Links to items discussed:
Hi, it's Conor Svensson here, founder and CEO of Web3 Labs and this is your Week in Blockchain on Monday the 2nd of August 2021. The highlights this week include more US states targeting BlockFi. FTX and Binance remove high leverage products from their platforms. Binance is taking further steps to support regulatory interests. Goldman is filing for a DeFi ETF. Uniswap has also dropped tokenized stocks and digital cats cause chaos on Ethereum yet again. The crypto lender BlockFi is now on the radar of four different US states. We mentioned previously how New Jersey was planning to pursue it over the selling of unregistered securities in the States and we've now had Texas and Alabama join in and place similar restrictions on BlockFi's operations. Also from a posting on BlockFi's website, the state of Vermont has raised concerns about the BlockFi interest accounts as well although there's not more information on that at present. It certainly doesn't look good for BlockFi at the moment. Although they're a very well-funded company, coming under this increasing scrutiny from different states is not going to be a good thing for their business. The crypto exchanges FTX and Binance have removed high leverage products from the exchanges. These are the crypto industry's two largest exchanges and they've reduced the amount of leverage that their users can trade with. The maximum leverage now is 20 times, previously it went as high as 50. Both companies have spoken here in respect to wanting to actually protect consumers and so no doubt with the increasing amount of regulatory scrutiny that's coming under crypto and crypto exchanges they just want to play ball there with the regulators. Binance too on this has been taking some other steps. We've spoken extensively over the last month or so about how there has been a lot of regulators challenging Binance on them as a company and so one of the latest things that Binance has done is they've actually shrunk the non-KYC withdrawal limits apparently. Previously, people who had basic account verification could withdraw up to two bitcoin per day and now that's been lowered to point zero six for newly registered accounts. I mean of course, given the greyer area that can exist with cryptocurrencies, by enforcing much more rigorous KYC, again no doubt, Binance are wanting to play more into the hands of the regulator. Changpeng Zhao, the CEO and founder of Binance or CZ as he's more commonly known, as well he said that he's open to stepping down as the Binance CEO in pursuit of regulatory compliance. He's said that he's committed that Binance is going to be a fully regulated financial institution going forward. Also Binance have launched a tax reporting tool that will streamline reporting requirements for different jurisdictions. Keeping on top of tax with the trading of crypto assets can be very challenging just because of the ease with which people can do it and so exchanges have been creating products to help with this. Certainly, the exchange Kraken as well they've also launched one. It's very much again playing to the hands of the regulators, just to make it a lot easier for the users to actually report the tax associated with their trades. However there has been some bad news for Binance this week as well, with Malaysia ordering it to halt operations in the country and Binance have said they're planning to wind down futures and derivative products across Europe starting with Germany, Italy and the Netherlands. Goldman Sachs has filed for a DeFi ETF tied to a number of public companies. The idea here is that the ETF will provide investors with exposure to companies aligned with themes of blockchain technology and the digitization of finance. There isn't more information available just yet but I think the thing is, exactly what constitutes a company that's linked to DeFi remains to be seen here. Amazon have also said that they're exploring cryptocurrency payments. They listed a job posting for a digital currency and product lead who can create a vision and roadmap for a new payment products. Other than this information it's all fairly light on the ground but given the transaction volumes Amazon process, it certainly makes sense for them to look at additional payment rails there. Fireblocks they've achieved a $2 billion valuation with a $310 million series D. So Fireblocks we've spoken about them previously, in that they're working with Aave on their institutional platform but they provide custody and digital asset related services for institutions. This makes Fireblocks the latest crypto unicorn with this valuation of two billion. To date, they've raised $489 million in venture capital so far. With respect to this fundraise, they want to expand their internal capacity, increase the research and development and support teams and expand into further markets such as EMEA and APAC apparently. Mastercard have also announced that they're launching a accelerator program for crypto startups. They will provide technical and financial assistance to early stage projects in the space. They're launching this startup incubator with seven cryptocurrency based companies these include the NFT marketplace Mintable and a cryptocustody platform called GK8. Robinhood has secured a 32 billion dollar valuation for its IPO and is set to debut on the Nasdaq exchange under the ticker symbol HOOD. Robinhood, certainly its adoption has been very significant over the past few years with its fee-free trading but also the fact that you can trade cryptocurrencies as well there which helps propel its growth. Post IPO as well, the Robinhood CFO has said that there's been a lot of requests for crypto services that go beyond buying and selling cryptos. Apparently their users are requesting that they support things like an actual crypto