SWIFT cross-chain PoV, FTX Voyager $1.4B deal and $1B round, Cardano upgrade, Blockdaemon indexes, Web3 VC Database, Pantera $1.25B fund, Web3 Report TLDR, Christie’s NFTs, Top 50 Unis for Blockchain.
29 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 14 news you should be aware of
💸PE/VC funding
⚖️Policies and laws
📚Reports, here is the TLDR
📈Charts of the week
💡Metaverse and NFT news, trends and insights
🔦Company spotlight
📅Blockchain, Crypto and Web3 events calendar
👩💻The job fair
📚The terms of the week
📎Miscellaneous resources
🗞️ The 14 news you should be aware of
1. SWIFT, Chainlink Labs reveal work on cross-chain proof-of-concept
The proof-of-concept involves Chainlink's Cross-Chain Interoperability Protocol, which allows for token transfers across blockchains as well as the development of cross-chain applications.
2. Circle expands USDC stablecoin to five new chains, unveils cross-chain transfer protocol
Circle is expanding USDC to Arbitrum, Near, Optimism, Polkadot, and Cosmos. It will use a tool called the Cross-Chain Transfer Protocol to enhance USDC transactions between different blockchains. Stablecoins are now a $150 billion asset class and they serve as an important bridge between traditional finance and the crypto space.
3. Developers can now issue assets like stablecoins on Bitcoin
Lightning Labs' Taro enables minting, sending, and receiving assets on the Bitcoin blockchain. It leverages Taproot, a major upgrade to Bitcoin that went live last year, to issue assets in a private and secure manner without bloating the Bitcoin blockchain. Taro does not require a separate blockchain nor does it add extra data directly on-chain. Its alpha release allows developers to issue tokens on testnet and test applications with testnet coins.
4. Crypto exchange FTX wins bid to buy out bankrupt Voyager for $1.4B
Beating out Binance and Wave Financial, FTX won the bid to buy out Voyager Digital who filed for Chapter 11 bankruptcy in July. Multiple bids were submitted as part of companies restructuring process.
5. 95% drop in ETH token issuance following Merge
ETH supply dropped from 3.81% to 0.22% following Merge according to ultrasound.money. The network issuance has dropped to 772 tokens per day compared to 12500 before the upgrade. No doubt the energy consumption has dropped dramatically but still, the token remains slightly inflationary.
6. Crypto lender Nexo hit with enforcement actions from eight states
Several states took action against Nexo Group’s earn interest products. According to regulators, these securities must be registered under investor protection law. DFPI mentions that 36 % of the interest rate offered by these crypto assets was significantly higher than short-term rates.
7. Compute North files for bankruptcy as crypto-mining data center owes up to $500M
The company owes $500M to at least 200 creditors. CEO Dave Perrill stepped down earlier this month and its COO will serve as president. Previously, Computer North raised $85 million in a Series C equity round and $300 million in debt financing.
8. ETH coin mixer Tornado Cash is back on Github
Despite the house of the treasury’s ban of Tornado cash mixer, Ethereum Developers figured out the code is still available on GitHub. Almost $7.6B of the token was transferred through Tornado cash in 2019 in which $1.5B was illegal. This month, Coinbase funded a lawsuit against US department of treasury for the ban.
9. CFTC pursues the first case against a DAO
bZeroX’s protocol facilitated unlawful margined and leveraged retail commodity transactions on its platform as per CFTC. A charge against bZeroX DAO was filed and founders Tom Bean and Kyle Kistner. The DAO allowed users to take leveraged positions without registration as future commodity merchants.
10. Cardano’s Vasil upgrade triggers after a 3-month delay
Vasil upgrade brings increased network capacity, higher throughput, and lower transaction costs. It also introduces enhancements to Plutus — Cardano’s smart contract language enabling developers to create more powerful dApps
11. Microsoft leads $20M investment in first decentralized data warehouse
Microsoft’s interest in Web3 underscores how eager big tech is to get involved with a push to decentralize the internet. Earlier this year, Google announced the formation of a team focused on Web3 and other blockchain-based applications
12. CryptoCompare, Blockdaemon release staking yield indexes
CryptoCompare, a data provider, unveiled a new group of staking yield indexes with blockchain infrastructure platform Blockdaemon. The goal is to help investors develop more informed investment strategies. This allows institutional investors to create return and yield swap products.
