This Week in Blockchain on 31st May 2021

Hi, I'm Conor Svensson, Founder and CEO of Web3 Labs and this is your Week in Blockchain on Monday the 31st of May 2021. The leaders this week include Goldman Sachs' latest endorsement for Bitcoin, Circle's latest major funding round, Mark Cuban putting his weight behind Polygon's Eth scaling protocol, CBDC activity continues to heat up, more activity around the blockchain for SpaceX, Dfinity's huge developer fund for building on the platform and Binance's upcoming NFT platform launch. Goldman Sachs has published a report about Bitcoin. In this report it includes comments from a number of high-profile members including their head of digital assets. Goldman Sachs you may recall launched a crypto asset trading desk earlier on this month. Some of the comments included in the report state that Bitcoin is now considered an investable asset in its own right although it does come with its own idiosyncratic risk. Its activity doesn't behave in the same way that other assets do so in their view it's not tightly correlated to other market assets. This is also reflected in terms of what they're seeing with their clients and others trading Bitcoin as it's an asset class in its own right. They do however also call out Ethereum and the potential of Ether as an asset class as well just because of the popularity of DeFi and NFTs and various other things. They think that this dominance could continue to grow. Todd Morley, the co-founder and former chief executive of the financial services firm Guggenheim Partners is planning to build a blockchain tower in Manhattan. Apparently this tower is going to provide a wireless network aiming to improve access to digital ledgers. What's not fully clear is exactly how this makes it easier to access a blockchain given that typically all you require is an internet connection. I'm curious to see how this one will pan out but the idea is that it makes access more ubiquitous to the technology so it'll be an interesting one to watch. Todd Morley also shared his thoughts on what the future looks like, believing that Ethereum could play a central role because of its much higher utility than Bitcoin. He has a new venture called Overline Network which is building the skyscraper we just mentioned but it's also planning to host the world's largest NFT museum. The Overline Network is very focused on interoperability with to help avoid some of the challenges that people face such as the high gas fees for running on networks such as Ethereum. The other thing he called out too was that the Ethereum community of developers is growing at a far greater rate than on any other blockchain so again another key person putting their weight behind the platform. Circle, the provider of the stablecoin USDC, have raised close to $440 million funding round. They've got a number of major backers for this including Fidelity Management and Research, Intersection Fintech Ventures, Atlas, Digital Currency Group as well as Michael J Price and friends. There's currently $22 billion of USDC in circulation according to both Circle and Coin Gecko and there's a number of services including Dapper Labs's NBA Top Shots that are making use of it. So, unlike Tether with the USDT , USDC has come under less criticism about the reserves that they hold. and they're really positioning themselves as trying to be the most widely supported and also the closest thing there is to a fully regulated decentralized US dollar. Mark Cuban has invested in the Ethereum layer 2 protocol Polygon, Matic the underlying token shot up off the back of this. Almost every week the subject of scaling on Ethereum comes up. Polygon is certainly one of the leading platforms at the moment that we're seeing a number of protocols starting to actually open up support for as well. Mark Cuban specifically called out how he's using it and integrating it with one of his platforms lazy.com which is a company that allows people to easily display their NFT purchases. Back in Bitcoin news, Elon Musk tweeted that he'd spoken with the North American Bitcoin miners and they were committed to publish current and renewable energy usage and asking miners to do so. Of course, it being Elon Musk tweeting this it had significant effect on the crypto markets and suddenly the price of Bitcoin shot up off the back of it. Michael Saylor at around the same time, disclosed that he had hosted a meeting between Elon Musk and executives from a number of Bitcoin miners in North America including Argo, Hive, Marathon, Riot and Hut 8. They said that they'd agreed to form a Bitcoin mining council to provide greater transparency around sustainable energy usage for the Bitcoin network so again we'll see how this fascinating space continues to evolve. The crypto derivatives provider Opium and the DeFi platform UMA are working together to provide insurance products for the SpaceX flights. This will see Opium plug into UMA's optimistic oracle to produce financial derivatives hedging risks related to SpaceX flights. They basically work as binary options contracts and allow people to purchase insurance against the failed launch of SpaceX. Insurance is already offered by SpaceX at about five percent of the value of the payload and Opium and UMA are attempting to compete with that. They really see this as being an opportunity to demonstrate efficiencies that potentially DeFi can provide for making insurance cheaper. Also related to SpaceX, you have Space Chain who are deploying a commercial blockchain solution. What they're saying is that they're planning on launching Ethereum nodes in space which brings physical security when transacting in crypto assets Space Chain is expected to send a number of commercial services into orbit next month the first one of these is slotted for June the 3rd and it will see Space Chain's space node launched and ultimately installed at the International Space Station which will act as a way of demonstrating the Ethereum technology can run on the International Space Station. Vitalik Buterin, the founder of Ethereum, has published a lengthy paper about the limits to blockchain scalability to help address some of the claims that have been made by Elon Musk who's spoken about trying to speed it up significantly in the context of Doge coin. Vitalik really calls