BlackRock and CF Benchmarks, Franklin Templeton metaverse ETF, FIFA NFT platform, Coinbase and MakerDAO, Google $1.5B in blockchain firms, 21.co raises $25M. Plus 3 TLDRs and 6 Web3 job opportunities.
8 September 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 17 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
🔦Company spotlight
📅Blockchain, Crypto and Web3 events calendar
👩💻The job fair
📎Miscellaneous resources
🗞️ The 17 news you should be aware of
1. Brazil banned Singapore-based crypto Exchange Bybit for seeking to raise funds without authorization
According to the CVM, Bybit was “seeking to raise funds from investors residing in Brazil for investments in securities,” without the company having the authorization to act as a securities intermediary. In Brazil,
only Brazil’s stock exchange B3 can offer securities.
2. Saudi Arabia's central bank hires crypto chief to boost digital ambitions
As part of its plan to turn the capital city into a global hub, Saudi Arabia hires Al Zahrani, a former managing director at Accenture, to lead its virtual assets and digital currency program (CBDC). Meantime, the Saudi government has been collaborating with UAE for several years with UAE on potential Joint digital currency
3. Crypto investment slowdown will continue through rest of 2022
Global investments in cryptocurrency are down from a record $32.1 billion in 2021 to $14.2 billion in the first half(H1) of 2022. However investment at mid-year remained well above all years prior to 2021, “This highlights the growing maturity of the space and the breadth of technologies and solutions attracting investment.
4. IIC launches next-generation Web3 boating ecosystem test drive
The number of IoT-connected devices worldwide is in the billions across every sector of society. In 2019, McKinsey estimated that by 2023, people would own about 43 billion internet-connected devices. The Web3 has the potential to effect change and significantly disrupt the IoT sector because of its decentralized nature. The boating industry is no exception
5. China’s state-backed Open Source Blockchain onboards HK Conglomerates HSBC, Emperor Group
China’s state-backed Blockchain Service Network (BSN) newly launched Spartan Network, an open source blockchain infrastructure project with an aim to use blockchain technology without cryptocurrencies. The network added 10 Hongkong based conglomerates to gain users outside mainland China.
6. The final countdown to the Ethereum Merge has officially begun
Bellatrix upgrade – the network's final "hard fork" before the Merge – was activated on Tuesday marking the beginning of Ethereum’s long-awaited transition from proof-of-work (PoW) to proof-of-stake (PoS). This will save energy usage by 99.5% and set the stage for further improvements like security and sustainability to its core infrastructure capability
7. UK crypto firms must now report sanctions breaches, freeze accounts
US and Europian union extended sanctions due to Russia and concerns about digital fraud and illegal activities. Crypto companies must freeze assets and report them to the Office of Financial Sanctions Implementation (OFSI), an authority within the Treasury if they suspect they are from a sanctioned entity.
The upcoming update will increase TPS from 5000 to 10000. What Binance effectively announced is a separate blockchain where transactions can be offloaded and processed faster and more cheaply, with the results passed back to BNB.
9. Algorand, a proof of stake layer 1, announced its update to boost TPS and security
The change will increase the current transaction speed of 1200 TPS to 6000 and upgrade the security of the cross-chain transactions.
10. Coinbase looking to acquire $1.6B of MakerDAO’s USDC
The proposal would move a third of the Circle stablecoin backing Maker’s dai stablecoin, an estimated $1.6 billion, to Coinbase Prime in exchange for a 1.5% yield — or an estimated $24 million of MakerDAO revenue.
11. Celsius artificially inflated its CEL token, Vermont Regulators
The investigation found out the company allegedly manipulated its token price. Celsius filed for bankruptcy in June.” The appointment of an Examiner is critical to protect the retail investor's funds”, the filing said.
12. Google invested $1.5B in blockchain companies
The investment took place between the fall of 2021 and the spring of 2022 and was channelled into Fireblocks, Voltage, Dapper Labs, and Digital Currency Company. Google’s parent firm is the largest participant in blockchain investing on a list of 100 public companies.