wallet on the platform and participate in other things such as staking where people can see returns on their actual crypto assets as well. So, if Robinhood start to embrace this side, it will certainly be a very significant move in terms of opening up aspects of DeFi to a wider pool of people. Paypal is looking to launch crypto trading in the UK apparently. The actual crypto support is working out very well for them according to their second quarter earnings. They're looking at launching the trading offering potentially in the next month. They're adding incremental functionality to the platform and we mentioned previously how they've already increased purchasing limits to a hundred thousand dollars per week. There's a new partnership that's been established in India with LegitDoc where they plan to place India among the early adopters of implementing an e-governance system for higher education. The intent here is that this Indian blockchain startup LegitDoc will provide a credentialing system that's powered by Ethereum to provide tamper-proof diploma certificates. This is one of the really strong use cases of blockchain being able to provide authenticity of documents for our digital fingerprints and so it's really great to see that there's some progress being made here in India for rolling this technology out. On a related note, the Ethereum based project EthSign has raised a significant significant seed round to put signed documents onto the blockchain. This Singapore-based company has raised $650 000 including backing from Draper Associates, Hashkey Capital and ImToken Ventures. They currently have a 10 person team and are looking to hire more developers as well as partner with other relevant companies. The idea with their platform, they actually use decentralized identifiers and in order for people to be able to sign documents using Ethereum behind the scenes. The FTX exchange which we mentioned earlier on, have spent a million dollars on carbon offsets to become carbon neutral as well. So, they've committed to giving one million dollars to this newly launched FTX climate program each year to ensure that they can achieve the company goal of being carbon neutral. A new blockchain food consortium has also launched called SecQuAL, which is a take obviously on the database technology SQL and that doesn't exactly roll off the tongue! But, it's a new 11-member UK consortium that aims to use data and blockchain to reduce food waste and improve traceability. Lloyd's Register is leading the group but it also includes IBM's Food Trust and the UK's Food Standards Agency as well. The intent is that the consortium's going to use smart labels for pork production and by attaching a digital ID to the food product, the blockchain can be used to track, trace and monitor it. Being able to understand where food is can help a lot in recalling food. Also, where it's been stored can help to find the actual food shelf life too. So this would help make those practices such as stamping on labels when things go out of date and so on potentially a thing of the past if you can get a more dynamic update about it. Paxos who provide the crypto services to Paypal have secured a 300 million dollar funding round with Bank of America, FTX and Coinbase Ventures joining in with the round. Paxos has raised over 500 million dollars in total funding and the series D saw the the firm valued at $2.4 billion. Ernst and Young have collaborated with the UK authorities to design a blockchain solution related to the cross-border withholding tax process. EY was looking at the complexities of the withholding tax process to better the taxation process in the European Union. The solution here is called Tax Grid and uses EY's blockchain technology to assist with the mechanization of DeFi data between two stakeholders of tax authorities and intermediaries. Moving on to protocol news, ZKSwap's V2 mainnet has gone live. So the decentralized exchange ZKSwap went live via the Ethereum mainnet but they're also planning to do a Layer 2 launch sometime thereafter. The multi-chain relay protocol Biconomy has raised 9 million dollars in private funding. Biconomy's goal is to make decentralized apps and Web 3 more user-friendly by building transaction infrastructure with powerful APIs behind it. In DeFi news, Aave is on the verge of launching its institutional DeFi platform called Aave Arc, we've previously referred to this as Aave Pro. The intent here that we've spoken about on previous editions is that it's going to enable institutions to actually engage in decentralized finance with other institutions that have been onboarded through their KYC process. Also the Ethereum decentralized exchange Uniswap have dropped tokenized stocks in anticipation of regulatory scrutiny. We've seen these stop being offered by Binance recently and no doubt with Uniswap although they are a fully decentralized exchange, they want to ensure that they're not going to come under excessive amounts of regulatory scrutiny there so it's a sensible move by them. The growth of Uniswap recently has also seen DeFi adoption grow to three million total users. There's over three million crypto addresses that have interacted with DeFi projects and the top three of these protocols are either decentralized exchanges like Uniswap and DEX aggregators such as 1inch. Uniswap though is certainly the leader here which is hosting more than 80% of all DeFi users. The Uniswap creator and Paradigm developers are working together to improve large Ethereum trades in DeFi. They've proposed a new type of market maker for decentralized exchanges to this end. The idea is that it will enable large trades to be split up into many smaller ones and executed over a period of time so it's kind of like what previously was called block trading where banks would take