This Week in Blockchain

This Week in Blockchain on 17th May 2021

May 17, 2021 Season 1 Episode 14
This Week in Blockchain
This Week in Blockchain on 17th May 2021
Chapters
This Week in Blockchain
This Week in Blockchain on 17th May 2021
May 17, 2021 Season 1 Episode 14

Each week your host, Conor Svensson, founder and CEO of Web3 Labs, provides a rundown of the major events that took place in the blockchain industry during the past week. 

  • Watch this podcast here
  • Discuss this podcast on Clubhouse weekly at 12:00 EST / 17:00 GMT

Links to items discussed:

Show Notes Transcript

Each week your host, Conor Svensson, founder and CEO of Web3 Labs, provides a rundown of the major events that took place in the blockchain industry during the past week. 

  • Watch this podcast here
  • Discuss this podcast on Clubhouse weekly at 12:00 EST / 17:00 GMT

Links to items discussed:

Hi, I'm Conor Svensson, founder and CEO of Web3 Labs and this is your Week in Blockchain on Monday the 17th of May 2021. The highlights this week include Elon Musk changing his tune on Bitcoin while continuing to promote Doge, Vitalik Buterin and significant charitable donations with meme coins, the digital Yuan edging closer to widespread roll out in China, Coinbase becoming the most popular app on the app store, Uniswap flipping Bitcoin, ebay adding NFT support and Merriam Webster adding the word NFT to the dictionary and having a token to boot. Big news this week was Tesla announcing that they're going to stop accepting Bitcoin for car purchases, not too long after they announced that they'd start accepting them in the first place. They've said that this is due to their concerns about the great cost to the environment of the cryptocurrency. Off the back of this we saw a sharp decline in Bitcoin's price. However there's still been lots and lots of activity off the back of it with Dogecoin with Elon Musk continuing to talk about that in the last weeks and there's been a few things that have popped up. One of these is the SpaceX, Elon Musk's space company that makes spaceships, is going to be accepting Dogecoin payments and it plans to launch a "Doge 1" mission to the moon in 2022. The idea here is that they'll accept Dogecoin payments to help fund this mission which will be launched next year. Elon Musk also asked the Twittersphere if they wanted Tesla to accept Doge and 78% unsurprisingly came back and said yes. He also claims that he's working with the Doge devs on potential improvements. He tweeted that he's engaged with them on improving the actual transaction of efficiency. The other thing though that's fascinating is that the Dogecoin developers say they've been working with Elon Musk since 2019 apparently and he's been encouraging them to improve the transaction throughput and provided lots of advice and input allegedly during this period. Coinbase have come out and said they're going to start supporting Doge as well as other assets because they're certainly losing out a lot to other exchanges like Binance which have a much wider portfolio of different coins that people can trade on the platform. Mark Cuban has countered Elon Musk and said that his basketball team the Dallas Mavericks will continue to accept Bitcoin. I think the driver he mentioned is that in his view replacing gold as a store of value will help the environment and ultimately shrink the big banks and coin usage which will have more widespread benefits for society as a whole. Off the back of this news, the proof of stake coins Cardano and Polygon, one of the scaling coins for the Ethereum network we've mentioned previously, reached all-time highs. One of the other amazing things that happened around the same time was that Vitalik Buterin, the creator of Ethereum, offloaded a whole load of dog-themed meme coins that he had been receiving. He has some crypto wallets which are well known and so a number of projects tend to throw coins to these wallets with the hope that he'll start promoting them. He actually received more than a billion dollars worth of these meme coins including the Shiba Inu coin, Dogelon and Akita Inu. These crypto currencies have been taking off following Dogecoin's rally, they're built around similar memes and they have much larger token supplies. This week in a single transaction, Vitalik Buterin donated 50 trillion SHIB tokens worth $1.2 billion to India's Covid Relief Fund that was set up by Sandeep Nailwal who's the co-founder and CEO of Polygon, the proof-of-stake Ethereum scaling solution that we mentioned just now. This was in addition to last month when Buterin donated about $600,000 in Ether and the Maker token to the fund. It's a really great initiative from Vitalik to do this but it caused the price of Dogecoin to really go down because it showed that he wasn't interested in these tokens. The asset manager VanEck has become the first firm to submit an application for an Ether ETF with the United States Securities and Exchange Commission. They want to make it easy for retail and institutional investors to gain access to Ether, which is the second largest cryptocurrency by market cap, without having to own it. VanEck actually submitted a Bitcoin ETF proposal to the SEC previously and there's been a lot more noise about the Bitcoin ETF proposals to the SEC because so far none of them have been accepted. The Winklevoss twins being prominent examples of the people that have been trying to do this for a number of years now. However, there's apparently optimism here that maybe one of these applications will get through successfully, especially with the success with both Bitcoin and Ethereum or Ether ETFs getting listed on the Canadian stock exchanges recently. China's digital Yuan is inching closer to a full rollout via AliPay. One of the world's largest banks in China, ICBC, has allowed users to activate China's e-CNY wallets from inside the bank's mobile app. AliPay has also reported enabling the e-CNY module for some users inside their payments app too which basically means that Chinese users have additional methods to participate in the long-running digital Yuan test. According to the top charts listed on the Apple app store, Coinbase is the most popular ahead of Tik Tok, YouTube, Facebook, Instagram and trading app for Robin