Polygon hard fork; Binance cold storage; Bitzlato?!; Thiel $1.8bn; Visa & Merge; Davos; Optimism vs. Arbitrum; CoinDesk restructuring; HashKey $500M fund; 10 market recovery indicators; MiCA vote.
19 January 2023
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Table of Content
🗞️The 18 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 term of the week
📎Miscellaneous resources
🗞️ The 18 news you should be aware of
1. Polygon completes hard fork to reduce gas fee spikes, disruptive reorgs
Polygon successfully completed a hard fork on Tuesday. The fork was designed to reduce spiking gas fees and disruptive chain reorganizations. The proposal for the fork was passed with only 15 validator teams taking part in the voting process. Polygon's native token MATIC is up nearly 15% over the past week.
2. Binance will allow institutional investors to keep collateral off the crypto exchange
Binance Custody will hold collateral in cold storage for institutional investors. Assets will be made available to users once trades are settled. The feature will allow users to trade crypto during volatile sessions without risking massive outflows on an exchange. Their assets will also be protected against on-chain hacks. The move is aimed at building trust with Binance among institutions.
3. What is Bitzlato? Crypto Twitter rolls eyes at DOJ’s big arrest
Crypto watchers were quick to deride the DOJ’s latest crypto crackdown after speculation about the teased enforcement action. The FBI arrested Bitzlato founder Anatoly Legkodymov for allegedly transporting and transmitting $700 million in illicit funds through his crypto exchange.
4. Peter Thiel’s fund wound down 8-year bitcoin bet before market crash
Founders Fund, the venture capital firm co-founded by billionaire Peter Thiel, closed almost all of its eight-year bet on cryptocurrencies shortly before the market began to crash last year, generating about $1.8bn in returns.
5. CPMI, IMF says multilateral platforms might improve cross-border payments, including CBDC
The Research paper mentions 20 separate platforms, most of which use conventional technologies and are in production. It also includes three CBDC cross-border payment platforms which are still in development and all use blockchain. Most existing multilateral platforms are regional, with only three global ones in production: CLS, Visa, and Mastercard.
6. Visa report: Ethereum (ETH) Merge does not guarantee more decentralization
Visa's cryptocurrency arm released its much-anticipated The Merge: What to expect from a new era of Ethereum report on the mainnet activation of The Merge mechanism. The visa crypto team will closely monitor the next developments in the Ethereum 2.0 roadmap to decide whether it is ready to play a significant role in the global cross-border payments system.
7. Filecoin Foundation set to test IPFS-based communication in space
Filecoin Foundation, the entity that controls the Filecoin network, is moving forward with its plan to launch a decentralized file system in space this year. Filecoin Foundation will deploy the interplanetary file system (IPFS) in space aboard a Lockheed Martin satellite.
8. European finance ministers oppose the digital euro being programmable money
The digital euro should at all times and throughout the euro area be convertible at par with other forms of the euro, such as banknotes and commercial bank deposits. The digital euro therefore cannot be a programmable money.”
9. Solflare wallet brings 'priority' gas fees to Solana
Solflare users can now pay higher gas fees to prioritize transactions on Solana. The wallet will automatically detect whether the Solana network is under load and increase fees to prioritize transactions. Individuals using other wallets may experience difficulty completing transactions during periods of heavy network activity. The feature is now live on Solflare's web app and in-browser extensions, with support for mobile launching soon.
10. COSCO shipping subsidiary issues first bill of lading on GSBN blockchain
The Global Shipping Business Network (GSBN) announced that its blockchain network has been used for its first electronic bill of lading (eBL) by COSCO Shipping Specialized Carriers. If all the eBL solutions are interoperable, this will mean banks don’t have to do 15 different integrations to support every eBL solution on the market.
11. The City of Lugano issues CHF 100m blockchain bond on SDX
The City of Lugano announced it had issued a CHF 100 million ($108M) digital bond on the blockchain of the SIX Digital Exchange (SDX). The six-year bond with a 1.625% coupon can be held either in the SDX central securities depository (CSD) or the conventional Swiss CSD, SIX SIS.
