Speaker 1: Hello everyone, and welcome to the latest episode from the
Speaker 1: midweek edition of the coin Bureau podcast. Every week, I
Speaker 1: pick out two of my favorite videos from coin Bureau's
Speaker 1: YouTube channel to present to you in podcast form. The
Speaker 1: audio you're about to hear is from those videos I've
Speaker 1: chosen this week, and I hope you enjoy listening. The
Speaker 1: fallout from the collapse of f t X and Alameda
Speaker 1: Research continues to dominate the crypto headlines and is likely
Speaker 1: to do so for some time. There are well founded
Speaker 1: concerns that the contagion from this disaster could spread to
Speaker 1: other crypto companies and projects in due course. One project
Speaker 1: that could be most at risk is Slana, thanks to
Speaker 1: the fact that f t X and Alameda were its
Speaker 1: biggest investors. Slana is, or rather was, f t x's
Speaker 1: day facto exchange chain too. The project is therefore uncomfortably
Speaker 1: exposed to the fallout, and Soul's price has already crashed
Speaker 1: much harder than most other cryptos. It's not just Slana itself, though,
Speaker 1: the projects in its ecosystem are also at risk, which
Speaker 1: means a lot more pain is coming for them. For
Speaker 1: Salana and for the crypto market as a whole. So
Speaker 1: here's a breakdown of what Salana is all about, why
Speaker 1: it's so threatened by ft x IS collapse, and why
Speaker 1: there may still be hope for the future. Next up,
Speaker 1: it's mercifully time to move away from crypto for a
Speaker 1: while and look at something happening in the wider world.
Speaker 1: Aging populations in the West and elsewhere mean that Africa
Speaker 1: is projected to become increasingly influential in coming decades as
Speaker 1: it reaps a demographic dividend from its higher birth rates
Speaker 1: as well as young working age people. The continent is
Speaker 1: also rich in other resources too, and as such is
Speaker 1: attracting increasing amounts of investment from countries looking to capitalize
Speaker 1: on its riches. One country has been more proactive than
Speaker 1: any other in this regard, and that is China, which
Speaker 1: has invested billions of dollars across Africa as part of
Speaker 1: its Belt and Road initiative. An increasing amount of Africa's
Speaker 1: infrastructure has been built using Chinese money, and naturally, China's
Speaker 1: influence across the continent has grown with every railway laid
Speaker 1: and airport terminal built. But as some nations have discovered
Speaker 1: to their cost, Chinese money can come with some unpleasant
Speaker 1: strings attached, and many are worried that the ultimate cost
Speaker 1: of China's largesse may be greater than what many in
Speaker 1: Africa bargained for. In the second part of today's episode,
Speaker 1: you'll hear the story of China's own scramble for Africa,
Speaker 1: how it's gone down with Africans themselves, and what the
Speaker 1: future might hold. Thanks for listening to today's episode, and
Speaker 1: there'll be more coming your way soon. And if you
Speaker 1: want even more content from coin Bureau, be sure to
Speaker 1: subscribe to our YouTube channels and visit us on social
Speaker 1: media too. And one more thing. This year at the
Speaker 1: coin Bureau, we're celebrating Black Friday with up to fifty
Speaker 1: off items in our merch store. There's a link in
Speaker 1: the description of the podcast, so please do check it
Speaker 1: out and see if there's something you fancy. The collapse
Speaker 1: of f t X and Alameda Research has done serious
Speaker 1: damage to the crypto market, and it seems that Slana
Speaker 1: was one of the most affected crypto projects. Now this
Speaker 1: makes sense given that Salana was the day facto exchange
Speaker 1: chain of f t X, and that both f t
Speaker 1: X and Alameda were big investors and participants in Salana's ecosystem. Today,
Speaker 1: I'm going to give you a quick recap of Salana,
Speaker 1: tell you what's been going on with the project, and
Speaker 1: examine whether Soul will survive the f t X Alameda meltdown.
Speaker 1: I want to start with some transparency, and that's that
Speaker 1: I no longer hold Soul as part of my crypto portfolio.
Speaker 1: If you're subscribed to my weekly newsletter, you'll know that
Speaker 1: Soul accounted for almost eight percent of my portfolio until
Speaker 1: last weekend. Note that you can find the link to
Speaker 1: my weekly newsletter in the description. Now, my decision to
Speaker 1: sell Soul was based on many factors, including the current
Speaker 1: state of the crypto market, but there is no denying
Speaker 1: that the ft X Alameda situation was top of mind
Speaker 1: for me. Now, I must also stress that this is
Speaker 1: not financial advice. It's just my opinion, and you will
Speaker 1: obviously have yours. That said, I will give both a
Speaker 1: bearish and a bullish case for Salana in today's video.
Speaker 1: That's because there does seem to be some hope for
Speaker 1: Soul on the horizon. It just looks very far away
Speaker 1: from where I'm standing. That's just my perspective, though, and
Speaker 1: I would love to get yours in the comments section now.
Speaker 1: As many of you will know, Slana was founded in
Speaker 1: twenty seventeen by former Qualcom engineer and a Toty Yakovenko.
Speaker 1: The Salana blockchain was built by Salana Labs, which is
Speaker 1: based in the United States, and its ongoing development is
Speaker 1: coordinated by the Salana Foundation, which is based in Switzerland.
Speaker 1: Salana raised twenty five million dollars across various I c
Speaker 1: o s between twenty eighteen and twenty, and raised an
Speaker 1: additional three hundred and fourteen million dollars from crypto vcs
Speaker 1: last year. F t X and Alameda Research were two
Speaker 1: of the largest investors in Salana and were two of
Speaker 1: the largest investors in Salana's ecosystem, that is, crypto projects
Speaker 1: building on Salana. This is because Salana's original goal was
Speaker 1: to become a decentralized alternative to centralize stock exchanges like
Speaker 1: the NASDAK. Now this is a goal that f t
Speaker 1: X and Alameda founder Sam Bankman Freed could get behind,
Speaker 1: given that his endgame was also to displace the existing
Speaker 1: institutions with his own infrastructure. Salana's main net went live
Speaker 1: in twenty twenty and its blockchain is still technically in beta.
