Blockchain bonds, securities lending transactions, insider trading cases, decentralized identifiers and fiat on-ramp solutions. Plus M&A, VC/PE, Metaverse and NFT latest stories.
28 July 2022
Hello there and welcome to the Blockchain From First Principle newsletter where we curate some of the week's news, summarise reports, podcasts, articles and look at blockchain, crypto and web3 from the first principles for those seeking to understand more and stay ahead of their game.
Thanks to Vaibhav Singh and Farid Fatah who contributed to this edition of the newsletter with some of the most interesting stories.
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Table of Content
🗞️The news you should be aware of
💸 The development of a startup ecosystem and major PE/VC funding
📚Reports and breakdowns of noteworthy developments, here is the TLDR
📈Charts of the week
💡Inside the Metaverse and NFT latest news, trends and insights
📅Blockchain, Crypto and Web3 events calendar…
📎Miscellaneous resources
🗞️ The 11 news you should be aware of
1. IDB issues blockchain bond on BME stock exchange with BBVA help
The Spanish stock exchange BME has announced that the Inter-American Development Bank (IDB) has issued a 2 year $10M blockchain-based bond, the first Spanish bond to be listed on a regulated market. Spanish bank BBVA played a crucial role in the DLT pilot project by tokenizing money, which will be used for all payments during the term of the bond. Additionally, it acts as the transaction’s digital custodian, digital structurer, and active bookrunner.
2. BNY and Goldman settle first HQLAx agency securities lending transactions
HQLAᵡ, the distributed ledger-based tokenization platform, has executed its first agency securities lending transaction between BNY Mellon and Goldman Sachs, both investors in the company. The 35-day term transaction was for hundreds of millions of dollars. The primary purpose of HQLAᵡ is to save money for big banks that have to keep high quality liquid assets (HQLA) for Basel III balance sheet compliance.
3. Bitcoin network difficulty drops to 27.693T
Difficulty in mining bitcoin reduced by 5% decreasing from the last three months. The difficulty level touched all time high in May 2022 means rewards using lower resources. Bitcoin continues to be the most resilient and immutable block network. The difficulty level is adjusted every 2016 blocks (every two weeks approximately) so that the average time between blocks remains 10 minutes. The extensive power uses lead. The hash rate touched highs of 231.428 hashes per second but the low below $20,000 questioned the monetary benefits of energy wastage. GPU prices also dropped opening opportunities for small miners.
According to Statista data, the US represents 37.84% of the global hash rate, followed by China at 21.11% and Kazakhstan at 13.22%.
4. Nine tokens engaged in insider trading listed by SEC
A total of 9 out of 25 suspected tokens, Powerledger (POWR), Kromatika (KROM), DFX Finance (DFX), Amp (AMP), Rally (RLY), Rari Governance Token (RGT), DerivaDAO (DDX), LCX, and XYO were involved in the insider trading caught by Security and Exchange Commission. Caroline Pham, commissioner at United States CFTC expressed concerns about the possibility of implications against former product manager Ishan Wahi at Coinbase.
5. ApeSwap partners with MoonPay to launch fiat on-ramp
ApeSwap is a DeFi Hub on BNB Chain, Polygon and Ethereum on the other hand MoonPay offers purchase of tokens using credit and debit card. Customers can now purchase crypto of their own choice without leaving ApeSwap. Long term partnership goals include offering utility tokens directly through their platform. Transaction fees of 4.5% will be applied which includes DAO efforts.
6. OKX strikes partnership with TradingView
Now the 30 million customers of Trading view can execute trade on OKX directly through trading view which will offer users 640 more spot trading pairs and 100-plus crypto derivatives. This partnership will add liquidity for a wide range of digital assets. The assets made available on TradingView through OKX’s integration include market leaders such as Near Protocol (NEAR), Cosmos (ATOM), and Monero (XMR). Beyond Bitcoin (BTC) and Ether (ETH), swaps and futures will be available for top assets like Aave, Solana (SOL) and Litecoin (LTC), among others.