13. Japan’s SBI joins Singapore institutional DeFi experiment with JP Morgan, DBS
SBI has been at the forefront of blockchain and tokenization in Japan and elsewhere, and its involvement in Project Guardian, which aims to explore institutional DeFi on a public blockchain, is an extension of other initiatives in Singapore.
14. BlackRock to use Kraken subsidiary for crypto offering
BlackRock will use CF Benchmarks’ bitcoin index for its new crypto offering. CF Benchmarks falls under the "crypto facilities" group of companies, a member of Payward Inc., which owns and operates crypto exchange Kraken.
15. SEC and CFTC want help building a new crypto reporting regime for hedge funds
The SEC and CFTC are calling for public comment on a proposal to integrate digital assets into the reporting regime for hedge funds. The request for comment lays out some core questions about how to define and classify different digital assets.
16. Curve Finance unveils plans for New crvUSD stablecoin
Curve Finance is planning to roll out its own stablecoin offering dubbed crvUSD. It recently uploaded the preliminary code for the stablecoin on GitHub. crvUSD will be over-collateralized and the team plans to hold reserves in crypto. The stablecoin is rumored to be released sometime this month.
17. Nigeria to establish special economic zone for Bitcoin, Crypto
Nigeria is in discussions to create the first economic free zone for cryptocurrencies in West Africa. The country is in talks with Binance and Talent City to create virtual free zones. It aims to create a mirror of the Dubai Virtual Free Zone. Last year, the Central Bank of Nigeria issued a ban on regulated institutions from dealing with cryptocurrencies. Despite the ban, Nigeria is in the top 10 countries worldwide for its bitcoin adoption.
💸 The development of a startup ecosystem and major PE/VC funding
1. Crypto regtech firm VerifyVASP raises funds at $100M valuation
FTX Ventures led the funding, VerifyVASP said, adding that Peak Capital and Bcharu participated. The funds will be used to onboard more members, including small- and medium-sized digital asset businesses.
2. DEFI Platform Credix raises $11.25M in series A funding led by Motive partners and ParaFi Capital
Within the next decade, debt capital markets will be on-chain and democratized. Credix is building the infrastructure to enable this at scale. The funds will be used to accelerate the development of the platform, team growth, and integration with Web3 projects to connect Institutional lenders with emerging market fintech.
3. Newly formed 21.co raised $25M in a funding round, $2B valuation
The 21.co is the parent company of 21 shares, the largest crypto exchange-traded product issuer (ETP) and Onyx, a proprietary technology platform used to issue and operate ETPs. 21Shares is affiliated with token provider Amun. The firm wants to expand outside of Europe and Australia into the Middle East.
4. Helium proposes shifting its entire network to Solana Blockchain months after $200M raise
Helium network, a grid of medium-range wireless hotspots pitched as an alternative to hard-wired internet service, is proposing to migrate away from the project's own blockchain onto Solana. This move faster transaction speeds, higher uptimes and more interoperability with other blockchains
5. Crypto asset manager Babylon Finance will shut down after failing to recover from Rari Hack
Ethereum-based asset management protocol Babylon Finance will fully shutter in November after failing to recover from the impact of April’s $80 million exploit on Rari Capital. Several liquidity pools and the BABL token price were severely impacted, which contributed to the decision.
6. Chinese metaverse industry raises $780M in funding
The Chinese Metaverse industry is expected to be $5.8T by 2030. Around 16,000 trademark applications connected to the metaverse suggest that Chinese players are prepared to enter the virtual world. Around 500 businesses are working on metaverse creation in China with major tech against such as Tencent, Alibaba, and Bytedance expected to influence the industry
7. Metaverse Magna raises $3.2M to build Africa’s largest gaming DAO
MVM started in cooperation with a multi-strategy blockchain investment fund, Old Fashion Research (OFR), embraced participation from investors containing South Korean video game developer Wemade, Japanese blockchain-focused venture capital firm Gumi Cryptos Capital (GCC), and others.