Speaker 1: Recent comments by anatotally suggest that Salana may soon be
Speaker 1: entering its alpha stage, which is surprising given that the
Speaker 1: Salana blockchain continues to experience issues. More about all that
Speaker 1: later on. Under the hood, the Salana blockchain uses a
Speaker 1: novel proof of state consensus mechanism that time stamps transactions
Speaker 1: using a technology called proof of history. This consensus mechanism
Speaker 1: makes it possible for the Salana blockchain to process up
Speaker 1: to sixty five thousand transactions per second. Until recently, the
Speaker 1: Salana blockchain was secured by almost twenty two hundred validators.
Speaker 1: Salana's validate account was just eighteen hundred and fifty when
Speaker 1: ft X and Alameda collapsed. This suggests that f t
Speaker 1: X and a meda we're running lots of Salana validators.
Speaker 1: Note that Salana transactions are processed by clusters of up
Speaker 1: to one hu fifty validators now. Soul is the native
Speaker 1: cryptocurrency coin of the Salana blockchain. Like all cryptocurrency coins,
Speaker 1: Soul is used to pay for transaction fees. Of every
Speaker 1: transaction fee is burned, with the other half going to validators. Obviously,
Speaker 1: Soul is also used for staking staking rewards are currently
Speaker 1: around eight percent for both validators and delegators with a
Speaker 1: five day lock up. There is no minimum stake for
Speaker 1: validators or delegators, though the hardware requirements for running of
Speaker 1: validator are very high. Misbehaving validators are also slashed. Staking
Speaker 1: soul as a delegator can be easily done using the
Speaker 1: Phantom Browser extension wallet, which also acts as a gateway
Speaker 1: to Salana's ecosystem. The Phantom extension has been downloaded over
Speaker 1: two million times on Chrome and dab Radar's data suggests
Speaker 1: that Salana's DAPs have at least half a million monthly
Speaker 1: active users. The focus of Slana's ecosystem was initially defy.
Speaker 1: This was in large part due to f t X,
Speaker 1: which had its own defied project called projects Serum. What's
Speaker 1: crazy is that the order book based Serum decks lay
Speaker 1: at the heart of Salana's entire defy ecosystem, providing liquidity
Speaker 1: and pricing data to many other major DeFi protocols. To
Speaker 1: my knowledge, most of Serum's liquidity came from f t
Speaker 1: X and Lameter. Now, the massive draw down in the
Speaker 1: total value locked in Salana's DeFi protocols following terrorist collapse
Speaker 1: in May. Therefore, suggests that this is when ft X
Speaker 1: and Alameda started to experience the issues that ultimately lead
Speaker 1: to their collapse. You can learn more about the ft
Speaker 1: X an Alameda situation using the in the description I
Speaker 1: digress now. It's barely been three months since our last
Speaker 1: covered Salana, but a lot has happened since then, and
Speaker 1: not just stuff that's related to Alameda and f t X.
Speaker 1: Shortly after our last update, a group of Salana projects
Speaker 1: announced the creation of a cross chain messaging protocol. If
Speaker 1: you watched our Cosmos update from around that time, you'll
Speaker 1: know the announcement seems to have been a not so
Speaker 1: subtle response to cosmos announcement about its upcoming interchain security.
Speaker 1: To my mind, Salana's subsequent announcement underscored the multi chain
Speaker 1: future of crypto. Institutional crypto custodian fire Blocks also announced
Speaker 1: that it had added support for Salana DeFi protocols and
Speaker 1: Salana n f t s in case you missed the memo,
Speaker 1: Salana was becoming increasingly popular with institutions. This was in
Speaker 1: large part due to Salana's close relationship with f t
Speaker 1: X and Alameda. In early September, a crypto project called
Speaker 1: Sui announced that it had raised three hundred million dollars
Speaker 1: from various crypto vcs. Now this is significant because suey
Speaker 1: has its roots in Facebook's failed digital currency project d
Speaker 1: M a k A. Libra, just like Aptos, and Aptos
Speaker 1: is considered by many to be a Salana killer. This
Speaker 1: arguably makes Sue a Salana killer too. This is in
Speaker 1: part because both Sue and Aptos are coded in Move,
Speaker 1: a novel programming language developed by d MS developers. Move
Speaker 1: is based on the Rust programming language used by Salana,
Speaker 1: but is much more developer friendly, or so I've heard.
Speaker 1: For those who don't know, Sue and Aptos are considered
Speaker 1: to be Salana killers because they're all backed by the
Speaker 1: same entities. Ft X Ventures was a big investor in
Speaker 1: both Aptos and Sue, and aptos co founder Mohammed Shake
Speaker 1: confirmed in an interview that the project was working very
Speaker 1: closely with fd X. Fortunately for Slana, Aptoss and Sue's
Speaker 1: exposure to ft X so early on in their development
Speaker 1: could set them back quite a bit. Unfortunately for Slana,
Speaker 1: it's even higher exposure to f t X could mean
Speaker 1: that it will be the crypto project that picks the
Speaker 1: shortest straw. More on that in a moment anyways. Another
Speaker 1: Salana related announcement in early September came from coin base,
Speaker 1: whose cloud division spun up archival notes for the Salana blockchain.
Speaker 1: This is significant because Salana's full transaction history was only
Speaker 1: being stored on Google Big Table, which made it quite centralized.
Speaker 1: In mid September, sec chairman Gary Gensler said that proof
Speaker 1: of state cryptocurrencies could be securities. Although Gary's comment was
Speaker 1: likely about Ethereum's transition to proof of steak, Slana Labs
Speaker 1: was recently accused of selling securities that is soul, which
Speaker 1: could put it at risk. At the end of September,
Speaker 1: the Helium community voted to migrate it's peer to peer
Speaker 1: networks from the Helium blockchain to the Salana blockchain. This
Speaker 1: is something we had predicted in one of our earlier
Speaker 1: Salana updates. Were it not for the f t X
Speaker 1: Alameda situation, this would have been bullish for h and However,
Speaker 1: the ft X Alameda situation wherein has made Helium Salana
Speaker 1: integration incredibly bearish for h n T, and not just
Speaker 1: because it's a part of Salana's ecosystem. Back in February,
Speaker 1: Helium raised two d million dollars in a funding round
Speaker 1: co led by you guessed it, f t x Ventures.
