J.P. Morgan DeFi & public blockchain, VISA wallet, Revolt crypto cards, Apollo Global & Anchorage, Centrifuge $4M, India & Singapore CBDC trials, NFL NFTs, plus PE hiring, SWIFT and DID reports TLDRs.
2 November 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.
If you're reading this and haven't signed up, subscribe by clicking below and join a community of 5,000+ people who share your interests. If you are already an aficionado, thank you!
Table of Content
🗞️The 15 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 15 news you should be aware of
The Monetary Authority of Singapore (MAS) announced today that the first industry pilot under MAS’ Project Guardian - that explores potential decentralized finance (DeFi) applications in wholesale funding markets - has completed its first live trades. DBS Bank, J.P. Morgan and SBI Digital Asset Holdings conducted foreign exchange and government bond transactions against liquidity pools comprising tokenized Singapore Government Securities Bonds, Japanese Government Bonds, Japanese Yen (JPY) and Singapore Dollar (SGD).
2. Visa files trademark applications for Crypto Wallets, NFTs, and the Metaverse
Payments giant Visa (V) filed two trademark applications to the United States Patent and Trademark Office (USPTO) related to digital wallets, non-fungible tokens, and the metaverse. The move follows that of other large corporations and payment companies including American Express.
3. Surging Popularity of Ethereum Staking Keeps Lid on Yields
Ethereum staking has become so popular that yields are starting to drop. More stakers results in a lower percentage of the share of staking rewards. The staking yield post-Merge is around 4% to 5%, well below what was predicted. Investors are unable to withdraw their ETH until after Ethereum's next significant upgrade. More than 14 million ETH worth over $2 billion is currently being staked.
4. Stasis integrates euro-backed stablecoin with XRP Ledger
Malta-based startup Stasis completed integration with XRP Ledger in an effort to expand the settlement layers it uses to facilitate cross-border payments with its euro-backed stablecoin, EURS. More than $5 billion in EURS has been settled on-chain to date according to a Stasis blog post, with about 66.7 million EURS in circulation, according to its website.
5. Crypto exchange Deribit loses $28 million in the hack, halts withdrawals
Deribit, the largest bitcoin options exchange by market share, lost $28 million in a hot wallet hack. The company said it is performing ongoing security checks and has halted withdrawals. It comes shortly after Deribit raised around $40 million from existing investors at a $400 million valuation in late September.
6. Revolt adds crypto spending feature to everyday debit cards
Revolut is adding a crypto spending mode to its debit cards in the UK and Switzerland, enabling customers to switch between crypto and fiat purchases whether online or offline. The new feature can be activated on any existing card within the Revolut retail app.
7. Crypto exchange Bitmex cuts part of its workforce following CEO departure
Crypto exchange Bitmex has reduced its headcount as part of a pivot away from the exchange's "beyond derivatives" strategy which included a push into spot trading, brokerage, and custody services. Bitmex was once considered a leader in cryptocurrency derivatives, claiming 35% of the open interest across bitcoin futures, according to data from The Block Research.
8. DBS goes live on SGX unit’s crypto platform; launches programmable money pilot
SGX-owned Maxx Trader provides foreign exchange pricing and risk services to over 100 global and regional banks, broker-dealers, and hedge funds. DBS has become the first bank to go live on a new digital asset trading platform from the Singapore Exchange unit MaxxTrader.
9. Visa brings NFT art to FIFA World Cup 2022 in partnership with Crypto.com
Visa announced the launch of the Visa Masters of Movement campaign, a fan experience bringing together football and art in the celebration of the FIFA World Cup 2022. the campaign will kick off with an NFT (non-fungible token) auction ahead of the World Cup. During the World Cup, fans attending the tournament will be given an opportunity to create their own digital art.
10. Digital Currency Group (DCG) promotes Mark Murphy to President, cuts nearly 13% staff: report
DCG is the parent company of Coin Desk, as well as digital asset manager Grayscale Investments and crypto brokerage Genesis Trading. Around 10 employees left the Connecticut-based firm, bringing its headcount to 66, the report said, promoting Murphy to become the firm's first president.
11. Apollo Global to hold crypto for institutional clients through Anchorage partnership
Anchorage, which is the first federally chartered digital asset bank in the U.S., will custody a “significant portion” of Apollo’s crypto portfolio. In total, Apollo holds over $500 billion in assets under management. The move marks another major entrance into crypto following BlackRock’s partnership with Coinbase for Bitcoin trading and custody in August.
12. Coinbase files to support Ripple against SEC case
Coinbase has petitioned a federal court for permission to file a friend of the court brief in the ongoing lawsuit between the US SEC and Ripple Labs. The SEC is suing Ripple on allegations that it sold XRP as an unregistered security. Coinbase's petition highlights the fact that the regulator has not provided clear guidance to businesses. It also argues that the SEC has been inconsistent with its enforcement, creating uncertainty for companies in the sector.