12. Metamask launches Ethereum staking services via Lido and Rocketpool
Metamask has launched Ethereum staking features in beta. Users can choose either Lido or Rocketpool's liquid staking services through the wallet's interface. Lido and Rocketpool both offer wrapped versions of Ethereum that can be used as collateral in DeFi or swapped for other tokens. RETH has an overall market cap of around $254.49 million while STETH has a market cap of around $6.85 billion.
13. Blockchain’s non-crypto applications take center stage on Davos Day
The day began with a panel from traditional finance players attempting to draw a line under the FTX scandal – to note that, even if it’s a crisis for the cryptocurrency industry, it’s not a crisis for other tools built on distributed ledger technology. That promise of wider blockchain applications was later echoed by former Indian central bank Governor Raghuram Rajan.
14. Swing launches software tools for easier deployment of cross-chain solutions
Swing has rolled out a new widget and SDK for cross-chain developers. The project says these software tools will simplify the process of deploying cross-chain solutions
15. Ethereum Layer 2 protocol Optimism surpasses Arbitrum in transaction volume
Ethereum-based Layer 2 scaling protocols Optimism and Arbitrum have seen a significant divergence in transaction activity. Optimism has outperformed Arbitrum since mid-December in transaction count.
16. China's digital Yuan used to buy securities for the first time
The digital yuan, or e-CNY, a token issued by the Bank of China, has been used to buy securities for the first time according to a local report.Now investors can use the e-CNY to buy securities with the Soochow Securities mobile app, China Securities Journal reported, citing the securities firm.
Decentralized finance (DeFi) protocol Frontier started an in-browser wallet extension that allows crypto users to interact with staking, transactional and non-fungible token (NFT) activities over 35 supported blockchains. Other popular wallets such as MetaMask and Zerion do not publicly offer similar features to users of their in-browser wallets.
18. Digital Dollar Project warns on U.S.'s cautious approach to CBDCs
In its updated white paper, the DDP, a nonprofit organization advocating for a U.S. central bank digital currency (CBDC), said the U.S. should take an independent decision to deploy a U.S. CBDC. More than 100 jurisdictions around the world are researching or developing a CBDC, while the U.S. remains cautious about the merits of a CBDC.
💸 PE/VC funding
1. CoinDesk explores full or partial sale to attract growth capital, CEO says
CoinDesk is seeking advisory services from Lazard, a firm specializing in mergers, restructuring, and capital strategy, as the company explores a potential sale, The Wall Street Journal first reported.
2. Celsius and Fabric Ventures lock horns over $8M Series B clawback
Celsius is attempting to make VC firm Fabric Ventures pay the remainder of its commitment to the troubled lender’s Series B round. Fabric had pledged just over $8 million, with a payment schedule over the course of three months in 2022.
3. Seven Seven Six leads $9.5M Series A for digital fashion brand Syky
Brevan Howard Digital, Leadout Capital, First Light Capital Group, and Polygon Ventures also joined the round, according to a release on Tuesday.
4. Polygon-backed web3 gaming platform Intella X raises $12M ahead of Q1 launch
Polygon, Animoca Brands, Magic Eden, Planetarium, Big Brain Holdings, Crit Ventures, JoyCity, Pearl Abyss, XL Games, Wemix and Global Coin Research were among the investors.
5. Pantera and Archetype co-lead $12.5M Series A funding round for Obol Labs
Obol Labs aims to make proof-of-stake blockchains more secure. The fresh funding brings Obol Labs’ total financing to $19 million.
6. FalconX, Bitmex founder Hayes invest in market maker Elixir amid dearth of providers
Decentralized finance protocol Elixir raised $2.1 million to make the crypto market making more transparent. The seed round includes investment from FalconX, OP Crypto, ChapterOne, and Bitmex founder Arthur Hayes.
7. Crypto investor HashKey Capital closes third fund at $500M
Dubbed HashKey Fintech Investment III, the fund targets investments across crypto areas, with a focus on infrastructure and application builders.
8. Diva closes $3.5M seed round for distributed liquid staking protocol
The round was led by A&T Capital. Diva plans to build out a cooperative decentralizing staking pool.