Speaker 1: At the end of September, Circle also announced that it
Speaker 1: would be expanding its USDC stable coin to five additional
Speaker 1: smart contract cryptocurrencies and introducing its own cross chain interoperability protocol.
Speaker 1: Now this is evidence that Circle is moving away from Salana,
Speaker 1: which is apparently the official chain for USDC. In early October,
Speaker 1: the Salana blockchain experienced yet another outage. This time it
Speaker 1: was due to a misconfigured validator node. For context, most
Speaker 1: of Slana's outages have been due to spam transactions facilitated
Speaker 1: by its block chains fixed transaction fees, which are extremely low.
Speaker 1: In mid October, app toss announced its main net launch,
Speaker 1: and if you watched our video about the project, you'll
Speaker 1: know that the launch was pretty badly botched. It's still
Speaker 1: boggles my mind that a project with so much funding
Speaker 1: and backing managed to make so many mistakes, but hey,
Speaker 1: let's not go there. At the end of October, a
Speaker 1: crypto project called trip Protocol announced it would be creating
Speaker 1: a decentralized alternative to right sharing apps like Uber built
Speaker 1: on Salana Now, this is the kind of DAP that
Speaker 1: could reach serious mass adoption, and it's such a damn
Speaker 1: shame that it's been set back by recent events. In
Speaker 1: early November, almost half of Salana's validators went offline after
Speaker 1: a German cloud service provider called Hetzner banned all crypto
Speaker 1: companies and projects from using its services. The huge impact
Speaker 1: this had on the Salana blockchain raised even more questions
Speaker 1: about Salana's supposed decentralization. Luckily, for Solana, this bearish news
Speaker 1: was quickly overshadowed by all the bullish news that came
Speaker 1: out of Salana's annual Breakpoint conference in Lisbon. The biggest
Speaker 1: news was that Google Cloud had begun running a validator
Speaker 1: on Salana, which logically means that Google had purchased lots
Speaker 1: of soul. Google Cloud also announced that it had released
Speaker 1: software too, in decks. Slana's transaction history, which your recall,
Speaker 1: is being stored on Google Big Table. Now. This is
Speaker 1: significant because Anatole had mentioned in earlier interviews that it
Speaker 1: was extremely difficult for developers to analyze Salana's transaction history.
Speaker 1: Helium also announced that it was building out a mobile
Speaker 1: network and would be giving out simcards with a free
Speaker 1: thirty day trial to everyone who purchased Salana's upcoming Saga phone.
Speaker 1: Helium also recently partnered with telecoms Giant T Mobile to
Speaker 1: increase five G coverage in rural areas, another great initiative
Speaker 1: now under threat now. The announcement that everyone seemed to
Speaker 1: miss was that Salana's Neon layer would be launching sometime
Speaker 1: in December. If you've been keeping up with our Salana updates,
Speaker 1: you'll know Neon supports the Ethereum Virtual Machine or e
Speaker 1: v M. E v M compatibility could supercharge Salana's adoption.
Speaker 1: As a cherry on top, Circle announced that it would
Speaker 1: be bringing it's recently released eurostable coin to the Salana
Speaker 1: blockchain next year, making Salana the second smart contract cryptocurrency
Speaker 1: to support euroc after Ethereum. This suggests that Circle hasn't
Speaker 1: given up on Salana just yet. And then f t
Speaker 1: X and Alameda blew up. Not surprisingly, the price of
Speaker 1: every single cryptocurrency that f t X and Alameda had
Speaker 1: invested in instantly plummeted. As ft X is day facto
Speaker 1: exchange chain, Soul was at the top of the list.
Speaker 1: Souls price was only the tip of the Iceberg, However,
Speaker 1: as its entire ecosystem also went into crisis mode, loans
Speaker 1: were liquidated, wrapped tokens issued or backed by f t
Speaker 1: X and Alameda d pegged. The total value locked in
Speaker 1: Slana's DFI protocols fell off a cliff. The upgrade keys
Speaker 1: for Project Serum and the Serum DECKX were revealed to
Speaker 1: be in the hands of f t X, causing the
Speaker 1: community to fork what was left of the protocol. Soul
Speaker 1: holders also feared that nearly a billion dollars of Soul
Speaker 1: set to be unlocked would be sold now. Their fears
Speaker 1: were calmed after the Salana Foundation announced it would be
Speaker 1: postponing the unlock of the thirty or so million Soul
Speaker 1: once again, though calling Salana's decentralization into question. To add
Speaker 1: insult to injury, Google Cloud announced that it will also
Speaker 1: run validator notes for the ap toss blockchain, and that
Speaker 1: it had partnered with the project for a developer accelerator program.