out the specifics here and goes into details and around the sharding and the limitations associated with with all of this. Apple is on the hunt for someone with cryptocurrency experience in an alternative payments business development role. The job posting indicates that Apple remains interested in cryptocurrencies at least in the context of alternative payment methods. They're looking for someone who's got a significant experience in this space to lead the company's alternative payments partnerships. PayPal is going to be adding support for third-party crypto wallets. We've spoken previously about how PayPal is embracing cryptocurrency support and now what they want to do is add support so that people can withdraw funds directly from their PayPal wallets to their crypto wallets. They haven't said exactly when this will happen be happening but it should be quite soon. It's likely that they'll roll it out regionally if their previous feature updates are anything to go by. Coinbase announced something called fact check this week on their blog. The idea here is that they're going to have a section on their blog for addressing misinformation and mischaracteristics about Coinbase or crypto that's being shared around the world. Of course one of the problems that everyone suffers with is the impact of fake news but certainly in the world of crypto you have Twitter for being like a real echo chamber for certain sentiments and views on the market. Coinbase clearly wants to dispel some of the myths that are associated with it so some of the the topics that they're addressing initially include addressing misinformation about the effects Bitcoin mining has on the environment, misinformation that spreads on social media and then what's been said in government and industry about illicit activity in crypto. In the world of CBDC there's been more big announcements this week and it's just continuing to gather pace with four different jurisdictions. There's been some significant news coming out. Indonesia has announced that they're going to launch a central bank digital currency they're currently assessing which technology to use for their digital rupiah but the intent is that once issued it will be a legal payment instrument in Indonesia alongside banknotes. The central bank doesn't have a timeline yet for when they'll implement this in Indonesia. The country's transaction frequency on digital banking platforms has risen 60% on an annual basis to more more than 570 million transactions in April while the value of these increased as well significantly alongside this. Cryptocurrencies themselves are banned as a payment method in Indonesia but it is legal to trade in them and the government has enacted a tax legislation for crypto trades. South Korea too have announced that they're going to be kicking off a digital currency experiment in the summer. This is a pilot program looking at a central bank digital currency. South Korea's central bank has opened up bids to suppliers to be the role of the technology supplier for the trial. It will be conducted in a virtual environment in a couple of stages and the first one's going to run from August to December 2021. The key thing to call out here they don't have any plans to issue its digital currency this really is just a pilot program looking at the feasibility of it. The South African reserve bank as well is launching a a retail CBDC feasibility study. They're looking at a general purpose retail central bank digital currency. The South African reserve bank have been one of the pioneers of CBDC's, they kicked off the project a couple of years ago now but that was that was focused on the wholesale CBDCc markets. Remember that there' two parts to CBDC initiatives, one part is the wholesale markets which is between regulated financial institutions and then the other part is what's focused on retail which can impact consumers or individuals directly. It's fascinating to see that they're going to be looking at the the retail aspect as well. Then finally, Sweden is also moving forward with its e-corona CBDC. This again is a pilot, they're moving on from only having simulated participants to cooperation with external participants in a test environment and the experiment will involve participation between Riksbank and Handelsbanken. These are retail bank chains based in Sweden. In the world of crypto, the stable coin supply has crossed the $100 billion mark. Most of that's been driven by the two main stable coins, Tether's USDT and Circle's USDC which we mentioned earlier on. Again it shows just there's ever increasing growth and interest in the stable coin markets. Hedge funds have continued to get more and more exposure to crypto during the past year. According to PWC, 46% of all hedge funds are now investing in the crypto industry via Bitcoin and Ethereum and this number actually doubled in 2020 going from 2 billion in 2019 to 3.8 billion in 2019. I'd imagine once the figures are there for 2021 that figure's going to have jumped again even more. More than 90 percent are trading in Bitcoin and then Ethereum with 67% and then the top five Litecoin, Chain Link and Polkadot make up the the remainder that were in the survey. Everledger has announced a partnership with a product verification Source Certain International to enhance the transparency in the mining industry. Everledger has been very well established in the supply chain space for a number of years with their blockchain-based platform. Metals and mining supply chains are notorious for human rights violations and unsustainable practices and there's a big consumer desire here to understand how minerals are extracted but this is a relatively recent thing that people have really wanted to see. This is a big step forward with SCI and Everledger to provide more transparency and these these very important supply chains. The Dfinity platform launched their Internet Computer earlier on this month after five years of development and over $100 million raised from a number of investors including Andreessen Horowitz and Polychain Capital have said that they're putting aside a $200 million fund to help developers build the Internet Computer. The idea behind the Dfinity project is that they want to take on the cloud computing markets and free the world of its centralized