverage.

Kwenta currently supports two blockchains – Optimism and Ethereum.

Kwenta is a decentralized exchange on which you can trade Synths (which can also be traded across a variety of DeFi protocols). Unlike other DEXs, the exchange does not have an order book and instead utilizes peer-to-contract trading, meaning all trades are executed against a smart contractChainlink oracles provide price feeds, which are used to set an exchange rate for each asset. A variable fee between 0.3% and 1% is levied on each trade and sent to a pool where it can be claimed by SNX stakers.

7c – Chainlink Oracles

Chainlink is a decentralized oracle service that offers an effective, reliable, and secure connection to external (off-chain) data that can feed on-blockchain smart contracts. LINK is the protocol’s native token, which requesters use to pay for services on the network, and also acts as a deterrent to nodes against providing faulty data. To learn more about how a Chainlink oracle works, check out Chainlink In Practice.

Oracles provide a trusted methodology for a blockchain network or smart contract to retrieve external, real-world data when it’s needed. Oracles query, verify, and authenticate external data and then relay it to a smart contract. This technology enables contracts to be executed in a trustless manner, but oracles themselves, and the data they provide, require a high degree of trust, privacy, and security. This is known as the oracle problem, a dilemma Chainlink is working to solve.

8 – TL,DRS
  • Not your keys, not your coins. Not your name, not your shares.

  • IMO FTX is the scapegoat and SBF is the fall guy for The Great Reset

  • This was Part 1 – explaining the mechanisms by which everything is intertwined.

  • I’m working on a part 2 – it’s a work in progress but so far my running theory is that short share locates in the stock market are buried by FTX in perpetual futures of GME tokens via Uniswap, Solana, Synthetix, Kwenta and possibly others.

More to come. Stay tuned.

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