Speaker 1: The timing couldn't have been worse given the circumstances. So
Speaker 1: as you can see, Soul's price was holding up quite
Speaker 1: well until the FTX Alameter situation. Now this is impressive
Speaker 1: considering that Soul's supply has increased by around fifteen millions
Speaker 1: since August. Assuming an average price of around thirty dollars
Speaker 1: per soul, this means Soul experience up to five hundred
Speaker 1: million dollars of cell pressure. On the demand side, it
Speaker 1: seems that Solana's n f T marketplaces were absorbing most
Speaker 1: of this supply shock. Institutional investment vehicles for Soul also
Speaker 1: still have more than one hundred million dollars invested at
Speaker 1: Soul's current prices. This is scary considering some of these
Speaker 1: et f s were seemingly issued with the help of
Speaker 1: f t X. What's even scarier is that analytics on
Speaker 1: the Salana Explorer show that transactions on Salana have fallen
Speaker 1: off a cliff over the last week. The silver lining
Speaker 1: is that the analytics also suggests the drop in Salana's
Speaker 1: validate account was due primarily to Hetzner's crypto ban and
Speaker 1: not the f t X Alameda situation. In any case,
Speaker 1: it's clear that the demand for Soul is down, and
Speaker 1: it's easy to understand why some have begun to question
Speaker 1: Solana's future. And this is in large part due to
Speaker 1: the massive amount of Soul that f t X and
Speaker 1: Alameda will be forced to sell when the time comes
Speaker 1: to compensate their creditors. According to the coindesk article that
Speaker 1: kick started the concerns about f t X and alamedas
Speaker 1: balance sheets, Alameda held roughly one point to billion dollars
Speaker 1: of soul in June. Assuming the price was around forty
Speaker 1: dollars per soul at the time, This works out to
Speaker 1: around thirty million soul held by the market maker. As
Speaker 1: for f t X, recent leaks suggests the exchange held
Speaker 1: around one billion dollars of soul as of a few
Speaker 1: weeks ago. Assuming an average price of around thirty three
Speaker 1: dollars per soul, this means that f t X held
Speaker 1: an additional thirty or so million soul now. It's not
Speaker 1: clear how much soul f t X and Alameda currently
Speaker 1: hold for what it's worth, these numbers are consistent with
Speaker 1: the recent disc closures by Solana Labs and the Salana
Speaker 1: Foundation about their exposure to f t X and Lameter.
Speaker 1: Slana Labs and the Salana Foundation sold a total of
Speaker 1: fifty eight million soul to f t X and Alameda
Speaker 1: over the course of more than two years. At current prices,
Speaker 1: this soul is worth roughly nine million dollars and accounts
Speaker 1: for more than fifteen percent of souls total supply. While
Speaker 1: not all the Soul held by f t X and
Speaker 1: Alameda is liquid, the fact of the matter is that
Speaker 1: it will inevitably be sold at some point as part
Speaker 1: of their bankruptcy proceedings. As I mentioned a few moments ago,
Speaker 1: Soul managed to survive half a billion dollars of cell
Speaker 1: pressure over the last three months. However, this assumes that
Speaker 1: the fourteen million Soul that entered circulation were sold, which
Speaker 1: is unlikely. This means that Soul may not be nearly
Speaker 1: as resilient to sell pressure as it seems. More importantly,
Speaker 1: the demand for Soul is not nearly what it was
Speaker 1: even just two weeks ago. This could make it difficult
Speaker 1: to absorb the hundreds of millions of dollars of cell
Speaker 1: pressure that's coming. And that's just from f t X
Speaker 1: and Lameter. There are certainly other institutions and retail investors
Speaker 1: who will sell their Soul, never mind all the promising
Speaker 1: Salana projects that will die because of their exposure to
Speaker 1: f t X and Lameter. To make matters worse, the
Speaker 1: bottom of the cryptobar market probably isn't in yet. This
Speaker 1: means that Soul will go lower even without all the
Speaker 1: cell pressure from these entities. It's long term price charts
Speaker 1: suggests Soul could fall to eight dollars. This would be
Speaker 1: consistent with the estimated percentage loss in other large alts. Now,
Speaker 1: if you're wondering how long this cryptobear market will last,
Speaker 1: be sure to check out our video about that from
Speaker 1: a few months back. I reckon it still holds true
Speaker 1: and be doing another video about the potential catalyst that
Speaker 1: could take us out of the crypto bear market lows
Speaker 1: in the next week or two, so stay tuned. Now.
Speaker 1: Whether Soul will ever rally back to its all time
Speaker 1: highs and beyond depends on the project's upcoming milestones. These
Speaker 1: can be found in an October blog post on the
Speaker 1: Salana GitHub and in interviews with Salana founder Anatoly Yakovenko.
Speaker 1: The October blog post in question is called quote Salana
Speaker 1: Network Upgrades, and it appears to have been published in
Speaker 1: response to the outages Solana had experienced earlier that month.
Speaker 1: The next milestone on the list is the introduction of
Speaker 1: different fee markets for different types of transactions. After that,
Speaker 1: Solana will be increasing the size of the blocks on
Speaker 1: its blockchain. This should make Salana even faster, but it
Speaker 1: will likely make its blockchain even more centralized and could
Speaker 1: further compromise its security. As a alt more about the
Speaker 1: tradeoffs of tps using the link in the description. The
Speaker 1: third milestone noted in the blog post is compact vote state,
Speaker 1: which can be simply understood as reducing the size of
Speaker 1: certain transactions. This could further increase Salana's TPS while protecting
Speaker 1: against some of the centralization and security issues that could
Speaker 1: arise from the block size increase. Now, what's funny about
Speaker 1: these milestones is that they're eerily similar to aptosses milestones.
Speaker 1: Ap toss is currently working on implementing different fee markets
Speaker 1: for different types of transactions. Salana's inspiration doesn't stop at
Speaker 1: transactions either. That's because a repository on the Salana gitub
Speaker 1: suggests that it's looking to make it possible to build
Speaker 1: on its blockchain using the move programming language. This is
Speaker 1: significant because the difficulty of building on Salana has been
Speaker 1: one of the project's biggest drawbacks. The Salana gitub also
Speaker 1: contains many repositi trees related to on chain governance, something
Speaker 1: that's been in the works for a while now. I
Speaker 1: don't imagine Solana is in a rush to roll out
Speaker 1: its on chain governance now that a significant chunk of
Speaker 1: Soul's supply is in limbo via f t X Alameda
Speaker 1: and other affected crypto vcs. Speaking of which, anatotally dropped
Speaker 1: a bombshell about Salana's development during a panel discussion at
Speaker 1: the project's aforementioned Breakpoint conference earlier this month. He basically
Speaker 1: said that he will consider Solana to be out of
Speaker 1: beta once a second validator client has been completed. Now,
Speaker 1: this is huge news that seems to have flown under
Speaker 1: everyone's radar because of the ft X Alameda situation. To
Speaker 1: be fair, and it's only only said that he would
Speaker 1: consider Salana to be out of beta at that point,
Speaker 1: not that it necessarily would be. Even so, it's the
Speaker 1: closest thing we've got to an alpha timeline thus far.