7. W3C launches Decentralized Identifiers as a web standard
Decentralised Identifiers (DID) are cryptographically decentralised identifiers that can be stored and transferred across different types of digital infrastructure including blockchain. Most addresses today are easy to spoof. DIDs are cryptographically verified messages while many of the e-addresses are not. The digital signature and encryption would be much more widely available then today’s conventional X.509-based public key infrastructure (PKI).
8. SEC probing Coinbase for allegedly listing securities
Security and Exchange commission probing Coinbase for publicly trading unregistered securities. Last week a former Coinbase product manager was brought under custody for seven cryptocurrencies insider trading involvement. The Coinbase for its part criticised SEC for not clarifying crypto laws even after a close look at the working of the exchange.
9. Wharton School launches metaverse-focused business course
The Wharton School, a business school out of the University of Pennsylvania, announced the launch of a new course regarding business in the metaverse. Other universities in the United States have incorporated Web3 tech as learning tools, such as Duke University and Stanford University. However, Wharton’s new program marks one of the first instances that the metaverse as an economic opportunity enters higher education.
10. Both crypto and stock market in relief after Fed interest rate decision
Bitcoin and ethereum gained value after the Fed deleard a 75 basis point increase in value. Central Banks across the world increased interest rates to restore price stability and combat inflation. Rate hikes have a ripple effect throughout the financial system, making it more expensive for businesses and consumers to take out loans and effectively cools down the economy by diminishing demand.
11. Tether, Bitfinex, Hypercore launch encrypted communications protocol Holepunch
Tether, Bitfinex, and Hypercore have launched a peer-to-peer platform for developers to build web3 applications. Holepunch is a fully encrypted protocol for peer-to-peer applications. Keet, an app that facilitates communications using distributed technology, will be the first project to be built and launched on Holepunch. The Holepunch platform will support USDT tokens and the Lightning Network for in-app payments.
💸 The development of a startup ecosystem and major PE/VC funding
1. Blockchain infrastructure company Chain completes $100M acquisition of MDT token ecosystem
The $100M deal will provide Chain with a number of assets, including MDT, cash-back application RewardMe and financial data protocol MeFi. The deal is unique inasmuch as it will involve a token conversion in which MDT will become Chain's native token XCN
2. Final Fantasy maker Square Enix backs Bitcoin gaming startup Zebedee in $35M round
Zebedee has announced a $35M Series B funding round led by Kingsway Capital, which includes participation from Square Enix and The Raine Group, plus existing Zebedee investors Initial Capital and Lakestar. Zebedee’s platform makes it possible for game developers to build in micropayments via the Lightning Network, which is built on Bitcoin.
3. KuCoin raises $10M from Susquehanna to fund hiring, growth plans
Crypto exchange KuCoin and Susquehanna will also work together to help incubate and build networks for crypto startups, especially for projects built on the KCC chain, the blockchain network backed by KuCoin. The funds will be used to upgrade KuCoin platform's infrastructure, enrich its product lineup and support hiring plans.
4. Aptos Labs raises $150M in funding round led by FTX Ventures
Aptos Labs (made up of former employees from Facebook parent Meta Platforms) raised $150M in a Series A funding round that was led by FTX Ventures, and Jump Crypto, the round included investments from Andreessen Horowitz, Apollo, Franklin Templeton, Griffin Gaming Partners and Circle Ventures.
5. Decentralized Oracle Empiric Network launches with $7M funding round
Empiric Network, a new decentralized blockchain oracle on StarkNet, has raised $7M in a funding round led by Variant and including data partners Alameda, CMT, Flow Traders, Gemini and Jane Street plus ecosystem partners StarkWare and Polygon co-founder Sandeep Nailwal. The funding will largely go toward hiring.
6. SpiderVille raises $1M pre-seed funding to accelerate Web3 music adoption
SpiderVille, a Web3 music startup, has raised a $1M pre-seed round from Contents Technologies, Samsung Next, and other notable angel investors to improve the discovery and distribution of music NFTs.
7. Farfetch to fund Web3 startups through new accelerator
The programme, now in partnership with VC firm Outlier Ventures, awards up to 10 Web3 fashion startups with coaching and $150,000 each. It will focus on digital fashion, tokenised loyalty, immersive experiences and the creator economy.
