Tether's billions with Aleks Krotoski; Shanghai Shadow fork goes live; Circle's Cross-Chain protocol; e¥ on Meituan; Wormhole stolen funds; Injective $150M fund; DeFi technology TLDR; NAB stablecoin.
26 January 2023
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Table of Content
🗞️The 11 news you should be aware of
🎙️ An interview with Aleks Krotoski
💸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 11 news you should be aware of
1. Ethereum Shanghai mainnet Shadow fork goes live
Ethereum core developers on Monday announced the successful deployment of the first mainnet shadow fork to test the ETH staking withdrawal mechanism. The Shanghai upgrade, expected to launch in March, will introduce staked ETH withdrawals to Ethereum. There is almost $26.5 billion worth of staked ETH. The Shanghai update was originally expected to include other updates, but these were postponed in favor of prioritizing withdrawals.
2. Circle's Cross-Chain transfer protocol
Cross-Chain Transfer Protocol (CCTP) is a permissionless on-chain utility that can burn native USDC on a source chain and mint native USDC of the same amount on a destination chain. It can be embedded into apps to give users a capital-efficient way to transfer USDC across chains. The CCTP smart contract is designed to allow the composability of additional functionality. It can be used to build novel cross-chain apps while abstracting complexity away from users.
3. China launches smart contract functionality on Digital Yuan through e-commerce app Meituan
China has enabled smart-contract functionality for its central bank digital currency through the e-commerce app Meituan. Users who place orders through Meituan have a chance to win a daily share of 8,888 RMB into their digital yuan wallets. The smart contract searches for keywords in transactions and sends a share of the prize to customers if they qualify. China's digital yuan accounted for 0.13% of the total circulating RMB at the end of 2022.
4. Saudi central bank continues wholesale CBDC exploration
The Saudi Arabia Monetary Authority (SAMA) said it was continuing its central bank digital currency (CBDC) experiments focusing on a domestic wholesale CBDC. Its focus is on exploring the economic impact, the readiness of participants, and the potential for wholesale CBDC applications The central bank confirmed that no decision has been made about introducing a CBDC.
5. National Australia Bank eyeing a ‘green’ stablecoin
National Australia Bank (NAB), one of the country’s big four banks, has issued a stablecoin AUDN, which is not yet widely available. NAB confirmed a partnership with agritech start-up Geora to use blockchain to record sustainable agriculture practices. The Stablecoins will be tested internally before it is expanded.
6. Crypto’s Wormhole hacker moves $150M to tap popular trade
A digital-asset wallet linked to the hackers that stole $320 million from Wormhole in an exploit last year, has moved $150 million of stolen funds for the first time in months to tap a trade involving staked Ether.
7. How AML drives people to cryptocurrencies or to be unbanked
The compliance cost to banks ($274 billion annually) is more than a hundred times the money recovered by AML’. The AML reduces a person’s sense of control over their own money. It’s a matter of time before many people realize that AML is largely ineffective at enormous cost. Fix it or ditch it.
8. Singapore minister says regulating crypto legitimizes it. He’s not keen
During the World Economic Forum, Singapore Senior Minister Tharman Shanmugaratnam, who is also the Chairman of the Monetary Authority of Singapore (MAS), stated, he believes if you start to regulate crypto in a similar way to banks or insurance companies, that may not be the right path.
9. Swiss private bank Cité Gestion tokenizes its own shares
The Cite Gestion tokenized its shares using the Taurus digital asset platform. The Swiss private bank has CHF7 billion in assets under management. Switzerland has progressive laws on tokenization and has a special licensing regime for DLT trading facilities that allows direct access to retail investors
10. FINMA green lights blockchain euro bonds, digital euro on SIX Digital Exchange
The SIX Digital Exchange (SDX) confirmed it received regulatory clearance from Swiss regulator FINMA to issue euro-denominated bonds. In November 2022, UBS used SDX for a substantial CHF375 million ($406m) bond issuance. The UBS issuance marks a breakthrough not just for SDX but for tokenization generally.