Hood. Just seeing that shows how much interest there is right now in cryptocurrency trading. Where it could go from here remains to be seen of course but that's a lot of people using the Coinbase app which just shows that it really has crossed over into the mainstream now. Facebook's Diem is going to be launching a US dollar backed stable coin. We mentioned about this a few weeks ago but the Diem foundation have now withdrawn an application for a FINMA license which was based out in Switzerland because they want to focus their stable coin on the US participants. FINMA noted in a statement that the application for a license has been in place since April 2020. US officials are investigating crypto exchange Binance amid the huge boom that's been happening. Officials from the department of justice and the Internal Revenue Service in the United States are seeking information about Cayman Islands based Binance from people with intimate knowledge of the company's operations. It's not clear exactly what they're probing into but the report has stated that prosecutors within the DOJ's bank integrity unit, who are charged with the complex international cases involving money laundering or at least partly, are leading the inquiry. Bloomberg pointed out that more illicit funds flowed through Binance in the last year than any other crypto exchange according to Chainalysis. Of course though, because it's the world's largest crypto exchange it's not a great surprise in certain respects that that could be the case. The investment bank UBS are hot on the heels of Goldman Sachs and are looking at ways to offer crypto investments to their rich clients. They're currently assessing what offers they can create but again what they want to do is give exposure to their clients. UBS being one of the world's largest wealth managers, there's just a lot of client demand for the asset class at the moment. Grayscale's parent company have bet one million dollars on Dogecoin's decline. Barry Silbert the founder and CEO of Grayscale revealed that his firm has put a one million dollar short position on Dogecoin. In a tweet he said now the time has come for people to move back across to Bitcoin, it being in his view the more stable and serious asset. But, given everything that Elon Musk's doing here I'm sure he's generating a lot of counter interest in Doge which is being reflected by the meteoric price rise we've seen. Microstrategy have bought another 271 Bitcoin, adding to their existing substantial position in the cryptocurrency and MoneyGram in the US is now allowing retail Bitcoin buying. Tether have finally released the breakdown of its $42 billion in crypto reserves. They claim that they hold over 75% of their reserves in cash and cash equivalents. The remaining is in loans to unaffiliated entities and corporate bonds and precious metals, in addition to some additional investments. Adhara, the blockchain technology company have who focus on tokenized blockchain banking solutions such as cdbc's and interbank payments, have raised their seven and a half million series A round. Microsoft has announced this week that they're going to stop supporting their Azure blockchain service in the autumn. However, ConsenSys who provides the Quorum technology which it uses are in effect going to take over the running so there's a migration path there for users. The game developer Ubisoft has unveiled the next batch of crypto startups it plans to help grow. Ubisoft are very well established in the world of gaming, they're behind huge game franchises like Assassin's Creed and Just Dance. They've started to invest in the crypto space by finding crypto based gaming companies to support. In the world of DeFi this week we've seen another high profile hack. This time it was Rari Capital that had an exploit which drained $10 million worth of ETH from their pool, which was 60% of all users funds. Apparently though they're looking to use their developer fund to help compensate the victims of this so hopefully all is not lost for them. It's been an another interesting week for Uniswap, we recently spoke about their V3 release, Vitalik Buterin posted on their forum this week that UNI should actually be an oracle token. The reason being is that algorithmic stable coins need an oracle for the price of ETH and USD in order to function and also synthetic assets need an oracle for the price of ETH denominated in whatever asset they're mirroring. He recommends that Uniswap and the UNI tokens step in and provide such an oracle that could be modeled after the protocols Augur or UMA. This would be to specialize in providing price data that's robust and extremely costly to manipulate an attack. Currently the most governance-minimized stablecoins are using Chainlink as their oracle but in his view it's really valuable for many oracle use cases. It's a very complex system with many features and the incentives are not as clear as they could be potentially. The other thing that happened this week was that Uniswap flipped Bitcoin on its daily revenue. It's generated over $7.1 million in fees versus Bitcoins $4.6 million during a 24-hour period in the last week. Another big announcement is that the DeFi lending platform Aave revealing a permissioned pool for institutions. The idea here is they'll have permissioned DeFi pools for lending assets that will be subject to KYC and AML restrictions. This will be fascinating to see how it plays out because it's one of the leading DeFi providers opening their platform up in a way that could be institutional friendly. The GoodFi coalition have added more industry leaders. The GoodFi coalition have the goal of being able to support 100 million DeFi users by 2025. Seeing more people joining this initiative is a great thing for decentralized finance because, for anyone who's used it, it's still quite clunky and it's slow to to work with on a number of platforms so and it's great to see this initiative getting more momentum. The 1inch network have launched on the Polygon network. They aggregate some of DeFi's most essential projects into one app. The reason for going live on Polygon, which we mentioned earlier on today in a different context - it's the network that provides a scaling solution built on top of Ethereum, is to actually provide lower