8. DSCVR raised $9M in its seed funding round led by Polychain Capital
Other investors in the round include: Upfront Ventures, Tomahawk VC, Fyrfly Venture Partners, Shima Capital and Bertelsmann Digital Media Investments (BDMI). This raise will help DSCVR accelerate its roadmap and make Web3 accessible to “anyone who knows how to use social media".
9. Bluejay Finance raises $2.9M in funding
Bluejay Finance, a capital-efficient decentralized stablecoin protocol for issuing stablecoins pegged to real-world currencies, has raised $2.9M in funding from Zee Prime Capital, C2 Ventures, Stake Capital Group, RNR Capital, Daedalus Angels, Moonlanding Ventures, Oval Ventures, and more, with operator-angels including DeFi projects like Ribbon Finance, Flux, Voltz, and Alpha Venture Dao.
10. Unstoppable Domains clinches unicorn status in $65M Series A round
Pantera Capital led the funding round, with additional investments from Mayfield, Gaingels, Alchemy Ventures, Redbeard Ventures, Spartan Group, OKG Investments, Polygon, CoinDCX, CoinGecko and others. The funds will be used to reduce friction of crypto payments between applications and build out infrastructure for a loyalty reward program within the crypto ecosystem based on a user’s reputation.
📚 Reports and breakdowns of noteworthy developments, here is the TLDR
Nontraditional WMs are currently managing up to $1.0 trillion in crypto-related money. That's a huge amount of money up for grabs, totalling around 2% to 3% of overall asset AUM in 2021. Furthermore, cryptocurrency has the potential to provide excellent revenue margins. In 2021, for example, the crypto native platform BlockFi made three to five times the revenue per dollar of AUM as a conventional private bank.
Furthermore, WM clientele is eager to participate. Almost 80% of respondents polled in April 2022 stated they'd consider growing their crypto holdings if WMs provided advising and instructional services. Furthermore, two-thirds of WM clients who obtained their crypto investment from third parties did so because they did not believe their WM offered such services.
To date, digital currencies have dominated the crypto investment landscape, accounting for over 90% of all assets in the market. However, new products are sprouting, including NFTs, crypto custody and insurance, certified crypto ETFs and mutual funds, and crypto options and futures, and their value and attractiveness are increasing. The weekly trade volume of art and gaming NFTs will continuously exceed $150 million in 2021. Decentralized finance (DeFi) products based on blockchain are also gaining popularity.
Crypto, like most things digital, has a young audience. Individuals aged 35 and under are 1.5 to 2 times more likely than those aged 45 and up to hold digital assets. Those in the upper wealth categories have also shown a willingness to experiment with complex crypto items. Cryptocurrency ETFs, crypto-linked equity ETFs, crypto-linked mutual funds, and NFTs account for up to 10% of the average high-net-worth crypto portfolio.
A few WMs have begun to dabble in crypto. Julius Baer, for example, permits consumers to trade and keep crypto assets through a partnership with a digital asset bank (SEBA Bank). HSBC has begun to offer a themed fund to its rich clientele that invests in metaverse-related activities such as virtualization. DBS uses its in-house digital asset market to provide accredited investors with buy-sell and custody services. Furthermore, fintech such as StashAway is beginning to include crypto exposure in its advice services for accredited investors.
📈 Charts of the week
The collapse of the Algorithmic stablecoin with $50B wiped out from exchange, unauthorised access to trade crypto, centralised finance and other projects are some of the causes of the killer use case of crypto trading. Gartner's hype cycle on base on social media and trends in hype can be explained in the following diagram.
The graph below depicts on-chain Stablecoin volume since 2017
💡Inside the Metaverse and NFT latest news, trends and insights
1. Microsoft’s Minecraft to ban NFTs on game servers, derivative NFT projects
Minecraft will soon ban blockchain tech on game servers, which are run independently by fans and creators, plus it will prohibit the use of Minecraft imagery to create NFT projects.
2. FC Barcelona finally to release NFTs
Ten artworks from FC Barcelona are planned to be released. Each piece will feature historic moments and players from the club’s history. All this is part of FC Barcelona’s efforts to engage with its younger fanbase, using NFTs as an experiential product to develop its brand.
