Twitter + Stripe = Coins; L1 Comparison; Mastercard & Polygon; Amazon & Avalanche; Goldman GS DAP goes live; Binance $12B outflow; Tether delisted; Gemini vs. Genesis; Quasar, C14 & Easy $20M funding.
12 January 2023
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Table of Content
🗞️The 21 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 21 news you should be aware of
1. Twitter developing ‘Coins’ feature with Stripe payments
Twitter is developing a feature that will allow users to purchase 'Awards' for other users with 'Coins'. The feature will use Stripe to process payments in fiat. It is unlikely that Twitter's Coins will be blockchain-based, but the Stripe integration may mean that crypto could be added as a payment option.
2. Mastercard taps Polygon for Web3 artist accelerator
Mastercard will use Polygon to launch its Mastercard Artist Accelerator. The program will help musical artists learn how to expand their brands through minting NFTs, building an online presence, and establishing a community. It will kick off in spring and end later this year with a live-streamed artist showcase. Participants will receive a limited edition NFT, The Mastercard Music Pass, which will give holders access to exclusive educational materials, resources, and other experiences.
3. AWS partners with Avalanche
Amazon Web Services (AWS) has partnered with Ava Labs to help scale blockchain adoption across enterprises, institutions, and governments. AWS will support Avalanche’s infrastructure and decentralized application ecosystem, alongside one-click node deployments, through its marketplace.
4. Goldman Sachs’ tokenization platform GS DAP™, leveraging Daml, goes live
GS DAP is developed on top of Digital Asset’s Daml smart contract language and Canton, its privacy-enabled blockchain. Daml-based tokenization platforms, such as GS DAP, capture the full complexity of rights, obligations, and cash flows throughout the lifecycles of assets.
5. Binance acknowledges past flaws in maintaining stablecoin backing
Binance has acknowledged past flaws in the management of BUSD reserves which at times led to more than $1 billion in missing collateral. At no point were redemptions impacted for users. Binance says that it has improved its process with enhanced discrepancy checks. Data shows that BUSD was often undercollateralized between 2020 and 2021.
6. Binance sees $12B withdrawn in 60 days
Binance has seen $12 billion of outflows over the past two months. Estimates of Binance's holdings from data providers vary wildly. Several reports have led to traders worrying about Binance's holdings. However, these reports fail to address Binance's size or consider the volumes the exchange handles.
7. Ethereum devs prep plan to let stakers withdraw ETH from Beacon
Ethereum developers have set March as a tentative target for Ethereum's next upgrades, Shanghai and Capella. Public testnets for the upgrades will be deployed next month. Staked ETH withdrawals will be prioritized for the next upgrades. All unrelated changes have been removed from the Shanghai codebase to minimize the risk of delays in rolling out withdrawals.
8. Silvergate stock plummets as FTX collapse triggers $8.1B in customer withdrawals
FTX's collapse triggered a rush of withdrawals at Silvergate Capital, causing the crypto lending specialist's shares to plummet. Customer deposits fell by $8.1 billion over the last quarter. Silvergate sold $5.2 billion of its digital assets at a $718 million loss to maintain liquidity during the rush of withdrawals. It will cut 40% of its staff to reduce costs.
9. Crypto.com will delist Tether in Canada to comply with Ontario Regulator
Crypto.com has delisted USDT for users in Canada in accordance with instructions from the Ontario Securities Commission (OSC) as part of their pre-registration undertaking for a restricted dealer license.
10. Coinbase to slash 20% of workforce in second major round of job cuts
Coinbase is cutting a fifth of its workforce following an 18% staff reduction in June. CEO Brian Armstrong pointed to recent pressure on the crypto sector thanks to “unscrupulous actors in the industry,” referring to bankrupt exchange FTX and its founder, Sam Bankman-Fried.
11. Bitvavo rejects DCG's partial loan repayment offer
Bitvavo says it rejected Digital Currency Group’s offer to repay at least 70% of the outstanding loan. DCG’s beleaguered crypto lending subsidiary, Genesis Global, holds $297 million of Bitvavo’s funds.
12. Barry Silbert defends DCG in response to Gemini's Winklevoss
Silbert’s letter comes on the heels of the latest salvo of accusation from Gemini’s Cameron Winklevoss. Silbert reiterated that DCG doesn’t comingle funds, defends involvement with Three Arrows Capital.
13. ABN AMRO issues tokenized corporate bond on public blockchain
ABN Amro issued a €450,000 bond on a public blockchain on behalf of APOC Aviation, an aircraft parts company. The bond’s entire issuance process was digital, including the preparation, placement, and documentation.
