This Week in Blockchain on 10th May 2021

Hi, I'm Conor Svensson, Founder and CEO of Web3 Labs and this is your Week in Blockchain on Monday the 10th May 2021. The highlights in this week's issue include Ether reaching another all-time high, Elon Musk hosting Saturday Night Live, PayPal discussing the launch of a stablecoin, Goldman Sachs now offering crypto derivatives, eBay outlining their plans for NFTs and crypto and over $125 million in sales of the latest hot NFT. Ether prices have continued to rally, it's getting close to breaching $4000 at the time of recording. It now has a market capitalization of over $440 billion which exceeds that of Johnson and Johnson, Walmart and United Health. If it continues this upward trend, it wouldn't be long before its market cap is half of its larger siblings, Bitcoin, which is just over $1.1 trillion currently. This makes Ethereum's 27 year old creator, Vitalik Buterin, the world's youngest crypto billionaire. The driving force behind a lot of this is the increased institutional adoption of the cryptocurrency which is also being driven by the cut over to the ETH2 network which hopefully will be happening before the end of the year which will reduce the power consumption drastically of the network. Also EIP1559 will lower transaction fees for using the network and make the Ether cryptocurrency more scarce and other adoption that you're seeing in wide-scale pilots and projects such as the European Investment Banks bond issuance we spoke about last week. Elon Musk hosted this week's Saturday Night Live. As expected, the Dodgecoin cryptocurrency came up during a weekend update section. Someone asked him what is Dodgecoin and he went into some detail and started talking about it. There was a lot of speculation about the price of Dodgecoin cryptocurrency off the back of it and it fell actually 22% as the show began which resulted in it being down nearly 30% although, it has seen 130 fold increase this year in value off the back of everything that's been happening. There's been a lot of discussions about what's causing so much interest in it given that it was created originally as a meme coin. Charles Hoskinson, one of the co-founders of Ethereum and also the creator of the Cardano blockchain network has come out with some quite rational and balanced views on it. He sees Dodgecoin as an actual threat to the crypto space because he sees that Dodgecoin being a meme coin it could could destroy the reputation of the industry just because of its some somewhat comical nature and the fact it was never created as a serious thing. The other side is that people really are just buying it to get rich, there's no underlying network utility which people are buying into as such in the same way that they are with the scarcity narrative of Bitcoin and the programmability and computing capabilities of the Ethereum network. Off the back of this, it hasn't stopped many companies getting involved more in terms of supporting it. Etoro actually listed Dodgecoin ahead of Musk's appearance on SNL, Gemini also listed it recently as well. The actual coin has a market capitalization of over $70 billion which makes the coin worth more than Twitter, Capital One and Nintendo, which is kind of ironic given that Elon Musk has been using Twitter to talk about Dodgecoin and then it's off the back of this it's resulted in the actual capitalization exceeding that of it. This has also put Dodgecoin at number four in terms of the largest crypto currency by market capitalization, bringing it closer to Binance's coin. We've also seen the volumes in Korea exceed those of its entire stock market as well in the last week so there's a lot of activity happening. Coinbase has come out this week to say that they're going to allow users to pay for crypto using PayPal accounts. This will drastically increase the ease of which individuals can fund their Coinbase account. One of the challenges that a lot of people encounter is that they have to use their bank accounts to fund the accounts. Some banks are slightly wary of supporting crypto payments so by using the PayPal rails it just makes life a lot simpler for people. PayPal have also said that they've had exploratory talks about launching a stablecoin. Apparently they've been speaking with a number of the top stablecoin protocol developers suggesting that they might be working with a third-party company on this. Ava Labs, the team behind the Avalanche blockchain, is one of the organizations that's been speaking with PayPal about stablecoins but it's not clear what other protocols have been involved in the discussions. Grayscale have become a crypto sponsor of the American football team the New York Giants. They will be presenting as home game sponsor and support some of the Giants training camps. They'll also be hosting educational seminars and cryptocurrencies for the team's personnel. Again, it's this whole thing of crypto starting to be normalized. When you start seeing crypto brands showing up alongside established sports teams it starts to put it more and more into the minds of everyone. Goldman Sachs have now started offering Bitcoin derivatives. They have started offering trading with non-deliverable forwards which is a derivative that's tied to the price of Bitcoin which investors can pay for in fiat. It's also been announced this week that they're one of the lead investors in a series b round for the blockchain data firm Coin Metrics. There's been a lot of interest in the last few months with the great rise of crypto in analytical tools for crypto prices. We saw Chainalysis having some very hefty investments a few weeks back and this continues to show that there's more and more interest in companies that can provide analytics for this space. Sotheby's has become the latest auction house to accept cryptocurrency in an artwork sale. They've announced that a piece of art that's going to be sold can be paid for in crypto and they're working with Coinbase on this. The piece of art is by the famous artist Banksy, it's called 'Love is in the Air' and it will be auctioned on May the 12th in New York. The bids can be paid for in either Bitcoin or Ether. Given Banksy's anonymity and the appeal that he's had for a number of years within the more underground art movements and his very innovative ways of working, I think it's great to see that he's embracing the crypto revolution and starting to do sales and offerings here as well. The S&P Dow Jones now offers a cryptocurrency index series and an S&P Bitcoin index. These indexes are known as the digital marketing indices. They measure how digital assets that are registered on cryptocurrency exchanges are performing. The series was announced in December 2020 and they're curating pricing data from the crypto software provider Lukka but the indices are curated by S&P's index committee. The three indices cover Bitcoin, Ethereum and cryptocurrency