11. Norway government to use public blockchain to track SME stock ownership
The Norwegian government project to track unlisted stock ownership, moved into the sandbox phase earlier this month. Through this ‘ concept of creating a blockchain system to track the change of ownership of any private stock and get a current view of the ‘cap table’ – who owns stock, how much they own, and when they bought it.
🎙️ The hunt for Tether's billions: an interview with Aleks Krotoski
This week we are thrilled to bring you an exclusive interview with journalist and social psychologist Aleks Krotoski. Aleks has dedicated the last 6 months to researching Tether, resulting in the podcast series titled "Real Money: The Hunt for Tether's Billions". Her story is a great listen if you're interested in the issues of trust and transparency in the cryptocurrency world.
In our interview, Aleks will also speak about the challenges she has encountered in the pursuit of her work and the importance of staying true to oneself.
G: How did you first become interested in investigating Tether's billions?
A: I first heard about it when one of my colleagues emailed me with Zeke Fox’s article from October 2021 in Bloomberg - it was such an intriguing story, that I felt it deserved more investigation. And what I continue to uncover is that the rabbit hole is so deep, that there are many stories to pursue and too little time to do them all justice!
G: What were some of the biggest challenges you faced while conducting your investigation, and how did you overcome them?
A: This is a finance story, but for people who aren’t finance people. As a psychologist with a background in tech reporting, I’ve had a steep learning curve. But because of my long background reporting on and researching the social phenomena of digital communities, we were able to turn this into a wider story about the internet, what it facilitates and how the same ideas continue to captivate people in today’s online world.
Also, getting people inside the crypto space to speak with non-crypto-related media was a challenge. We found - like most of our journalist colleagues across the mainstream press - that many of the entrepreneurs who are making it big, or are the major thought leaders, resist coverage from outside outlets. They may have their reasons, but when it happens again and again, it becomes an even more compelling story!
G: Without revealing too much, did you find Tether’s billions?
A: I can neither confirm, nor deny that we located the assets. But I can certainly confirm that it’s been a wild wild ride!
💸 PE/VC funding
1. Layer 1 blockchain Injective launches $150M ecosystem fund
The fund will be used to accelerate interoperable infra and DeFi adoption. CEO Eric Chen told TechCrunch there is a lack of an established ecosystem fund for Injective and Cosmos. Injective was incubated by Binance Labs in 2018 and later backed by Jump Crypto, Pantera Capital, and Mark Cuban.
2. Mythical Games eyes $50M raise, launches enhanced NFT-gaming marketplace
Last valued at $1.25 billion, the Andreessen Horowitz-backed gaming company acquires and integrates the technology of the NFT marketplace DMarket in the hopes that improving the buying and selling of digital assets will boost user growth.
3. Metaverse training software used by Nike and Carlsberg raises $18M
The round was led by Parkway Venture Capital. The deal values the business at $60 million. The fresh funds will foster a growth push in EMEA and expansion in North America.
4. A16z leads Series A funding for game studio Voldex
The amount wasn't disclosed. Voldex improves games on user-generated content platforms like Roblox and Minecraft.
5. QuickNode reaches $800M valuation in Series B round
QuickNode, a web3 infrastructure firm that provides blockchain development tools, reached an $800 million valuation. Dan Tapiero's 10T Holdings led the round, with Alexis Ohanian's Seven Seven Six, Tiger Global, Protocol Labs, QED Investors, and others.
6. Private sharding startup Calimero Network raises $8.5M
The seed round was co-led by Khosla Ventures, Lyrik Ventures and the Near foundation and will be used to build private sharding infrastructure.
7. Former FTX US head scores $5M for crypto startup Architect
The former president of FTX US, Brett Harrison, has launched the crypto trading platform Architect with a $5 million round, according to reports. The funding comes from investors including Coinbase Ventures, Circle Ventures, and former White House communications director Anthony Scaramucci.
