Google vs. Etherscan; BNB Chain, Temple DAO & Mango Markets exploits; JPMorgan, Visa, DB payments; FTX & Visa; BNY digital asset custody; Tiger $6B fundraising; Mainnet '22 TLDR, Meta new VR device.
12 October 2022
Hello there and welcome to the Blockchain From First Principle newsletter where we curate some of the week's news, summarise reports, 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 16 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 16 news you should be aware of
1. You can now google the balances of Ethereum addresses
The world’s biggest website now tells you how much ETH some wallets hold when you punch an Ethereum address into the search bar. The new feature saves searchers a visit to Etherscan, returning balances directly in your search results.
2. Google selects Coinbase to take cloud payments with cryptocurrencies and will use its custody tool
Google will use Coinbase to let some customers pay for cloud services with cryptocurrencies in 2023. Coinbase will move its data-related applications to Google from Amazon Web Services. Google is considering adding digital currencies to its balance sheets through Coinbase Prime.
3. Crypto investment product firm 21Shares launches Bitcoin ETP in the Middle East
21Shares has continued to expand globally, and its newly formed parent company recently raised $25 million at a $2 billion valuation. The new physical bitcoin exchange-traded-product (ETP) is set to be listed on the Nasdaq Dubai.
4. Tata Consultancy launches CBDC solution.
Tata Consultancy Services announced it has updated its Quartz solution to support central bank digital currencies issuance, executing and recording transactions. It is also designed to enable commercial banks to work with central banks for digital currency distribution. The announcement came just after Reserve bank of India shared its digital rupee pathway.
5. BNB Smart Chain performs hard fork as a fix for $100M exploit
This occurs at 8.00 UTC on Oct 12 Wednesday. The deposits and withdrawals for the BSC network were suspended for an hour before the hard fork.
6. Onyx by J.P. Morgan and Visa bridge their private Blockchain networks to streamline global payments
Visa’s cross-border payments product for financial institutions and corporate clients, B2B Connect, has adopted Confirm to validate account information. Also, Deutsche Bank is joining as the EMEA founding member of the Confirm product.
7. Valkyrie to liquidate Bitcoin balance sheet ETF after limited uptake
Crypto asset manager Valkyrie Funds said it will liquidate its Balance sheet opportunities ETF (VBB) at the end of October and delist in Nasdaq. Net asset under Management is only $570K, which is a minuscule number for ETFs.
8. Hacker steals $2.3M from Temple DAO
Temple DAO, a protocol that provides sustainable income via staking, suffered a malicious exploit on one of its staking vaults. Its CORE vaults, which hold over $100 million in stable coins, are unaffected, and “the exploiter can do no further harm."
9. Hacker steals over $100M from Mango Market
The hacker manipulated the price of the MANGO token which allowed the attacker to steal the funds via a bad debt position. Hackers deposited $5M USDC creating the abnormal long position and then manipulated collateral value to borrow funds from the Mango borrowing and lending platform. The token price jumped nearly 1000% in less than an hour.
10. FTX seeks to roll out crypto-linked Visa cards globally
Currently available to US users, the exchange looks to launch debit cards in 40 additional countries. The card allows users to make purchases using crypto at the 80 million merchant locations that accept Visa. Product rollout in Latin America and Europe is planned for the end of 2022.
11. Top UK asset manager joins Headera DLT governing council
With $577B of AUM, abrdn is exploring using Hedera for tokenizing funds and joined the governing council of 27 large corporates including IBM, Google, Boeing, Nomura, Standard Bank, DBS Bank, and FIS.
12. Hamilton Lane to tokenize funds with Securitize
Hamilton Lane has $835B in Assets Under Management. It entered an agreement with Secuterize to tokenize three of its funds including unlisted equities, private credit, and secondary transactions. Converting funds into tokens enables these private investors to place money in assets previously only accessible to institutions.
13. Binance partially delists Helium, a project backed by Andreessen Horowitz
Binance partially delists HNT trading as a result of its threatened liquidity. In response, Scott Sigel, COO told “There are dozens of other exchanges that continue to support HNT. We hope Binance reverses course and re-lists the other HNT trading pairs soon.”
