Twitter and eToro, Ethereum’s Shanghai Upgrade Complete, CryptoPunks’ $211-million hot streak, CryptoGPT, VC/PE slowdown...
13 April 2023
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Table of Content
🗞️The 12 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
📅Blockchain, Crypto, and Web3 events calendar
👩💻The job fair
📚The term of the week
🗞️ The @@ news you should be aware of
1. BIS prefers tokenized deposits over stablecoins for private digital
Bank for International Settlements (BIS) published a paper comparing stablecoins to tokenized bank deposits. It asserts that stablecoins are similar to the (unstable) era of privately issued bank notes before the creation of the U.S. Federal Reserve. the BIS argues that tokenized deposits support the ‘singleness’ of money.
2. Central Bank of Montenegro Partners Ripple for digital currency pilot
Central Bank of Montenegro (CBCG) announced a new collaboration with blockchain and crypto firm Ripple to develop a digital currency strategy and pilot for a central bank digital currency (CBDC) or national stablecoin. The central bank is deliberating between the two options, but a national stablecoin seems more likely due to the country’s unique currency situation.
3. Twitter partners with eToro to let users trade stocks, crypto as Musk pushes app into finance
Starting Thursday, Twitter will give users the option to buy and sell stocks and other assets from eToro. The partnership marks a rare deal for Twitter since Elon Musk took the reins as CEO after buying the platform for $44 billion last year. Musk has made it his mission to turn Twitter into a so-called “super app” that offers users financial services on top of social media.
4. Ethereum’s Shanghai Upgrade Is Complete, Starting New Era of Staking Withdrawals
Ethereum’s Shanghai hard fork, also referred to as “Shapella,” has been finalized, enabling withdrawals for users who have “staked” their ether (ETH) to secure and validate transactions on the blockchain.. The upgrade on the blockchain, also known as "Shapella," was triggered at 22:27 UTC, and the network is now processing withdrawal requests.
5. The finance head promotes Hong Kong’s place in the web3 ecosystem
In 2018 Hong Kong introduced its first licensing regime for exchanges and service providers, which targeted institutional investors, with only two licenses issued. Hong Kong is relaxing its approach to crypto. In February, Hong Kong allocated a HK$50 million budget for Web3 to Cyberport, a Hong Kong technology accelerator and ecosystem developer.
6. Sushi Swap to return stolen funds following weekend hack
After a high-profile hack, Sushi Swap has outlined plans for returning funds. Some funds residing in a white hat contract will be returned via a Merkle contract. Funds stolen by black hat hackers will require a case-by-case claims process. Users can check if they were affected or not, but Sushi notes that "you likely have no exposure if you haven't interacted with Sushi in the past ten days, as the exploited contract is less than ten days old.
7. Ethereum is burning ETH at a rate of $5.5 billion per year as Shapella upgrade approaches
Ethereum is burning ether at a rate of $5.5 billion annually, according to ultrasound. money. Had The Merge never occurred, the ether supply would have increased by $4.5 billion over the last 208 days. Additionally, full withdrawals, wherein a validator entirely exits the Ethereum blockchain, might also take considerable time.
8. CryptoPunks’ $211-million hot streak fueled by added liquidity and Blur incentives
The major jump in volume technically covers “wrapped” CryptoPunks, which are tied to an Ethereum token that makes trading possible on top NFT marketplaces OpenSea and Blur. The “wrapped” CryptoPunks hit $133 million in trading last month, the best any collection has performed in 10 months.Blur’s forgoing of fees and offering traders bonuses is helping to spur the spike in trading.
9. Bitcoin spikes on 'soft-ish' US inflation data before coming back down to Earth
Bitcoin briefly traded about $30,400 following the release of U.S. inflation data for March, which came in below consensus estimates. Headline inflation in the U.S. was up 5% annually and 0.1% month-on-month, below estimates of 5.1% and 0.2%, respectively. Core inflation, which excludes food and energy, came in at 5.6% and 0.4%, in line with estimates.
10. How the Liquid Staking scenario will change after the Ethereum Shanghai upgrade.
The Shanghai Upgrade marks the final milestone in Ethereum's transition from Proof of Work (PoW) to the Proof of Stake (PoS) consensus mechanism. This transition will shepherd proposals to reduce transaction costs, increase transaction speeds, and unlock staked ETH. The Beacon chain's release in December 2020 enabled the stake function of ETH and initiated the dual-track system of PoS and PoW.
11. Aptos giving $20 million to artists willing to create on its blockchain
Aptos’ investment in artists could help increase the number of people and developers engaging with its blockchain. Competition is stiff among blockchains and scaling solutions. The $20 million to be awarded will be on top of $3 million Aptos has already disbursed.
