Happy Merge all! Also Norway CBDC prototype, Linux Foundation digital wallet, EDX Markets, KKR PE fund on Blockchain, MoMA and Starbucks NFTs, Doodles NFT raises $54M and a survey to get your opinion.
15 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.
Today is a historic day for crypto, blockchain and specifically the Ethereum ecosystem. The Merge is one of the largest technological event in the industry to date. A lot has been said about it but what do you think? Leave comments below!
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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. Norway builds CBDC prototype on Ethereum infrastructure
Norway's central bank digital prototype is based on Ethereum infrastructure. The testing environment for the DSP is available on GitHub. It features support for MetaMask and a custom frontend. More features are expected to be implemented by mid-September. Only around 4% of payments in Norway are conducted with cash.
2. Crypto lender Maker Turns to staked Ether to reduce USDC influence
Crypto lending platform Maker has doubled the debt ceiling of its staked ether vault to reduce its reliance on USDC. More than 34% of all locked USDC assets are locked on Maker. The token is the largest source of collateral on the platform, but the recent blacklisting of addresses by Circle has caused Maker to lessen the stablecoin's influence.
3. Linux Foundation announces the OpenWallet Foundation to develop interoperable digital wallets
The OpenWallet Foundation, a project backed by the Linux Foundation, was created to encourage interoperability across digital wallets. The initiative has buy-ins from companies including Okta, Ping Identity, Accenture, CVS Health, and the OpenID Foundation.
4. Schwab, Citadel Securities, Fidelity, other Wall Street firms start crypto exchange EDX Markets
EDX Markets is a new cryptocurrency exchange backed by financial heavyweights including Charles Schwab, Citadel Securities, and Fidelity Digital Assets. Its CEO will be Jamil Nazarali, a former senior executive at Citadel Securities. EDX Markets' trading platform will be provided by the Members Exchange.
5. Russia’s PM sets 2022 deadline for clarifications on digital currency, as Yuan reaches 26% of FX
Russia finds an alternative to Dollar. Last month Yuan constituted 26% of the FX transactions, a step to peg Chinese currency to the dollar. The master plan is to introduce CBDC by the next budget.
6. Crypto lending now pays less than safest US Government Debt
Three months of Govt Debt securities paying similar interest with low risk, a threat to cryptocurrencies, triggers hard for investors to keep invested. Crypto yield has collapsed significantly over the last 2 years.
7. KKR makes piece of PE fund available on Public Blockchain
KKR & Co. is making part of its private equity funds available on the Avalanche blockchain. It has partnered with Securitize to tokenize an interest in the second iteration of its Health Care Strategic Growth Fund. Only qualified purchasers with at least $5 million in investable assets will be allowed to invest in the tokenized feeder fund. Investors will be able to sell their securities after a year on a secondary market managed by Securitize.
8. BNB Chain and Google Cloud work together to advance the growth of Web3 and Blockchain projects
Above 150 projects will get access to the Google startup support program under the BNB chain. It includes infrastructure, cloud-computing credits, and mentorship support to early-stage startups.
9. Blockchain firms join Bosch led GAIA-X consortium for vehicle identity
It aims to use decentralized vehicle identities for data exchange, including locating charging spots, billing, and autonomous driving. The consortium includes 19 members with half of the project funds ie $26M from the German govt.
10. Russian millionaire’s startup plans Ruble Stablecoin following DAI Model
Businessman and ex-banker Alexander Lebedev, known for the controversial statement about Putin, plans to introduce a Ruble-backed stablecoin resembling DAI in his statement to bypass the corrupt mainstream banking system.
11. Asset tokenization to expand into $16.1M business opportunity by 2030
With a 50-fold increase predicted between 2022 and 2030, from US$310 billion to US$16.1 trillion, tokenized assets are expected to make up 10% of global GDP by the end of the decade,” the report states.
12. Crypto conman ploughed crores into Georgian vaults
The Enforcement Directorate (ED) arrested a man for laundering multi-crore funds from Hyderabad to Georgia and Armenia by duping people by promising huge returns through hedge funds of Russian oil company Rosneft and crypto-currency investments.
13. Google Cloud to validate transactions on Axie Infinity’s Ronin network
Google Cloud has agreed to run a validator node on the Ronin network, a gaming-centric Ethereum sidechain, Google Cloud will be the 18th validator on Ronin.
14. Russia aims to set rules for crypto cross-border payments by year’s end
Russia might become the first country in the world to allow cross-border crypto payments while banning local crypto payments. This latest news brings another official confirmation that Russia has been growing increasingly serious about the possibility of cryptocurrencies for cross-border transactions.
15. SWIFT pilots Blockchain project
SWIFT is piloting a project with fintech company Symbiont Inc. The collaboration, which includes Citigroup Inc., Vanguard and Northern Trust, is aimed at driving “efficiencies in communicating significant corporate events,” like dividend payments and mergers, SWIFT said in its post.
💸 The development of a startup ecosystem and major PE/VC funding
1. Doodles NFT project raises $54M with Reddit's Chief Leading the way
The Doodles NFT project has announced its first round of funding of $54 million, led by Reddits Alexis Ohanian's venture firm. It is also supported by FTX Ventures and Acrew Capital. The project has already outlined a plan to increase hiring and expand the team to 30 from 11.
2. MetaWeb Ventures raises $30M for builder focused Blockchain Fund
LPs in the Fund include NEAR Foundation, Sequoia China, Dragonfly Capital, GSR Markets, Octopus Network, SevenX, Mentha Partners, as well as notable entrepreneurs. MetaWeb is focused on supporting developers and researchers building the future of Web3.
