This Week in Blockchain on 22nd March 2021

Hi, I'm Conor Svensson, Founder and CEO of Web3 Labs and this is your Week in Blockchain on Monday the 22nd of March 2021. In this week's episode I'm going to be discussing institutional crypto news from Visa, Morgan Stanley, JP Morgan crypto exchange's plans on going public, minor protests in Ethereum, DeFi platform attacks and all of the NFT activity including Elon Musk getting in on the act and then not, skateboarder Tony Hawk's first NFT and a toilet paper NFT! First of all, the Visa CEO, Alfred Kelly said that they're looking at crypto from multiple angles within payment processing where they don't only want to facilitate the store of Bitcoin but also the spending. A key thing here is being able to enable the purchase of Bitcoin using Visa credentials and secondly working with Bitcoin wallets to allow Bitcoin to be translated into a fiat currency at the point of sale so it can be used at any of the 70 million places around the world where Visa is accepted. We also saw the volumes of crypto trading in South Korea overtaking regular trading. According to data from CoinMarketCap, the combined 24-hour volume from a number of the major South Korean crypto exchanges exceeded that of the standard equity exchanges within South Korea so it's a huge milestone to happen in that market and South Korea has a very active crypto trading community. We've also seen a Grayscale Investments launch five new investments trusts which include support for Filecoin, Chainlink and BAT which is linked to the Brave browser which is very popular at the moment and these are publicly traded on OTC markets. Morgan Stanley has become the first U.S. bank to offer its wealthy clients access to three funds that enable ownership of Bitcoin. This isn't like with stocks that are linked to Bitcoin, this is funds that invest directly in cryptocurrencies. Two of these are from Galaxy Digital while the third is a joint effort from an asset manager called FS Investments and Bitcoin company NYDIG. JP Morgan's also looking at crypto clearinghouse options as well in order to de-risk trading of cryptocurrencies because right now when OTC trading desks take orders from their clients, they need to deposit funds with crypto exchanges in order to make a trade. This results in firms like JP Morgan having to take more financial risk with the trade and so if they were able to establish a crypto based clearing house this would actually help move the risk onto the clearinghouse. It is somewhat ironic that one of the big pushes of blockchain itself is to be able to eliminate these middlemen but again when you see how it factors into the institutional trading operations there is a real need for it as we've seen with JP Morgan ramping up its cryptocurrency services over the past year. Coinbase has revised their S1 form which they filed with the SEC recently in preparation for their exchange listing. They haven't said when the listing is likely to take place but some are saying it's going to be at least in April, it's not going to be happening in March now as was originally planned. The crypto exchange Kraken has announced that it plans to go public next year via a direct listing and then the Robin Hood competitor and crypto friendly trading platform eToro is going public via a merger that's happening for $10 billion with SPAC fintech corporation. Owners of the new Fiat 500 electric car will be able to earn KiriCoins for sustainable driving activities. KiriCoin is a platform that rewards people for undertaking sustainable activities in their day-to-day life and by linking it with this new electric car they've been able to grow their ecosystem. Last week we mentioned Meitu, the Chinese image editing app, which is incredibly popular. They've bought more Bitcoin and Ethereum increasing their overall holdings now to $90 million. It's not clear at this point what they plan to do with it but they have a board approved investment plan that allows the company to invest up to $100 million of its capital into cryptocurrencies. The encrypted messaging platform Signal is now accepting crypto donations. Historically they accepted only fiat, so they're widening the opportunity to receive donations. The third largest cryptocurrency by market capitalization, Cardano, has been added to Coinbase and is also available in the Bloomberg Terminal. On the Ethereum network, we've mentioned previously about EIP1559 which makes the transaction fees fairer for users of the Ethereum network which should help the overall fees go down. One of the big criticisms right now with the public Ethereum network is that it is so expensive to transact on. However, several miners have voiced support for coordinated action against this and what they plan to do on the 1st of April (apparently it's not an 'April fools') is move the hash power that they provide onto one of the main mining platforms called Ethermine for 51 hours to demonstrate that by putting all of the hash power onto Ethermine's platform you'll in effect have more than 51% of the network all going through the same source. Whether this goes ahead or not is still unclear but it would certainly be quite a significant show of force by the Ethereum mining community. In the world of DeFi, we've seen DeFi platforms PancakeSwap and Cream Finance hit with domain attacks by hackers. This basically meant that their home page was redirected to a malicious site that asked people to input their seed phrase for their wallets. Anyone who did would then enable the hacker to drain all of the funds associated with those wallets. Again, it's a reminder to be very careful if you're