9. Framework Ventures leads Parfin’s $15M raise to provide web3 rails in LatAm
The raise also includes backers such as Alexia Ventures, Valor Capital Group and L4 Venture Builder, which is the Brazilian stock exchange’s investment fund
10. Crypto market maker CyberX raises $15M led by Foresight Ventures
The deal follows several fundraises by market makers in the digital asset space in recent months, including Brussels-based Keyrock and decentralized market-making protocol Arrakis Finance.
11. Alkimiya raises $7.2M to build 'decentralized capital markets for blockspace'
The round was led by 1kx and Castle Island Ventures. The round for the protocol, which closed in November, featured participation from Dragonfly, Circle Ventures and Coinbase Ventures among others.
⚖️ Policies and laws
1. French crypto companies must seek authorization by 2024 under new lawmaker plans
Crypto companies in France would have to seek authorization from regulators to operate if they are not already registered with the country’s financial regulator by Jan. 1, 2024, under plans adopted by lawmakers at the National Assembly. The French crypto industry has reacted with concern to the proposals, arguing they could damage France’s goal of becoming a crypto hub.
2. European Union postpones MiCA vote to April
The European Union’s landmark crypto legislation, the Markets in Crypto Assets regulation, or MiCA, has been delayed until April because of issues in translating the rules into the 24 official languages in the EU.EU procedures require legal acts such as MiCA, which was negotiated in English, to be available in all the bloc's 24 official languages.
3. SEC racks up 50% increase in crypto enforcement actions in 2022
2022 was a record year for crypto-related enforcement actions.A new report from Cornerstone Research of 30 enforcement actions shows 70% percent alleged fraud and 73% alleged an unregistered securities offering, while 50% alleged both.
4. Thailand SEC issues regulations for crypto custody providers
The regulations offer policies and guidelines for overseeing the management of digital wallets and keys plus procedures for designing digital wallets. The regulation also says custodians need to have a contingency plan in case an event occurs that could affect the management system of digital wallets and keys.
5. Justice Department to announce major international crypto enforcement action
The U.S. Justice Department plans to announce a major international cryptocurrency enforcement action at noon ET on Wednesday. The press conference will be led by Deputy Attorney General Lisa Monaco, and other speakers will include Assistant Attorney General Kenneth Polite Jr. of the Justice Department's criminal division.
📚 Reports, here is the TLDR
REPORT 1 - The Road to Interoperability
This report discusses why an “open metaverse” cannot exist without extensive interoperability and why is that expression gaining momentum despite its odd framing.
To better understand and capture the essence of the open metaverse movement, Lighthouse, one of the authors of the report, decided to go directly to the source and speak to the people and companies building it.
The result is this wide-ranging report on the state of openness in the metaverse as viewed by industry builders themselves. And since an open digital environment cannot exist without the unimpeded exchange of assets, value, and experiences across worlds, interoperability is the key feature that is examined in this report.
Here are some defining features of an open, interoperable metaverse highlighted in the report:
REPORT 2 - Ten Indicators for Tracking a Bear Market Recovery
In this report, the Glassnode team explores a suite of ten indicators that provide a useful toolbox for navigating these later stages of Bitcoin bear markets.
These metrics have been selected and developed using a variety of both technical and on-chain concepts. The suite has a goal of spotting confluence and consistency across several fundamental market properties and human behavior patterns, drawing upon the following broad concepts:
Technical: Mean reversion with respect to popular technical analysis tools.
On-chain Activity: Positive upticks in on-chain activity and network utilization.
Supply Dynamics: Saturation of the coin supply held by Long-Term Holders.
Profit/Loss: A return of profitable on-chain spending and exhaustion of sellers.
