Midweek Thoughts:
Thank you if you’ve found your way to my inaugural biweekly journal. My goal is to catalog my thoughts, share my mind with others and transition to becoming a contributing member of the crypto community. Cheers! So far this week we see markets continuing to hold on for dear life at the whim of bitcoin, which has been holding onto the 41k - 44k region. Heavy geopolitical and uncertain macro sentiment is weighing heavily on financial markets while adoption is seemingly pouring from every corner without a much long awaited relief in the crypto markets yet. Eyes are still on March to see what action the Federal Reserve will take in regards to interest rates and inflation. Despite sluggish price action, the fundamentals for crypto are looking stronger than ever.
Recent notable examples can be seen in bitcoin hash rate reaching an all time high, FTX, eToro, Crypto.com and Coinbase debuting crypto ads during Super Bowl 2022, the New York Stock Exchange following several other public companies that have filed trademark applications not only to protect their brands but to signify their exploration into blockchain and NFTs. Recently, McDonalds submitted a trademark application to open restaurants in the metaverse. Disney's patent for interactive attractions for theme park visitors has also been approved recently. Colorado will also start accepting cryptocurrencies for tax and other payments to the state by the end of this summer. Countries, governments, celebrities, athletes, companies and financial institutions are scrambling to throw their hat into the metaverse and crypto ring, with NFTs, gaming, metaverse and Web3 seeming to be the hottest current buzzwords. According to @nftgoio's stats, the NFT market cap has grown from 95m to 16.5b in a year.(157x). The daily transaction also witnessed a 400x growth from 2m to 800m peak on Feb 1st 2022. However this leads to the obvious question of whether or not this is true adoption taking place or merely a cash grab by every player who sees money on the table? Only time will tell and until then, all we can do is follow along and observe the chessboard as all the various players scurry about.
The most recent meta narrative that has captured my attention is the focus on monolithic vs. modular blockchain design, with the era of spinning up a new PoW blockchain or an entirely new monolithic layer 1 coming to an end. Modular blockchain design separates into three main levels : settlement/consensus, data availability, and execution and over the next few years we will see many layer 2 solutions rise and they’ll be securing themselves using the best settlement layer, which many speculate to be Ethereum. The brightest minds in the crypto ecosystem seem to have come to a consensus that this is looking like the best path forward to achieve maximum decentralization, security and scale - the crux of the blockchain trilemma. Eyes out for projects focusing on this.
Recent hot narratives finding traction on CT include the Cosmos ecosystem as well as blue chip NFTs however narratives are evolving and changing at an incredibly rapid pace at this current time. Instead of weeks or months, trends are seeming to ebb and flow over the course of days or hours. Stay careful, stay safe and don’t forget to practice risk management.
Please feel free to reach out to me on twitter! I’d love to connect with other like minded individuals - twitter.com/TheoDelarosa_
- Time moves differently in crypto. Crypto is an intricate game filled with various players operating across multiple time frames and with varying agendas. Day in, day out, the pieces are moving all across the board. Sometimes for the better and sometimes for the worse. Here’s a glimpse of what has happened so far this week in our little crypto bubble -
News:
Australian Securities Exchange (ASX) chief executive, Dominic Stevens, said Sunday his exchange would likely list more crypto businesses in the future as the industry continues to develop - source
Crypto miners exempt from IRS reporting rules, US Treasury affirms. The U.S. Treasury affirmed that crypto miners and wallet operators are exempt from the IRS reporting rules, preparing appropriate regulations. In a letter to a group of senators on Friday, the U.S. Treasury indicated that it plans to exempt crypto miners, stakers and other market participants from rules that would require crypto brokers to share data on their clients’ transactions with the Internal Revenue Service - source
Singaporean megabank DBS works on expanding Bitcoin trading to retail. DBS Bank’s crypto exchange launched in late 2020, allowing to trade cryptocurrencies only to professional investors - source
FTX, eToro, Crypto.com and Coinbase debuted crypto ads during Super Bowl 2022 - source
NBA merch designer turned to blockchain to help end world hunger. “We need to relate and provide products to future generations to continue to tackle the global hunger crisis but at the same time make the products engaging and interactive,” says Shawn Kurz. Motivated to mend the shortcomings of traditional charity systems, Kurz founded FoodChain Global (FCG), an organization that uses a blockchain-based ecosystem to support charitable initiatives targeting global hunger - source
Sanctions and trade: Iran aims to develop a central bank digital currency. The Middle Eastern nation has faced considerable economic and financial hardships due to sanctions imposed on it by the United States and believes that piloting a CBDC can resolve problems associated with the blockade. - source
74% of stolen funds from ransomware attacks went to Russian-affiliated wallet addresses in 2021. Russian hackers allegedly netted a profit of more than $400 million through crypto-ransomware in 2021 - source