large trades and potentially break them up into multiple orders and we also get a similar thing happening with algorithmic trading. So it's fascinating that this approach is looking to be built into these public blockchain protocols as well. Over in NFTs, there's been a lot of activity this week. Cats cause chaos again in Ethereum as the Mila Kunis project sold out in 35 minutes. There's an animated series called Stoner Cats that's backed by NFTs and the characters are voiced by a number of celebrities including Jane Fonda, Seth MacFarlane and Chris Rock. The NFTs grant the owner access to watch the show and the project uses NFT sales to fund it. The product sold out in 35 minutes. Vitalik Buterin, the founder of Ethereum, he's a voice actor for one of the characters called Lord Catsinton, who is described as a spirit guide. The launch of this was initially delayed by a day after a bug was found in it but then the second time it was successful but the gas prices on the Ethereum network absolutely soared as a result of it. There were just over ten thousand cats that were sold at a price of 0.35 ETH and there's going to be more being released apparently. There was a total of 344 Ether that was actually lost in value due to failed transactions there and the actual gas fees went up as high as 33 dollars for some of the transactions which again we've not seen this activity in a number of months. But it's stuff that will hopefully be addressed with the upcoming EIP 1559 fork that is now imminent and of course, the merge with the Ethereum Beacon Chain scheduled for next year. Satellite visualization solutions from Exodus Orbitals Inc., they're using satellite technology and NFTs to protect African wildlife against poaching and climate change. The idea here is that there'll be this Exodus Orbitals' space on demand satellite mission will be launched in 2022 and NFTs will be used to acquire and access observational activities for specific areas of concern. Shopify is going to allow its e-commerce customers to start selling NFTs directly. We spoke previously about how they were very interested in finding opportunities to use blockchain technology and what they're now supporting is that merchants can actually sell NFTs directly on the platform there. They want to make it easier for people to do this using the Shopify platform. The NFT game Splinterlands has raised 3.6 million dollars. They're running on the Hive blockchain. They've raised this in advance of an upcoming launch of their governance token. Participants include Animoca Brands, the blockchain gaming offshoot of Animoca and other platforms including Enjin, Polygon and the Onchain Capital CEO. Splinterlands is a digital trading card game that enables you to collect rare trading cards and also fights other players with them. The Binance NFT marketplace is going to be issuing a set of tokenized collectibles of famous paintings and masterpieces in partnership with the State Hermitage Museum in Saint Petersburg. These tokens will depict famous paintings of artists such as Van Gogh, Da Vinci and Monet. All existing Binance users will be able to buy these NFTs through the auction which is going to be happening at the end of August. Yahoo! Japan is working with Line to launch NFT trading on the platform. The cryptocurrency subsidiary LVC Corporation is collaborating with Yahoo! Japan to enable secondary trading of NFTs issued on its blockchain. Yahoo! Japan will actually place the blockchain-based NFTs on its online Yahoo! Auctions service. Yahoo! Auctions was been set up many, many years ago to compete with ebay. What's interesting here is that they're looking to integrate Yahoo! Auctions with the Line Bitmax wallet whereas ebay, although they do allow people to sell NFTs, they don't provide a native integration there as well. Although, as this space evolves you would expect that potentially to change. Coca-Cola has partnered with the digital art creator Tafi to release a collection of one-off NFTs to celebrate International Friendship Day. The auctions just started over on OpenSea and the proceeds of the sale will go to the International Organization Special Olympics International which supports children and adults with disabilities. The crypto unicorn Amber Group has partnered with TR Labs to launch a new initiative to help creators access the NFT market. It was unveiled this week which basically provides infrastructure setup, support custody and support directly for Amber Group itself. The NFT platform Alchemy NFT has raised six million dollars from investors which includes Mark Cuban, a Crypto.com Capital and Framework Ventures. The funding will be used to add staff and help build out the platform. The platform allows payments for celebrities and artists who wish to sign NFTs and donate the proceeds to charities such as Save the Children. The actual project has come from the team behind the crypto wallet called AlphaWallet. One of the first participants on the actual platform was Vitalik Buterin who used his Twitter ID to sign an NFT entitled The Alchemist which is by the artist Mladen Petronijevic which was a week or so ago. Over to our metrics, the crypto market cap is up almost 17 percent at $1.6 trillion. Assets locked in DeFi are up almost 14 percent to just shy of $70 billion. The seven-day NFT sales are up a whopping 120% to almost $120 million with an average price up 180 percent of $3,300. 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 weekendblockchain.com. We've also launched a brand new podcast Blockchain Innovators where I talk to individuals who've made significant contributions to the blockchain ecosystem. Find out what inspires these people, get their thoughts on the latest news and events spanning crypto, blockchain, protocols, DeFi, NFTs, DAOs and IoT. Thanks and I'll see you next week.