📚 Reports and breakdowns of noteworthy developments, here is the TLDR
Currently, more than half of the entire DeFi ecosystem exists on Ethereum. The network has seen skyrocketing figures (e.g. 200M unique addresses, 1M+ transactions per day, and 13.3M ETH has been staked by over 418.5K validators) for adoption and utilization, which are strong signals for network maturity.
Over the last two years, many leading institutions have taken meaningful steps into the DeFi and Web3 ecosystem by pivoting their business models to focus on Web3, and by deploying capital into the ecosystem.
On September 5th, MetaMask Institutional and the ConsenSys Cryptoeconomic Research team launched an insight report examining the Impact of the Merge on Institutions. The report analyses the key changes the Merge will deliver across Ethereum network activity, security, and valuation to determine how the event will impact institutions.
Here are the top five outcomes they highlight:
Sustainability: Ethereum will use 99.95% less energy to validate transactions - tremendously reducing its carbon footprint, and increasing its appeal toward institutions with environmental, social, and governance (ESG) mandates and energy-efficiency concerns.
Rewards: In switching from the Proof of Work (PoW) to the Proof of Stake (PoS) consensus mechanism, the Merge will change the way value is accrued across the Ethereum network. While a validator will earn rewards of 5.5-13.2% for validating transactions and adding them to blocks, token holders will earn rewards through a token-burning mechanism. The burning mechanism creates a powerful flywheel of ultrasound money, which incentivizes long-term holding and staking of ETH for all Web3 participants.
Deflationary supply of ETH: Reduced ETH issuance and increased burns will systematically reduce ETH supply - putting deflationary pressure on ETH, thereby alleviating institutional concerns of token price dropping to zero, and increased the likelihood of an increase in value.
Improved security: With the democratized participation and improved decentralization of the PoS mechanism, the cost to attack the Ethereum blockchain will be more than $11B at current prices, roughly 10-20X more expensive than PoW. The Merge will make Ethereum significantly more secure, producing stronger security guarantees for institutional investors. In addition, the security of the network running PoSwill rise over time as more validators will come on board, and the amount of staked ETH will increase.
Ecosystem growth: On-chain apps and Layer 2 solutions will likely leverage the above-improved security conditions and multiply on top of Ethereum - stimulating an increase in applications, and opportunities for institutional investors.
With further upgrades planned for the Ethereum ecosystem after the Merge, the Ethereum roadmap will present institutional investors with ever-increasing opportunities for growth and returns on investment.
The Digital Asset World of 2035, A Scenario Planning Exercise, is a report developed by the Wharton Blockchain and Digital Assets Project supported by the Wharton School at the University of Pennsylvania.
It considers 4 scenarios on how political, economic, social, and/or technological developments will shape the digital asset world of 2035. The authors further question whether the world is going to be more decentralized than it is today or whether is it going to be less so and rather be controlled by central intermediaries as well as whether the digital asset world and the established financial system will be two separate systems or one.
The 4 Scenarios are summarised:
Unitechnocracy: Two systems develop in parallel based on CBDCs and private digital assets. Virtual realities exist and the economy is tokenized with clear distinctions. AI-powered systems place people in either system. Augmented reality, virtual reality, and the metaverse are a way for people to escape reality.
Blockchain in Name Only (BINO): Society has become cashless, open blockchains have collapsed entirely. Permissioned blockchains are used by central authorities. There is a central financial regulator. Decentralization and web3 is a fading ambitions from the past, web2 has advanced and virtual realities are mainly used by elites.
Pluribus: The decentralized crypto world coexists with the legacy system. While nation states have started collapsing, web3 communities proliferate and thrive. Bridges between systems become powerful gateways and DNA-based identification is used to navigate the multiple metaverse(s).
DAO-Mundus: There is a steady decline of nation-states amidst the proliferation of self-selected DAO-governed communities. Self-sovereign judicial systems, enhanced by augmented and virtual reality, the metaverse, zero-knowledge proof privacy, and a tokenized economy are triggers for an economic boom.