13. Google Web3 lead says Google Cloud is a 'Layer Zero' for crypto
Google has set its sights on becoming the backbone of Web3, working to “build a giant bridge” between Web3 companies and blockchain by offering node services via Google Cloud. Nodes, which run code for crypto networks, can be imagined as foundational building blocks for Web3.
14. Proof of Stake risks concentrating power to crypto exchanges
IMF as part of a recent paper, making suggestions for a regulatory framework that could limit global digital asset risks touched on how PoS “could create an excessive concentration of decision-making powers on crypto exchanges and wallet services providers, which may increase market integrity risks” despite the potential energy savings.
💸 PE/VC funding
1. Web3 VC Ranking Database curated by @codygarrison_
Although this is not really a funding story, we thought you might be interested in a new tool for founders which maps out competitive dynamics, deal activity, post investment support, and much more across the expanding Web3 VC ecosystem
2. Anchor creator Coral raises $20M led by FTX Ventures and Jump Crypto
Coral, known for creating Solana developer framework Anchor, has raised a $20 million strategic funding round co-led by FTX Ventures and Jump Crypto. Other participating investors in the round, which closed in May, include Multicoin Capital, Anagram and K5 Global.
3. Crypto exchange FTX eyes $1B round
FTX is planning to raise up to $1 billion in new funding that would maintain the company's roughly $32 billion valuation. The crypto exchange operator raised a $400 million Series C in January. Existing investors include Singapore’s Temasek, SoftBank’s Vision Fund 2 and Tiger Global.
4. Theta Capital raises $500M to invest in crypto-native VC funds
Amsterdam-based Theta Capital has raised $500 million to invest in crypto-native venture capital funds. The investment is structured as a fund-of-funds and will seek exposure to the Web3 projects around the world.
5. MPCH Labs raises $40M Series A, emerges from stealth
Tech venture studio MPCH Labs raised a total of $50M and over 80 employees to develop the next generation MPC9 engine, available in its first product Fraction. Multi-Party computation (MPC) helps to secure the privacy of the data in multi-party computation.
6. Fortnite creator Epic Games backs tech startup Hadean’s $30M Series A
European investment firm Molten Ventures led the round, with 2050 Capital, Alumni Ventures, Aster Capital, Entrepreneur First, and InQTel also providing support Hadean will build the infrastructure to help give metaverse capabilities to Epic’s Unreal Engine, undergirding the hit game Fortnite.
7. Decentralized machine learning protocol ChainML raises $4M led by IOSG Ventures
The Startup is building a tamper-proof, scalable protocol for decentralized machine learning and related complex data-driven computation in Web3,
8. Pantera Capital reportedly eyeing New $1.25B Blockchain Fund
Pantera Blockchain fund currently offers five products - early-stage tokens, venture, bitcoin, liquid token and blockchain fund. It is for qualified members with minimum investment value of $1M.The planned $1.25B is expected to close in May, would invest in equity and digital tokens
⚖️ Policies and laws
1. Europe AML rules could implicate DeFi, DAOs and NFTs
A series of amendments drafted for the EU Parliament’s opinion on anti-money laundering regulation seems to eliminate rules on transferring funds to unhosted wallets. The amendments push for including decentralized finance, decentralized autonomous organizations and NFTs into anti-money laundering provisions.
2. Regulators must extend existing processes to crypto, BoE's Jon Cunliffe says
Jon Cunliffe said regulators should extend existing regulatory standards to cryptocurrency. The deputy governor also spoke about the benefits of crypto technology in trade settlement.
3. Crypto.com wins approval to operate as a digital asset service provider in France
The company is ready to operate in France. This year company got a permit to operate in Italy and UK as well. Crypto.com is a cryptocurrency exchange based in Singapore. This year it partnered with Shopify to give the business across eCommerce platforms the ability to accept cryptocurrency as payments.
4. Peer-to-Peer validation for Digital Euro might not be feasible, ECB Says
The digital euro might only work online using third parties such as banks to validate transactions. ECB retains controls over digital euro issuance and settlement but considers a rulebook under which private sector intermediaries can distribute the central bank’s digital currency
5. Central Banks of Israel, Norway and Sweden team up to explore retail CBDC
BIS in association with multiple central banks have set up multiple innovation hubs. This new collaboration named Project “Icebreakers” will test key functions and technical aspects of interlinking different domestic CBDCs. The final report is expected in Q12022.