8. SphereOne Raises $2.5M to Build Crypto for Grandmas
The Austin-based crypto payment platform raised $2.5 million in seed funding. Distributed Global led the round and was joined by Newark Venture Partners, Zero Knowledge, and other angels.
9. Sequoia China and Dao5 back ZK startup Hyper Oracle
Zero-knowledge (ZK) middleware developer Hyper Oracle closed a $3 million round co-led by Sequoia China's seed fund and Dao5. Foresight Ventures and FutureMoney Group also participated in the round, according to a company release.
10. Castle Island, a16z founders back Escape Velocity's $25M fund
Mahesh Ramakrishnan and Salvador Gala have raised $25 million for Escape Velocity’s first crypto fund. Founders from well-known VC firms such as Castle Island, a16z, and Framework Ventures are backing the new fund.
⚖️ Policies and laws
1. EU Parliament passes Basel III rules, including crypto assets clause
European Parliament’s Economics and Monetary Affairs Committee approved a draft law to implement the Basel III rules on banking capital and liquidity requirements. A single clause included in the draft requires euro of balance sheet capital for a euro of every crypto asset held.
2. French National Assembly to vote on mandatory crypto firm licensing
French legislators are debating whether to impose mandatory licensing for digital asset service providers before European Union-wide regulations come into effect towards the end of 2024. “The recent bankruptcy of FTX has highlighted the risks inherent in any investment in crypto assets, especially when the company operates outside of any regulation,
3. ECB says it will leave digital euro privacy decisions to EU lawmakers
Lawmakers, and not the European Central Bank will need to decide how much personal information the bank will have access to if it adopts a digital euro. But the ECB's leadership isn't clamoring to have direct knowledge of individual transactions, one of its board members told MEPs. The ECB is halfway through its investigation phase on the digital euro.
4. UK Minister commits to greater crypto industry engagement as new regulation looms
U.K.'s financial services minister, Andrew Griffith, on Wednesday pledged greater engagement with the crypto sector as he plans new post-Brexit laws. The U.K. crypto industry, which has been waiting for regulatory clarity, is keen to know the rules under which it will operate. Griffith acknowledged the importance of speed
5. Indonesia regulatory switch could see crypto classed as securities, not commodities
Being treated as commodities has kept crypto out of the debate over which digital assets should be treated like traditional securities, something regulators and industry members in other economies like the U.S. are still arguing about. The change in regulations could benefit industry development.
6. EU banks face stricter rules for crypto holdings
Banks holding crypto will need to follow strict laws to ensure capital requirements, lawmakers decided in a European Parliament committee vote on Tuesday. An amendment slipped in before the vote proposed that banks should apply a risk-weighting of 1,250% to crypto-assets exposures.
📚 Reports, here is the TLDR
DeFi, or Decentralized Finance, is a financial system that utilizes distributed ledger technology to provide services such as lending, investing, and exchanging digital assets without the need for a central intermediary.
These services are implemented as smart contracts, which are software programs that pool the resources of DeFi users to give them control over their funds. This paper:
Delves deep into the architecture, technical foundations, and financial functions of DeFi protocols. It examines the individual components and how they interact, using a DeFi stack reference model consisting of three layers: settlement, applications, and interfaces.
Describes the financial services offered by the most popular DeFi categories such as decentralized exchanges, lending protocols, derivatives protocols, and aggregators.
Explains how composability allows for the creation of complex financial products that could have applications in traditional finance and highlights potential sources of systemic risk.
Concludes by outlining a research agenda for the field.
📈 Charts of the week
According to CoinMarketCap, there are 134 stablecoins. The top 3, USDT, USDC, and BUSD represent +90% of the total stablecoins market cap ($138 billion).
The table below shows that Optimism has largely been resilient during the bear market of 2022. The total on-chain value did not see a downward spiral that plagued many other ecosystems but, instead, remained relatively stable from July to Dec 2022.