12. Cardano Developer IOG Releases Lace Wallet, Boosting ADA Ecosystem
Cardano blockchain-focused development lab IOG released Lace, its first native wallet for the Cardano network, developers said Tuesday. Lace is a browser-based wallet similar to the popular MetaMask product. It allows users to access the Cardano network directly and use Cardano-based decentralized applications.
💸 PE/VC funding
1. CryptoGPT raises funds at a $250 million token valuation
CryptoGPT announced raising $10 million from DWF Labs at a $250 million token valuation. But only $420,000 of the total amount has thus far been invested by DWF Labs, CryptoGPT co-founder and CTO Dejan Erja told The Block.
2. Bitget unveils $100 million venture fund with focus on Asia
Bitget, the derivatives exchange operator, today announced a new $100 million venture capital fund focused on web3. The fund will invest globally, with a focus on Asia.
The Seychelles-based exchange operator has been busy lately as it pursues a so-called "go beyond derivatives” strategy. It acquired crypto wallet BitKeep in March after investing an additional $30 million in the startup. It then took a $10 million strategic investment from Dragonfly Capital, the crypto investment firm, on April 4.
3. How shareholders are selling OpenSea stock despite restrictions
OpenSea stock is on offer at steep discounts on secondary markets, as are the shares of many of the crypto sector’s blue-chip startups. Secondary market platforms are using SPVs to skirt bans on stock sales.
4. Venture Capitalists Show Waning Interest in Crypto
Crypto financial services firm Galaxy Digital Holdings revealed that investments in crypto companies dropped to $2.4 billion in Q1 2023. Late stage investments in Web3, NFT, and gaming firms saw the least investment. Major corporations Meta and Disney and traders in virtual world pioneer Decentraland have pulled back from investing in the space.
5. Crypto fraud prevention startup Fire raises $3.5M
Fire, a browser extension aiming to prevent crypto fraud, raised $3.5 million in funding led by venture studio Atomic.
Why it matters: Crypto scams remain a major issue for the industry, with Chainalysis estimating that bad actors made off with $5.9 billion in 2022.
How it works: The Chrome extension acts as a check — showing in real-time if a transaction is about to occur, and what exactly is going to which wallet address.
6. New Lisk Accelerator Offers Up To 250K To Web3 Start-Ups
Established Web3 company Lisk has recently announced the launch of its new Accelerator. Start-ups intending to build blockchain apps and drive Web3 adoption forward can receive up to 250K in CHF (that's about $270K)in funding. The company does not claim any equity in the projects it chooses to support.
⚖️ Policies and laws
1. EU votes for AML legislation impacting crypto. Defi not particularly targeted
EU parliament voted in favour of three major pieces of anti-money laundering (AML) legislation. Crypto payments for goods and services in excess of €1,000 must be subject to AML. And the legislation expands the definition of crypto asset service providers (CASPs) to pull in NFT platforms. However, none of the Acts and Regulations are final, so things could still change.
2. IOSCO confirms the timing of regulatory work on crypto, DeFi
The International Organization of Securities Commissions (IOSCO) confirmed it plans to launch a consultation for the regulation of crypto and digital assets in the current quarter (Q2), with a final report by the end of the year. IOSCO previously outlined how in many cases, existing securities regulations might be applied to DeFi.
3. Crypto regulation by enforcement is 'really, really bad,' says Binance CEO
Binance CEO Changpeng Zhao said “chasing people by enforcement is really, really bad.”Zhao and Binance were sued by the CFTC last month for allegedly violating U.S. laws. Having no regulatory clarity is the worst. Having bad restrictive regulations are better than that," Zhao said at the Hong Kong Web3 Festival.
4. Texas Senate passes bill to limit bitcoin miners' participation in demand response programs
The Texas Senate passed a bill that will cap how much bitcoin (BTC) miners can participate in demand response programs, under which they get paid to curtail their operations at times of high energy demand. The bill aims to limit bitcoin miners participating in demand response programs
5. Stablecoins need to be regulated like commercial bank money, bank of England's Andrew bailey says.
Stablecoins would need to be regulated like commercial bank money, said Bank of England (BoE) Governor Andrew Bailey in a Wednesday speech at the Institute of International Finance. The collapse of Terra's algorithmic stablecoin terraUSD (UST) last year wiped out billions of dollars from the crypto market and prompted regulators to question the stability of stablecoins.