14. Coinbase stock pops on Google deal to accept crypto for cloud
The deal will see Coinbase shift its data-related applications from its usual AWS’ cloud to Google. Google will accept payment for cloud services from a small group of customers across the Web3 space via a Coinbase Commerce integration. Markets seem responsive to how this could benefit Coinbase — more than Google. Coinbase stock jumped 5% after the news.
15. BNY Mellon launches new digital asset custody platform
The platform is live in the US. America's oldest bank, Bank of New York Mellon (BNY Mellon), said Tuesday that select clients can now hold and transfer bitcoin and ether. “With more than 20% of the world’s investible asset, banks can do a lot in blockchain as well” President & CEO Robin Vince.
16. Huobi founder sells 100% stake to Justin Sun Fund
Major shareholder Leon Li agreed to sell his stake in the crypto exchange Huobi Global to Hong Kong-based investment firm About Capital. The deal has no impact on the core business and management but will appoint a Global Advisory board for international brand promotion.
💸 PE/VC funding
1. Wintermute Ventures leads Zerion's $12M raise to shake up crypto wallets
The round is led by Wintermute Ventures and other backers — including Mosaic, Coinbase Ventures, Alchemy, and Placeholder. The new funds from the Series B raise will be used to further develop the wallet — leveraging advanced data and intuitive design.
2. Web3 developer platform SettleMint raises €16M as it expands to Japan
The round was co-led by venture firms Molten Ventures and OTB Ventures. It seeks to use the funding to solidify its India, Singapore and EMEA operations and establish a base in Japan.
3. Paradigm leads blockchain indexer Nxyz's $40M raise
Blockchain indexer Nxyz has been spun out from private search engine Neeva. Its CEO and co-founder Sridhar Ramaswamy will also become the CEO of Nxyz. The Series A round was led by Paradigm. The funds will be used to expand the Nxyz’s team and expand into different chains.
4. Crypto.com backs discovery platform Magic Square amid fundraising flurry
Crypto app store Magic Square keeps raising funds from strategic investors following its $3 million seed round in July. The latest investor to get involved is Crypto.com. To date, the startup has raised $4 million at a valuation of $75 million.
5. DeFi startup Arch raises $5M to become the 'BlackRock of web3'
The oversubscribed seed round was co-led by Digital Currency Group and SoftBank spinoff Upload Ventures. Other investors included the venture arm of Latin America blockchain firm Ripio, TechStars and GBV, Arch said in a company release.
6. Tiger Global seeks $6B raise to invest in tech companies: Axios
Tiger Global has invested in more than 35 crypto and Blockchain startups so far. Recently the firm has acquired stakes in gaming infrastructure startup Lysto and the NEAR protocol. The process of fundraising will undergo its first closing in January.
7. Ex-Coinbase employees raise $5.3M for web3 infrastructure Scale3 Labs
Scale3 Labs founded by a former Coinbase Engineer who raised $5.6M is an infrastructure startup especially focused on serving blockchain node operators. It takes around 8 hours to update a node which Scale3 reduces to less than 20 minutes.
8. Citi Ventures co-leads $6M round in crypto investment startup Xalts
Xalts is an investment-focused crypto startup. The company began with the idea of wrapping digital assets into investment products fit for institutional investors. COO Kaur said, “We are creating a platform to allow institutions to issue structured notes with embedded crypto options.”
9. NFL superstars back Coolkicks founder’s $6M raise for collectible trading platform
MynaSwap is a platform that enables individuals to discover, buy, sell and trade collectibles around the world. The startup raised $6M at a valuation of $50M. Users can send physical items to MynaSwap for authentication and users in exchange will get digital assets that they can trade on the platform.
⚖️ Policies and laws
1. Bored Ape Yacht Club creator Yuga Labs part of SEC probe into NFT market
The SEC began investigating NFTs in March to determine whether any projects go against federal securities laws. While Yuga Labs is included in the investigation, the agency has not accused the company of any wrongdoing. Yuga Labs says it is committed to fully cooperating with any inquiries. The SEC has chosen to regulate by enforcement rather than clarify its position on which cryptocurrencies are securities.
2. G20 central bankers warn stablecoins aren't 'stable', recommend action around crypto assets
FSB in its report Concluded” No stablecoins currently meet the standards set for the digital asset category by central bankers of the world’s largest economies, and many stable coins “do not have credible mechanisms to support their promise of price stability. The board also cast doubt as to how “stable” stablecoins actually are.
