This Week in Blockchain

This Week in Blockchain on 12th July 2021

July 12, 2021 Season 1 Episode 22
This Week in Blockchain
This Week in Blockchain on 12th July 2021
Show Notes Transcript

Hi, it's Conor Svensson here, founder and CEO of Web3 Labs and this is your Week in Blockchain on Monday the 12th of July 2021. The highlights this week include more on Binance's regulatory woes. Circle, the creator of the stable coin USDC, is planning on going public. Wyoming has legally recognized its first DAO. Aave's upcoming pro platform launch is coming soon for institutional DeFi and over one billion dollars has been spent using crypto Visa cards in the first half of 2021. Binance's regulatory woes are continuing. The latest issue that's hit them this week includes Barclays UK customers are no longer able to use debit or credit cards issued by Barclays to transfer funds onto the platform. The line being taken here with Barclays is that they have done this in order to help protect their customers money because of some of the scams that have been running on top of the platform. It's been nearly two weeks since the the UK's Financial Conduct Authority said that Binance markets wasn't authorized to run crypto operations in the UK. However, Binance have come back and countered this news from Barclays by pointing out the fact that the FCA in the UK doesn't actually affect services provided via their website binance.com which is where the exchanger operates on and so their view is that Barclays' response is over the top there and they haven't really interpreted the FCA guidance properly. Binance has however suspended deposits from a key European payments network. It's not going to be accepting payments from via SEPA going forward and apparently this was caused by events beyond their control. So the SEPA is used for allowing people to move Euros between different countries and Binance has said that stopping the support will be temporary. The CEO of Binance, 'CZ', he's been responding to the regulatory issues that have come up saying that compliance is a journey and he's said that his view is it's part of what comes with the territory of having grown as fast as they have, there's only so much they can do with with respect to embracing all of the regulatory guidelines and laws in different jurisdictions. His view there it's not that of course they're trying to circumvent it in any way but, it's just that it takes time for them to build up and respond in the way they need to for these different jurisdictions. But of course, given how fast their growth has been, it certainly seems that from the perspective of a lot of regulators they haven't been as responsive as an organization of their size should be in this space. Circle, the creator of the USDC stablecoin, are planning to go public later this year at a four and a half billion dollar valuation. They're planning to do this via a merger with Concord Acquisition Corp which is a publicly traded special purpose acquisitions company led by the former CEO of Barclays bank, Bob Diamond. This transaction will value Circle at four and a half billion dollars and this is fresh off the back of their more recent $440 million fundraise which was completed in May which was the largest venture round that had ever been performed by a crypto startup. The intent is that they'll actually trade on the New York stock exchange and again they expect the actual transaction to close in the fourth quarter of 2021 subject to the relevant approval from shareholders of Circle and Concord. Visa have reported that more than one billion dollars has been spent using crypto linked cards in 2021. This is just going from January through to June of this year. What Visa have done is they've teamed up with a number of different exchanges and other crypto companies that enable people to pay with Visa cards at point of sale and at that point of sale the actual crypto on the account with the exchange or the crypto company holding the assets is then converted straight into fiat to make good on that transaction. From the merchant's perspective, those people who are accepting these crypto payments, it's just like any other Visa transaction where they get paid in fiat. At the same time it shows that there is adoption of people using these cards to spend their crypto. That being said, there's still quite a big narrative of course around HODL in the cryptocurrency space and a lot of people are just holding on to these assets for the long run for their broader growth potential. So, whether it continues to gain traction remains to be seen but nonetheless you know one billion dollars is a pretty impressive number here. Visa have also said how they have 50 active partnerships which is up from 35% which was just four months ago. This is 50 crypto firms that they've partnered up with where they're launching debit or credit card so it includes the partnerships they have with Coinbase, Binance, Crypto.com and a number of others are getting involved here as well. Other crypto news, Grayscale have added significant weighting to Cardano in their large cap fund. The majority of this fund is currently invested in Bitcoin and Ether which makes up almost 90% of it but then now they've allocated over 4% to ADA, the token of Cardano, which shows that it makes up the majority of the remaining allocations. This clearly is a bullish message coming from Grayscale in terms of their view on the potential for Cardano. Now, Cardano isn't as far along as some of the other leading third generation platforms in so far as they haven't yet launched their smart contract development capabilities but they're certainly on the cusp of doing that. As a result, the number of applications being built is somewhat lower compared with some of the other third generation platforms like Polkadot for instance. That being said, we expect this to change significantly and with what Grayscale have done here, it obviously shows that there's a lot of anticipation, that there's going to be a lot of growth in terms of adoption of Cardano. Sotheby's, we spoke about last week, how they were selling a diamond where they'd accept crypto payments. They've managed to sell this diamond in cryptocurrency in a Hong Kong auction to an anonymous buyer. This was for a 101.38 carat diamond which sold for $12.3 million. They said that this was a big milestone in the adoption of cryptocurrencies. This is the