From October 2nd to October 8th
Bad news came together.
Summary (links are an extract of links below)
This week is the first release published on Substack. Hope you’ll like it.
It offers better interface and links (such as main sections below):
Business news (including M&As, fundraisings and investment tools)
Business sectors (including mining, exchanges, DeFi, NFTs, infrastructure and al.)
Markets, coins and tokens (including alt-coins, stablecoins and CBDCs)
Opinions, regulations, sanctions and scam.
On the news side, beside the beginning of the Sam Bankman-Fried trial, which I will not cover (see below), the week was unfortunately marked by bad news (more layoffs, more winds down, M&A and fundraising activity to a low for Q3 - see the deep fundraising report from Messari…).
We have to look further to hope for the crypto spring, for possible Bitcoin spot ETF approval (in 3-6 months) or for Bitcoin halving (in April 2024)(interesting paper with a comparison with quantitative tightening), or look elsewhere, on a lighter note, to Starbucks’ Pumpkin Spice Latte NFTs or to NFT to prove authenticity of psychedelic mushrooms.
Much, much more below (on JP Morgan and tokenized assets, on El Salvador’s Lava Pool, on risks of stETH 7% weight in the Ethereum supply, and more) … and you now have direct access below.
_________________________________
Business news
Business news
UBS launches tokenization trial on Ethereum with Monetary Authority of Singapore.
Crypto-friendly neo-bank Revolut has struck a share deal with SoftBank to remove a major barrier to its much-sought U.K. banking licence.
Yuga Labs, creator of the Bored Ape Yacht Club NFTs collection, announces major restructuring, eliminating several roles across the organisation, and focusing on its metaverse ‘Otherside’. Yuga Labs invests in spatial computing startup Hadean (an undisclosed but significant amount), to power Otherside.
Bad news
Chia Network lays off third of its staff a loss of banker delayed going public.
Chainalysis idling 150 employees.
Ledger cuts 12% of staff (approx.88 persons).
Nexo to phase out cashback for UK exchange and card transactions, as FCA rules approach.
Utopia Labs winds down all services, and pivots to a new business model. Positioned as crypto payment and stablecoin offramp/onramp, Utopia raised $22m in June 2022, from investors including Paradigm, Circle and Coinbase.
Yield Protocol to wind down by year’s end. At its peak in April 2022, the DeFi lending project had over $22 million in total value locked, but this figure has since dropped to around $2 million.
Splinterlands and Stargarden, two blockchain games are also winding down.
Business news: M&A
In Q3 2023, the number of crypto M&A fell 19% QoQ to 26 (and 48% from Q3 2022) for a total disclosed consideration of $59m.
Business news: partnerships
Conflux and LayerZero are working with China Telecom to develop a blockchain-based SIM card, able to transfer assets between chains.
Crypto Separately Managed Accounts (SMA) platform Eaglebrook partners with Anchorage Digital, a bank chartered by the OCC, for custody. In April 2022, Franklin Templeton invested in Eaglebrook, joined by Ark Invest in October 2022.
Business news: companies fundraising
Crypto fundraising marks lowest quarter since Q4 2020, to $2.1b, down 36% QoQ, with an increase in early stage share, and a dominance of infrastructure.
Crypto VC funding decreased in September to $510m (-24% MoM or -72% YoY).
Closed deals
$24M for Blackbird, web3 restaurant loyalty app, in a Series A round led by a16z. Additional participants in the round include QED, Union Square Ventures, Shine, Variant and various restaurant groups. Blackbird gives restaurants a way to bolster revenue by better creating repeat customers. The app tracks a customer's preferences such as likes, dislikes and seating arrangements, in addition to tracking how often the customer comes in. Blackbird also rewards customers with a cryptocurrency, which they can redeem for an entree, drink or other restaurant reward.
$10m for Trinetix, product development company with blockchain expertise, in a strategic funding form Hypra, Kyiv-based investment fund.