3. EU Commission launches proposal for a study of automated Defi supervision
EU Commission calls for the study of Defi protocols on Ethereum, The pilot project aims at developing, deploying, and testing a built-in technology to supervise activities within Defi. Researchers will gather automated supervisory data directly from the Ethereum blockchain to monitor Defi activity in real-time.
4. OECD Releases New Global Tax Reporting Framework for Crypto Assets
The framework approved in August ensures the collection and automatic exchange of information related to relevant crypto transactions. The scope of crypto includes stablecoins, NFT, and any other coins held and transferred in a decentralized manner.
5. SEC rejects WisdomTree’s latest spot bitcoin ETF proposal
The SEC is yet to approve a spot-based Bitcoin ETF, Issuing wave after wave of rejections. Most orders cite these concerns of insufficient practices to prevent market manipulation.
6. Crypto Mixers haven't 'slowed' DOJ investigations
Eun Young Choi, the director of the DOJ's national crypto enforcement team told crypto enforcing laws are no different from a lot of other activities. Choi also said the U.S. DOJ is working with foreign law enforcement entities to support their efforts as well.
7. Slicing the elephant: inside the design of a Digital Euro
Evelien Witlox told CoinDesk that the design development of the digital Euro is sliced into multiple decision-making. She also added, it is possible that ECB can still abandon the project after making so much, and the final decision rest on cool-headed weighing the pros and cons.
📚 Reports, here is the TLDR
Progress continues as the "crypto winter" approaches one year. With capital tightening, particularly from VCs, many cryptocurrency projects are focusing on building real use cases, attracting long-term users, and following prudent business practices—aspects that were largely absent during the last bull market.
VC funding for cryptocurrency startups has tracked cryptocurrency asset price movements and continues to trend downward. However, over $20 billion of capital has been committed to cryptocurrency venture funds in 2022, which is already far greater than the record amount of $13.9 billion raised in 2021.
The primary Layer 1 challenger to Ethereum remains unclear. Solana, Cardano, Avalanche, Near, and Algorand, to name a few, are all highly secure, scalable, low cost, and environmentally friendly but investors remain excited about L1s, which have seen ten mega-deals of $100 million or more in 2022.
Notable fundraising announcements. (a) Messari announced that it had raised a $35.0 million Series B from BH Digital, Coinbase Ventures, Point72 Ventures, Underscore VC, and FTX Ventures, among others. (b) Companies working to secure cross-chain bridges—one of the most vulnerable aspects of cryptocurrency infrastructure—are attracting VC dollars.
📈 Charts of the week
Stablecoin Market Share
An analysis of stablecoin supply composition. Stability is, of course, a core tenant of a stablecoin, and investors tend to own the stablecoins they are most confident will maintain its $1 peg. If a given stablecoin’s dominance begins to drop, it could signal a loss of confidence in the peg or backing of the stablecoin.
The below Image shows that 44 out of the top 100 public companies have been actively using blockchain since August 2021
CBDC vs Stablecoins - is there really a difference?
💡Metaverse and NFT news, trends, and insights
1. Meta prioritizes work over play as it unveils costly new VR headset
Meta, the parent company of Facebook, debuted its new virtual-reality headset today. Available for pre-order as of Tuesday, the Meta Quest Pro VR device will cost $1,499. The company appears to be targeting businesses as a significant portion of the presentation was spent on Meta’s growing body of corporate partnerships, including one with Microsoft.
2. Dapp Radar says it’s recalculating Decentraland user data
Since Decentraland shared its reports seeing 8000 average daily transactions in response to Dapp Radar report showing only 38 active users. The data tool is working together with the metaverse platform to more accurately track its number of daily “active" users following a Coin Desk report
3. CNN shutters vault NFT marketplace, prompting rug pull accusations
The cable news network shared a statement that it’s shutting down Vault, a non-fungible token (NFT) marketplace, as well as information on the collection’s legacy. However, vaults NFT collections will live on.
4. Hugo to launch NFT collection
Hugo fashion brand in collaboration with the web3 company Imaginary Ones plans to launch 1001 NFTs by November. The company plans to engage with the metaverse to promote its brand and jump into web3.