infrastructure. The$200 million fund is there for developers to apply for and companies to apply for who want to build on top of the platform and help them in building out their vision. It's a fairly common thing with blockchain protocols for them to do this but certainly the amount of money which they have here is is pretty significant because normally you'll see there might be a fund of tens of millions but not hundreds of millions. Polygon, the Ethereum layer 2 scaling technology which we touched on earlier with Mark Cuban's investments, they've also announced that they're going to be integrating with Google's Big Query which is going to make it much simpler to provide in-depth analytics of the Polygon blockchain data. One of the things with these protocols when they emerge is that they're slightly different to what's there already so people need to take time to familiarize themselves with it. The more analytics that are available the better, Polygon are really trying to help build this vision of being Ethereum's internet of blockchains. They also announced their SDK as well this week too so this sort of integrates with Google's technology, although centralized, it's still very helpful for just building greater understanding of the platform and provide more analytics for people. Moving on to DeFi, Uniswap v3 has flipped the v2 platform on volume. We've mentioned last week how it sounded like this was going to happen soon and now that it obviously has. Hayden Adams, the founder of Uniswap, commented that both are actually earning more daily and weekly fees than Bitcoin miners which is very significant for people on the platform. Also, Arbitrum, an optimistic roll-up scaling solution for Ethereum, has launched this week. A Uniswap governance forum user also put forward a proposal suggesting that Uniswap v3 should launch on it too. There was lots of support within the community but we'll see how it goes. Arbitrum is an optimistic roll-up scaling solution for Ethereum. The DeFi platform FormationFi has joined forces with Polygon to develop a secret dark pool automated market maker. For those of you who are familiar with the world of equity trading this notion of a dark pool is what's called a liquidity venue where you can trade with other participants but in a way where you don't have visibility of what assets are in there via a transparent price discovery and so it's interesting to see these kind of more traditional things from the world of finance bubble over into into DeFi. This cross-chain liquidity partnership will run on top of Polygon's layer 2 solution and support Formation Fi's vision for chain agnostic yield farming 2.0 very much like a frontier type technology but it's fascinating to see these innovations move forward. The Shark Tank co-host Kevin O'Leary is set to launch a DeFi firm. He's announced that he intends to launch a DeFi investment company called DeFi Ventures. He's the major shareholder and he has a led a $20 million fundraising round. He's previously shared why he's so interested in the DeFi sector and sees that it's going to play a crucial role in the overall crypto space. The world of NFTs, Binance has revealed the first batch of creators as its NFT marketplace is now scheduled to go live on June the 24th. When it launches it's going to provide digital collectibles from some of the top personalities including musicians, digital artists, athletes and celebrities and they're also accepting applications from individuals to feature their NFTs. In terms of the the people involved who are going to be there, the first slate of creators include Lewis Capaldi, the the two-time Brit award winner, Trevor Jones and eStarPro Esports club and professional football stars Michael Owen and Alfonse Davis. Given how much influence that Binance has just as a trading venue but also within the world of DeFi, it really does have the potential to be huge when this launch happens later this month especially given that there is so much interest in NFTs and lowering the barriers to entry for people. The blockchain startup, Propy, is planning its first ever auction of a real apartment as a collectible NFT. They have a platform that introduced smart contracts for real estate sales and now they're pushing the boundaries by auctioning a real apartment as an NFT. It's going to be attached to a one bedroom part in Kiev, Ukraine. The auction itself will happen over a 24-hour period so we'll see how that goes. The gaming retailer GameStop is building an NFT platform on Ethereum. They've quietly unveiled a new web portal for their NFT platform. Also the Tezos powered OneOf marketplace which is an NFT platform is going to be launching. It includes collectibles from current and legacy artists such as Whitney Houston and Quincy Jones. The OneOf NFT marketplace was founded by Quincy Jones and his Quincy Jones production firm and it will launch in June. Dapper Lab's NBA Top Shots NFT platform has crossed the million user mark which is a huge milestone for them. They've notched over $700 million in total sales in less than a year, having this number of users too is an incredible figure to see that much traction happening there. Also a UFO sighting authenticated by the CIA is getting sold as an Ethereum NFT. An NFT frame from the alien autopsy film will be auctioned off on Rarible. The buyer will also receive a physical 16 millimeter frame from the original film that was shot in 1947. The frame clearly depicts the autopsy of an extraterrestrial said to have crashed landed in Roswell. For those of you who were watching the X-Files back in the 90s, I'm sure this will strike a chord with you. Apparently the NFT volumes in the market has more than tripled according to dApp Radar with the sales rising from almost 300 percent from 21 000 per day to 82 000 per day so far in May. Although as our stats report the numbers have gone down in the last couple of weeks, which leads us nicely on to our metrics. The crypto market cap is up just shy of 10% to $1.56 trillion. The assets locked in DeFi is just over $60 billion and that's up 16% in the last seven days. We've seen NFT sales just shy of $18 million which is up 23% , the average price of $787. 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 at our website weekinblockchain.com. Thanks and I'll see you next week.