6. Australia to compete its CBDC pilot initiative by mid-2023
The project aims to analyze the maximum number of use cases to precisely outline the major public benefits that can be generated and to determine the major benefits, risks, and operational models associated with the implementation of CBDC in Australia.
7. US lawmakers propose amending cybersecurity bill to include crypto firms reporting potential threats
Under the proposed amendment, the 2015 legislation would be renamed the Cryptocurrency Cybersecurity Information Sharing Act. Bill allows “voluntary information sharing of cyber threat indicators among cryptocurrency companies” to protect cryptocurrency from dangerous practices.
📚 Reports, here is the TLDR
This McKinsey article is a primer on the fundamentals of Web3: what it is, the pillars on which it is built, what it can and cannot yet do, the significant risks and challenges it needs to overcome, and the implications for stakeholders as it continues to evolve.
Understanding the disruptive potential of Web3. Web3 could mark a paradigm shift in the business model for digital applications by making disintermediation a core element with respect to data, functionality, and value. Users and creators could gain the upper hand and, through open-source rather than proprietary applications, would have incentives to innovate, test, build, and scale.
Risks and challenges of Web3 that still need to be addressed. The chief challenge is regulatory scrutiny and outlooks. Furthermore, the user experience and the security in this new ecosystem is not yet ready for mainstream adoption. Indeed, a prominently featured concern is that users engaged in Web3 may not fully understand the risks of decentralized technology, thus expecting the same type of protections they are used to from centralized (and often regulated) entities. The technology itself may not be ready for mainstream adoption. Data privacy in the current system is arguably lacking. Last, proof-of-work and transaction cost are also specific adoption challenges.
Imagining the Web3 endgame. VC investments in Web3 exceeded $18 billion in the first half of 2022, remaining on track to top the full-year total VC investments of $32.4 billion in 2021. Executives across a range of sectors could develop a deliberate strategy by asking how Web3 native companies could disrupt their industry and what challenges and opportunities this might present. If the disruption does take place, it and other associated opportunities for incumbents are likely to happen across three levels: assets, infrastructure, and services.
Incumbents that are not thinking about responsible ways to interact with Web3 may suddenly find themselves overtaken by a fast-moving set of new technologies, new assets, and new ways of doing business.
📈 Charts of the week
Top 50 Universities for Blockchain 2022 according to CoinDesk
This metric tracks the percentage of blocks built by OFAC-compliant mev-boost relays since the Merge (as a percentage of mev-boost proposed blocks or all blocks).
The Ethereum Merge that occurred on September 15, 2022, has enabled the rise of mev-boost due to the wider distribution of block proposers compared to a small set of miners in charge of block production under PoW. Mev-boost is a service that Ethereum POS Validators have the option to run to outsource their block production duties to the highest bidder, effectively increasing their APR. When setting up mev-boost, Validators add to their config which relays they would like to accept blocks from.
There are currently seven major mev-boost relays including Flashbots, BloXroute Max Profit, BloXroute Ethical, BloXroute Regulated, BlockNative, Manifold and Eden. Of the 7 available major relays only 3 do not censor according to OFAC compliance requirements. OFAC compliant relays will not include any transactions that interact with the Tornado Cash smart contract or other sanctioned wallet addresses as designated by OFAC. Not all blocks built by OFAC compliant relays are censoring, however, all blocks built by OFAC compliant relays will censor when non-compliant transactions are broadcast to the network.
According to Token Terminal, of all major lending protocols, only MakerDAO's revenue exceeds token incentives
Meta's $70 billion spend on the metaverse was the biggest investment ever made by a tech company on a new technology
💡Metaverse and NFT news, trends and insights
1. Art Blocks Fidenza creator sells $17M of Ethereum NFTs amid market slump
QQL, a new generative art project from Tyler Hobbs and Dandelion Wist, has sold nearly $17 million worth of NFTs. Hobbs is the creator of the Art Blocks project, Fidenza, which has yielded several individual NFT sales over the $1 million mark since launching last year.
2. The Punk 2924 was bought for 3,300 ETH
The Punk 2924 was recently purchased for 3,300 ETH, around $4.5 million USD. The purchase was the ninth-highest CryptoPunk sale of all time in terms of USD value. The Punk is one of twenty-four Ape CryptoPunks and the only Ape CryptoPunk with the 'Hoodie' trait. The artwork for Punk 2924 is available in the thread.