second largest pear-shaped diamond ever to appear on the public market which came originally from the company Diacore. Crypto.com, the exchange and the crypto card payments provider, have signed a deal with the UFC to become their global official 'fight kit' partner which basically means that the crypto.com logo is going to be placed on UFC apparel being worn by athletes when they fight in competitions. It's going to attract significant visibility to the crypto.com brand especially when you look at the fact that the UFC has more than 625 million people in its fan base and over 150 million social media followers. It's certainly going to be another big push to help increase awareness of this this company in the mainstream much like we heard about FTX doing last week with their deal with Major League Baseball. The state of Wyoming, which considers themselves very crypto friendly, has approved the first legally recognized decentralized autonomous organization or DAO in the United States. The CryptoFed DAO as it's called, received notice from the Wyoming Secretary of the State's Office on Tuesday recognizing it as a legal entity. The American CryptoFed DAO was established by a mobile banking solutions provider called mSHIFT at the beginning of the month. The project describes its mission as promoting a two token economy that's immune from inflationary or deflationary influences and interestingly it's been built on top of the EOS blockchain which, although is one of the larger third generation blockchain platforms it's certainly not as widely used as or as popular as Ethereum and some of the other ones that are up and coming like Polkadot, Binance Smart Chain and so on and so forth. Again, whether that will start to see a trend of more DAOs on EOS remains to be seen. The Indian IT giant, Tech Mahindra, is working with a blockchain startup called StaTwig for a blockchain product for tracing the global vaccine supply chains. The intent here of course, is to provide greater transparency and prevent failures in vaccine supply including the distribution of expired vaccines and address things like counterfeiting in the process. The two companies are going to work with a global network of vaccine researchers, governments, pharmaceutical companies, distributors and healthcare workers in order to achieve this goal. IBM and Heifer International have announced that they're going to assist the Honduras farmers to access the global markets using the blockchain. So, small coffee and cocoa farmers in Honduras are going to be able to make use of IBM's blockchain platform along with the non-profit Heifer International. The idea is is that people purchasing cocoa through Heifer's Honduras Chocolate4All project will be able to trace the provenance of goods using IBM's Food Trust. IBM's Food Trust is a dedicated supply chain blockchain that IBM have created that's focused on tracking food through supply chains. So again, it's gradually getting more and more attraction for that specific purpose. Also on a related note, CIBC, Natwest, National Australia Bank and Ita Unibanco have partnered to launch Project Carbon which is a voluntary carbon marketplace. The idea here is that it will help the bank's clients to achieve a net zero carbon goal. There's lots of commitments to make different jurisdictions reduce their carbon emissions as per the Paris Agreement which is looking for fairly aggressive cuts by 2030 and other organizations too are talking about this goal of transitioning to net zero by 2050. The intent here is that these banks will work together in consortium to make it more accessible for people to tap into the carbon offsets markets. It's planned to be launched in August and is going to be running on a private Ethereum platform. Also, the Swiss crypto bank Sygnum, has launched an Ethereum 2 staking service. They claim to be the first bank to offer this service and the idea is that you can stake your Ether and see a return of up to 7% annually with that. Of course, this number goes down the more people that are staking there. They didn't actually say whether the ETH can be withdrawn or not but, typically it's not possible because once people actually stake ETH if they're doing it without going through a third party, it's impossible to unstake it so to speak. So certainly when people want to get those returns they will need to be locking it up until the cut over to the Ethereum Beacon Chain goes live which is expected in the first quarter of next year. EY have announced the release of Nightfall V3 which is the latest iteration of the Nightfall protocol which was first released in 2019. Nightfall combines zero knowledge proofs and optimistic roll-ups to give organizations capabilities for transacting using the Ethereum mainnet behind the scenes but without putting details of what those transactions are. Something that EY are very keen on seeing is greater adoption of the main public Ethereum network by enterprises but they need to have sufficient controls over how much it will cost so it needs to be as efficient as possible. Also, they need to be able to handle significant volumes as well but in a secure way where the information about the transactions that are taking place is not visible to other participants and so this is something that they've been working on for some time with Nightfall. They're putting it out there into the public domain because they really believe in the power of the technology but also how important it is to share the work that they're doing in order to help bring forward the overall adoption of the technology. The Ethereum London hard fork is now scheduled for early August. The London hard fork for Ethereum, there's a lot of talk about it because it's the one that implements EIP1559 which is the one that will start burning some of the transaction costs that people pay to the Ethereum network in order to bring down the fees and make it fairer for people trying to participate in the network. We spoke previously about how some of the test networks had already been updated. The current anticipation now is that it'll be August the 4th when this upgrade happens so it'll be a big piece of news for the Ethereum community when that does happen. Like I said, transaction fees should go down but also the Ether gets burnt in the process as well maybe so it adds a slightly deflationary economics to the actual network there as well. The