Binance Chain and Binance Smart Chain (BSC) will become BNB Chain. A transition that highlights BSC’s connection with the BNB token and BNB ecosystem - source
Gemini Client IRA Financial Hacked for $36M in Bitcoin and Ethereum. Hackers stole $21 million in Bitcoin and $15 million in Ethereum from retirement accounts held with IRA Financial Trust on February 8 - source
Accused Bitfinex Bitcoin Launderer Heather 'Razzlekhan' Morgan Released on Bail. Heather Morgan, accused of laundering $3.6 billion of Bitcoin tied to the Bitfinex hack in 2016, has been released. Her husband remains in jail - source
Number of Ethereum Addresses Holding 0.1 ETH Hits All Time High - source
The average transaction fee on the Ethereum blockchain has hit $15.31 and the median tx fee hit $6.67. The lowest price since September of 2021 - source
Monero community concerned as leading mining pool nears 51% of ecosystem's total hash rate. The sharp increase in MineXMR's mining hash rate in the past few months has led some XMR enthusiasts to suspect ulterior motives. Privacy coin Monero (XMR) mining pool MineXMR's hash rate surpassed over 1.4 GH/s, accounting for 44% of the hash rate of the XMR network. MineXMR has about 13,000 miners and charges a 1% pool fee - source
Binance.US is under investigation from SEC over trading affiliates. Binance CEO Changpeng Zhao allegedly has connections to two market makers buying and selling crypto on Binance.US. The SEC is looking into the relationship between Binance.US and trading firms Sigma Chain AG and Merit Peak - source
Massive Crypto Whale Abruptly Moves Over $1,900,000,000 in Bitcoin (BTC) for Just $3.56 in Transaction Fees - source
Gas prices have significantly decreased 72% from their peak last month - source
Rainbow, an Ethereum wallet, has raised an $18 million Series A led by Seven Seven Six, the VC fund set up by Reddit co-founder Alexis Ohanian. Other investors in the round included Thirty Five Ventures, founded by Kevin Durant and Rich Kleiman; Vine founder Dom Hofmann's Bloom Investment Holdings; Nikita Bier; Hyperguap; Uncommon Projects Capital; and Y Combinator - source
Aussie trading platform SelfWealth to offer crypto trading to its 325K users. BTC Markets CEO Caroline Bowler emphasized that the partnership with SelfWealth demonstrated further legitimacy of broad-scale crypto adoption - source
Portugal slowly becoming a 'haven' for European Bitcoiners. The small, sunny country recently welcomed the Bitcoin Family to its shores; a closer inspection reveals a growing Bitcoiner community basking in a zero tax glow. A 2016 law by the Portuguese tax authority ruled that because cryptocurrencies are not considered currencies, they are not legal tender in Portugal and are, therefore, non taxable - source
Blockchain infrastructure company Fireblocks has finalized the acquisition of First Digital, a stablecoin and digital asset payment platform, as part of a broader effort to expand its payment capabilities for the cryptocurrency sector. Through the acquisition of First Digital, Fireblocks plans to expand support for business-to-business, business-to-consumer and cross-border payment options via USD Coin (USDC), Celo and other stablecoins as early as this spring - source
Warren Buffett's Berkshire Hathaway dumped a portion of its Visa and Mastercard holdings and invests $1B in Nubank, the largest fintech bank in Brazil that's also popular among the country's Bitcoin investors - source
NYSE files a trademark application for trading NFTs. The New York Stock Exchange, or NYSE, has filed a trademark application with the United States Patent and Trademark Office, or USPTO, on Feb 10 to register the name “NYSE” for several blockchains and crypto related products and services. The goods specified include virtual reality and augmented reality software, nonfungible tokens, or NFTs, and online marketplaces. This is not the NYSE's first foray into NFTs or the Metaverse. In April 2021, six NYSE NFTs were minted to commemorate the first trades for Spotify, Snowflake, Unity, DoorDash, Roblox - source
Nezha has closed a $1.4M in a Private Fundraising Round. Investors participating in fundraising include AU21, ZBS Capital, OIG, Vespertine Capital, Coban, 5ire, Llama Ventures, Nodeseeds, Insignius Capital, and more. A blockchain-based prediction market platform, Nezha is developing an exciting gamified decentralized finance ecosystem with a multitude of mechanisms to ensure attractive yields and security through tailor-made smart contracts, as well as delivering long-term growth and stability for its users and token holders - source
Colorado will start accepting cryptocurrencies for tax and other payments to the state by the end of the summer, Gov. Jared Polis said during a CoinDesk TV appearance on Wednesday. The state is currently hosting the 2022 ETHDenver conference - source
Metaverse:
UK Tax Authorities Seize 3 NFTs Involved in $1.8M Fraud Investigation. For the first time, Her Majesty’s Revenue and Customs has seized three NFTs amid a wider tax fraud investigation in the United Kingdom. The NFT seizure came along with the arrest of three people who are suspected of evading taxes using various sophisticated means - source
Animoca Brands has partnered with Brinc, a venture accelerator, to launch the Guild Accelerator Program to build and grow the play-to-earn (P2E) guild ecosystem globally. The new acceleration program offers a total investment capital of up to US$30 million over two years - source
Lunaverse has raised $5.66M in the Seed and Private investment rounds. Investors include ZBS Capital, Skyvision Capital, Maven Capital, Genblock Capital, StarTerra, Kujira Ventures, Pylon Protocol, Everse Capital, DWeb3, Angel Protocol, and many more - source