$9.7m in pre-seed capital commitments for Cicada, a non-custodial credit risk management company aiming to bring greater transparency and accountability to institutional lending over public blockchain infrastructure. The round was led by Choppa Capital with participation from Bitscale, Bodhi Ventures, Shiliang Tang, and others.
$7.5m for AirDAO, a community-governed layer 1 blockchain. The sole investor seems to be DWF Labs, which previously invested $2m in AirDAO in September 2022.
$7m for Phaver, web3 on-boarding services startup. Polygon Ventures, Nomad Capital, Symbolic Capital, dao5, Foresight Ventures, Alphanonce, f.actor and Superhero Capital invested in the round, as well as Swissborg, which shared its allocation with its members.
$5m for ParaFinance, decentralised lending startup, in a seed round with participation from OKX Ventures, Kosmos Ventures, Uniswap Labs, and Gate Labs.
$3.5m for Ostium Labs, a decentralized perpetuals exchange for real-world assets such as commodities and forex, trading on the blockchain. Investors include General Catalyst, LocalGlobe, SIG, Balaji Srinivasan and others.
$2.5m for Fairblock, blockchain security startup, to develop conditional encryption. The funding round was led by Galileo and saw participation from Lemniscap, Dialectic, Robot Ventures, GSR, Chorus One, Dorahacks, and Reverie among others.
$2.5m for Convergence RFQ, a Solana-based trading platform, in a pre-seed token round, with a fully diluted valaution of $30m. The round was led by C² Ventures, with participation from Big Brain Holdings, Israel Blockchain Association, Auros Global and others
Ań unknown amount (« 8 figures ») for The Open Network (TON), a decentralised blockchain platform initially designed by Telegram, in a strategic funding form the venture arm of the crypto exchange MEXC. MEXC will provide marketing services and TON collateral lending services.
An unknown amount for Accumulated Finance, a liquid staking protocol, in a private round with participation from De Facto Capital, Curve Finance and Stake DAO team members.
Business news: funds
Deus X Capital, a family office backed investment firm, launched with $1 billion of assets, including existing investments (such as Galaxy Digital, former company of Deus X’ CEO and Hilbert Group, a company specialised in quantitative strategies in digital assets) and capital to be deployed in private equity, venture capital and fund allocation opportunities in the digital asset, blockchain, fintech and institutional capital markets sectors.
ParaFi Capital, a crypto-focused investment firm with $633m in AUM, has raised $39m of a $100m target for its second VC fund.
Business news: ecosystem funds and grants:
Sui Foundation reallocates 117 million SUI to support growth initiatives.
Filecoin development team Protocol Labs launches venture studio program.
$88m in Arbitrum grant proposals are competing for a $44m pot (see previous weeks).
Business news: investment tools
Nine of the ETFs offering exposure to ether futures came to market on Monday Oct.3. Five hold only ether futures, while four have a mix of bitcoin and ether futures. However, they had a slow start, with a total trading volume of $2.53m over the two first days.
Grayscale filed to convert is Ethereum Trust (ETHE) into a spot ETF.
SEC likely to approve all spot bitcoin ETFs at once, in the next 3-6 months.
Business news: people
Amanda Fabiano, Galaxy Digital’s head of mining, leaves to start her own consulting firm, ahead of bitcoin halving.
Jaynti Kanani, Polygon co-founder, steps down. Is Polygon in trouble?
Crypto hires and fires.
Crypto adoption
Approximately 50% of crypto users are investing in digital assets to improve their everyday living standards.
_________________
Business sectors
Mining
El Salvador introduces first mining pool tapping geothermal energy, Lava Pool, launched by mining firm Volcano Energy and Luxor, mining software provider.
Production in August is announced at 383 bitcoins for Bitfarms, 659 for CleanSpark, 1’072 for Marathon, 383 for Bitdeer, 333 for Riot Platforms, 103 for Hut 8 (which is merging with USBTC).
Marathon announces private exchange of approximately $417m of 1% convertible notes due 2026 for shares of common stock.
Bitmain delays salary payments for September.