mega caps. S&P have said that they intend to expand the series to other coins later this year. So, again more signs of the normalization of crypto as an asset class with these pricing providers getting very involved. A Mexican Bitcoin exchange, Bitso, has raised $250 million which makes it Latin America's first crypto unicorn. The round was led by head hedge fund giant Coatue and investment firm Tiger Global which puts the valuation at $2.2 billion. This makes it one of the largest fintechs in the region and as we said the first crypto unicorn. An Ethereum 2 staking project called Lido has raised $73 million in a new funding round led by Paradigm. Lido is a liquid ETH2 staking protocol. Right now, people who've invested in the ETH2 network have their ETH cryptocurrency locked up in the network until the main Ethereum network transfers across to it which hopefully will be happening later this year. When the funds will become movable is not clear quite yet but the idea here is that people who've staked ETH can then use it to earn yield using the Lido project. It's another very innovative DeFi application allowing people to earn additional yield on their Ether that's locked up in the ETH2 network. Nokia has also announced that they're launched a blockchain powered marketplace for data trading which will provide secure data trading and AI models. The idea here is that it will enable trusted exchange and monetization of data via a private blockchain and it offers secure multi-party transactions to benefit a wide range of industries. Amazon have rolled out a Chia crypto mining solution on AWS in China. What they say on the site is that users can deploy cloud-based storage system in as quickly as five minutes in order to mine XCH the native cryptocurrency on the network. Right now this seems to be just limited to China but because of the interest it's received by Chinese investors they decided to move forward and put something out there. In DeFi, Uniswap has successfully launched its V3 on Ethereum. The new Uniswap V3 release is for people who are providing liquidity funds available for others to trade on the platform, giving them more control over the actual price ranges that their capital is allocated to. Historically it would just be put in a pool and there wasn't too much that you could configure about it whereas now it gives you more flexibility. The other notable feature with Uniswap V3 is that multiple fee tiers will enable liquidity providers to earn various amounts depending on the levels of risk that they take on. Uniswap's creators claimed that this is the most flexible and efficient money market ever designed. CryptoPunks, one of the most popular NFT projects on the web, have just released their latest project called Meebits. The project boasts 20 000 procedurally generated 3D characters that are tradable on the Ethereum blockchain. They hope that these 3D characters will eventually serve as avatars for virtual worlds games and VR. It's been an incredibly successful project, in the last week they've managed to sell $125 million worth of them. Terra Virtua and Hashmasks have unveiled a rolling royalty model with a joint NFT collection which sold out very quickly. During the week leading up to the release, people were able to register their masks in the queue and then when the drop happened, the Hashmasks sold out in less than five minutes which was a very fast sale on the marketplace they were listed on. It's the first time that Hashmasks NFT owners will be entitled to a part of the royalties sold from an ongoing collection. What this means is that there will be rolling royalties for Hashmask users to derive income from a tertiary NFT asset. Again, it's another big innovation happening in the space. eBay have also started making a bit of noise about crypto and NFTs. They've said that they want to start supporting NFT digital collectibles. eBay's CEO, Jamie Iannone, made the indication during an interview with CNBC. He also said they're also looking at supporting crypto as a payment offer as well. An NFT startup called RTFKT has raised $8 million in seed funding led by Andreessen Horowitz. They're best known for actually holding an NFT sale of digital sneakers in collaboration with an 18 year old artist called Fewocious earlier this year which yielded over $3 million in under seven minutes. What's interesting here is that they're focusing on digital fashion with their offerings. They started off with sneakers but I'm sure from here they'll continue to expand. Dole have partnered with the 'Hungry Artist' David Datuna to help address hunger. They announced that David Datuna is going to be working with the Dole sunshine company to create an NFT for a collection inspired by their'Sunshine for All'(TM) rallying cry. The idea is to increase awareness of food insecurity and malnutrition worldwide and the works will be made available on the Rarible platform. The Ethernity Chain has presented the Mohammed Ali and Pele NFT collections. They've been putting up auctions for some exclusive NFTs for the boxer Mohammad Ali and also Pele the famous Brazilian footballer. Also in boxing news, there's a marketplace for NFTs being launched by travala.com and they're going to be pairing up with the heavyweights champion boxer Tyson Fury. Finally, a collaborative NFT art project called the dCanvas has opened. They're creating a limited allocation of 256 NFTs to the public. dCanvas is the largest collaborative NFT art project and is going to be allocating the 256 public releases to a community pixel board. Each one of these NFTs gives its owner full control over pixel colors at a specific location on the canvas board. The NFT holders may participate in community based NFT backed art piece creations through an independent decentralized autonomous organization giving the community control over the projects in its future. The key thing to take away here is that they're very focused on this community NFT creation and having governance using a DAO. This is a governance model that exists on top of a blockchain so they're really taking the kind of decentralization plus collaboration approach to these NFTs. In terms of the metrics this week there's been some big moves, the crypto market capitalization is up to up 10% to $2.4 trillion, the amount locked in DeFi is up over 20% to just under $84 billion and the seven day NFT sale volume is up almost 400% to $170 million with an average sale of$31,000. This is thanks to the Meebit sale which we mentioned earlier on. That's all we have for this week, if you like what you hear please subscribe to our podcast and our YouTube channel, links to all items discussed are available in the show notes and our website weekinblockchain.com. We also host a weekly Clubhouse room every Monday at 12 p.m eastern, 5 pm UK if you'd like to discuss any of the items we've covered here. Thanks and I'll see you next week.