In all scenarios, technological development is not only rapid but accelerating even further. The metaverse, multiple metaverses and AR/VR augmented realities exist in a more immersive, reality like manner and people spend much of their time in these.
It is useful to incorporate scenario planning into policy making and regulation, where experts can come together for a longer period of time to design a series of future realities. Regulation in a fast-paced area such as blockchain is challenging because its effectiveness may be diminished by the time of its implementation. Unforeseen events can happen on either the political, economic, societal, or technological dimensions. Governments and policymakers need to make use of the best tools available to prepare and implement the regulation in a strategic manner. Scenario planning may just be one tool to be added to a regulator’s toolbox.
A recent course on Monetary Law and Regulation developed by UC Berkeley lecturer, Bruno Meyerhof Salama, included cryptocurrency and the involvement of fintech innovations in driving the changes in law and the regulation of money.
This addition of cryptocurrencies to the conventional monetary course contents is important as comprehensive and structured education about the new financial instruments remains to be missing for all levels of financial actors, which creates uncertainties for all stakeholders involved.
A part of the course discusses contemporary legal dilemmas such as the regulation of bitcoin and stablecoins, the creation of central bank digital currencies and their role in the financial ecosystem.
📈 Charts of the week
The image below demonstrates how Ethereum's monetary policies have evolved since its inception, shifting from inflationary to deflationary following the merger
The below image shows how Institutional Defi has Evolved in the Last Two Years
Where is a16z, a VC firm allocating all its money? See below
💡Inside the Metaverse and NFT's latest news, trends and insights
1. Harry Styles and Adele's record label files trademarks for NFT-backed media
Sony Music filed a trademark application which suggests it is looking at using NFTs as a way to authenticate fans for downloadable audio and video recordings and for live performances.
2. Renault enters metaverse through the Sandbox
Renault enters Metaverse through Sandbox to mark its presence in this space and provide customers with virtual automative experience. This automotive experience is intended to enrich the Sandbox platform and allow Renault to reach a wider audience.
3. Franklin Templeton launches metaverse ETF for European investors
Many big tech companies have already pivoted towards the metaverse for their next major area of development. This new ETF will list on Deutsche Börse Xetra (XETRA), and Borsa Italiana as well as London Stock Exchange (LSE). ETF tracks Solactive global Metaverse index.
4. Japanese government presents local authorities with NFTs in national first
Japan’s cabinet has handed out NFT awards. The PM of Japan convinced that NFTs and metaverse-related innovations will spark Web3-powered growth for Japan and has pledged to help startups by reforming restrictive tax laws.
5. Kate Spade to provide new shopping experiences in the Metaverse
Customers can shop at New York brand Kate Spade’s autumn 2022 collection in Metaverse. For online shopping, an interactive space has been provided for consumers to buy their goods including bags in a virtual New York townhome.
6. Trademark applications for crypto, NFTs and Metaverse surge in 2022
In addition major firms in and out of the crypto space including Meta, Formula One, Mastercard, McDonald’s, Gatorade and the U.S. Space Force have all, in 2022, made filings with the USPTO suggesting virtual products or involvement with crypto and blockchain.
7. LG picks lesser-known Hedera Blockchain for Television NFTs
LG is releasing a NFT marketplace called LG Art Lab that plugs into the Hedera Network. Television owners with sets updated to LG’s most recent software will be able to buy, sell and showcase their Hedera NFTs from their screens.
8. Latest Solana NFT is a rivalry for Ethereum for their free mint and intellectual property rights.
The “y00ts mint t00b” collection has topped OpenSea volume charts for the past 48 hours, amassing 227 thousand Solana (SOL), or over $7.1 million in secondary sales at the time of publication.
9. FIFA launches NFT platform on Algorand in run-up to World Cup
The platform, FIFA+ Collect, is set to launch later this month, and will feature “affordable, inclusive, and accessible” NFTs that depict notable soccer moments, art, and imagery, according to FIFA.