14. FTX has recovered 'Over $5B' in assets
The announcement substantially raises the total FTX has recovered since filing for bankruptcy last year but it's still short of what customers are owed in total.
15. Shiba Inu turns out to be the largest holding in WazirX’s proof of reserves
India’s largest crypto exchange WazirX has released its proof-of-reserves (PoR) and has a reserves-to-liability ratio of over 1:1. WazirX reports reserves worth $286.10 million, with Shiba Inu (SHIB) token as the highest holding worth almost $54 million.
The international organization talked about what the future holds for the crypto industry, highlighting the widespread applications of cryptography and blockchain technologies, adding that their use in the financial services sector is already notable.
17. ConsenSys launches private beta testnet for zkEVM scaling technology
ConsenSys zkEVM has been in development for several years and was formally announced in December. Whitelisted users can now begin using the ConsenSys zkEVM private test net. ConsenSys said the goal of the test net is to learn if the new scaling technology can substantially improve the crypto developer experience.
18. Banks concerned USDC stablecoin will become ‘backdoor CBDC’ with BlackRock help
The Bank Policy Institute is worried that the BlackRock fund used for the USDC stablecoin reserves may access quasi Federal Reserve deposits.
19. Metropolitan Bank to stop servicing crypto clients
Metropolitan Bank plans to withdraw from servicing clients in the crypto-asset sector following a review by its board. It cited the drivers as the ‘recent developments’ in the crypto-asset sector, presumably including the crypto crash and bankruptcies such as FTX, as well as significant moves on the regulatory front.
20. Russia’s Sberbank tokenizes gold as digital asset
Sberbank announced that it had issued its first tokenized gold on the Sber blockchain. While this is Sber’s first metals token, Norlisk’s Atomyze issued tokenized palladium back in July 2022.
21. State Street’s Nadine Chakar joins tokenization firm Securrency as CEO
Securrency has an existing relationship with Chakar as State Street invested in Securrency’s $30 million Series B round in mid-2021 and she took a seat on the board.
💸 PE/VC funding
1. DeFi startup Quasar Finance raises $5.4M at a $70M valuation
Quasar Finance has secured a $70 million valuation after raising a $5.4 million bridge round. The round is led by Shima Capital and includes backing from Anagram, Polychain Capital and Blockchain Capital.
2. C14 launches fiat-to-crypto onramp with $2.5M in funding
The funding round led by General Catalyst and will enable the company to continue to build out new payment rails as well as fuel new partnerships with traditional banks and payment processors in emerging markets.
3. 126 Funds with $18.3B corpus launched for Indian startups with Blockchain a key investor theme
Out of the 126 funds launched in 2022, 62% are focused on early-stage startups while the remaining 38% are focused on growth-stage and late-stage startups. While nearly 22% of funds are sector-agnostic, the remaining 78% are focused on varied sectors such as SaaS, healthcare, SaaS, blockchain, crypto, fintech, logistics, and enterprisetech.
4. The Easy Company secures $14.2M funding for a new crypto wallet with social features
The company wants to make it easier for users to engage with Web3 and use digital wallets. This seed funding round was supported by a diverse group of investors, including venture capital firms Lobby Capital, Relay Ventures, and 6th Man Ventures, as well as Tapestry, Upside, and Scribble.
5. Galaxy Digital anticipates more VC funding for Web3 businesses in 2023
Alex Thorn, head of research at Galaxy Digital, stated that Web3 blockchain startups and trading-based services led venture-capital deals and funding in 2022, and the trend could continue this year.
6. Venture capitalists scarred by FTX collapse are sitting out the crypto scene
The future of easy VC returns seems rather insecure at the moment. Yet, Crypto venture capitalists may have stepped back, but they're not going away.
7. From $1.5B to $0, crypto payments platform Wyre shuts down
Crypto payments and infrastructure provider company Wyre is shutting down, months after Bolt Financial scrapped a $1.5 billion deal to buy the firm.
8. Lok Capital logs first close of its fourth fund at $90M
Lok Capital, the premier impact investor based in India, investing in inclusive growth across finance, health, agriculture & climate, is looking to expand into crypto and blockchain-based investments.
9. Abu Dhabi-based Venom Foundation launches $1B fund for Web3 and blockchain
Abu Dhabi-based blockchain platform Venom Foundation and investment manager Iceberg Capital announced they will allocate $1 billion of funding to Web3 and blockchain firms through a new partnership.