3. Revolving Games raises $13.2M to develop ‘AAA Quality’ Web3 games
The latest round was led by Pantera Capital, with Animoca Brands, Polygon, Dapper Labs, and Rockstar Games founder Dan Houser among those participating. Revolving Games will use the freshly-raised funds to create “decentralized” games, according to a press release.
4. Bolt abandons $1.5B deal to buy crypto startup Wyre
Bolt said in a statement that although the deal fell through, it would continue a partnership with Wyre. The company further explained that remaining independent would allow it to focus on what it’s good at and incorporate Wyre’s features to give users a native crypto buying experience.
5. VC Northzone secures $1B in funding to seed European Tech Startups
Venture capital firm has raised $1 billion in its largest fundraise to date, since its founding in 1996. The company said that it will continue investing in verticals like FinTech, HealthTech, and Software-as-a-Service (SaaS).
📚 Reports and breakdowns of noteworthy developments, here is the TLDR
One of the most anticipated events in the history of the digital asset industry has taken place in September – The Ethereum Merge. This is expected to bring about a host of emerging investment narratives for crypto’s second largest asset by market cap and largest smart contract platform.
The Ethereum Merge, expected to take place on September 14, 2022, will l transition the Ethereum network’s consensus mechanism from proof-of-work to proof-of-stake.
With staking, miners are replaced with validators posting collateral and attesting to transactions, and competition is replaced with randomization.
The Merge is expected to have several potential benefits such as decreasing Ethereum’s energy consumption by over 99%.
It also comes with potential risks, including centralization concerns, technical challenges, and liquidity concerns for stakers.
This milestone is not the end of Ethereum’s evolution towards an eventual mature state. The next series of upgrades following this event will be centred around transaction speed and cost – known as scaling.
The right custodian partner will assist the broker in building confidence in their operational capabilities, and as such more likely to attract more customer trading higher volumes. And do so faster and cheaper. If the custodian is able to support access to a whole range of venues and services, including DeFi, brokers will also be able to better source liquidity, and offer differentiating features like yield and margin.
So here are some key features to look out for and question:
High-performance security at scale. Can the custodian provably safe- keep private keys and manage transactions in near real-time, even under heavy load?
Flexible controls. Can groups of people manage cryptoassets in a controlled manner e.g. multisig, allow-lists?
Segregated accounts. Can you create as many individual keys as you need and independently monitor transactions?
Compliance monitoring Can you get notified of the transaction risk and make a decision on how to proceed?
DeFi support. Can you manage a wide range of cryptoassets across a multitude of decentralized financial services?
Exchange accounts. Can you securely transfer funds between centralised exchanges?
Clearing and settlement. Can you use your cryptoassets in custody to clear and later settle OTC transactions?
Trade credit. Can you use your cryptoassets in custody as trading credit on exchanges?
Under-collateralised lending. Can you use your cryptoasset portfolio under custody to secure loans?
Emerging brokers face two choices. Either they build the infrastructure themselves or they can choose an independent crypto custody provider.
📈 Charts of the week
The below image shows that right after the merge ~145 ETH was burned, giving us a hint of the soundness of ultrasound money
The below figure provides the Merge overview and its impact
💡Inside the Metaverse and NFT's latest news, trends and insights
1. European Union to use Blockchain & NFTs to Fight Forgery
The European Union’s blockchain and NFT adoption appeared the same week the Japanese government also announced adopting NFTs in empowering the lives of public
2. Starbucks taps Ethereum network Polygon for NFT rewards
The Starbucks Odyssey program, which will launch later this year, will let both customers and employees in the United States earn digital stamps as rewards, as well as purchase and trade limited edition digital stamps. Each stamp will be minted as an NFT, or a blockchain token that represents ownership for things like digital collectibles and artwork.
3. Singapore's biggest bank DBS to acquire land in The Sandbox metaverse
DBS will buy a 3x3 plot of LAND — a unit of virtual real estate in The Sandbox metaverse — to develop "BetterWorld," an interactive metaverse experience showcasing the importance of building a better, more sustainable world.
4. New York’s MoMA considers buying NFTs with proceeds of $70M auction
With the digital asset class gaining popularity, MoMA is considering buying NFT with the proceeds of an auction of William S. Paley's art collection worth $70M. The museum has a team of people keeping tabs on the digital art market, the museum's director said.
5. South Korea’s Seongnam city to provide citizenship rights through NFTs
Seongnam, the 12th most populated city in South Korea, is planning to recreate the city in the metaverse and will issue non-fungible token (NFT) citizenship to give access to municipal information
📅 Blockchain, Crypto and Web3 events calendar
….for the next couple of months
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
🆕 Digital Asset Summit 2022 | Oct 17-18, 2022 | London, UK
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
🆕 Blockchain Economy Summit | Nov 10-11, 2022 | Barcelona, Spain
🆕 Istanbul Blockchain Week | Nov 14-17, 2022 | Istanbul, Turkey
👩💻The job fair
Union Square Ventures - USV Analyst Program 2022 - New York
Moon Pay - Full-stack Engineer - Remote
Moon Pay - Country Lead - Brazil
SPERAX - Lead Smart Contract Engineer - Bangalore, India, Remote
BINANCE - Card Product Manager - Eastern Europe, Asia, and Australia
BINANCE - Financial Institutional Product Manager - Global
📎 Miscellaneous Resources
The Post-Merge Era: How Will Proof of Stake Affect DeFi and Institutional Investment in Ethereum
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.
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A higher burn rate means a higher degree of reduction in digital coins. Now the retail investor can participate as coin holders will try to dump in fractions too. Ultimately your small pockets demand it.
Eth-backed NFTs can probably be in high supply.