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- Your Chance to Win Big 🎁💸, Zuckerberg Launches New Metaverse Project 🔮
Your Chance to Win Big 🎁💸, Zuckerberg Launches New Metaverse Project 🔮
PLUS: Deutsche Bank to hold crypto for institutional clients. Polygon 2.0 kicks off with 3 new proposals.
Manan Vora
September 15, 2023
Snapshot Web3
September 15, 2023
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Your Chance to Win BIG!
Put on your creative hats!
We are thrilled to hit 3000 subscribers. We would like to thank all of you amazing readers for being with us on this journey. To celebrate this occasion with you all, we are doing a give away!
Caption the above image - reply to this email with your caption - it could be funny, serious, witty - anything. We will choose the best captions and the top 3 winners will get Amazon gift vouchers worth INR 3000 each. Winners will be contacted separately and announced in Monday’s edition. Entries close at 6pm IST on Sunday, 17th September. Let’s go!
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Regulatory and Legal News
House Republicans aim to prohibit U.S. Central Bank Digital Currencies (CBDCs) preemptively, while Democratic Representative Stephen Lynch introduces a bill for a digital dollar pilot. The House Financial Services Committee discussed CBDC implications, juxtaposed by Republican bills seeking to ban them. Lynch's ECASH Act proposes a Treasury Department pilot program for a digital U.S. dollar, aiming to enhance financial inclusion. Meanwhile, Rep. Alex Mooney's Digital Dollar Pilot Prevention Act opposes CBDC testing. The Federal Reserve is in early CBDC research stages, with significant Republican support required for progress. The Biden administration has yet to propose a CBDC.
Coinbase CEO, Brian Armstrong, advises decentralized finance (defi) protocols to challenge regulatory actions in court, particularly those by the Commodity Futures Trading Commission (CFTC). He argues that defi protocols aren't traditional financial services and suggests the regulations may not apply. Armstrong believes legal battles can establish important precedents and prevent the industry from moving offshore. Critics raise concerns about the true decentralization of some defi platforms, highlighting administrative controls.
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Innovation and Launches
Deutsche Bank has partnered with Swiss crypto firm Taurus to offer custody services for institutional clients' cryptocurrencies and tokenized assets. While not immediately entering crypto trading, Deutsche Bank aims to support clients in the digital assets ecosystem. The move follows a trend of financial institutions exploring blockchain's potential in traditional asset trading. The current crypto market is valued at around $1.1 trillion, down from a peak of over $3 trillion in November 2021. Deutsche Bank assures a cautious approach, ensuring regulatory compliance and risk mitigation.
Polygon, a leading Ethereum scaling solution, has kicked off the implementation of Polygon 2.0 with four major upgrades. These include transitioning MATIC to the POL upgrade, making POL the native token for proof-of-stake (PoS), and launching the staking layer. Community voting will determine approval, with implementation expected in the fourth quarter. This upgrade may impact MATIC's demand and an airdrop for POL could benefit MATIC holders. Currently, MATIC is up 1.6% at $0.5186.
SSV.network, in partnership with the Ethereum Foundation, has launched its mainnet to decentralize Ethereum staking pools. Their distributed validator technology (DVT) enhances security and resilience by spreading key management across multiple parties, reducing single points of failure. This aims to address concerns about the centralization of ETH staking. The technology allows some nodes to go offline without compromising security. SSV.network's approach offers an alternative to dominant ETH staking pools, potentially increasing decentralization in the ecosystem.
BNB Chain's Opbnb, a layer-two network on the Optimism OP stack, has launched its mainnet. It offers fast transactions with low fees, catering to interactive applications like games. Opbnb aims to be a high-performance ledger, while Binance Smart Chain acts as a secure settlement layer. The network prioritizes security and responsiveness, making it ideal for gaming transactions. Future plans include added security for offchain transactions and decentralized sequencing for network resilience.
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NFT, Gaming and Metaverse
Meta's Horizon Worlds, Mark Zuckerberg's metaverse project, is now available on mobile and web platforms, expanding beyond virtual reality. The initial offering, "Super Rumble," a multiplayer shooter game, is accessible to a limited number of users with a wider rollout planned. Meta aims to make the metaverse accessible across various devices. Additionally, avatars in Horizon Worlds now include virtual legs, a feature previously missing, addressing earlier criticism.