6. Argentina’s National Securities Commission Approves Bitcoin Futures
Argentina’s National Securities Commission (CNV) authorized the launch of a bitcoin (BTC) index-based futures contract on Tuesday, according to a statement.The contract is to be based on the bitcoin index of Matba Rofex, an Argentinian stock exchange, with negotiation and settlement in Argentinian pesos.
📚 Reports, here is the TLDR
Deposit Tokens : A Foundation for stable digital Money
Ongoing progress in developing blockchain technologies for commercial applications is creating demand for blockchain native “cash equivalents” that act as liquid means of payment and stores of value in blockchain-native environments.
However, the foreseeable adoption of blockchain for complex commercial transactional activity including institutional activity has brought Deposit tokens and CBDC into focus. JP Morgan Onyx has published a detailed report on this.
The Report covers the Global digital money landscape, Use cases of Deposit tokens and Policy Consideration.
Global digital money landscape
Various forms of digital money solutions have been created to meet the demand for stable and liquid value on-chain, taking different forms in terms of issuers, claim rights, reserve characteristics, and regulatory requirements The main forms of digital money and money alternatives grouped are
1) Blockchain Based deposit 2) Stable coins 3) CBDC’s .
Blockchain-based deposits refer to deposit claims against a licensed depository institution for stated amounts recorded on the blockchain. They are economic equivalents of existing deposits recorded in a novel form used to pay, and settle trades between digital assets, and generally act as a store of value and means of exchange on blockchain ledgers. Blockchain deposits can be broken down into different categories based on two main factors (i) whether they are account or token-based, and (ii) whether they are “native” to the blockchain.
Applying blockchain technology in this manner allows payments made with commercial bank money to benefit from programmability, instant, and atomic transaction settlement, and improved transparency as to the status of transactions. These features help to address common pain points in liquidity management and cross-border payments.
Use Cases for Deposit Tokens
Deposit tokens can improve a variety of traditional payments and liquidity management related uses of commercial bank money by enabling advanced programmability features, the ability to exchange funds with other digital assets atomically. Notable use cases include
Payments: By removing intermediaries from the chain, deposit token would enable the direct, peer-to-peer transfers of funds, which can also include bank-to-bank transfers to benefit customers off-chain.
Programmable money: The programmable nature of deposit tokens enables innovative solutions to support existing deposit-taking activities, such as the conditional transfer of funds based on conditions at a smart-contract. .A deposit token integrated into the banking system provides new benefits when it becomes programmable by automating manual solutions, enabling complex logic for transactions without manual intervention, and reducing the risk of human errors or delays.
Policy Considerations
The following section presents considerations for policy formulation on new forms of digital money with a focus on deposit tokens and comparisons to non-bank issued stablecoins where applicable
Devaluation and Run Risk
Like traditional deposits, and other bank liabilities, the existing liquidity, capital, and risk management frameworks already require banks to engage in robust analysis of potential deposit token redemption.
Contagion Risk
A run on stablecoin issuers or deposit tokens could disrupt traditional markets if the issuers hold insufficient cash to meet the demands on their liquidity, resulting in a large-scale sale of assets to obtain cash. We separately note that digital money that is interoperable with central bank payments systems may also enhance the effects of monetary policy that seeks to introduce liquidity into the system, as digital money can increase the velocity of money.
Conclusion
As digital transactions grow in scale and complexity, deposit tokens can become a strong foundation for digital money and an important part of a broader tokenized asset ecosystem. Their technical features, alignment with well-established bank regulatory frameworks, will acts as enhancement for commercial bank money, the world’s most used form of money.
Deposit tokens are well positioned to help the digital money landscape stabilize and mature. Accordingly, they merit separate consideration by banks looking to innovate, regulators looking to establish appropriate regulation that shape this evolving space, and the broader set of participants in the financial system looking to interact with digital money
📈 Charts of the week
DeFi Ecosystem
DeFi has developed into a rich ecosystem of dapps. As of today, these dapps offer users alternative platforms to engage in most all of the primary use-cases of the traditional financial services industry, including: saving, borrowing, lending, asset exchange, derivatives, insurance, and asset management. Most DeFi projects and protocols live in public and open-source blockchain infrastructure, and while the ecosystem is not limited to the projects in the chart below, these are the most prominent and valuable to date based on user adoption and economic activity.
These projects, which have amassed massive amounts of users, can be assessed by the total monetary value locked (TVL) within them. TVL is an important DeFi metric because it provides insight into the monetary value deposited in the smart contract applications and serves as a reliable gauge of sentiment and growth. Locking assets within protocols can indicate growth, utility, and user conviction in the ecosystem depending on the stickiness of the project and the incentives offered to attract users.