5. Multiverse Labs, launches Metaverse City in UAE in collaboration with the government of Sharjah
The Securities and Commodities Authority of the United Arab Emirates is creating regulations for crypto licensing that will allow businesses dealing in digital assets to set up shop there. Several other nations from Japan and South Korea identified it as a component of their nations’ digital transformation.
6. OpenSea adds avalanche marketplace
OpenSea now supports seven blockchains with NFT trading. Avalanche joins six other supported chains including Ethereum, Solana, Arbitrum, Klaytn, Polygon, and Optimism. Gemini announced support for the trading of native AVAX on Tuesday.
🔦Company spotlight
The company: 👉 Fluree 👈 is an open-source graph database that guarantees data integrity, provides traceability into data provenance, facilitates secure data collaboration and powers connected data insights, ultimately bringing data into the blockchain space. Fluree fills the need for operational data management for Web3 applications by bringing a practical and familiar platform to enterprises looking to build blockchain applications.
The story: Founded by Brian Platz, this California-based Startup has raised $6.5 M in Series A funding.
Why should I care: Fluree’s solutions bridges an important market gap: Enterprise applications require intensive data storage and retrieval — functionalities that traditional L1 or L2 blockchains are not optimized for. This includes for storing metadata around supply chain updates or user information for a customer web application. However, sticking the entire database functionality on Ethereum or Polkadot for blockchain applications is cost-prohibitive or downright impossible. This is where Fluree’s evolved solution comes in bringing Data Integrity, security and traceability.
📅 Blockchain, Crypto, and Web3 events calendar
….for the next couple of months
Future Blockchain Summit | Oct 10-13, 2022 | Dubai, UAE
Stellar Meridian 2022 | Oct 11-13, 2022 | Rome, Italy
Devcon Bogotá | Oct 11-14, 2022 | Bogotá, Colombia
🆕 Sustainable Blockchain Summit | Oct 12, 2022 | Bogotá, Colombia
CBDC Summit 2022 | Oct 12-13, 2022 | Washington, US
Bitcoin Amsterdam 2022 | Oct 12-14, 2022 | Amsterdam, Netherlands
🆕 CCA TOKEN SUMMIT | Oct 13, 2022 | Vaduz, Liechtenstein
🆕 Ibiza NXT | Oct 13-15, 2022 | Ibiza, Spain
World Blockchain Summit Dubai 2022 | Oct 17-18, 2022 | Dubai, UAE
🆕 Merge by Fintech Nexus | Oct 17-18, 2022 | London, UK
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
🆕 Crypto Asset Conference 2022 | October 18–19 | Frankfurt, Germany
Vietnam Blockchain Summit | Oct 19-20, 2022 | Hanoi, Vietnam
🆕 Canadian Blockchain Summit | Oct 19-20, 2022 | Calgary, AB, Canada
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
🆕 Nordic Blockchain Conference | Dec 1, 2022 | Copenhagen, Denmark
Blockchain Expo Global | Dec 1-2, 2022 | London, UK
Africa Bitcoin Conference | Dec 5-7, 2022 | Accra, Ghana
🆕 Israel Crypto Conference | Dec 7-8, 2022 | Tel Aviv-Yafo, Israel
🆕 CoinAgenda Caribbean 2021 | Dec 7-9, 2022 | San Juan, Puerto Rico
🆕 World Blockchain Summit Bangkok | Dec 8-9, 2022 | Bangkok, Thailand
👩💻The job fair
Story Protocol - Senior Smart Contract Developer - Remote
Story protocol - Marketing and Community Lead - SF Bay Area
Binance - Marketing & Community Associate - Switzerland / Remote
CoinBase - Senior Blockchain Security Engineer, Cryptography Research - San Francisco
📚The term of the week
The current limitations of crypto transacting (bearer assets)
When a cryptocurrency (such as Bitcoin or Ether) changes hands, it’s recorded on a public blockchain but the parties involved remain anonymous. The anonymous nature of crypto can be beneficial in some circumstances but effectively renders crypto a bearer asset, posing limitations to businesses and individuals seeking to use it. Bearer assets are prone to loss or theft, are difficult to insure, pose accounting challenges, and typically aren’t useful as collateral or proof of reserve. This is one of the factors limiting crypto’s wide-scale adoption. In spite of the fact that over 300,000,000 people worldwide invest in crypto, its utilization in other use cases remains limited.
📎 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.