Speaker 1: The thing is that Salana still seems to be unreliable,
Speaker 1: and its block chain and especially its ecosystem seem to
Speaker 1: be in a more vulnerable position than ever. This makes
Speaker 1: it hard to understand how Salana could be considered complete
Speaker 1: when it's still experiencing so many issues. This brings me
Speaker 1: to my concerns about Salana, and my first concern has
Speaker 1: to do with Salana Labs and the Salana Foundation, specifically
Speaker 1: their balance sheets. The blog post detailing their exposure to
Speaker 1: f t X and Alameda suggests that the Salana Foundation
Speaker 1: only has around one hundred million dollars of cash on hand.
Speaker 1: In case you're wondering, the foundation only had around one
Speaker 1: million dollars of cash on ft X when it collapsed. However,
Speaker 1: it had two hundred million dollars worth of f t
Speaker 1: T and s r M sitting there. These tokens are
Speaker 1: now essentially worth nothing, along with the three point two
Speaker 1: million shares of ft X the foundation also holds. Frustratingly,
Speaker 1: the blog post didn't reveal how much runway Salana Labs has,
Speaker 1: but Anna Totally mentioned on Twitter that it has enough
Speaker 1: money in the war chest for another thirty months or so.
Speaker 1: Anna Totally specified that this runway is in dollars, which
Speaker 1: begs the question of how much soul Salana Labs holds,
Speaker 1: and a Totally also confirmed that Salana Labs had no
Speaker 1: assets on ft X, which is certainly good news. The
Speaker 1: bad news is that f t X and Alameda were
Speaker 1: the primary money funnel for the Salana ecosystem. What's more
Speaker 1: is that Salana's association with ft X and Alameda could
Speaker 1: make its ecosystem unattractive to other vcs. What this means
Speaker 1: is that the Salana Foundation and Slana Labs might be
Speaker 1: the only entities willing to invest in Salana's ecosystem for
Speaker 1: a while, and the cash they currently have on hand
Speaker 1: won't be nearly enough. This means they might have to
Speaker 1: start selling Soul, which would cause its price to fall
Speaker 1: even further. This relates to my second concern, and that's regulation.
Speaker 1: As I mentioned earlier, the SEC is watching proof of
Speaker 1: state cryptocurrencies very closely, and Salana Labs is already involved
Speaker 1: in a security suit. The fact that the SEC and
Speaker 1: others are now investigating FTX means that Salana could come
Speaker 1: under additional scrutiny. Now, my final concern about Salana is straightforward,
Speaker 1: and that is competition. Anatoly admitted in an interview that
Speaker 1: the Salana team is anxious about Aptos and Suey because
Speaker 1: of how developer friendly they are. Aptos and Suey also
Speaker 1: have an absurd amount of big tech backing due to
Speaker 1: their d M origins. There are also other smart contract
Speaker 1: cryptocurrencies like Polka Dot, Near Protocol, Avalanche, Cardana, and Ethereum,
Speaker 1: which are fundamentally fighting for dominance of the same critical
Speaker 1: crypto niche. These crypto projects aren't nearly as exposed to
Speaker 1: f t X and Alameda as Salana was and continues
Speaker 1: to be. In the race for superpower dominance, resources and
Speaker 1: influence are the currency's worth accumulating, and this is something
Speaker 1: that China has been doing for years in a continent
Speaker 1: many in the West seem to have forgotten about. I am,
Speaker 1: of course talking about Africa, home to some of the
Speaker 1: largest deposits of natural resources in the world, a continent
Speaker 1: that contains sixty of the world's arable land, a continent
Speaker 1: that by twenty fifty will have a quarter of the
Speaker 1: world's population. Today. I'm going to tell you exactly what
Speaker 1: China has been up to in Africa and what it
Speaker 1: could mean for the balance of global power. Before we
Speaker 1: dive into China's strategy in Africa, it's important to appreciate
Speaker 1: how important the continent will be in the next few decades.
Speaker 1: As I mentioned, it's a vast and largely untapped resource
Speaker 1: for all types of minerals and commodities, everything from copper
Speaker 1: to cobalt, gold to diamonds, and aluminium to titanium. For example,
Speaker 1: according to estimates from the United Nations, Africa is home
Speaker 1: to thirty percent of the world's mineral reserves of the gold,
Speaker 1: twelve percent of its oil, and nine of its chromium
Speaker 1: and platinum. This map over here is pretty handy, and
Speaker 1: it shows exactly how resource rich Africa is. It's color
Speaker 1: coded by those countries with the most abundant minerals. All
Speaker 1: of these resources are important for any country that is
Speaker 1: looking to continue growing economically. They're even more important at
Speaker 1: a time when older minds are starting to become exhausted
Speaker 1: and older wells are running empty. What's perhaps most surprising
Speaker 1: about this is the fact that Africa only accounted for
Speaker 1: about five point five percent of the world's total mind
Speaker 1: minerals in twenty nineteen. Those deposits are sitting there waiting
Speaker 1: to be extracted, and it's not only the mineral wealth
Speaker 1: that much of Africa is sitting on. Those vast tracts
Speaker 1: of arable land mean that the continent could become a
Speaker 1: bread basket for the world. This is particularly relevant now
Speaker 1: when you realize how dependent we've become on farmland in
Speaker 1: regions such as Ukraine and Russia. And finally, we also
Speaker 1: have to consider African's human capital potential. The continent has
Speaker 1: the fastest growing population in the world. Sub Saharan Africa's
Speaker 1: population is expected to double by twenty fifty. This is
Speaker 1: important because of the fact that population decline is one
Speaker 1: of the biggest threats the world faces. It's something that
Speaker 1: Elon Musk is most concerned about and it's the subject
Speaker 1: of a video I did recently that is in the
Speaker 1: description for you. The point is that countries cannot continue
Speaker 1: to grow economically if they have declining populations. Hence, as
Speaker 1: Africa is going to have plenty of new young people
Speaker 1: entering the workforce in the coming decades, it can continue
Speaker 1: its rapid economic growth. By some estimates, Africa is well
Speaker 1: on its way to becoming a five trillion dollar economy,
Speaker 1: as household consumption is expected to increase at a three
