Solana attack, Gucci goes APE, the Merge, VeeFriends raises $50M, Tiffany and Muse NFTs. Plus the holy grail of cross-border payments, a DeFi report, a list of Web3 jobs and more.
4 August 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.
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Table of Content
🗞️The 15 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's latest news, trends and insights
📅Blockchain, Crypto and Web3 events calendar
👩💻The job fair
📎Miscellaneous resources
🗞️ The 15 news you should be aware of
1. BlackRock to offer crypto access to institutional clients through Coinbase deal
BlackRock, which manages around $9 trillion of customer funds, will use Coinbase Prime to provide the service, according to a blog post from Coinbase on Thursday. Clients using the asset manager's Aladdin portfolio management software will soon be able to get direct access to crypto through the partnership — initially bitcoin.
2. Meta expands digital collectables support on Instagram to 100 more countries
The regions supporting the expansion include the Americas, Asia-Pacific, the Middle East and Africa, according to an updated post from Meta. Users must connect a digital wallet to the social media platform Instagram to start posting their digital collectibles. Meta is also leveraging the Flow blockchain, developed by CryptoPunks creator Dapper Labs, to allow individuals to post their assets minted on the Flow blockchain on Instagram. Meta's currently supported blockchains include Ethereum, Polygon and Flow.
3. Solana-based stablecoin NIRV and ANA dropped 85% following a $3.5M exploit
A flash loan attack on Wednesday caused the drop in the value of stablecoin by 85% resulting in a loss of 3.49M worth of USDT. Hacker borrowed 10M from the Soland main pool vault and used it against Nirvana financial treasury transferring the fund into ether account using Wormholes’ cross-chain bridge. The team of Nirvana identified the hacker tied to a centralised exchange and requested a paid pack for the good functioning of the community.
4. Ethereum flips Bitcoin into the options market for the first time
Value in the Ethereum options open contract was 32% higher than the locked-in Bitcoin options trades. The put call ratio of Ethereum is at an all-time low which indicates the investors are extremely bullish on Ethereum because of the Merger. Traders are in a hope that the Merger will bring a 90% reduction in ETH Issuance.
5. Robinhood lays off 23% of staff a day before earning report
Robinhood CEO Valad Tenev reported that the company is in suffering low growth in the last quarter. The reasons are catalysed by the events such as the fed tight money policy and the crypto crash which eroded the volume from the exchange and decreased fee collection.
6. The merger will not lower the Ethereum transaction fee
The shift from proof of work to proof of stake so-called merge will do little with the transaction cost and increase the efficiency in energy consumption. The early next year surge is expected to curb the transaction cost problem. Layer 2 impact on ETH fee is just a band-aid for higher gas fees, an Industrial CEO said.
7. INX is the first tokenized ICO approved by SEC, helping others to do the same
INX, which has been in existence since 2017, now works with companies to help them issue digital securities and licensing, technology, marketing compliances and more. The company recently helped Trucpal with a token offering. Security token provider said it has been playing by rules for years and now wants to help others with regulations.
8. FTX US to make fractional stock trading fee
The company is set to make the trading of fractional stocks free from October 1. New stock applications are of fractional variety. The company will launch its commission-free stock trading platform in May. The app launched with 970 tickers available to trade including stocks, ETFs and American depository receipts.
9. MUFG launches blockchain utility tokens, wallet
MUFG launched its wallet and permissioned R3’s enterprise blockchain. MUFG in conjunction with Tokyo Dome city launched utility tokens with the aim to provide shareholders with a reward independent from owning stock. Now users can book hotels, spas with different partners using discounted NFTs offering security tokens.
10. Seven out of ten tell Fed they don’t want a digital dollar
Cato Institute Libertarian think tank analysed the response to the CBDT and found two third rejected a digital dollar with a risk of disintermediating the banking system. 11.74% were in support of CBDT and 17% were neutral. China was a centre of attraction for the discussion as they deployed CBDT digital Yuan and are practising cross-border trials.
11. Synapse reveals to be the first to launch its own cross-chain smart contract platform
The platform will address the limitations of the cross-chain applications. The platform has a volume of $11B and connects Layer 1 and Layer 2 blockchains. The limitation that cross-chain applications are facing is the lack of a single execution environment and which they solve using a single smart contract across multiple blockchains.
12. Schwab set to launch its first crypto-linked ETF
Investment brokerage Charles Schwab has launched its first crypto-related ETF, with trading set to begin on or around August 4. The asset manager made the announcement on Friday, sharing that the fund will track the Schwab Crypto Thematic Index. This new fund will give investors exposure to companies that may benefit from the development or growing utilization of cryptocurrencies and digital assets.
