This Week in Blockchain

This Week in Blockchain on 28th June 2021

June 28, 2021 Season 1 Episode 20
This Week in Blockchain
This Week in Blockchain on 28th June 2021
Show Notes Transcript

Conor Svensson, founder and CEO of Web3 Labs, provides a rundown of the major events in the blockchain industry during the past week. We cover #crypto​, #enterprise​, #DeFI​ and #NFTs​.

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Links to items discussed:

Cryptocurrencies Plummet
China + Crypto
Andreessen Horowitz
Goldman Sachs
Banque de France CBDC Experiment  
Alchemy + Optimism
London upgrade launches on testnet 
Wirex Fireblocks Integration   
Wicked Cranium NFT
Rarible on Flow
Reddit Snoo NFT
Alipay NFT
'Gotchiverse' litepaper
Beeple's NFT Marketplace

Hi, I'm Conor Svensson, founder and CEO of Web3 Labs and this is your Week in Blockchain on Monday the 28th of June 2021. The highlights this week include China's crackdown on cryptocurrencies. Goldman Sachs performing a Repo trade on JP Morgan's blockchain platform. Brave's new search engine. a16z's latest crypto fund. Binance's NFT marketplace launch although regulatory issues may be looming for the firm and Beeple's latest NFT project. The major cryptocurrencies this week all suffered significant drops including Bitcoin, Ethereum and Dogecoin off the back of China's crackdown on cryptocurrencies. Local authorities claim that the crackdown has cut the the country's Bitcoin production by more than 90% and given that it's estimated that 80% of global Bitcoin operations take place in China has the potential for significant impact. There are stories of a number of firms having moved their mining operations out of China or will be trying to as a result of this. One of the drivers here was the People's Bank of China which told the country's major financial institutions that they had to stop facilitating virtual currency transactions. This meant they couldn't provide products or services such as trading, clearing and settlement for crypto. They were also told that they had to identify virtual currency exchanges and the accounts of dealers for providing over-the-counter trades in a timely manner. This was off the back of a consultation with a number of leading banks in China. The Agricultural Bank of China as well had a statement on its website which banned all crypto transactions and crypto trading related activities. As a result of this all of the major cryptocurrencies took a big hit this week. Then, in slightly more upbeat news, we've had Andreessen Horowitz, the Silicon Valley VC firm, they've raised their largest ever crypto fund which is a $2.2 billion dollar crypto venture fund. This crypto fund, which is the third one that they've launched, will be co-led by Chris Dixon and Katie Haun. As I said, it's their largest one to date. Goldman Sachs announced that they performed their first ever Repo trade on JP Morgan's blockchain platform. The trade which was for a tokenized version of US treasury bond which was swapped for JPM Coin, the transaction took three hours and five minutes to complete. JP Morgan have been talking about their Onyx blockchain platform for a long time and it's great to see more traction happening there. Brave have launched a privacy-preserving search engine in beta. What they're trying to do here is trying to capitalize on the growth in private browsers such as Duck Duck Go being the the major one. Given that Brave is so widely used now and it's certainly managing to eat away at things like Google's Chrome browser. It's a good opportunity for them to break in here. Key with this though is that it enables users to actually search for things and what they're searching for isn't tracked which of course, anyone who's using Google is all too familiar with the issues there. Brave actually purchased the company called Tailcat recently in March and so the technology that they're building out here is based on what they bought with that acquisition. Also this week, Binance have announced that their NFT marketplace was launching. They had an Andy Warhol and Salvador Dali collection, this was called the Genesis auction. There was high-end work by a number of artists and it it featured Andy Warhol's "Three Self Portraits" and a digitised NFT of Dali's "Divine