Speaker 1: point eight percent yearly clip. This growing population also presents
Speaker 1: economic advantages for key trading partners. All of these African
Speaker 1: citizens will be important consumers of products and services and
Speaker 1: hence will offer strong export demand for countries that have
Speaker 1: tapped out Western markets. Not only that, but all these
Speaker 1: people could be potential allies or adversaries based on how
Speaker 1: they view other countries. In a game of international influence,
Speaker 1: the more people and country that you have on your side,
Speaker 1: the more geopolitical clouds you have. So it's quite clear
Speaker 1: that there are a number of reasons why Africa is
Speaker 1: a continent which cannot be ignored and China is now
Speaker 1: involved in a modern day quote scramble for Africa. Take
Speaker 1: a look at this chart over here. This is the
Speaker 1: total amount of f d I, or foreign direct investment
Speaker 1: that China has been sending to Africa over the past
Speaker 1: seventeen years. As you can see, it has gone from
Speaker 1: a mere seventy four million dollars in two thousand and
Speaker 1: three to over forty five billion in two thousand and eighteen,
Speaker 1: although it shrunk slightly during COVID. All of this makes
Speaker 1: China Africa's fourth largest investor and places it ahead of
Speaker 1: the United States in this regard. Not only that, but
Speaker 1: Chinese loans to African countries have totaled one hundred and
Speaker 1: fifty three billion dollars between two thousand and two thousand
Speaker 1: and nineteen. More about that, in a bit. The vast
Speaker 1: majority of this investment in and loans to Africa has
Speaker 1: gone into the development of infrastructure. This is all part
Speaker 1: of China's so called Belt and Road Initiative or b
Speaker 1: r I for those unfamiliar. This is a global infrastructure
Speaker 1: initiative unveiled by the Chinese government in twenty thirteen. It
Speaker 1: forms the centerpiece of Zijimping's foreign policy and calls for
Speaker 1: China to play a greater role in world diplomacy. Essentially,
Speaker 1: it's a strategy to win the hearts and minds of
Speaker 1: foreign populations. Of course, this is all infrastructure that the
Speaker 1: Chinese could also eventually use themselves. Now. As of August
Speaker 1: twenty nineteen, one hundred and forty nine countries were listed
Speaker 1: as having signed up to the b r I. Chinese
Speaker 1: investments in infrastructure for African countries have been particularly outsized, however.
Speaker 1: For example, according to this report in twenty eighteen, China
Speaker 1: provided over twenty of the overall funding contributed towards infrastructure
Speaker 1: development projects in Africa, and in this seventeen McKinsey report,
Speaker 1: Chinese firms and construction companies one almost half of all
Speaker 1: engineering and procurement projects continent wide. However, while China has
Speaker 1: been ramping up its infrastructure development on the continent under
Speaker 1: z it's not in fact a new phenomenon. That's because
Speaker 1: China first entered Africa back in the nineteen seventies and
Speaker 1: one of its first projects was a railway that connected
Speaker 1: ports in Tanzania to towns in Zambia. This was done
Speaker 1: under the leadership of Chairman Mao and it was the
Speaker 1: most expensive infrastructure project that China had ever attempted. It
Speaker 1: was also a godsend to Zambia, which was effectively cut
Speaker 1: off from seaports further south thanks to the actions of
Speaker 1: the Zimbabwean government. With this new railway, Zambia could export
Speaker 1: its copper to world markets, including co incidentally enough, a
Speaker 1: fast growing China. I'll leave a link to the story
Speaker 1: about the Tazara railroad in the description for you. It
Speaker 1: is truly fascinating now. Of course, infrastructure developments like this
Speaker 1: and many subsequent ones mean that China has strong ties
Speaker 1: with politicians and business leaders in the African countries it
Speaker 1: has been built in. This means that they can enter
Speaker 1: into mutually beneficial trade agreements which shake up the status quo.
Speaker 1: According to data from China's Customs Agency. Trade between China
Speaker 1: and Africa rose to its highest level last year. It
Speaker 1: increased by thirty five percent from twenty to two hundred
Speaker 1: and fifty four billion dollars last year. You can see
Speaker 1: what that looks like here. Not only that, but China
Speaker 1: looks set to overtake the EU as Africa's biggest trading
Speaker 1: partner by This will be a symbolic moment given that
Speaker 1: many European nations are viewed by any in Africa as
Speaker 1: the colonizers of yesteryear now being overtaken by new colonizers
Speaker 1: so to speak. What do I mean by that, Well,
Speaker 1: it all really depends on the terms that China has
Speaker 1: attached to much of its infrastructure spending. While f DI
Speaker 1: is great loans for bridges eight and Africa has been
Speaker 1: racking up quite a number of loans over the past
Speaker 1: few years. If you take a look at this infographic here,
Speaker 1: you can see those countries that are most in debt
Speaker 1: to China. African ones stick out like a sore thumb.
Speaker 1: Those countries with the highest debt loads were Jibooty and Angola,
Speaker 1: where the aggregate Chinese debt exceeded forty of their gross
Speaker 1: national income. In the case of Jibouti, China holds seventy
Speaker 1: of its total debt. According to the World Bank and
Speaker 1: the i m F, these loans are structured more like
Speaker 1: commercial loans, and they have shorter repayment windows. Their conditions
Speaker 1: are also confidential, and they're usually used for the purpose
Speaker 1: of building infrastructure rather than broader humanitarian goals. Now, of course,
Speaker 1: I would argue that the i m F and World
Speaker 1: Bank don't exactly have much right to opine on the matter,
Speaker 1: but perhaps that's just me. Either way, the point is
Speaker 1: that when someone owes you money, you have a great
Speaker 1: deal of sway over them. That's why people have accused
Speaker 1: China of engaging in what is termed quote debt trap diplomacy. Essentially,
Speaker 1: if you owe China money, you're more likely to dance
Speaker 1: to its tune, not only when it comes to concessions
Speaker 1: within your own country, but also on the international stage.