Pre-orders of Samsung’s New Galaxy S22 Smartphone to Come With NFTs. The launch of Samsung’s flagship devices is accompanied by a commemorative NFT from Theta Network for consumers who pre-ordered in South Korea. The NFTs reportedly come equipped with "ongoing membership benefits and privileges" - source
Polygon and Cere network to launch Web3 media platform, DaVinci. The DaVinci platform intends to offer perks from subscription NFTs and immersive creator exhibitions to digital and real-world fan events - source
Victoria's Secret is headed to the metaverse and has plans to sell virtual lingerie. The company has filed 4 new trademark applications indicating that it intends to sell "virtual undergarments, footwear and fashion accessories." - source
Makers of Magic The Gathering Threaten DAO With Lawsuit Over IP. The DAO said the NFTs would function as tickets to tournaments and "don't represent ownership." Copyright and intellectual property issues are moving front and center in Web3 as more and more non-fungible tokens (NFTs) and decentralized autonomous organizations (DAOs) spring up around brands, books, movies, and consumer products - source
Steve Aoki Says He’s Made More Money With NFTs Than From 10 Years of Music Advances. At a Gala Music event, the veteran DJ and producer said royalties don’t even come close to paying musicians’ bills. There were live performances by H.E.R., BT, Kings of Leon, 3lau, and Aoki himself - source
OpenSea customer service migrating from Discord to Metalink to more adequately protect its community. The NFT marketplace no longer intends to offer customer support over Discord DMs. According to OpenSea, the platform is making the switch after fraudsters began impersonating support associates on its Discord page - source
Crypto at the Olympics: NFT skis, Bitcoin bobsledders and CBDC controversy. Bitcoin and nonfungible tokens are all over the Olympics this year while China’s CBDC is there too amid a controversial rollout - source
PMorgan Enters the Metaverse With Virtual Decentraland Lounge. The metaverse, JPMorgan said, has a market opportunity of $1 trillion in yearly revenue. The “Onyx lounge” was unveiled along with a report from the bank outlining metaverse-related growth opportunities for businesses and causes for its “explosive interest.” - source
NYSE files a trademark application for trading NFTs. The world's largest stock exchange may be planning to bring business into the Metaverse - source
Label Foundation, an NFT infrastructure with a permissionless P2P incubating platform, has secured an additional $2M equity investment. The equity investment round was led by Korean Investment Funds EBEST Investments & Securities and Groom Funds - source
YouTube has kicked off the hiring process for a director of Web3 product management - source
InvestGame report pointed out that in 2021, blockchain games raised $3.1b in 135 transactions, the concentration of seed round financing is high (72%), and the average financing size is still Smaller (~$3 million/pen) - source
The museum with world's largest collection of Gustav Klimt paintings celebrates Valentine's Day with its own "digital declaration of love." The Belvedere museum in Vienna collaborated with the artèQ investment fund to launch a nonfungible token (NFT) drop inspired by one of Austrian painter Gustav Klimt's most famous works "The Kiss." Released on Valentine’s Day, a digital copy of this early 20th century depiction of a pair of lovers was divided into a 100-by-100 grid of 10,000 individual pieces offered as NFTs - source
Red Bull Racing scores $150M sponsorship with Bybit. Formula One team Red Bull Racing scores a multi-year partnership worth $50 million per annum with crypto exchange Bybit. Bybit will act as an issuer of fan tokens and as a tech incubator for Red Bull Racing as part of the deal - source
Forward Protocol has partnered with BoundlessPay. Through this partnership, Forward will build global connections through Borderless Payment Portals and deliver the ultimate crypto payment and Web 3.0 experience on mobile devices - source
Defi:
Axelar raises $35M in Series B funding round. Dragonfly Capital, Polychain Capital, North Island Ventures, Rockaway Blockchain Fund, Cygni Capital, Lemniscap, Olive Tree Capital, Blockchange Ventures, Node Capital are among investors. This latest funding round has brought Axelar’s valuation to $1B. Axelar is building a decentralized network and tools that connect users, assets, and dApp across multiple blockchain ecosystems - source
Coinbase Offers Free Crypto Cashouts For Transfers to Mexico. Coinbase is challenging the likes of Western Union with a crypto transfer program that will initially let recipients convert crypto into pesos for free. After March 31, cashing out will incur a fee but one that Coinbase says will be 25-30% less than existing transfer services - source
DAOs:
Build Finance DAO Falls to Governance Takeover. It was only a matter of time before 1980s-style hostile corporate takeovers went on-chain. And yesterday, Build Finance became one of the first decentralized autonomous organization (DAO) to fall victim to the phenomenon - source
Marshall Islands officially recognizes DAOs as legal entities. The Pacific island state has been keen to adopt blockchain technology and its recognition of decentralized autonomous organizations further highlights this approach - source
DAO that funds students to attend crypto events loses half its budget to risky management. Padawan DAO was set up to fund students to attend crypto and blockchain events. But those running it put the treasury at risk - source