13. J.P. Morgan exploring applications of Digital Identity
JPMorgan is exploring the idea of a digital wallet that would allow users to control their digital identity and assets across platforms, though the potential offering’s level of decentralization remains to be seen. The bank’s potential digital wallet would enable people to choose digital identity credentials they want to share across Web3, Defi, and the metaverse.
14. Google introduces cloud-based blockchain node service for Ethereum
The company said its Google Cloud Blockchain Node Engine will be a “fully managed node-hosting service that can minimize the need for node operations. Google’s announcement signifies the growing attention that technology giants are giving to the blockchain, crypto, and Web3 projects.
15. 74% of institutions plan to buy crypto: Fidelity Survey
Fidelity survey cited Investors cited decentralization, uncorrelation to other assets, and the macro environment as reasons to get involved in digital assets. About 35% of respondents believe digital assets should be viewed as an independent investment class, up from 23% in 2021.
💸 PE/VC funding
1. DeFi protocol Centrifuge raises $4M in strategic round
Participating investors include Coinbase Ventures and BlockTower. BlockTower and MakerDAO are set to create a $220 million pool on Centrifuge.
2. Nomura unit invests in Orderly Network's token round at a $200M valuation
Nomura’s Laser Digital has invested in the Near-based Defi infrastructure protocol Orderly Network. Orderly Network raised the funds via a simple agreement for future tokens, its co-founder Ran Yi told The Block.
3. Web3 fund led by ex-Binance Labs executive Nicole Zhang lands $20M
The fund is a sister fund to Beijing-based Lingfeng Capital, with an AUM of $400M. LIF is focused on early-stage projects and had already invested in more than 10 companies some of which include ApolloX, ZetaChain, and Ultiverse.
4. Andreessen Horowitz (A16z) crypto fund lost 40% in the first half of 2022
The VC fund launched $350M Crypto Fund I in 2018 and lost 40% in the first six months but is still bullish on the crypto space. Andreessen Horowitz holding includes companies like Dapper Labs, OpenSea, Solana, and Uniswap.
5. Venture funds in the crypto space have the money, but they are slow to deploy it
2022 has already been a record year for venture capital funding in the crypto space, There have been 415 crypto-focused venture funds launched so far this year, with a collective $121 billion raised, but only $32 billion in venture capital has been deployed since the start of the year.
6. Bain Capital Crypto has led a $3.3M round for notebook Labs
Notebook Labs, a startup that aims to verify the identities of crypto users without compromising privacy, has raised $3.3 million in a seed funding round led by Bain Capital Crypto. The funds will go toward building out the development team, scaling the technology infrastructure and funding security audits for the platform.
7. Caitlin Long's digital asset bank Custodia raises $7M
State-chartered bank Custodia, formerly known as Avanti, has raised $7 million, according to a filing submitted to the SEC. The startup raised a $37 million Series A round in March of last year from backers including Binance.US, Coinbase Ventures, and Lemniscap.
⚖️ Policies and laws
1. Singapore to trial purpose-bound money CBDC, digital currency, with DBS, OCBC, and UOB pilots
The Monetary Authority of Singapore (MAS) issued a whitepaper on purpose-bound money, a tokenized form of digital currency which restricts how money can be used. It is part of the Project Orchid retail central bank digital currency research (CBDC) initiative. It is also conducting cross-border multi-CBDC experiments as part of Project Dunbar.
2. Hong Kong’s new crypto policy is a cautious one
At the start of Hong Kong Fintech Week, Hong Kong’s government made a policy statement about crypto-assets, showing a cautious but slightly more open approach to what it refers to as virtual assets (VA). The government’s caution is highlighted by its own description of the opportunities that crypto offers which emphasize the metaverse, tokenized real-world assets, and CBDC.
3. Singapore starts two new token pilots with Standard Chartered, HSBC, and others
The first pilot is being led by Standard Chartered (STAN) to explore tokens for trade finance, and another pilot to look at the tokenization of wealth management products. The wealth management pilot involves HSBC (HSBC), UOB working with Market node, a digital asset platform built by the Singapore Exchange (SGX) and Temasek.
4. Indian Finance Minister says crypto regulation should be an international priority
Sitaraman said, “No one single country can succeed in individually, being in a silo, trying to regulate the crypto assets,". India hasn't set crypto-specific legislation yet because "we need to have all the members of the G-20 first of all to come on board to see how best it can be done.
5. India starting wholesale CBDC trials to settle government bonds
In India, the Clearing Corporation of India Limited (CCIL) is the central counterparty through which government securities are usually settled. The goal is to reduce transaction costs by removing the need for centralized intermediaries to guarantee settlement and reduce the need for collateral to address settlement risk.