3 new mining machines, all below 20J/T (Joules per Terahash). Bitmain S21 (200T; 17.5J/T; $19.6/T), Canaan A1466I (170T; 19.5 J/T; $18.88/T) and WhatsMiner M60 (whose details will be revealed on Oct24 in Dubai).
Exchanges
CCData publishes its September 23 exchange review report, showing that spot trading volume fell 29% MoM to $336b, and derivatives trading volume fell 17% MoM to $1.33t, the lowest since Dec.20.
Binance
Binance spot market share drops for 7th consecutive month.
Coinbase
Coinbase adopts ‘International-first mentality’.
Other
Gemini to cease offering crypto services in the Netherlands in November.
JPEX, the Hong Kong crypto exchange that’s become the target of a police investigation, has come up with a new idea for getting itself out of trouble — it is now a DAO.
DEX
Uniswap v3 deploys on ZkSync Era, via GFX Labs’ Oku interface.
THORSwap suspends trading after illicit fund flows identified. RUNE plummets 9%.
DeFi
From CeFi to DeFi: Velvet is about to launch an omnichain, DeFi operating system, for investors to easily launch tokenized funds.
Contango launches decentralised perpetuals leveraging Aave.
NFTs
Millions of compressed NFTs are being minted weekly on Solana. Bubblegum from Metaplex leverages Merkle trees to reduce costs of minting.
Starbucks issues Pumpkin Spice Latte NFTs.
OpenSea launches OpenSea Studio.
The MoMA launches MoMA postcards, an experiment in collective creativity on blockchain.
Saatchi Gallery held its first NFT-crypto art exhibition.
NFTs to prove authenticity of psychedelic mushrooms. Blockticity uses the Avalanche blockchain to authenticate large batches of cannabis products.
Zora launches free minting.
Gaming
Fashion
AdWorld launches AdWorld Fashion Week.
Metaverse
SocialFi
Inspired by Friend.tech, Stars Arena boosts Avalanche C-chain network. Daily transactions reached 250k on Oct.4, less than a week after launch.
Infrastructure
Payments
Wirex introduces another self-custody debit card, following Gnosis, Suberra, Holyhead, SORA…
A bunch of players got Major Payment Institution license (MPI) form the Monetary Authority of Singapore (MAS), including full license for Ripple, Sygnum, Coinbase, and in-principal for GSR.
Sending stealth payments with Umbra. (I disagree)
Identity
Brazil rolls out blockchain-based digital ID
Authenticity
Nodle uses blockchain to authentify real-world media. Nodle is bringing ContentSign to the Content Authenticity Initiative, a project led by Adobe and the Linux Foundation, to create a future standard for media attestation.
Tokenization
JP Morgan crypto lead: « 99.9% of conversations with clients are about tokenized assets, not crypto. ».
Operating under the Swiss DLT act, Backed Finance issued a tokenised product tracking short-term iShares Us treasury bond ETF, on Base network, after having launched on Etehreum and Gnosis, with a combined market cap of $37m.
Real World Assets
AI
_________________
Markets, coins and tokens
Markets
Last week:
Kaiko publishes its deep, data-driven quarterly market report Q3 2023, showing low trade volumes and even lower volatility, despite big events, such as Grayscale and Ripple legal wins, and FTX approval to liquidate $3.4b in holdings.
Uptober? May be too early to tell.
Oct.2:
Oct.3:
Analysts still predict a BTC price crash to $20k.
ETH retraces after futures ETF launches fall flat.
Oct.4:
BTC hovers above $27.4k. XRP rises 5%; SOL slides.
Poor week for Ether prompts research firm to reverse outlook and advise favouring Bitcoin instead.
Oct.5:
BTC steady at $27.6k. Why are XRP and AVAX pumping?
Bitcoin due new local low?
Oct.6:
BTC dives 2% to $27k on US jobs data.
This week:
BTC and ETH hold stable amid frantic news cycle. Only AVAX and SOL gained 15%.
Bitcoin
Bitcoin beats US dollar versus ‘eggflation’.
Ordinals growing despite NFT downturn.