13. Gucci goes APE: Bored Ape Yacht Club token becomes a payment option
Luxury fashion brand Gucci will accept ApeCoin (APE) at select U.S. stores. The firm accepts other top crypto coins and has also collaborated on NFT and metaverse game projects.
14. Solana’s latest $6M exploit likely tied to Slope wallet
The closed-source Slope wallet may be responsible for the latest attack on the Solana network. At least $6 million worth of tokens have been stolen from more than 9,000 hot wallets. The attack was likely a hack of Slope's centralized servers, where private keys may have been stored as plain text. The Slope Wallet for iOS and Android uses Sentry for event logging but it isn't configured to scrub sensitive information, resulting in mnemonics being leaked.
15. Prominent Chinese Ethereum miner wants to resist Merge, create a fork
Chandler Guo, a well-known crypto miner, has launched a campaign to fork Ethereum to create a Proof-of-Work version. Guo was a major proponent of creating the Ethereum Classic in 2016. The transition to Proof-of-Stake will leave miners with costly and now potentially useless specialized hardware. Guo's plan will require an immense amount of economic and technical support. The forked coin would be an entirely distinct network with no assumed value, infrastructure, or utility
💸 The development of a startup ecosystem and major PE/VC funding
1. Proof of Impact raises $6M in pre-series A funding
Rakuten Capital led the round with first-time participation from a global suite of investors including Franklin Templeton Blockchain Fund, Five T, Blockrocket VC and Advaita Capital. The new funding will allow Proof of Impact to accelerate go-to-market efforts focused on private credit and private equity fund managers, expand its impact-linked finance solutions, and further extend its core product offering by incorporating blockchain-based innovations in the form of proprietary impact oracles.
2. Gary Vee’s NFT company (VeeFriends) closes million-dollar seed round
VeeFriends announced on July 28 has raised $50 million in a seed round led by the Web3 leading American venture capital firm Andreessen Horowitz (a16z). The company plans to use the funds to expand the VeeFriends universe through its creative, technical, and experiential operations. The plan is to develop further the future intellectual property of the 283 VeeFriends characters to reach different multimedia platforms, including new physical and digital spaces. The funds will also be used to hire fresh talent from the entertainment and Web3 industries.
3. Crypto hardware wallet startup Ledger is raising $100M
The Company is said to work on upcoming fundraising for at least $100 million as the business grows. Ledger last raised $380 million, topping $1.5 billion in value.
4. AO Labs raises $4.5M for Web3 gaming platform Spacebar
Virtual gaming studio, AO Labs, has raised $4.5 million in a seed round for its first blockchain game, Spacebar. The round was led by Yield Guild Games (YGG), with participation from 70 investors, including some of the biggest names in crypto and GameFi. Investors who participated in the round included Gabby Dizon, CEO of YGG; Balaji Srinivasan and Sandeep Nailwal of Polygon; Jeff “Jiho” Zirlin of Axie Infinity maker Sky Mavis; and Kyu Lee of South Korean video game company, Com2uS.
5. NFT marketplace OneOf closes over $8M in the strategic round to accelerate the development
NFT marketplace, OneOf, announced that it has closed over $8 million in a round including participation from Amex Ventures, Mirabaud Lifestyle Impact and Innovation Fund, Snow Hill Ventures, Sangha Capital, Chain Link Crypto Fund and others. The new capital brings the company’s total funds raised to over $72 million. Existing investors include famed environmentalist and VC Bill Tai’s Actai Unicorn Fund, Galaxy Digital, Nima Capital, Sangha Capital, Recharge Capital, Andromeda Capital, Sanctor Capital, Tezos Foundation and others.
6. Oracle and InfStones collaborate to accelerate Web3 development
Oracle is providing a building block infrastructure and cloud infrastructure for Web3 to enterprise clients. An integration API offering, allowing developers to build applications on blockchain networks such as Polygon, Solana and Chainlink. The company raised $66M finds with a valuation of $1B.
UneMeta has raised $5 million in a round led by the Jasmy Foundation. The company provides NFT incubation, trading and social networking services. Among the other participants were SPB, Avatar DAO, CGV FoF, Consensus Lab, K24 Ventures, Taihill Venture etc.
8. Crypto specialist Triblock emerges from stealth
Triblock, a Boston-based Web3 investment firm, has emerged from stealth. The firm has already made 20 investments since mid-2021; it targets pre-seed and seed-stage rounds across DeFi, gaming, NFTs and more.