Speaker 1: For the clearest example of this, you only need to
Speaker 1: look at how countries in Africa tend to vote on
Speaker 1: u N resolutions. For example, in fifty countries issued a
Speaker 1: statement supporting China's crackdown in Hong Kong, more than half
Speaker 1: were African Some African countries have also been silent on
Speaker 1: China's human rights record in places like Sinjang. The president
Speaker 1: of Burkina FASO has stated, quote, some Western forces hyping
Speaker 1: up the so called Sinjang related issues are actually launching
Speaker 1: unprovoked attacks on China to serve their own ulterior motives.
Speaker 1: That same meeting was attended by the presidents of Sudan
Speaker 1: and the Republic of the Congo. Or if you want
Speaker 1: to take a look at a much more sensitive issue
Speaker 1: with China, you can see how support for Taiwan has
Speaker 1: almost completely evaporated across Africa. This wasn't always the case.
Speaker 1: Back in the nineteen sixties, Taiwan outpaced China in its
Speaker 1: efforts to cement diplomatic ties with African nations. However, ever,
Speaker 1: since a ninety one vote that denied Taiwan a seat
Speaker 1: at the UN table, African countries have been switching their
Speaker 1: allegiances in Burkina FASO officially cut ties with Taiwan, and
Speaker 1: now there is only one African country that retains ties
Speaker 1: with the island. That's the Kingdom of es Swatini, one
Speaker 1: which has been under represented in Chinese investments and wasn't
Speaker 1: invited to numerous Africa China summits. It does make me
Speaker 1: wonder how long they can hold out. The point is
Speaker 1: that China knows that these investments, as well as debts,
Speaker 1: give it a great deal of clout with these countries.
Speaker 1: But what happens if a country finds itself in a
Speaker 1: position where it can no longer service its debts. Well,
Speaker 1: like any hard up individual debtor, it could lose some
Speaker 1: of its collateral. Up until a few years ago, the
Speaker 1: notion that a nation state would seize another country's key
Speaker 1: infrastructure over a bad debt was laughable. However, this happened
Speaker 1: a few years ago when China took over the hambn
Speaker 1: Tota Port in Sri Lanka. This was a port built
Speaker 1: by the Chinese with debt financed by Chinese banks. When
Speaker 1: Sri Lanka struggled to repay its debt, it was forced
Speaker 1: to hand over the port on a nine year lease.
Speaker 1: More about Sri Lanka's economic woes in the description. So
Speaker 1: given Sri Lanka's experience with bad Chinese debt, African countries
Speaker 1: are naturally beginning to worry too. You only need to
Speaker 1: take a look at the number of Chinese built ports
Speaker 1: around the world and where they are concentrated. The alarm
Speaker 1: over this was raised three years ago in Kenya, for example,
Speaker 1: by the country's Order to General. He said that Kenya
Speaker 1: could be made to surrender control of its port in
Speaker 1: Mombassa if it defaulted on a three point six billion
Speaker 1: dollar loan from China used to build a railway. It's
Speaker 1: not just ports either. Quite recently, there were concerns that
Speaker 1: China may attempt to grab Uganda's sole international airport. This
Speaker 1: was due to the fact that China had extended a
Speaker 1: two hundred million dollar loan to expand the facilities there.
Speaker 1: A parliamentary probe in Uganda concluded that China had imposed
Speaker 1: onerous conditions on the loan, including potential forfeiture of the
Speaker 1: airport in case of default. The Ugandan finance minister was
Speaker 1: hauled before parliament and grilled about the loan. He apologized
Speaker 1: profusely and said, we shouldn't have accepted some of the clauses,
Speaker 1: but they told us you either take it or leave it.
Speaker 1: Whether that is indeed the case is hard to tell.
Speaker 1: The Chinese, for their part, have adamantly denied the claim
Speaker 1: that they were attempting to seize the airport. Moreover, the
Speaker 1: concerns that were raised about the Mombassa port appeared to
Speaker 1: be as a result of a misunderstanding over a key
Speaker 1: clause in the contract, and as of yet, China still
Speaker 1: hasn't seized any African infrastructure. However, concerns do remain. Now
Speaker 1: remember that chart I showed you about how in debt
Speaker 1: Djibouty was to China. Well, it turns out that China
Speaker 1: has been investing heavily in the country. This has been
Speaker 1: happening ever since China's People's Liberation Army or p l
Speaker 1: A established its first and only overseas military base. China
Speaker 1: is said to have spent five hundred and ninety million
Speaker 1: dollars on both this military facility and the door Allah
Speaker 1: Multi Purpose Port, the deepest port in East Africa. The
Speaker 1: port is also of great strategic importance given its location.
Speaker 1: It sits on the Horn of Africa and near key
Speaker 1: shipping routes. More recently, a Chinese company agreed to finance
Speaker 1: Djibouty's port revamp in a three hundred and fifty million
Speaker 1: dollar investment deal. The company already owned twenty three and
Speaker 1: a half percent of the port, so this could be
Speaker 1: a further ploy to embed its influence. Given the parallels
Speaker 1: that this shares with the Sri Lankan port prior to
Speaker 1: its seizure, you have to worry. Let's also not forget
Speaker 1: that military base near the port, one that the Chinese
Speaker 1: seem dead set on keeping in place. Either way, the
Speaker 1: prospect of infrastructure seizures or more onerous concessions will always
Speaker 1: dog those African countries that have taken on Chinese debt. Okay,
Speaker 1: So that's a concern that many have with Chinese engagement
Speaker 1: in Africa. But what do Africans themselves think of this?