10. UAE investor groups launch billion-dollar Web3 fund
Venom Ventures Fund will invest in several web3 applications including dApps, DeFi, and gaming. The announcement of the $1 billion fund comes during a tumultuous era, with the crypto industry riddled with scandal, investor losses, and falling prices.
⚖️ Policies and laws
1. Five UK associations collaborate to support digital currency
City of London Corporation, Digital Pound Foundation, The Payments Association, TheCityUK and UK Finance announced the formation of the UK Forum of Digital Currencies (UK FDC). The alliance aims to promote innovation and help develop policy and regulation around digital currencies.
2. US regulators warn banks over cryptocurrency risks
The watchdogs told financial institutions to be wary of potential fraud, legal uncertainty, and misleading disclosures by digital asset firms. Banks were also cautioned over the "contagion risk" from the sector.
3. Hong Kong to propose approved set of crypto tokens for retail trading
Hong Kong is showing signs of relaxing tough regulations to become a more crypto-friendly environment. The CEO of Hong Kong's securities regulator said only "highly liquid" assets will be on the list.
4. Digital pound won't track retail transactions, UK minister says
A digital pound platform would give authorities visibility into banks and not users, a treasury minister said in a Parliament meeting. A consultation paper on a UK central bank digital currency will be published by the government in the coming weeks, in cooperation with the Bank of England.
5. French central banker pushes mandatory crypto firm licensing for 2023
Bank of France governor François Villeroy de Galhau called for switching to a mandatory licensing regime for crypto firms in 2023. The central banker wants to be ahead of EU-wide crypto regulation, which is expected to start rolling out in 2024.
6. Indonesia plans to launch its own crypto exchange
Indonesia plans to launch a national crypto exchange in the coming year. Crypto supervision will be transferred between financial regulators in the country’s financial-sector reforms. Cryptocurrencies are currently banned as a payment method in the country, but it is legal to trade them.
7. Iranian courts order the return of thousands of seized crypto mining machines
About 150,000 pieces of crypto mining equipment are held by the Organization for Collection and Sale of State-Owned Property, many of which will be released following the judicial rulings.
📚 Reports, here is the TLDR
REPORT 1 - Comparing Layer-1 Platforms
The Block Research was commissioned by Ava Labs and the Solana Foundation to produce this report, which provides an in-depth study across ten dominant smart contract Layer-1 (L1) ecosystems: Algorand, Avalanche, BNB Chain, Cardano, Cosmos, Ethereum, NEAR, Polkadot, Solana, and Tron. Here is the TLDR.
Many smart contract blockchains built using novel technologies have seen significant user adoption in the past few years. Currently, research and development activity is largely focused on scaling blockchain technologies to accommodate potentially billions of regular users. Several scaling approaches are being experimented on across smart contract platforms:
New Layer-1 (L1) technologies: Incorporate novel technologies (e.g., sharding, zero-knowledge proofs, parallel runtime environments, etc.) within monolithic chains.
Interoperable chains: An ecosystem of app chains, ideally with high security as well as seamless communication and interaction between them.
Sidechain/Layer-2 (L2) solutions: Connect a new chain to an existing chain to leverage its security/decentralization while increasing scalability.
Modular approaches: Multiple task-specific chains that leverage the function of one another to fulfill the core functions of a monolithic blockchain – data availability, consensus, settlement, and execution.
Entities that interact with smart contract platforms can be divided into two groups – developers that build and deploy blockchain-enabled decentralized applications (DApps) as well as the community of end users that interact with the said DApps.
Major takeaways for DApp end-user communities across ecosystems:
End-user adoption trends are a mixed bag: Most ecosystems show a decrease in active addresses coinciding with the downturn in the market starting in late 2021. However, a few individual ecosystems, notably Tron, have defied this trend. Lower market prices also impact the total value locked (TVL) and the average transacted value on-chain, both of which have generally decreased significantly.
Low-fee transactions are in-demand: We can see this in the robust numbers for active address and transaction counts for low-fee ecosystems such as Tron and BNB Chain. However, there is sustained strength in demand for Ethereum L1 block space despite its high fees.
Multichain ecosystems are growing but have a long way to go: Daily active addresses and transaction counts of app chains and L2 scaling solutions show an increasing trend despite weak market conditions, especially for the rollup-centric Ethereum scaling solutions (e.g., Arbitrum & Optimism).
Social metrics show resilience despite market conditions: Interest from the general public is showing strength as measured by the increasing number of Twitter, Reddit, and YouTube traffic. However, recent news events (e.g., FTX collapse, etc.) may be short-term catalysts for the elevated social metrics.