The table below shows that Last quarter, every sub-sector had a drop off in its number of deals and funding in dollar amounts. The one exception was Crypto Financial Services (CFS), which saw its investments increase by approximately 77%.
💡Metaverse and NFT news, trends, and insights
1. Moonbirds creator Kevin Rose hacked, at least $1 million in NFTs stolen
The cause of the hack has not been confirmed. Rose’s estimated losses may exceed $1 million. At its peak on April 17, the project brought in $280 million in trade volume.
2. Decentraland goes to the dogs as Pedigree brings canine adoption to the metaverse
Pet food company Pedigree has created a program called the Fosterverse, which allows Decentraland property owners to “foster” digital versions of real-life rescue dogs. The program aims to drive dog adoption and end pet homelessness.
3. Yves Saint Laurent YSL Beauty launches NFT rewards
The campaign release involves a two-part NFT series. Chapter one contains 2014 NFTs and will be provided alongside purchases of the Black Opium fragrance, starting from January 30 in the UK, US, France and Australia.
🔦Company spotlight
The company: 👉 Frigg.eco 👈 makes sustainable finance accessible, efficient, and composable. It was founded with the mission to onboard real-world assets to DeFi at scale and to tackle adverse selection as the industry needs a standard. Frigg developed the Frigg Standard, a suite of compliance, financial and technical workflow that allows investors and project developers easy access to the asset class. This software empowers Issuers to connect directly with Investors that seek access to sustainable projects with measurable impact at the asset level. It equalizes the playing field for all investors and asset owners, which leads to higher capital efficiency that accelerates the development of sustainable projects.
The story: Frigg was founded by Phillip Berntsen, a sustainable infrastructure finance specialist that is passionate about how end-to-end digitalization of project development and funding can help solve the climate crisis. After his 7 years at UBS, Phillip's sustainable infrastructure is key to reducing greenhouse gas emissions and combating climate change. However, we are significantly underfunding important projects such as renewable energy and climate adaptation infrastructure.
Why should I care: Successful transition to net zero must entail radical transparency to fight against greenwashing. Frigg is one of the first platforms that publish real-time project data in public. The vision for the Frigg Standard is to serve as the golden standard for securitizing sustainable projects using blockchain- and Internet-of-Things (IoT) technology. This exemplifies the use of blockchain for good and creating an impact in the climate space.
📅 Blockchain, Crypto, and Web3 events calendar
….for the next couple of months
January 2023
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
🆕 Saudi Meta Show | Mar 8, 2023 | Riyadh, Saudi Arabia
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
🆕 Blockchain & Fintech Week Tel Aviv | Mar 13-15, 2023 | Tel Aviv, Israel
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 Int’l Scientific Conference | Mar 18, 2023 | Manchester, UK
Crypto Expo Europe | Mar 19-21, 2023 | Bucharest, Romania
🆕 NFT LA | Mar 20-23, 2023 | Los Angeles, USA
🆕 Paris Blockchain Week 2023 | Mar 20-24, 2023 | Paris, France
🆕 DC Blockchain Summit | Mar 21, 2023 | Washington, DC
🆕 Art Basel | Mar 23-25, 2023 | Hong Kong, China
🆕 Nigeria Bitcoin Conference | Mar 24-25, 2023 | Lagos, Nigeria
👩💻The job fair
Sui Foundation : Head of Product Marketing, Remote/USA
Grow Today AB : Business Development Manager, United States
Roboto Games : Senior Product Manager, United States
Parasol : Full-stack software Engineer, San Franciso, USA/ Remote
Parity Technologies : Technical Project Manager, Remote
📚The term of the week
Airdrop is a marketing strategy that involves sending coins or tokens to pre-qualified wallet addresses. The ultimate goal of a crypto airdrop is to promote awareness and circulation of a new token, project, or coin. While some are legitimate, other airdrops have been seen as fraudulent when attempting to steal wallet or personal information.
📎 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.