Speaker 1: And are these characterizations by the Western media fair. Most
Speaker 1: Africans view China in a positive light. For example, a
Speaker 1: survey last year of thirty four African countries by Afro Barometer,
Speaker 1: a research group, found that six of the respondents thought
Speaker 1: China had a very or somewhat positive influence. The US meanwhile,
Speaker 1: only scored Quite surprisingly, the African Union has a lower
Speaker 1: rating than both countries. The Economist magazine also conducted a
Speaker 1: similar survey earlier this year, where the majority of the
Speaker 1: respondents thought China had a good rather than a bad influence,
Speaker 1: and in another survey by the Ichi Kowitz Family Foundation,
Speaker 1: the vast majority of African youth see China as the
Speaker 1: most influential player on the continent. This survey targeted four
Speaker 1: and a half thousand younger Africans between the ages of
Speaker 1: eighteen and twenty four. It's also important to note that
Speaker 1: US influence in the minds of these citizens has also
Speaker 1: dropped over the years. China's impact on the continent was
Speaker 1: also seen as more positive than that of the US.
Speaker 1: According to the survey's authors, quote, young Africans are telling
Speaker 1: us that they are seeing tangible, visible and very impactful
Speaker 1: signs of the role that China has played in the
Speaker 1: development of Africa. This is all quite telling. It shows
Speaker 1: that despite the concerns in the Western media about China's
Speaker 1: intentions in Africa, African people themselves still view China as
Speaker 1: a end rather than a foe. That is interesting in itself,
Speaker 1: but it also shows that mistrust of the West runs
Speaker 1: deep in Africa. China is definitely not making these investments
Speaker 1: for charitable purposes, but as long as local citizens see
Speaker 1: some of the returns from said investments, it's an improvement
Speaker 1: on the status quo. So what if China is funding
Speaker 1: the construction of an airport or a road. It's better,
Speaker 1: surely than not having them at all. Let's also not
Speaker 1: forget that the i m F and World Bank have
Speaker 1: a really shoddy record when it comes to growth and development.
Speaker 1: I talked about this in my video on the I
Speaker 1: m F, which I'll leave in the description for you. Moreover,
Speaker 1: I happen to think that the often patronizing way in
Speaker 1: which Western governments, media and other organizations portray Africa could
Speaker 1: play a factor in these surveys. Africa is sometimes made
Speaker 1: out to be a somewhat hapless place that's unwittingly being
Speaker 1: taken advantage of by ruthless foreign governments, an image that
Speaker 1: many Africans doubtless take issue with. African leaders also want
Speaker 1: to make it clear to Western governments that they have
Speaker 1: no option but to deal with China on account of
Speaker 1: the lack of engagement from the West, and they have
Speaker 1: a point. Despite this, though, it's encouraging to see that
Speaker 1: many Africans do also have a healthy dose of skepticism
Speaker 1: when it comes to China. According to that aforementioned Afrobarometer survey,
Speaker 1: the majority of the respondents are concerned about being heavily
Speaker 1: indebted to China and say that their governments have borrowed
Speaker 1: too much money. The respondents also think that China's influence
Speaker 1: is on the decline. The proportion of Africans who said
Speaker 1: China's economic activities in their countries have some or a
Speaker 1: lot of influence on their economies has declined over the
Speaker 1: past five years from se to But if China can
Speaker 1: in us to be viewed more favorably by Africans than
Speaker 1: the West, then it will be well positioned to take
Speaker 1: advantage of a continent that is poised to become a
Speaker 1: global powerhouse in a few decades time. Okay, time for
Speaker 1: a few of my thoughts on China's scramble for Africa.
Speaker 1: It's quite clear that Africa is going to become one
Speaker 1: of the most important, if not the most important, continent
Speaker 1: in the not too distant future. Therefore, it makes logical
Speaker 1: sense for China to be positioning itself to make the
Speaker 1: most of the opportunities there. China cannot continue to power
Speaker 1: its economic engine unless it has the resources to buy
Speaker 1: goods as well as the buyers to consume them. It
Speaker 1: also needs to curry favor with countries around the world,
Speaker 1: especially at a time when it's vying for allies against Taiwan,
Speaker 1: and its initiatives on the continent have had a great
Speaker 1: deal of success. This is affected in the growth of
Speaker 1: Chinese trade and the favorable perceptions the citizens of Africa
Speaker 1: have of China's influence. However, practices that threatened to entrap
Speaker 1: countries into debts they cannot pay back threatened to sustain
Speaker 1: that reputation. This is something that China seems to have
Speaker 1: appreciated more recently, and it has in fact forgiven the
Speaker 1: debt of a number of African countries. I also think
Speaker 1: that African countries have a healthy skepticism about these loans
Speaker 1: and Chinese involvement more generally from the era of European
Speaker 1: colonialism to the I m F, World Bank and USSR
Speaker 1: in the nineteen sixties, seventies and eighties. They know that
Speaker 1: other countries have long been eager to feed at their trough.
Speaker 1: But if they're able to craft deals and agreements with
Speaker 1: the Chinese that give them infrastructure and trade that they
Speaker 1: wouldn't have with the West, then they are in a
Speaker 1: strong position. It doesn't have to be a zero sum game,
Speaker 1: and for the West's part, he should also try and
Speaker 1: engage more with Africa, but it shouldn't be with the
Speaker 1: same playbook that many Western countries used in the past. Moreover,
Speaker 1: viewing Africa as a victim of exploitation isn't flattering, and
Speaker 1: trying to present yourself as the white knight who can
Speaker 1: save it is insulting. Quite simply, global superpowers should treat
Speaker 1: Africa as they would like to be treated. They should
Speaker 1: show its leaders respect on the world stage and foster
Speaker 1: mutually beneficial relationships that can take advantage of its growth.
Speaker 1: It could be an investment that pays off handsomely in
Speaker 1: thirty years time. Thank you so much for listening to
Speaker 1: the coin Bureau podcast. If you'd like to learn more
Speaker 1: about cryptocurrency, you can visit our YouTube channel at YouTube
Speaker 1: dot com forward slash coin Bureau. You can also go
Speaker 1: to coin bureau dot com for loads more information about
Speaker 1: all things crypto. You can follow me on Twitter at
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