Major takeaways for DApp development activity:
Battle of the execution environments? We observe the emergence of EVM alternatives such as Solana’s Sealevel runtime, MoveVM, WebAssembly (Wasm), MoveVM, and CairoVM that compete for the attention of DApp developers.
Decreasing trend in developer activity. The proxies for measuring developer activity in this report show a decreasing trend across all L1s, coinciding with the market downturn since late 2021.
Ecosystem growth: A thriving blockchain ecosystem relies on a self-sustaining community of developers and end users. Many of the ecosystems discussed have significant funding dedicated toward ecosystem expansion. Funding efforts may include developer grants, native token airdrops, incentivized liquidity mining to increase locked value on-chain, funding developer and community education, strategic partnerships, and many others.
Outlook and challenges for the smart-contract platform landscape:
Fragmented ecosystems: Independent blockchain ecosystems may not have native interoperability with one another due to fundamental differences in their design. Tools that enable trustless messaging/interoperability between incompatible chains (e.g., Ethereum and Cardano) is a lively area of research and development that will be crucial in addressing audience fragmentation and liquidity across blockchain ecosystems.
Exploits and hacks: The severity of smart contract exploits/hacks continues to be a major issue. Sophisticated DApps (e.g., money markets, bridges, DEXs, and more) may also require complex code that increases the surface area for malicious attacks. Uncovering vulnerabilities within specific DApps and complex development environments with broad expressivity remain extremely challenging.
Discovery of new blockchain-enabled applications:What are the next “killer apps” of blockchain technology? Decentralized finance (DeFi) and non-fungible tokens (NFTs) are examples that have garnered significant interest since 2020, helping bring DApps to the mainstream for the first time. Continued interest from DApp developers incentivized to discover and build innovative blockchain-enabled applications may be an important indicator for the health of the industry as a whole.
REPORT 2 - Cryptoassets: Beyond the Hype
This research paper offers a dispassionate look at cryptoassets from the point of view investment professionals. The paper distills research interviews conducted over the past year with a variety of investment practitioners and crypto experts.
The paper offers recommendations for policymakers and investors and offers a framework of key issues to consider before investing in crypto, including: valuation, fiduciary duty, custody, and safekeeping of client assets.
Key messages:
The need for crypto investors to ground their decisions in an investment case
The need to examine crypto use cases, especially in the absence of cash flows
The need for fiduciaries to think carefully about their duty of prudence in light of the specific characteristics of cryptoassets,
The need to look beyond the hype and to distinguish the disruptive potential of crypto technology from the value of individual cryptoassets,
The need to ask what decentralization means in the crypto ecosystem and the conundrum this presents for accountability and regulation; and
The need to establish a strong regulatory framework, for the benefit of crypto providers and users alike.
📈 Charts of the week
Liquid Staking continued to see a rise in adoption.
Over the course of 2022 ~4.3M ETH, ~$5.6B at a $1300 ETH price, was deposited into liquid staking contracts. stETH leads with over 60% of all staking derivative deposits.
In 2022, Gemini never reached more than 4% of the U.S. market share of spot crypto trading volume among the U.S. exchanges tracked by Kaiko.
The chart helps understand why attracting and keeping users leveraging Gemini Earn was such a priority.
How traditional payment giants like Visa, Mastercard and PayPal are integrating crypto payment services By BLOCK DATA
💡Metaverse and NFT news, trends, and insights
1. Game of Thrones NFT collection sells out in 7 hours despite weird avatar hands
A Game of Thrones NFT collection sold out in seven hours, but some people who paid for the NFTs didn’t receive them. Meanwhile, Crypto Twitter is laughing at an avatar’s claw-like hands.
2. MG Motors launches consumer metaverse experience
MG Motor India unveiled “MGVerse”, its metaverse platform. The platform was created in collaboration with Metadome.ai, a 3D and XR technology company that specializes in immersive experiences for automotive companies. The company had previously used blockchain to create a digital passport for its SUV car model.
3. Rolls Royce’s unique Phantom Series includes charitable NFTs
The company teamed up with artist Sacha Jafri for this venture: the interiors of each car include unique hand-painted artwork by the artist representing one of six elements – Earth, Water, Fire, Wind, Air, and Humanity.
4. 6 projects using NFTs for social good
People are using NFTs for raising funds for social welfare and cultural support. From fundraising during the Russia-Ukraine war to preserving indigenous traditions, some NFT projects were a force for good in 2022.
5. Ferrari cuts ties with crypto sponsor ahead of 2023 Formula One season
The Ferrari-Velas partnership from 2021 — set at $30 million a year — was aimed at increasing fan engagement through nonfungible tokens (NFTs) and other shared initiatives.