9. Estonia's Crypto Snack scoops up $50M
Online gaming cryptocurrency Crypto Snack has secured a $50 million investment from GEM Digital.
📚 Reports and breakdowns of noteworthy developments, here is the TLDR
The paper from the European Central Bank (ECB) argues that after thousand years of search, the holy grail of cross-border payment could be found within the Central Bank Digital Currencies (CBDCs).
The holy grail, whereby cross-border payments can be (1) immediate, (2) cheap, (3) universal in terms of reach, and (4) be settled in a secure settlement medium such as central bank money is in reach for the first time. This is thanks to the rapid decline in the costs of global electronic data transmission and computer processing, new payment system technology, innovative concepts (such as the interlinking of payment systems including a currency conversion layer; or CBDC), and unprecedented political will and global collaboration like the G20 work on enhancing cross-border payments.
The paper concludes that interlinking of domestic instant payment systems and CBDCs, both with a competitive FX conversion layer, are the most promising avenues as they combine: (i) technical feasibility; (ii) relative simplicity in their architecture; (iii) a competitive and open architecture by avoiding the dominance of a small number of market participants; (iv) monetary sovereignty is preserved, and (v) the crowding out of local currencies is avoided due to an FX conversion layer at the border (which does not hold for Bitcoin and global stablecoins). Interlinking of domestic payment systems would also perform well in terms of preserving the universal reach of correspondent banking.
However, a number of challenges need to be addressed to set up these solutions, such as: (i) the organization of an efficient competitive FX conversion layer conducive to narrow bid-ask spreads applying to the FX conversion; (ii) the global addressability of accounts; (iii) achieving the same degree of legal certainty for interlinked cross-currency payments as for domestic payments; (v) strong progress on the AML/CFT compliance side to ensure straight-through-processing (STP).
None of these challenges is unresolvable and forceful work on both solutions should continue, whereby for CBDC much of the energy of central banks will obviously be absorbed first for deploying them for domestic retail payments, says the paper.
Young Gamers and the Metaverse: How the Rules of Success Are Changing by Bain and Co
Younger gamers from 13 to 17 years of age are more likely to play metaverse games
Younger gamers (13 to 17) are more interested in them than players a few years older (18 to 34)
More likely to believe they will spend more time in them in the future
Metaverse games are immersive, and allow players to be active creators
Available on any device and offers in-game purchases
Time online and limits to customization
Gen Z spends more time and money on video games than the age group above them
The rise of new payment models like monthly subscriptions to game libraries (such as Xbox Game Pass and Apple Arcade) along with the global dominance of free-to-play games have improved average revenue per user (ARPUs)
There has been a backlash against features that let gamers pay for better performance, such as buying special capabilities or a more powerful weapon.
56% of younger gamers are comfortable paying to unlock features that improve their performance, while more older players are not
55% of gamers who plan to increase time spent on UGC-enabled platforms don’t see customization as essential to their overall gaming experience
Advances in technology will continue to play a major role in delivering more realistic and compelling game-playing experiences
Rules of play
Building fun, immersive experiences will remain paramount.
To remain competitive, gaming companies will need to gain a deep understanding of these younger players while building the capabilities within their organizations to delight and engage them
Gamers' hunger for more interactive media experiences creates new opportunities in franchise management
Game developers compete with other tech companies for top coding talent, but our research of salaries shows game companies pay less than competitors
Scale to succeed
Video game companies need to build and nurture the communities required for games to flourish
The development of metaverse gaming environments is changing the baseline expectations for young gamers and creating new worlds of opportunities for online experiences
DeFi: Moving the Dialogue on Standards and Regulation Forward by GBBC Digital Finance
The DeFi Report is a call to action for industry and agencies to engage in and commit to the development of right-size, globally harmonized standards and regulation of the DeFi ecosystem, and proposes how GDF can act as a stewardship platform to enable this.
The report outlines the key constituents of the DeFi ecosystem, summarizes the risks identified by regulatory and policy agencies, and proposes a two-track approach to moving the industry-regulatory dialogue forward:
Track 1 – Short-Term Industry Transition: Industry Standards
In the absence of regulation specific to DeFi, the industry must coordinate to establish governance and investor protection standards, as well as industry-led monitoring to demonstrate that it can operate to high standards of trust and predictability.
Track 2 – Medium to Long-Term: A Co-Regulatory Model
Industry and agencies must collaborate in a co-regulatory model to carry out the process of risk identification across the ecosystem in a shared engagement platform. This will accelerate the development of right-size regulation that is harmonized at a global level. In doing so, stakeholders have the opportunity to explore the design and operation of regulator nodes in a decentralized autonomous organization (DAO).