transaction fees and faster transaction times for their users which is one of the things that Polygon does very well. Cardano are getting ever closer to having a DeFi offering with what they've called their five million dollar deFIRE fundraiser. This platform will provide execution services on decentralized exchanges for token swaps, order routing services across the centralized exchanges and intermediary services between wallets and decentralized exchanges. One of the things that was spoken about earlier on this year was how Cardano is going to in effect integrate tokens natively into their protocol so you'll be able to swap ADA for other tokens rather than it be sort of an abstraction like it is in Ethereum. Again seeing more movement happening in Cardano and getting closer to launch, I think is making a lot of people quite excited about it. In the world of NFTs, the Merriam-Webster dictionary are going to auction off an NFT of its new definition of an NFT. They've added the definition of an NFT to its dictionary and they're auctioning off a token this week. The definition itself defines an NFT as "a unique digital identifier that cannot be copied substituted or subdivided that is recorded in a blockchain and that is used to certify authenticity and ownership as a specific digital asset and specific rights related to it". So, for those of you who are struggling to explain what an NFT is you can point people to the dictionary now! Christie's have auctioned off nine Crypto Punk NFTs for $17 million. We mentioned that these were being listed in a previous issue and they've obviously sold for a significant price which isn't that unexpected given that they came from Lava Labs who really are one of the pioneers of the NFT movement and they've certainly been in the space for a long time. We mentioned last week about their Meebit tokens which sold really really quickly, so clearly what they're creating here is perceived as having a lot of value within the NFT community. Ebay are also getting involved in the NFT game allowing sales of NFTs on their platform. Users can bid for NFTs as they would for any physical item, however all payments will be made in US dollars unlike other NFT platforms which usually accept Ether or other cryptos for NFT payments. Many of the NFTs currently available for sale on ebay's platform appear to be from the Wax blockchain with sellers typically stipulating that buyers create a Wax wallet in order to receive their NFT which is you know kind of logical. Sports, hip-hop and digital arts have collided with Jay-z and Serena Williams investing in Bitski, an NFT marketplace that aims to simplify creating buying and selling NFTs. It refers to itself as the Shopify for NFTs and they just closed the $19 million series A funding round led by Andresson Horowitz. The NFT game developer Sky Mavis announced that it had raised the seven and a half million series A funding round to support Axie Infinity. It's an Ethereum based Pokemon and Tamagotchi inspired monster collecting and battling game with investors including Mark Cuban. The founder of the Decentraland platform has unveiled a project bringing NFTs to the big-time video games in his words. Big Time Studios, a company formed by gaming industry veterans, whose mission is to bring these games to a massive audience came out of stealth and announced that their plan to raise $21 million in new funding. It did raise a $10.3 million series A with a lot of very significant investors including digital currency group Circle responsible for USDC and Ashton Kutcher's Sound Ventures. Apparently an additional $11 million in funding will be used to invest in partner gaming companies that's almost complete which brings it up to that $21 million figure. The NFT games firm Animoca brands is valued at one billion dollars following an $89 million raise. The Hong Kong based firm is not only the publisher of prominent upcoming crypto games like the Sandbox and F1 Delta Time but is also invested in and partnered with other notable players in the space. Also, there's a new platform called Creaticles which has launched that allows buyers who are known as requesters to place specific requests for NFTs and get them custom made to suit their liking. It sounds kind of similar to other marketplaces where people can engage with designers where they can put out a request for what they're after, someone comes back and then makes it for them. So the idea is that the end deliverable is an NFT. It's good to see that this opens up new opportunities for people to get them created who might not have the background in art and so on that could be seen as a prerequisite to launch some of these NFTs. Again, it would be fascinating to see how that expands but also whether platforms like 99designs and so on that are already well established in the design space start to embrace these sorts of innovations too. Finally, Dapper Labs have been sued on allegations that the NBA Top Shot Moments are unregistered securities. The documents that have been submitted claim that the Top Shots which have been phenomenally successful, are securities because their value increases with the success of the project. Although it's still early days, another one to watch and see what Dapper Lab's response is because it could have ramifications from more NFTs that are out there. Moving on to our metrics, the crypto market cap has only it's dropped slightly down just over 6% of $2.28 trillion, the assets locked in DeFi has only marginally decreased so it's just shy of $82 billion, the seven-day NFT sales average price is down significantly and this is off the back of the Meebit sale which resulted in the NFT prices shooting up last week. The average sale price is rounded about two and a half thousand dollars with the overall sales that happened in the last week at $37.5 million. That's all we have for this week. If you like what you hear please subscribe to our podcast and YouTube channel and of course like and review what you hear. Links to all items that are discussed are available in the show notes and at our website weekinblockchain.com. We also host a weekly Clubhouse room every Monday at 12 p.m eastern, 5 p.m UK time if you'd like to discuss any of the items we've covered here. Thanks and I'll see you next week.