The indicators covered in this report are:
Realized Cap HODL Waves (LTH) & Realized Price and Mayer Multiple Cross-over Indicator
New Address Momentum Indicator
Miner Fee Revenue Momentum Indicator
Relative Activity of Small and Large Entities Indicator
Realized P/L Indicator
aSOPR Indicator
Long-Term to Short-Term Supply Profitability Indicator
Cycle Change Detection Indicator
Short-Term Holder Confidence Indicator
Supply Stress Ratio Indicator
📈 Charts of the week
The below chart shows 61k NEW devs touched crypto code in 2022 by Electric Capital
The below Monthly devs grew 5% y/y while prices are down 70%+ by Electric Capital
💡Metaverse and NFT news, trends, and insights
1. Yuga Labs blacklists Blur, SudoSwap and other marketplaces in Sewer Pass mint
Yuga Labs joins other NFT creators in banning certain marketplaces in the coding of new NFT project smart contracts. The move is the latest salvo in the ongoing war over NFT royalties.
2. Metaverse land developer LandVault signs with Hollywood powerbroker CAA
LandVault, which has worked with Mastercard, L’Oreal, and Heineken, announced it has signed with top talent agency Creative Artists Agency. CAA will advise LandVault “on talent and brand-led metaverse opportunities” and more.
3. WEF launches metaverse meeting space with Accenture and Microsoft
World Economic Forum (WEF) unveiled a prototype of its metaverse – “Global Collaboration Village” at its annual meeting in Davos. Accenture, and Microsoft to provide the platform. Several international organizations, including Interpol, are adopting the metaverse for community engagement.
4. NFT blue-chip Azuki's new virtual city Hilumia touches the physical and digital worlds
Launched by Chiru Labs, the Azuki universe has expanded with the launch of the virtual city Hilumia. Hilumia will bridge the digital and physical worlds through its token Physical Backed Token (PBT). Chiru Labs was closing in on a $30M Series A raise in September, bringing the firm's valuation between $300M and $400M.
5. Blockchain game Synergy Land migrates from Solana to Polygon
Polygon has become increasingly favored among high-profile, branded drops like Starbucks, Reddit, and former U.S. President Donald Trump’s digital trading card collection. Currently Synergy land is a project hoping to finish an Initial Game Offering by the end of the first quarter of this year.
6. Andreessen Horowitz gaming partner James Gwertzman exiting VC firm
A16z General Partner James Gwertzman is leaving VC firm and Games Fund One to pursue his own interests in gaming. Gwertzman in the past collaborated with a16z to invest in web3 and Metaverse.
7. Metahood raises $3M to build the Zillow of the Metaverse
Metahood is creating a platform for buying and selling virtual real estate. It uses a map-driven interface to show available land plots in relation to those around it, providing a sense of the wider neighborhood or district while pointing out landmarks and highlighting sales trends, nearby land owners, and more.
🔦Company spotlight
The company: 👉 Islamic Coin Network 👈 IC Network develops the Islamic Coin which is a purposeful community crypto asset. It’s used as a native coin on the Haqq blockchain. Each time a new Islamic Coin is minted, 10% of the issued amount is deposited into a special Evergreen DAO for further investment into projects beneficiary for the Muslim community or given to Islamic charities. This is the first introduction of a coin bringing direct economic value to a community.
The story: ICNetwork is a privately financed technological enterprise founded by a group of seasoned blockchain and fintech entrepreneurs interested in the creation of highly ethical financial services and exploration of the potential of distributed technologies in the ethical finance domain. Notable early contributor and the founder of IC Tech is Andrey Kuznetsov (visionary, serial tech entrepreneur, and crypto evangelist). It has raised over $100M since 2022 from private investors based mostly in the Middle East.
Why should I care: IC uses the Haqq Blockchain. Haqq (Arabic for truth) is a Proof of Stake blockchain network compatible with the existing ecosystem of Blockchain tools and developer instruments (primarily, Ethereum and Cosmos) and meets modern industry requirements, with fast finality and high transaction throughput. Haqq’s purpose is to serve the international Muslim community by providing a financial and technological tool that allows for independent financial interaction while supporting technological evolution and philanthropy.