6. World Bank backs blockchain project to harmonize carbon registry data
Climate Action Data Trust (CAD Trust), co-founded by the World bank is a new initiative that uses blockchain to create a decentralized log of carbon credits to store data from multiple major carbon registries. It plans to launch and share details in December.
7. EU’s DLT pilot will allow market operators to trade stablecoins before new crypto regulations
A European Union pilot program will allow market participants to use stable coins for trades and settlements before the legal framework for crypto is enforced in at least two years. The plan, known as the DLT Pilot Regime, allows players from both traditional and digital finance to experiment using tokenized securities within a regulated environment.
📚 Reports, here is the TLDR
In December 2021, together with Northern Trust, Clearstream, Citi and technology partner SETL, SWIFT initiated a new set of experiments to explore the feasibility and benefits of having its network as an interconnector and ‘single access point,’ linking up multiple tokenization platforms and various cash leg payment types – SWIFT global payments innovation (gpi), Real-time Gross Settlement (RTGS) system and CBDC – with the clients interacting with tokenized assets via SWIFT, similar to the way they do today with traditional securities assets.
Tokenisation is a relatively nascent market, but the World Economic Forum has estimated it could reach USD 24 trillion by 2027. The potential benefits include greater market liquidity and fractionalization, which could increase access to investment markets for retail investors and enable institutional investors to build stronger portfolios.
These experiments - simulating market issuance and secondary market transfers of tokenised bonds, equities and cash - have shown that SWIFT can be used as a single point of entry to various tokenized networks, and its infrastructure can be used for creating, transferring and redeeming tokens and updating balances between multiple client wallets.
Can PE firms focused on purpose-driven investing do the same for hiring? In this report, a collaboration between EY (Pete Witte) and Columbia Business School Private Equity Program (Donna M. Hitscherich and Greta E. Larson), data that can offer PE firms a wealth of insights into the mindset of a professional cohort that might be interested in a private equity career is analyzed.
Here are the key findings:
While monetary factors are important when choosing a career, for a majority of professionals non-monetary factors are equally or even more important, a finding that holds true across generations, genders, and ethnicities.
Firms are laser-focused on developing their ESG competencies. While limited partnership (LP) demands are once driving dynamic, another factor is the desire to attract millennial candidates. The survey supports this strategy but finds that it isn’t just millennials who are interested in purpose-driven careers.
Firms are responding to the changing landscape with a plethora of new measures to make themselves both more competitive and more attractive to talent. Their responses include:
Rethinking whom they hire, from where they hire and what tactics they use when making hiring decisions
Tying recruiting and retention more firmly to purpose.
Reworking their cultures to be more open and inclusive
Using NFTs for identity use cases comes with issues (privacy, compliance, costs, scalability), because ownership and identity are different things and require different solutions. NFTs are good for modeling what you own, but not for modeling who you are.
NFTs are perfectly suitable for ownership-based access management - the idea that ownership of an asset comes with access to services, products or other benefits. Here are some examples to illustrate the diversity of applications:
Content, like articles or podcasts, that can only be accessed by people who already hold NFTs from the respective creator.
Special discounts for or early access to new products that can only be claimed by holders of NFTs from a special series.
New maps or challenges in online games that can only be played by holders of NFTs that represent certain digital assets like skins or trophies.
This is exciting because access rights are becoming tradable and are no longer tied to a person or their identity.
📈 Charts of the week
The Figure shows all of the below activity happened over the past 2 months alone
Source - Bitwise Assets Management
📌 Coinbase and BlackRock partnered to offer direct crypto exposure through Aladdin®
📌 Meta introduced the ability for users to cross-post NFTs across Facebook and Instagram
📌 Charles Schwab, Citadel and Fidelity Digital Assets announced the creation of a new crypto exchange called EDX Markets
📌 Nasdaq announced a new digital assets business
📌 GoldenTree Asset Management announced a $5 million investment in the SushiSwap governance token
📌BNY Mellon launched a digital asset custody platform
How the world's biggest financial institutions are leveraging blockchain analytics for the digital asset economy
💡Metaverse and NFT news, trends, and insights
1. NFL crypto video game kick off draws closer
NFL Rivals releases footage of “arcade-style” gameplay ahead of upcoming NFT drop. The game is one of many sports-themed blockchain projects in the works, including partnerships with NBA, MLB and UK’s Premier League.
2. New protocol aims to improve on-chain NFT intellectual property rights
V-Art Protocol helps embed NFT intellectual property on the NEAR and Ethereum blockchains, with support for Aurora and Polygon coming this year and Solana in the next. The tool helps improve the visibility of intellectual property rights for NFT projects — a long-running issue in the space.
3. Gucci launches metaverse event in The Sandbox
The Gucci Vault Land event will be available for two weeks until November 9. Fashion, NFTs, and Gaming businesses are looking for opportunities in Metaverse but are still unfamiliar with production value and detail. Large investment banks anticipate this business can capture 10% of the market by 2030.