rebeget." There have been some issues this week for Binance. The Japanese Financial Services Authority and the UK Financial Conduct Authority have both said that Binance should not be operating in those regions. Given that the platform is used by a number of people in those regions and especially how popular their app is on their respective app stores, it could spell trouble ahead for Binance. Off the back of this, we've also seen the UK bank TSB actually banning crypto trading because of scams around crypto wallets. What they've planning is to ban more than 5 million customers from purchasing cryptocurrencies. Some of the platforms that they've indicated that they want to cut down on include Binance. Binance is reported to be a particular concern according to them because about two-thirds of all frauds related with cryptos are tied to that platform. One of the reasons that Binance is so popular, it is the most widely used exchange, is their Binance Smart Chain project. It makes it very easy for people to spin up new DeFi protocols and so on which has brought scammers onto the platform. We did report in a previous edition how the community were trying to call on Binance to provide a bit more control on top of the platform to crack down on some of the scammers but exactly how much has been achieved there remains to be seen. Certainly these potential regulatory problems looming as well as a major bank like TSB in the UK stopping people from being able to use the platform could spell some troubles ahead for Binance. Other crypto news is that the Amber Group have managed to achieve a valuation of $1 billion off the back of a $100 million funding round. They plan to expand their global operations off the back of this. The firm offers algorithmic trading, high frequency trading and over-the-counter trading to institutional clients. They've been very successful this year off the back of all of the activity that's been happening in the crypto markets. The Banque de France has also extended their wholesale central bank digital currency experiments. What they've done in their latest experiment is use a CBDC to simulate the settling of securities using this TARGET2-Securities or TS2, which is the European Central Bank engine for instantaneous settlement. They did this using a public blockchain and there isn't more information about which blockchain they used but they previously did one using a private blockchain by the UK startup Settle. Sotheby's have announced that they're going to accept crypto payments for a rare diamond auction. In last week's edition we talked about Christie's accepting crypto payments for auctions on their sites. Of course, Sotheby's want to follow suit although they've certainly been one of the leaders in terms of innovating so far as listing NFTs on the platform. This specific listing is for a 101 carat diamond which is going to be auctioned in July. People will be able to pay in either Ether or Bitcoin. The Intercontinental Exchange subsidiary Bakkt has introduced debit card which allows customers to pay for retail purchases using crypto. Basically they can take their Bitcoin from their backed accounts without having to convert into cryptocurrency or fiat. The question with people who have crypto is that are they typically holding it there for everyday payments or are they there speculating on the asset and most people would argue that it's the latter. How much adoption there'll be remains to be seen but, of course, it's good news that you've got a company associated with the Intercontinental Exchange, which is obviously huge, getting involved. FTX, the crypto trading platform, are now an official sponsor of Major League Baseball which is a huge opportunity for them. The sponsorship deal which is expected to last for up to at least five years means that every Major League umpire will have an FTX patch on their uniform. In terms of just broadening the awareness of the FTX platform and also the digital assets that it supports, this is major news. We spoke recently how FTX has put a lot of money into eSports so they're really starting to have a lot of impact in terms of these sponsorship opportunities. Although Binance is having some issues in Japan, Coinbase has now been approved to enter the cryptocurrency market there. They've opened up the platform for investors so people can invest in Bitcoin, Ether, Litecoin, Bitcoin Cash and Stellar Lumen. The financial services agency there said that it's been registered in the jurisdiction as a crypto dealer and this was informed by a revision in the country's fund settlement. Certainly, Coinbase are in a great position for the Japanese market. In enterprise news, the billionaire real estate mogul, Frank McCourt, is planning to invest $100 million in a project leveraging blockchain attempting to democratize social media data. What they're looking to do is Project Liberty, as it's been called, is focused on the development of publicly accessible databases of people's social connections. The idea here is it will encourage a more egalitarian approach by social media platforms where they can start drawing from a shared place of social media data rather than this all being private behind closed doors which is obviously one of the problems. They're going to use blockchain behind the scenes and they're calling this new type of infrastructure the decentralized social networking protocol. It'll be a great project to see how it evolves. Morgan Stanley have announced that they're investing in the security token startup Securitize. They raised $48 million from an oversubscribed Series B which was led by Morgan Stanley. Blockchain Capital have also raised a new fund of $300 million with backing from Paypal and Visa. They've been going for a long time and again like Securitize, this has been a very over subscribed round. Although the crypto markets more broadly have been hammered, there's certainly money flowing into these funds. Alibaba's Ant Chain has also confirmed launch of the Blockchain Transmission Network. Ant Chain, which is the blockchain arm of Alibaba Groups affiliate Ant Group, have created this high speed and long distance blockchain communications technology called Blockchain Transmission Network. The idea here is that it will increase throughput and stability on on top of a high speed internet backbone which will cut the overall cost of bandwidth for people. With blockchain, there's a lot of data being sent between different participants given the distributed nature of them and so being able to optimize those bandwidth requirements can pay significant dividends if done well. They've also launched the Ant Chain Module as a Service, which is an integrated module for simplifying the deployment of blockchains is nicely integrated with the cloud. Another significant fundraise this week was Chainalysis which closed a Series E of $100 million which values them at a whopping $4.2 billion. Chainalysis provide software that kind of traces cryptocurrency transactions. In areas where there's fraudulent activity and regulators, they've got a great interest