3. Metaverse unicorn Mythical Games hopes to lure mainstream gamers to its ‘Party’
Mythical Games’ Blankos Block Party is the first metaverse game to be launched on the Epic Games Store. Blankos offers players a 3D playing experience unlike other existing web3 games like Axie Infinity. All-star cast of Mythical Games backers include Andreessen Horowitz, NFL and Michael Jordan.
4. Christie’s goes fully on-chain with new Ethereum NFT Marketplace
The 256-year-old institution has launched Christie’s 3.0, a new platform anchored by an exclusive collection from Diana Sinclair. The platform was created in collaboration with Manifold, a startup focused on smart contracts and other decentralized apps.
5. Disney hiring transaction lawyer for 'aggressive' NFT and Defi plans
A job was posted on Linkedin and got viral. The company is developing and exploring plans for the metaverse by hiring a transaction lawyer and working aggressively to analyze the introduction of NFTs and Defi.
6. Royalty-free NFT platform SudoAMM surpasses $50 million in volume months after launch
Two months after launch, SudoAMM trading volume surpassed $50M. Automated market maker hit other milestones, surpassing over 90,000 total transactions, seeing 29,000 users, and amassing $251,000 in total platform fees.
🔦Company spotlight
The company: 🌊 LIQUIFIED 🌊 is a DeFi startup offering lending to large-cap NFT holders on simple, non-discriminatory terms. It will allow owners of stable NFT assets to withdraw Ethereum in a few minutes, and retain airdrop and other benefits of owning the underlying collateral. Website: liquified.io Twitter: @Liquified_NFT.
The Story: LIQUIFIED recently raised pre-seed capita and was founded by a team of 1. the Global VP of a billion-dollar app in LA and poker professional; 2. a successful social-tech entrepreneur (with an exit) and a recent Cambridge MBA; 3. an ex-science consultant, crypto investor and recent Cambridge MBA.
Why should I care: LIQUIFIED envisions a not-so-distant future where most value will be captured in the form of liquid tokenised digital assets empowered by blockchain. LIQUIFIED believes that product ownership will also move to tokenised format (including the ERC-721 NFT protocol). LIQUIFIED is on-boarding highly influential players in the NFT space to provide initial funding for the lending liquidity pool in exchange for such tokens. Following the completion of early liquidity-raising rounds, Liquified will look at expanding its unique lending model to other NFTs and tokenised assets. Expect explosive growth following a #BUIDL product optimisation phase.
📅 Blockchain, Crypto and Web3 events calendar
….for the next couple of months
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 👉 Get £250 off your tickets with code NEWSLETTER
🆕 I.D.E.A.S. 2022 | October 18–19 | NYC, US
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
Pacific Bitcoin | Nov 10-11, 2022 | Los Angeles, CA, USA
Istanbul Blockchain Week | Nov 14-17, 2022 | Istanbul, Turkey
Adopting Bitcoin | Nov 15-17, 2022 | San Salvador, El Salvador
ETH Gathering Barcelona 2022 | Nov 17-21, 2022 | Barcelona, Spain
🆕 Cardano Summit 2022 | Nov 19-21, 2022 | Lausanne, Switzerland & Online
Next Block Expo | Nov 23-24, 2022 | Berlin, Germany
NFT Fest Aus 2022 | Nov 23-24, 2022 | Melbourne, Australia
🆕 DCentral Miami 2022 | Nov 28-29, 2022 | Miami, FL, USA
🆕 Decipher 2022 | Nov 28-30, 2022 | Dubai, UAE
🆕 MiamiWeb3 | Nov 28-30, 2022 | Miami, FL, USA
👩💻The job fair
Decommas - Rust Blockchain Developer - Remote
DeCommas - Blockchain Engineer Solidity - Remote
Optimism - Marketing Designer, Remote - NewYork
📚The term of the week
Tokenization is the process of converting something of value, an asset or utility, into a digital token that can be used on a blockchain application. Tokenization can be done to both tangible (gold, real estate, art) and intangible assets (voting rights, ownership rights, content licensing).
Key benefits of tokenization: 1. Liquidity. Tokenized assets can be made available to a much larger audience with less barriers. 2. Faster, Cheaper Transactions. 3. Provability and Transparency
📎 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.