3. Tezos’ branch in India just launched its own launchpad for Web3 games development
Tezos India, which is one of the biggest blockchain adoption entities in the country, announced recently the launch of its own Game Launchpad. The so-called Tezos India Game Launchpad, or TIGL, is a comprehensive platform meant to assist game developers with various aspects of developing, funding, and launching games on Tezos’ blockchain.
4. The Sandbox announces that Landz.io is coming to its network
Landz.io is the first disruptive real estate NFT collection that allows users to deploy their NFT estate in the most popular metaverse. The Sandbox announced that the public mint took place, Sunday, July 24th, at 6 pm UTC.
5. Metaverse courses made available at the University of Tokyo
The University of Tokyo (Todai) is set to offer courses in metaverse by the end of 2022. The courses center around engineering and science-related fields.
6. Istituto Marangoni is the first fashion school to join the Metaverse
The Istituto Marangoni in the Metaverse universe is divided into an evolving series of futuristic districts, each featuring a building that visitors can explore with customizable avatars. The spaces they can visit include an Infopoint, providing all the information about Istituto Marangoni’s programs in the fields of fashion, design and art.
7. Commercial Bank International launches virtual location in Metaverse
Commercial Bank International has announced that it is the first bank in the UAE to launch a virtual location in the Metaverse.CBI, a UAE-based corporate and retail bank, is the first bank in the UAE and among the first early adapter banks in the Middle East region as well, to open a virtual Metaverse location in Decentraland, a popular blockchain-based world.
📅 Blockchain, Crypto and Web3 events calendar…
…for the next couple of months
NFT South | Jul 28-30, 2022 | Dallas, Texas
NFT Expoverse Los Angeles | Jul 29-31, 2022 | Los Angeles, California
Sustainable Energy: Blockchain and Cryptocurrency | Aug 1-3, 2022 | Online
NFT3 Awards 2022 | Aug 5-7, 2022 | Los Angeles, California
Korea Blockchain Week | Aug 7-14, 2022 | Seoul, Korea
ETHToronto | Aug 8-10, 2022 | Toronto, Canada
Blockchain Futurist Conference 2022 | Aug 9-10, 2022 | Toronto, Canada
Fintech Fest 1.0 | Aug 10, 2022 | San Diego, California
Play-2-Earn Expo | Aug 10-13, 2022 | Bangkok, Thailand
Superverse | Aug 20-21, 2022 | Mexico City, Mexico
Coinfest Asia | Aug 25-26, 2022 | Bali, Indonesia
🆕 Surfin' Bitcoin | Aug 25-27, 2022 | Biarritz, France
The Science of Blockchain | Aug 29-31, 2022 | Stanford, California
BlackSeaChain | Sep 1-2, 2022 | Varna, Bulgaria
MetaWeek | Sep 11-14, 2022 | Dubai, United Arab Emirates
Hyperledger Global Forum | Sep 12-14, 2022 | Dublin, Ireland
Blockworks Digital Asset Summit | Sep 13-14, 2022 | New York, New York
The Family Office & High Net Worth | Sep 15, 2022 | New York, New York
NFT Show Europe | Sep 17-18, 2022 | Valencia, Spain
🆕 Australian Crypto Convention | Sep 17-18, 2022 | Gold Coast, Australia
🆕 Blockchain Expo Europe | Sep 20-21, 2022 | Amsterdam, Netherlands
Crypto Gibraltar | Sep 22-24, 2022 | Gibraltar, Gibraltar
🆕 Asia Crypto Week | Sep 26-Oct 2, 2022 | Singapore, Singapore
🆕 TOKEN2049 | Sep 28-29, 2022 | Singapore, Singapore
🆕 Blockchain & Infrastructure | Sep 29-30, 2022 | Washington, US
🆕 World Blockchain Expo | Sep 29-30, 2022 | Dubai, United Arab Emirates
📎 Miscellaneous Resources
The opinions are our own. The content of this newsletter is not intended to serve as financial advice and is for general informational and educational purposes only. We do not warrant, endorse, or assume responsibility for the accuracy of any information offered by third-party websites linked above.