💡Metaverse and NFT news, trends, and insights
How the Metaverse Can Transform Education - Meta report
Metaverse technologies have the potential to transform school lessons, bring teachers and students together remotely in shared spaces, enhance vocational training, and create new opportunities for lifelong learning. Studies have found that VR can positively improve a variety of learning outcomes — such as comprehension, knowledge retention, student engagement, attention span and motivation. Metaverse technologies can also help to tackle geographic disparities and give students opportunities to learn from people and institutions they can’t access locally.
Mind the gender gap: Women are underrepresented in the metaverse, too
According to a McKinsey report, the majority of metaverse leadership roles are currently held by men, despite the fact that women spend more time on the platform. Of those surveyed, 41 per cent of women have engaged in the metaverse for over a year, compared to just 34 per cent of men.
What’s more, women are also more likely to lead metaverse initiatives in their workplace. An impressive 60 per cent of women have implemented at least two initiatives relating to the metaverse. According to the report, this makes women 20 per cent more likely to launch multiple metaverse-related initiatives than men.
Everywhere and nowhere: Metaverse leaders plan for data centers on a whole new scale
Just the sheer volume of data and servers that will be needed to enable a semi-autonomous automotive experience, not even [fully] autonomous, is beyond existing datacenter capacities.
Metaverse Platform MetaPoint Exploited for Nearly $1M
Metaverse platform MetaPoint was exploited for nearly $1 million. Its related POT token dropped by nearly 80% in price after the incident. The incident comes as the broader tech industry begins tempering its expectations of the metaverse.
AI Will 'Accelerate' the Metaverse, Empower Creators: The Sandbox Co-Founder
The use of artificial intelligence, or AI, may speed up the pace at which original work is created in the metaverse, said Sebastian Borget, co-founder of The Sandbox and a speaker at Consensus 2023.
Sopra Steria & NVIDIA leverage power of industrial metaverse
Sopra Steria has partnered with NVIDIA to enable its customers to develop custom 3D simulations and create physically accurate virtual worlds.
Coachella 2023 Announces ‘Fortnite’ Metaverse Activation Featuring Music From Porter Robinson
Launching April 14 and staying live in perpetuity, Coachella Island marks the festival's first time in the metaverse.
📅 Blockchain, Crypto, and Web3 events calendar
April 2023
NFT.NYC 2023 | Apr 12-14, 2023 | New York, USA
DAO Tokyo | Apr 13, 2023 | Tokyo, Japan
ETHGlobal Tokyo | Apr 14-16, 2023 | Tokyo, Japan
EthereumZuri.ch | Apr 14-16, 2023 | Zurich, Switzerland
Bitcoin Alive 2023 | Apr 15, 2023 | Sydney, Australia
Polkadot Bled NFT hack | Apr 17 - 7 May, 2023 | Bled, Slovenia
HYFI Conference 2023 | Apr 20, 2023 | Ho Chi Minh, Vietnam
Sol.Ladies Build Hacker House | Apr 20-24, 2023 | Austin, TX, USA
ETH Taipei | Apr 21-25, 2023 | Taipei, TW
MIT Bitcoin Expo | Apr 22-23, 2023 | Cambridge, MA, USA
Consensus 2023 | Apr 26-28, 2023 | Austin, TX, USA
Bitcoin Day Omaha | Apr 29, 2023 | Omaha, NE, USA
Swiss Bitcoin Conference | Apr 27-30, 2023 | Bodensee, CH
Property and Crypto Expo | Apr 29-30, 2023 | London, UK
May 2023
Avalanche Summit 2023 | May 3-5, 2023 | Barcelona, Spain
MoneroTopia 2023 | May 5-7, 2023 | Mexico City, Mexico
Blockchain Economy Istanbul Summit | May 8-11, 2023 | İstanbul, Turkey
NFT Tallinn | May 8-10, 2023 | Tallinn, Estonia
The Crypto and Digital Assets Summit | May 9-10, 2023 | London, UK
CryptoVSummit | May 10, 2023 | Dubai, UAE
Solana Taipei Hacker House | May 10-14, 2023 | Taipei City, Taiwan
Crypto-Energy Summit | May 11, 2023 | Pittsburgh, PA, USA
👩💻The job fair
Parity Technologies : Senior Front-end Engineer, Remote
📚The term of the week
Hot Wallet: a Wallet (Software) that is online or otherwise connected to the internet to enable Hot Storage and that is used to allow faster access to the stored Cryptocurrency. Since Hot Wallets are connected in some manner to the internet, they are often targeted by malicious actors and hackers and therefore seen as risky.
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