The extended crypto winter has come with a potential silver lining – tax-loss harvesting, where NFT enthusiasts can sell their no longer valuable JPEGs and claim losses to offset their tax bill. The platform has so far purchased over 9,300 no-longer valuable NFTs that previous owners can count as losses to reduce taxable capital gains.
7. China to launch first national ‘Digital Asset’ marketplace
China is launching its first state-backed non-fungible token (NFT) marketplace, the latest sign of embrace for a technology that has occupied a legal gray area within the country’s notoriously strict regulations on cryptocurrency. This is the country’s first official foray into NFTs.
8. Three royalty-free NFT marketplaces launched in 2022 alone
NFT Creators Looking for Royalties Face an Uphill Battle. The emerging marketplace policies, Until yet another set of standards for corresponding smart contracts that execute NFT transactions are put into place, that’s not likely to change, according to a new research note from Galaxy Digital.
9. Fidelity trademarks hint at big banks Vying for metaverse customers
Fidelity wants to trademark metaverse services including mutual fund and retirement planning, alongside a potential NFT marketplace. Fidelity filed three patent applications last week related to marketing, placements, recruiting and referral services for investment and financial planning across the metaverse “and other virtual worlds.”
10. NFT marketplace SuperRare cuts staff by 30%
CEO John Crain said the company overhired during the market upswing and could not sustain its growth in recent months. The marketplaces were hit hard after FTX and some are working on cost-cutting methods.
11. Kia’s first NFTs have covered adoption costs for 22,000 pets in shelters
To alleviate overcrowded animal shelters, the car company raised $100,000 for the nonprofit, The Petfinder Foundation, by auctioning off thousands of robotic puppy-themed NFTs. Plus an additional $500,000 in fiat from Kia.
🔦Company spotlight
The company: 👉Pandora👈 is working on a futuristic vision for everyone to experience decentralized liquidity in the developing digital market, by building a thriving Decentralized Ecosystem for multi-asset classes. The aim is to leverage the Web3 space to realize a seamless, trustless & borderless NFT Economy, by allowing users to build dApps, induce liquidity and unlock interoperability.
The story: Pandora was founded in Singapore in 2021 by Pushkar Vohra. Since then it has raised over $2M in seed funding from 16 investors, with Zokyo and Master Ventures being the most recent investors.
Why should I care: The economic extension to the digital and real-world illiquid assets does not recognize any socio-physical boundaries. That’s why it is important to create an empowering ecosystem that provides creators with complete discoverability and will allow everyone to create or trade their assets cross-chain via NFTs with full transparency.
📅 Blockchain, Crypto, and Web3 events calendar
….for the next couple of months
Metavsummit | Jan 11-12, 2023 | Dubai, UAE
CFC St. Moritz | Jan 11-13, 2023 | St. Moritz, Switzerland
World Crypto Conference | Jan 13-15, 2023 | Zürich, Switzerland
🆕 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
Sustex - Blockchain for Climate | Jan 19, 2023 | Dubai, UAE
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
🆕 Solana Istanbul Hacker House | Feb 1-5, 2023 | Istanbul, Turkey
European Web3.0 Summit | Feb 7-8, 2023 | Antwerpen, Belgium
Fintech & Crypto Summit Bahrain | Feb 15-16, 2023 | Bahrain
European Blockchain Convention | Feb 15-17, 2023 | Barcelona, Spain
🆕 Global Digital Assets Investment Summit | Feb 22-23, 2023 | Hong Kong
🆕 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
🆕 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
🆕 Blockchaincon Latam 2023 | Mar 9-11, 2023 | Lima, Peru
👩💻The job fair
Apollo Global Management: Full Stack Developer, New York (Hybrid)
Stacks Foundation: Blockchain Security Engineer, Remote
Stacks Foundation: Blockchain Engineer, Remote
nWay Inc.: Community Manager, San Francisco
📚The term of the week
Total value locked (TVL) is the overall value of crypto assets deposited in a decentralized finance (DeFi) protocol. It has emerged as a key metric for gauging interest in that particular sector of the crypto industry.
Additionally, most DeFi platforms like Aave, PancakeSwap, and Uniswap issue namesake tokens. Users can deduce whether or not these tokens are undervalued or overvalued by using the TVL as a gauge of fundamental value and then taking its market cap and dividing it by the TVL, similar to the price-to-book (P/B) ratio for stocks. If the ratio is under 1, the asset is usually undervalued and more attractive to investors.
📎 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.