10. ConsenSys to launch 'Sustainable' NFTs celebrating the Ethereum Merge
The blockchain firm will release “one of the first sustainable NFT drops on the Ethereum mainnet” called Regenesis. Regenesis will include various editions of NFTs of “elaborately detailed worlds that embody the benefits of the Merge: sustainability, security, and scalability.”
🔦Company spotlight
The Company: 👉 SpiceAI 👈 is a Web3 startup that is creating technologies for developers to build the future of intelligent applications which learn and adapt to their uses. Its primary product is an application platform that combines the open source Spice.ai decision-engine with "ML-ready" data enabling developers to build the next generation of AI-driven applications.
The story: SpiceAI just closed a $13.5 million seed round led by Madrona Venture Group on September 7. It previously raised a $1.1 million pre-seed round in October 2021.
Why should I care: There is a massive opportunity for Spice AI to provide a developer-first framework and intelligent data sets that unlock insights in blockchain data and enable developers to create intelligent distributed Web3 applications. As the founders said, over the past ten years, there hadn’t been a way to obtain data in a well-structured, easy-to-understand format. SpiceAI will provide the next layer of infrastructure to actually start building data-driven applications on it that bridges between L-1s and the actual application.
📅 Blockchain, Crypto and Web3 events calendar
….for the next couple of months
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
Cosmoverse | Sep 26-28, 2022 | Medellin, Colombia
Converge22 | Sep 27-20, 2022 | San Francisco, US
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
Seoul Meta Week 2022 | Oct 3-7, 2022 | Seoul, Korea
Blockchain Economy Dubai Summit | Oct 4-5, 2022 | Dubai, UAE
Crypto Expo Dubai | Oct 5-6, 2022 | Dubai, UAE
Blockchain Expo North America | Oct 5-6, 2022 | Santa Clara, US
DeFi Conf 2022 | Oct 6, 2022 | Belfast, United Kingdom
Future Blockchain Summit | Oct 10-13, 2022 | Dubai, UAE
Stellar Meridian 2022 | Oct 11-13, 2022 | Rome, Italy
CBDC Summit 2022 | Oct 12-13, 2022 | Washington, US
Bitcoin Amsterdam 2022 | Oct 12-14, 2022 | Amsterdam, Netherlands
World Blockchain Summit Dubai 2022 | Oct 17-18, 2022 | Dubai, UAE
Vietnam Blockchain Summit | Oct 19-20, 2022 | Hanoi, Vietnam
Bitcoin Collective | Oct 21-22, 2022 | Edinburgh, GB
Money20/20 | Oct 23-26, 2022 | Las Vegas, US
Blockchain Expo Tokyo | Oct 26-28, 2022 | Makuhari Messe, Japan
🆕 Plan ₿ Forum | Oct 28-29, 2022 | Lugano, Switzerland
🆕 ETH Lisbon | Oct 28-30, 2022 | Lisbon, Portugal
San Francisco Blockchain Week | Oct 31-Nov 6, 2022 | San Francisco, CA, USA
LA Blockchain Summit | Nov 1-3, 2022 | Los Angeles, CA, USA
🆕 Blockchain Economy Summit | Nov 1-3, 2022 | Los Angeles, CA, USA
🆕 Florida Bitcoin & Blockchain Summit | Nov 4, 2022 | Tampa, FL, USA
🆕 Solana Breakpoint 2022 | Nov 4-7, 2022 | Lisbon, Portugal
🆕 Web3 & Blockchain World (W3B) | Nov 8-9, 2022 | Toronto, Canada
🆕 Crypto Nexus | Nov 8, 2022 | San Francisco, CA, USA
👩💻The job fair
Crypto Valley Venture Capital - Investment Manager - Berlin, Germany
Protocol Labs - Cheif Architect - Remote
Immutable - Blockchain Engineer - Australia, Remote
Silo Finance - Product Manager - Austin, TX, Remote
Silo Finance - Senior Product Designer - Austin, TX, Remote
Fuel Labs - Event Lead - Remote
📎 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.