Following SEC charges against Stoner Cats, the NFT project backed by Mila Kunis and Ashton Kutcher, sales surged by 2,433% within 24 hours. The floor value jumped from 0.0189 to 0.084 ETH (approximately $136). Stoner Cats, a cannabis-themed NFT collection linked to an animated series, was created by Kunis and Kutcher. It has generated $28.16 million in secondary sales since its July 2021 launch, with 10,420 Stoner Cat NFTs sold at 0.35 ETH each. One address holds 4.33% of the collection.
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Scams and Hacks
On September 14, Remitano exchange experienced suspicious transactions resulting in over $2.7 million being withdrawn from its wallet by a single account, raising concerns of a potential hack. A known Remitano hot wallet transferred $1.4 million worth of Tether (USDT), $208,000 worth of USD Coin (USDC), and 104,000 Ankr tokens to an address with no prior history. Tether froze the address, preventing further movement of the $1.4 million in drained crypto. Remitano has not yet issued a statement on the incident. The exchange primarily serves emerging markets in Asia and Africa. This comes after a series of crypto exchange hacks in 2023, allegedly orchestrated by the Lazarus Group, with ties to the North Korean government.
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Funding and Acquisitions
Crypto accounting platform Gilded has been acquired by Bitwave, a move aimed at bolstering Bitwave's enterprise solutions, including crypto payments, invoicing features, and tools for tax tracking and bookkeeping. Gilded, founded in 2018, helps companies integrate crypto solutions into their financial reporting and accounting processes. Bitwave, also established in 2018, focuses on crypto accounting and compliance services, recently closing a $15 million Series A funding round. The acquisition follows the unveiling of new U.S. rules for digital assets accounting, providing more clarity for tax reporting and accounting in the crypto space.
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Interesting Reads
The tokenization of assets is on the rise, predicted to reach $16 trillion by 2030. Major financial institutions like BNY Mellon, JP Morgan, and BlackRock are actively involved. Tokenized money markets and treasuries now have over $650 million in combined assets under management, offering a low-risk yield option in the digital realm. The goal is to smoothly transition from on-chain money markets to on-chain private equity. Security token and tokenized asset secondary markets have a global market cap of $15 billion across various asset classes, showing substantial growth potential in the digital ecosystem.
For traditional financial institutions (TradFi) venturing into the crypto space, monitoring key Bitcoin blockchain metrics is crucial. These metrics offer insights into the health and trends of the broader crypto industry. Metrics like realized cap, halving, hash rate, growth in large holding wallets, and solutions leveraging Bitcoin security provide critical information about market sentiment, security, and adoption. Additionally, transaction volume, Bitcoin distribution, miner revenue from fees, unique wallet addresses, and Bitcoin days destroyed offer valuable data for risk assessment, user engagement, and network health. Keeping a close eye on these metrics equips financial institutions with a better understanding of the evolving crypto landscape and potential investment opportunities or risks.
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Quick Links
A Bloomberg analyst reported the percentage of energy used for Bitcoin mining coming from renewable sources had exceeded 50% due in part to miners fleeing China’s ban.
Roni Cohen-Pavon, Celsius’ former chief revenue officer, has pleaded guilty to four criminal charges and will be free on bail until a Dec. 11 sentencing hearing.
The departure comes just after the crypto exchange lost CEO Brian Shroder.
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Miscellaneous
Genesis, a subsidiary of Digital Currency Group (DCG), is winding down its digital asset trading services, including spot and derivatives trading, through all of its entities, citing voluntary business reasons. This comes after a similar move by Genesis Global Trading, another DCG affiliate, earlier in the year. Genesis Global Capital, a British Virgin Islands unit, will be affected by this decision. The move follows a series of legal and regulatory challenges faced by DCG subsidiaries, including charges from the Securities and Exchange Commission related to unregistered securities offerings. Genesis lenders have expressed dissatisfaction with an agreement reached with DCG, claiming it falls short in recovering their funds.
One year post Ethereum's shift to proof of stake (PoS) in "The Merge," energy consumption dropped over 99.9%. This transition also made Ethereum economically deflationary. Liquid staking providers, notably Lido, now dominate, with 72% of all staked ETH. Concerns over centralization have risen, especially around control by providers like Lido. Vitalik Buterin highlighted the need for more accessible node operation, suggesting statelessness for long-term decentralization, although full resolution may take 10 to 20 years. Client diversity and node centralization remain key challenges.
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The information provided in this newsletter is for informational purposes only and should not be interpreted as investment advice, endorsement, or recommendation. Cryptocurrency investments carry significant risk due to their volatility. You should consider your financial situation, investment goals, and risk tolerance before making any investments. We strongly recommend consulting a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.
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