Shiden project has secured the third parachain slot on the Kusama network. Shiden is the sister project of the Polkadot-native layer-two decentralized app hub, Astar Network which was previously Plasm. They've won the third parachain auction for Polkadot's sister network Kusama. They managed to secure the slot with a total of almost 29 million dollars worth of the KSM tokens for that. The Shiden platform is a smart contract platform which offers multi-chain support for both the Ethereum Virtual Machine and WebAssembly-based contracts and they're planning to deliver layer 2 scaling technology as well shortly. So again, there's continuing to be more and more traction there in terms of these parachain auctions establishing the Kusama network. The blockchain infrastructure provider, Alchemy, has announced support for the Polygon network. We've spoken a few times about Alchemy previously and that they've had some very successful fundraisers. They also added support for the Optimism network for Ethereum and now they're also adding Polygon as well just in recognition of the fact that there's a lot of interest and people working with the Polygon network. They're trying to ensure that they support all of the major protocols that different teams want to build on top of. Gitcoin have announced that they're going to work with Tezos on a hackathon which has got $75 000 in prizes. This is off the back of Tesos integrating with the Gitcoin platform as well. What Gitcoin of course do is that they provide funding and bounties for people's work for different blockchains so seeing them starting to work with other blockchains outside of the Ethereum ecosystem is obviously a good thing for them and the model that they have. Moving on to DeFi news, Aave have announced that they're planning to launch the permissioned version of their platform for institutional investors this month which is called Aave Pro. They're launching this in partnership with the crypto custodian and service provider Fireblocks. The intent here is that they'll support Bitcoin, Ether, Aave and USDC and in order to participate with lending in those specific assets, the organization will have to have gone through KYC with Fireblocks in order to do this. Zerion, they've managed to raise $8.2 million in a Series A funding round which was which which was led by Mosaic Ventures. Zerion is a DeFi portal like Zapper that basically gives people an easy way to interact with these DeFi protocols, the actual exchanges or ones for doing things like yield farming and so on. They've seen a lot of growth around those people who are playing with and investing in the DeFi markets. It's recognition of the interest there is and the space for making it more straightforward for people to work with and also manage the various DeFi positions. Moving on to NFT news, the Million Doge Disco, an augmented reality game, has launched. It's a cross between Dance Party and PokemonGo apparently which encourages people to film themselves dancing with animated Shiba Inus and then go treasure hunting around town in order to earn various Doge NFTs as well as a prize from a pool of a million Dogecoins too. It also comes with a 'Proof of Party' mechanism which incentivizes users to upload the footage of themselves dancing with their Doges and receive a Dogecoin from community members. Decentraland have also announced they're going to be hosting one of Ethereum's first music festivals on the platform. So, crypto's Second Life sim will host To The Moon which is a music and arts festival. It's a collaboration between the NFT marketplace KnownOrigin, the NFT tastemaker collective Illumino and BEAR NFT. It's going to be based at KnownOrigin's virtual headquarters within Decentraland and feature performances by a number of electronic musical acts including SNBRN, Fred Thurst, Autograf, and Win and Woo. The organizers will be promoting exclusive NFT goodies and of course, people who attend will receive a virtual POAP, which is a Proof of Attendance Protocol. We spoke previously as well about Beeple's latest project. An NFT of the former Wimbledon champion Andrew Murray has sold for $177,777. This was on their WENEW platform that Beeple's been involved in and they've basically turned the moment of Andy Murray's win at Wimbledon from 2013 into an NFT. The NFT sales volume numbers came out as well. The volumes that we'd seen sold over the first half of 2021 actually totalled 10 000 to 20 000 every week since March with buyers actually outnumbering sellers. The volumes reached two and a half billion in the first half of 2021 which was according to a Reuters report. Going by what the non-fungible marketplace has said and of course, we report our weekly metrics on from that platform too, they've shown that the interest doesn't seem to be dying down as such even though of course the amount that they're exchanging hands for has certainly dropped since the peak we saw a couple of months back. Also in Israel, there's been an announcement that an NFT is being created of the presidential oath which will be given to the incoming president Isaac Herzog ahead of his inauguration. The original oath was actually signed by his father in 1983 and the idea behind the NFT is it was the emerging of the past and present combining a historical oath with modern technology. The president-elect will look after the NFT during his time in office and it will be kept in closed storage on a crypto hardware wallet which is obviously offline. Finally, we've seen a CryptoPunk NFT enter into a major art museum. One of the CryptoPunks was given to Miami's Institute of Contemporary Art by trustee Eduardo Barrillo. Apparently it's the first NFT to enter a major art collection. This is CryptoPunk 5293 which will join the ICA Miami collection that is a work that's representative of the cultural zeitgeist and will have historical significance for generations to come apparently. So, moving on to our metrics, the crypto market cap has remained somewhat stable over the last week and is still at $1.4 trillion. Assets locked in DeFi up four percent to $55 billion. The seven day NFT sales we've seen just under $25 million of sales which is up almost 14% from last week with an average price of a thousand dollars which is a big increase of 41%. 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. We're also hosting 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.