using any of these platforms. The decentralized exchange SushiSwap has launched on the Avalanche blockchain platform. This has been enabled via Avalanche's Ethereum bridge which they launched last month where you can take your Ether and transfer it onto the Avalanche blockchain network and then when it's there you can interact with D'Apps that are using Avalanche's infrastructure. The launch of this has certainly increased the activity on the network significantly during the period and this is where you're seeing a lot of blockchains trying to eat into Ethereum's market share. We saw it previously with Binance Smart Chain where they launched the Ethereum compatible chain and this is a similar sort of technology that Avalanche have launched that's enabled SushiSwap to launch there. In the world of NFTs, it's continued to explode and got crazier and crazier this week! We've seen the search volume for the phrase 'NFT' hit an all-time high and also across NFT platforms the active weekly use accounts is approaching 400 000 users. However, the vast majority of these are on NBA's Top Shots platform which is almost 380 000 users. The NFT platform OpenSea, where a lot of NFT collectibles are created and sold, has raised the series A of $23 million backed by some of the big names in the crypto space including Andreessen Horowitz. They've also had investment historically from Dallas Mavericks owner and Ethereum enthusiast Mark Cuban, angel investor Naval Ravikant, podcast host and personality Tim Ferriss and Metapurse, the fund owned by the buyers of the beeple NFT. There was a very interesting post on Twitter this week for those people who are less familiar with the mechanics of how NFTs work. It's the Twitter user called @jontywaring, who dug under the surface of the NFTs and showed how there are still issues with centralization of some of the data associated with them. This even includes the beeple NFT that was sold recently. A NFT is broken down into three parts, you have the image that typically resides on some sort of decentralized file store, you have the ownership of the asset which often lives as a smart contract on the Ethereum blockchain and then you have the metadata itself which links the ownership data with the underlying image. What this user was exposing was how a number of these high-profile NFTs have metadata which is being stored on publicly available but hosted by centralized services and so if those centralized services were to become no more or the companies go out of business, then ultimately that link from the ownership of the NFT to the NFT would be lost, which is certainly a concern for the markets which talk so much about decentralization. Again, this is only some NFTs but it's a useful thing to be across. Elon Musk, off the back of Jack Dorsey listing his first ever tweet, looked like he was going to get in on the NFT action and he tweeted saying that he was going to sell a song about NFTs as a NFT but unfortunately, 24 hours later he backed down and said he wasn't going to do it anymore. We've also seen in response to some of the environmental concerns by some in the community about the energy usage of the networks that power NFTs, there's a NFT auction taking place where eight unique carbon negative NFTs inspired by earth and the climate crisis are being created and sold on the Nifty Gateway marketplace with all proceeds going to the Open Earth Foundation. DC Comics is reportedly entering, well eyeing the NFT market. In October last year, some rare Batman NFT artworks by one of the DC artists Jose Delbo and crypto artist Trevor Jones raised over $200 000 in a sale that was bought by a mysterious collector. Then more recently, we've seen other NFTs based on comic book characters such as Wonder Woman that brought in $1.85 million. As a result of this DC are very seriously looking at the space because they have concerns about copyright infringement. If these NFTs are rubber stamped by the organizations that own the IP to the work, I'm sure it's going to bring more value to them. We've also seen Sophia the Robot join the NFT craze. Sophia the robot is an AI driven robot who creates pieces of art. She's created some art pieces which have NFTs linked to them that are going to be sold this week on the marketplace Nifty Gateway. Also, off the back of Christie's getting involved in the NFT action, auction house Sotheby's have as well. They plan to hold their first NFT sale next month starting with works by PAK, an anonymous digital artist. Tony Hawk, the skateboarder, is also ollying or jumping into the world of collectible NFTs. A video of his last ever 540 degree ollie on a half pipe ramp is going to be sold by the Ethernet platform. Finally, Charmin the toilet paper, have released a number of NFTs that bring the splendour of toilet paper to life and fortunately it's in a tasteful way! Proceeds will benefit a medical aid charity called Direct Relief. In terms of the metrics, we've seen the crypto market cap is down just over 4% at $1.74 trillion. Assets locked in DeFi are down to just under $44 billion that's down over 5.5% and the NFT volumes are up 33%, total values exchanged in the last seven days at $56.8 million but the average price is down 14% to $1300. That's all we have for this week, if you like what you hear please subscribe to our podcast and YouTube channel. Links to all items discussed are available in the show notes and on our website www.weekinblockchain.com. We're also hosting a weekly Clubhouse room every Monday at 1 p.m eastern and 5 p.m UK time if you'd like to discuss any of the items that we've covered here. Thanks and I'll see you next week.