in Chainalysis' capabilities. Over in the protocols news, the Alchemy platform we spoke recently how they'd closed another significant round, and now they're going to add in support for the Ethereum's Optimism scaling network. Although Optimism hasn't launched yet, we spoke previously about how they'd had significant investments of $25 million from Andreessen Horowitz at the end of last year and that they've got some very good people working on the technology. So between Polygon and Optimism they're certainly starting to emerge as the main scaling technologies for the Ethereum platform. By making Optimism available on the Alchemy platform, which a number of different projects use for providing their managed blockchain infrastructure service that sits on top of public blockchains, it's certainly going to be compelling and put Optimism in front of a wide number of projects. Ethereum's EIP1559, which has the goal of reducing fees that people have to pay on the network to miners has been released to the Ropston testnet. This is the first stage in a number of releases to different Ethereum testnets before it actually goes live on mainnet. It's great news that this first milestone has been hit. The plans are on June the 30th the the Goerli testnet will release and then finally Rinkeby on July 7th. After that point, it will actually go live on the Ethereum mainnet. Apparently we've also seen another hundred thousand Ether being sent to the Eth2 staking contract. Whether that's a a miner taking some of their funds and starting to stake, who knows, but again it's it's funny to see that the timing of this deposit happened alongside it. Coinbase have also announced a tool called Solidify which they're going to be open sourcing soon. It is used to audit smart contracts and DeFi clones. One of the problems that we see a lot with smart contracts especially in the DeFi landscape is where there's bugs or errors in smart contracts where they get hacked and then funds get drained out of them. The idea here is that it just makes it simpler for those people who want to be able to audit smart contracts who are issuing assets or maybe exchanges and have an easy way to do this. It's an exciting piece of technology to be released publicly. In DeFi news, the DeFi network Karura has won the first auction slot on the Kusama parachain for Polkadot's canary network called Kusama. Karura raised more than 500 000 Kusama tokens from its community which is about $100 million worth and this ensured that they were able to win that first auction. There will be other auctions for other parachain slots on the Kusama network and down the line there will also be for the main Polkadot network. It's a certainly a big milestone for that project for both Polkadot as well as Karura. Wirex are looking at bringing DeFi adoption to the mainstream by launching something new called X- Accounts which is a service that offers people the chance to earn up to 10% of this interest on crypto holdings and 16% on fiat. They're working with a custody and infrastructure company firm called Fireblocks for this. They're tapping into Aave, UniSwap, Maker DAO and 1inch for this technology so it's great to see this kind of integration with more mainstream technology emerging. In the world of NFTs we've seen Stellar Artois, the producer of beer, announce they're teaming up with a group called ZED RUN to give users some unique horse racing NFTs. The idea is that these horse breeds have got themed skins and a 3D race track for people to enjoy. There's going to be auctions that are happening this week to kick off this project. This week, we've seen the Wicked Cranium sales top $4 million in two days. These are new NFTs that are tied to algorithmically generated icons. Unlike things like Crypto Punks, these are portraits of skeletons rather than blocky Crypto Punks. There's 10, 762 in all. The NFT site Rarible are going to be launching a marketplace on the Flow blockchain off the back of a $14 million funding round. Rarible are in the market of selling NFTs so to be able to support one of the major NFT platforms like Flow which has had a lot of traction with their NBA Top Shots, it makes absolutely sense. I know that we'll start to see more marketplaces potentially extending onto that. Reddit have announced they're selling three Ethereum NFTs featuring their mascot Snoo. They're being called 'CryptoSnoos' which is an alien mascot that was originally created as a doodle but became Reddit's main alien mascot. Three CryptoSnoos are dubbed Original Block, Helium and Snooprematic. They're currently on sale on the OpenSea platform and the auction ends this week. Alipay, the Chinese company has also started selling NFTs. They sold over 16,000 under 24 hours. These were limited edition NFTs on its private blockchain called Ant Chain. However, the NFT transactions did not involve any cryptocurrencies, they were sold using fiat money. Given all the scrutiny that cryptos come under in China, I'm sure the last thing that the Ali Group would want to do here is create controversy around the artwork. It's featured flying 'apsaras' which are spirits, along with sacred deer from the Caves of the Thousand Buddhas in the Chinese city of Dunhuang. The NFTs were limited to eight thousand copies. The crossover DeFi / NFT project Aavegotchi have released their Gotchiverse litepaper. They're really starting to tap into the whole metaverse narrative now as well where they're thinking about how they can create a new type of token called the Gotchus Alchemica", which will be farmable within their REALM land plots as they're calling them. So, taking some ideas out of Decentraland's MANA and LAND token system. Again, given the excitement of the Aavegotchis and also how well they have been doing on the DeFi platform as well, it's great to see them pushing into the direction of the 'metaverse' now as well. Finally, Beeple's bubbled up again. The artist who has had some record NFT sales has announced that he's co-founded a new type of NFT project called WENEW which is a marketplace that will partner with top brands to offer collectible moments across sports, entertainment, history, music, comedy and more. The first drop will launch in partnership with Wimbledon. The first releases are going to be chronicling Andrew Murray, the tennis player, to his first big victory in 2013. Again, there's some similarities here with the NBA Top Shots but it's fun to see people getting involved in a new space and it'll be a good project to watch to see how it evolves. Into my metrics this week, the crypto market cap is down just over 6% so $1.3 trillion. The assets locked in DeFi are down just over 8% to just under $49 billion. The NFT sales over the last seven days we've seen $16 million worth of sales with an average price of $557 which is an increase of 11.2%. 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 our show notes at Also we'll be hosting a Clubhouse session at 12 p.m eastern, 5 pm UK if you're available to talk about any of the news items we've discussed here. Thanks and I'll see you next week.