4. NFT project Art Gobblers rakes in $13 million two hours after launch
The project attempts to make a self-sufficient art creation ecosystem — or a decentralized art factory. The project intends to attract more artists onto the platform to increase the attention of collectors, prompting a prominent feedback loop in the ecosystem.
5. Magic Eden, Rarible join Twitter pilot to embed NFTs in tweets
Marketplaces Rarible, Magic Eden, Dapper Labs and Jump.trade are the latest brands to join an NFT pilot program. The social media company first tested Tweet Tiles with select news outlets in August.
6. Meta platform 75% down from its highs plunges 15% after Metaverse losses
Meta’s Reality Lab division lost around $3.7B in Q3. WhatsApp, Instagram, and Facebook income are down 28% year over year. Investors lost their confidence and want Meta to divert its focus from Reality Labs to other projects.
7. EY takes Wavespace utility to the Metaverse
Wavespace by EY which facilitates customers to join meeting with EY now allows customers to interact in a VR environment.
8. Open Metaverse Alliance officially launched today and opened membership to Web3 builders
With Dapper Labs and The Sandbox among its ranks, OMA3 opens up membership amid push for an interoperable Web3 world.
🔦Company spotlight
The company: 👉 TaxBit 👈 connects consumer, enterprise, and government tax and accounting ecosystems through a platform that unifies assets and cryptocurrency with taxes and accounting to ensure compliance. TaxBit operates across industries and services individuals, enterprises and governments. The company’s platform can easily integrate with any native platform, allowing for instant automation and optimization.
The story: TaxBit was founded in 2018 by CPAs, tax attorneys, and software developers. It has been establishing an entirely new category of business to enable widespread adoption of cryptocurrency and other digital assets. Initially started with the founders’ vision of simplifying crypto taxes by automating the regulatory hurdles of tax compliance, the startup has raised $235M since 2019 including backers from Insights Partners and Haun Ventures.
Why should I care: TaxBit is a leading example that the crypto and blockchain industries have been evolving and maturing into an ecosystem that is willing to align with regulatory requirements at scale. Solutions such as TaxBit, transforming the cumbersome cryptocurrency tax reporting and accounting in a way that ensures compliance with tax law, is just the starting point in driving the transition of wider scale adoption of cryptocurrency in our financial industry. Also TaxBit is hiring: Check out the opportunities here.
📅 Blockchain, Crypto, and Web3 events calendar
….for the next couple of months
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
Singapore FinTech Festival | Nov 2-4, 2022 | Singapore, SG
🆕 Ghana Crypto & DeFi Summit 2022 | Nov 3-4, 2022 | Accra, Ghana
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
🆕 TOKEN2049 London | Nov 9-10, 2022 | London, UK
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
🆕 Digital Assets Week London 2022 | Nov 15-16, 2022 | London, UK
Adopting Bitcoin | Nov 15-17, 2022 | San Salvador, El Salvador
ETH Gathering Barcelona 2022 | Nov 17-21, 2022 | Barcelona, Spain
🆕 Metamorphosis | Nov 18-20, 2022 | 2022 Bangalore, India
Cardano Summit 2022 | Nov 19-21, 2022 | Lausanne, Switzerland & Online
Blockchain: Applied - An Introduction to Web3 | Nov 20, 2022 | London, UK
🆕 Dutch Blockchain Week 2022 | Nov 21-27, 2022 | The Netherlands
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
Future of Crypto by Benzinga | Dec 7, 2022 | NYC, US
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
Taipei Blockchain Week | Dec 12-17, 2022 | Taipei, Taiwan
MetaVentures Bangkok | Dec 14-15, 2022 | Bangkok, Thailand
Blockchain Expo World 2022 | Dec 21-31, 2022 | Istanbul, Turkey
👩💻The job fair
Ethereum Foundation - Research Scientist (Protocol economics) - Remote
Coin DCX – Product Manager - Bangalore/Mumbai
System 9 – Software Engineer - Remote/Los Angeles
Consensys – Senior Front end engineer - United States/Remote
Validation Cloud- Blockchain research analyst - San Francisco
TaxBit - Check out the opportunities here
📚The term of the week
Decentralised autonomous organisations (DAOs) - are entities with a bottom-up structure, which have no central authority and all members share a common goal to act in the best interest of the entity. This is done through tokens, whereby each member of the DAO can vote on initiatives for the entity. Smart contracts are implemented in the process and the code governing the DAO's operations in publicly disclosed as part of the publicly viewable blockchain, ensuring transparency of all members activity.
Read the DAO report covered in our previous edition: where we laid out how DAOs are disrupting investment, corporations, social clubs, and even political parties.
📎 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.