Ethereum
JP Morgan shows that Ethereum has become more centralised since the Merge and Shanghai upgrades.
stETH’s effect on Ethereum: where we see that the rise of liquid staking impacts the Etehreum supply, and, « potentially carries potential risk of stETH losing its peg, possibly leading to challenges related to handling bad debt on Aave. » (A deep and technical analysis from Glassnode).
Alt-coins, tokens and protocols
Should cross-chain rely on oracles or ZK? With an interesting underlying question when Google Cloud comes in: « Could the cross-chain security of blockchains ultimately rely on centralized internet giants? » (An interesting, although tough technical strategic approach of cross-chain future).
Reviewing the rise of BASE network: on-chain marketing may become the best approach (an interesting analysis of Base’s success).
360° coverage on the Solana ecosystem. Includes description of 18 apps.
Frame, a new L2 custom-tailored for NFTs.
Starkware delays token unlocks from Nov.23 to Apr.24.
State of EOS Q3 2023.
State of WAX Q3 2023.
State of Synthetix 3 2023.
Stablecoins
Stablecoin market decreased 35% in 18 months, from a peak of $189m in May 2022, to $124b in Sep.2023. Average daily trade volumes were divided 4x to $50b.
Uranium backed stablecoin? A proposal to include some Uranium in Maker’s DAI reserves.
Distributed Technologies Research has launched DRAM, a UAE dirham-backed stablecoin that aims to tap into the performance of the United Arab Emirates fiat currency.
CBDCs
EU plans for wholesale CBDC out within weeks, French central banker says.
_________________
Opinions, regulations, sanctions and scam
Opinions
Could SBF’s saga happen without crypto? An easy scapegoat goes on trial.
Asian banking giant DBS is patiently wading into crypto.
Regulations
BIS, with Dutch and German central banks develops a project mapping international crypto transfers between exchanges.
IMF proposes framework to assess systemic risk from crypto assets. The paper states that empirical tools from traditional finance are not well suited for crypto-related risk assessment.
A Kenyan parliamentary panel called on the country’s regulator to shut down Worldcoin operation within the country.
Dutch crypto companies score legal win in fight against $2.3m supervision bill.
Basel Committee to consider disclosure requirements for bank’s crypto assets.
UK to launch digital securities sandbox in Q1 2024.
Sanctions and trials
The judge has rejected the SEC bid to appeal against Ripple. XRP rallied 5%.
A class-action suit was filed against Binance.US and Binance CEO Changpeng Zhao, alleging various violations of federal and California law on unfair competition for attempting to monopolize the cryptocurrency market by harming its competitor FTX.
Bankrupt companies
BlockFi says it’s taken major step toward emerging from bankruptcy.
Celsius successor to be seeded with $450m if restart plan approved.
SBF and FTX
(I do not intend to publish day-to-day information on SBF’s trial. But if there is one paper covering most of the issue, read this one) On SBF situation and trial.
Did Changpeng Zao ‘trapped’ SBF? (Fortune, paywalled)(An interesting point of view, where the author considers that, selling its 20% stake in FTX in 2021 - for $2.2b-, CZ got $500m in FTT, which he later used to sink FTX (?), and $400m in BNB, which SBF could have used to retaliate - infos form controversial Michael Lewis book).
Scam and scam fighting
FTX ‘hacker’ moved 15 ETH last weekend.
Binance collaborates with Royal Thai Police to seize $277m from scammers, part a a crime ring conducting pig butchering scam.
Manifold Trading, an anti-sniping service, admits that an insider used nonpublic information to profit from a hyped launch on friendtech.
Friend.tech users targeted by SIM swap attack. Several ETH drained. Friend.tech adds option to login with email instead of phone number to prevent such attacks.
Galxe hit by DNS attack on front-end website. In total, the hacker’s address received over $160,000 in user funds. The same address was tied to the attacker who executed a similar DNS hijack on the Balancer decentralized exchange on Sept. 20.
Stars Arena drained of $2.85m. Will re-open after a full security audit.