📈 Charts of the week
The layer-2 season is approaching, as seen by an increase in the percentage of gas spent by layer-2 proof contracts settled on the Ethereum public blockchain. This measure rises as more transactions take place on Ethereum layer-2s
The open interest on Deribit in Ethereum options exceeded the open interest in Bitcoin options for the first time in history
💡Inside the Metaverse and NFT's latest news, trends and insights
1. Tiffany & Co turning CryptoPunk NFTs into $50K custom pendant
The handcrafted CryptoPunk pendants were announced by the jewellery brand on Sunday on Twitter, and are priced at 30 Ether (ETH), equivalent to $50,000 each at the time of writing.
The French National Gaming Authority is said to investigate on the French unicorn NFTs made fantasy football game. For the French Authority, Sorare’s activities may fall under gambling or betting. In late 2021, the United Kingdom Gambling Commission had already initiated an investigation on Sorare’s activities in the UK as one of the major NFT players related to soccer. Depending on the French National Gaming Authority analysis, Sorare’s activities could be threatened and all NFTs would be impacted by such legal and regulatory change.
3. British rock band Muse will release its 9th album on Polygon-based NFT Platform Serenade
On 26 August, the NFT edition will become the first release of its kind to qualify for the charts in the UK and Australia. It is the first new format to be added to the charts since album streams in 2015. Unlike many NFTs, buyers will not require a crypto wallet. After the purchase is made on Serenade’s website, a digital wallet is created and the NFT is transferred to that wallet. If users have an existing crypto wallet, such as BitCoin or Ethereum, they can use that.
4. MTV Opens ‘Best Metaverse Performance’ Award
The 2022 MTV Video Music Awards will be the first show in the company’s history to feature the category. The six nominees are Ariana Grande, Blackpink, BTS, Charli XCX, Justin Bieber and Twenty One Pilots, all of whom have done virtual concerts in the past year.
5. Binance launched blockchain NFT ticketing with Lazio
Binance is partnering with Italian football team SS Lazio to offer NFT ticketing for the 2022/23 season. Also, the French government has recommended NFT ticketing for major sports events. SecuTix is using the blockchain-based platform TixNGo to buy, transfer, resell and securely secure digital tickets. NFT thickening has the potential beyond sports ticketing in the entertainment industry.
6. Netgear joins SuperRare DAO to develop NFT licence developing model
Netgear, known for its Wifi Routers, uses the Meural digital display to exhibit NFTs, in partnership with SuperRare to buy governance token RARE and develop a licensing and royalty model. The cost and quantity of tokens to buy are confidential till now.
7. Solana Marketplace Magic Eden to offer Ethereum NFTs
Magic Eden, generating 90% of the Solana volume, now integrates cross-currency purchase support for Ethereum and Solana NFTs. The company also raised $130M in a Series B funding Round. The marketplace recently launched Magic Venture, a venture capital fund to invest in Web3 games and fund its own game. It also introduces its semi-fungible token marketplace for Web3 games.
📅 Blockchain, Crypto and Web3 events calendar
….for the next couple of months
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
🆕 Mainnet 2022 | Sep 21-23, 2022 | New York, New York
🆕 Web 3.0 for Developers 2022 | Sep 22, 2022 | Tel Aviv, Israel
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
🆕 SmartCon 2022 | Sep 28-29, 2022 | New York, New York
Blockchain & Infrastructure | Sep 29-30, 2022 | Washington, US
World Blockchain Expo | Sep 29-30, 2022 | Dubai, United Arab Emirates
🆕 Crypto Fest 2022 | Sep 30, 2022 | Cape Town, South Africa
🆕 Blockchain Economy Dubai Summit | Oct 4-5, 2022 | Dubai, UAE
🆕 Crypto Expo Dubai | Oct 5-6, 2022 | Dubai, UAE
🆕 DeFi Conf 2022 | Oct 6, 2022 | Belfast, United Kingdom
👩💻The job fair
1. Ledger is hiring a Web3 Senior Javascript Software Engineer - Ledger Live Compensation: $120k - $200k (France - Montpellier)
2. MoonPay is hiring a Senior Product Manager, Web3 Compensation: $60k - $90k (United Kingdom - London)
3. Binance is hiring a Web3 Project Management (Senior Manager/Director), Technology Compensation: $60k - $175k (Remote)
4. Cypherock Wallet is hiring a Web3 Blockchain Researcher Compensation: $31k - $93k (Haryana Gurgaon - India)
📎 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 the third-party websites linked above.