📅 Blockchain, Crypto, and Web3 events calendar
….for the next couple of months
January 2023
GBBC’s Blockchain Central Davos | Jan 15-19, 2023 | Davos, Switzerland
Crypto Summit | Jan 16-20, 2023 | Zürich, Switzerland
Blockchain Hub 2023 | Jan 17-19, 2023 | Davos, Switzerland
Decrypt Davos 2023 | Jan 19, 2023 | Davos, Switzerland
Bitcoin Day Naples | Jan 21, 2023 | Naples, FL, USA
Quantum Miami | Jan 25-27, 2023 | Miami, FL, USA
Block WorldTour Granada | Jan 26-27, 2023 | Granada, Spain
February 2023
Solana Istanbul Hacker House | Feb 1-5, 2023 | Istanbul, Turkey
🆕 StarkWare Sessions 2023 | Feb 5-6, 2023 | Tel Aviv, Israel
🆕 Building Blocks TLV | Feb 7, 2023 | Tel Aviv, Israel
European Web3.0 Summit | Feb 7-8, 2023 | Antwerpen, Belgium
🆕 The Blockchain Event | Feb 14-17, 2023 | Florida, USA
Fintech & Crypto Summit Bahrain | Feb 15-16, 2023 | Bahrain
European Blockchain Convention | Feb 15-17, 2023 | Barcelona, Spain
🆕 Blockchain Fest 2023 | Feb 16-17, 2023 | Singapore
🆕 Solana Melbourne Hacker House | Feb 20-24, 2023 | Melbourne, Australia
Global Digital Assets Investment Summit | Feb 22-23, 2023 | Hong Kong
🆕 DeFi Retreat Europe | Feb 23, 2023 | Lisbon, Portugal.
NFT Paris 2023 | Feb 24-25, 2023 | Paris, France
ETHDenver | Feb 24-Mar 5, 2023 | Denver, CO, USA
Blockchain Economy London Summit 2023 | Feb 27-28, 2023 | London, UK
Interop Summit | Feb 27-28, 2023 | Denver, CO, USA
Blockchain Life | Feb 27-28, 2023 | Dubai, UAE
Miami Web3 Week | Feb 27-Mar 5, 2023 | Miami, FL, USA
March 2023
Advancing Bitcoin Conference | Mar 2-3, 2023 | London, UK
Crypto, Blockchain & Metaverse Expo | Mar 3-4, 2023 | Dubai, UAE
Empower: Energizing Bitcoin 2023 | Mar 8-9, 2023 | Houston, TX, USA
Crypto Expo Dubai | Mar 8-9, 2023 | Dubai, UAE
🆕 Blockchain Economy Dubai Summit | Mar 8-9, 2023 | Dubai, UAE
Blockchaincon Latam 2023 | Mar 9-11, 2023 | Lima, Peru
🆕 Women In Blockchain Summit | Mar 13-15, 2023 | Limassol, Cyprus
🆕 Sustex - Blockchain for Climate | Mar 15-16, 2023 | Dubai, UAE
🆕 ETHDubai | Mar 15-16, 2023 | Dubai, UAE
🆕 Solana Hacker House | Mar 15-19, 2023 | Ho Chi Minh City, Vietnam
🆕 Virtuality Web3 Summit | Mar 16-17, 2023 | Paris, France
🆕 Blockchain Africa Conference | Mar 16-17, 2023 | Johannesburg, South Africa
🆕 ETH Porto | Mar 16-18, 2023 | Porto, Portugal
🆕 5th Blockchain International Scientific Conference | Mar 18, 2023 | Manchester, UK
🆕 Crypto Expo Europe | Mar 19-21, 2023 | Bucharest, Romania
👩💻The job fair
Brainbot : Smart Contract Auditor, Berlin/Remote
Chain Link Labs : Senior Product Designer, USA/Remote
Coin Flip : Jr Graphic Designer, Canada/remote
Coin Flip : Sales representative, Montreal, canada
Subspace Labs : Technical Project Manager, Remote
📚The term of the week
Forking. A fork happens whenever a community makes a change to the blockchain’s protocol or basic set of rules.
Forks can be ‘hard’ or ‘soft’ depending on how disruptive they are. Soft forks are incremental changes, while hard forks break with the common thread of the original project. When this happens, the chain splits — producing a second blockchain that shares the history with the original, but is headed off in a new direction.
📎 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.