Top Stories of Last Week

Regulatory

  • El Salvador’s government agreed to create $150 million Bitcoin trust to facilitate exchange between Bitcoin and U.S. dollars in country. El Salvador’s Minister of Economy, María Luisa Hayém Brevé, said there is possibility of increasing initial $150 million allocation. Trust will be set up at Development Bank of El Salvador.
  • SEC filed charges against BitConnect and founder Satish Kumbhani, alleging fraud against crypto lending company. SEC alleges BitConnect and Kumbhani siphoned investors’ funds for own benefit.
  • Trials for Indian CBDC could begin by December, according to Reserve Bank of India Governor Shaktikanta Das. Central bank is studying matters related to security and broader impact CBDC would have on monetary policy.
  • China aims to build international clearing and settlement network for mobile payments using digital yuan. Network will be breakthrough point in cross-border use of digital currency. China also wants to use digital yuan to improve monitoring and early warning capabilities regarding cross-border flows of yuan.
  • Bank of International Settlements Innovation Hub working with central banks of Australia, Malaysia, Singapore and South Africa to test efficacy of wholesale CBDC in cross-border settlements. Goal of “Project Dunbar” to develop prototype platforms that can support international settlements with digital currencies issued by multiple central banks.

Project Development

  • Twitter reportedly appears to be developing functionality that enables users to add Bitcoin and Ethereum addresses to their profiles, believed to be part of Twitter’s Tip Jar feature and adds to reports which surfaced earlier this week that firm would enable Bitcoin tipping for content creators.
  • Jack Dorsey also announced TBD, Square’s new division focused on creating an open developer platform, is planning to build a decentralized bitcoin exchange.
  • Fantom announced incentive program fund of 370 million FTM worth over $314 million for attracting DeFi platforms. Fantom’s program will distribute FTM tokens to projects that maintain TVL thresholds for set periods of time, targeting projects that surpass $5 million and $100 million.
  • Celo announced launch of $100 million “DeFi for the People” incentive program fund. Working in collaboration with Aave, Curve, Sushi, PoolTogether, 0x, UMA, Chainlink, RabbitHole and The Graph, the program will offer more than $100 million in educational initiatives, grants, and incentives.
  • Shop.com announced partnership with crypto payment service provider BitPay, which will allow it to accept payments in several cryptocurrencies.

Institutional

  • SBI Holdings intends to launch cryptocurrency fund before end of November, according to Bloomberg article which cited Tomoya Asakura, president of SBI affiliate Morningstar Japan K.K., who said fund could total several hundred million dollars in cryptocurrencies.
  • Miller Opportunity Trust disclosed in SEC filing a $44.7 million stake in Grayscale Bitcoin Investment Trust. Fund, which had assets of $3.1 billion as of June 30, said it owned 1.5 million shares of GBTC.

Exchanges

  • FTX.US acquired crypto derivatives exchange LedgerX for undisclosed sum. Deal is expected to close sometime in October, but deal’s financial terms have not been disclosed.
  • OKEx introduced DeFi Hub, a decentralized digital asset ecosystem that includes marketplace for NFTs called NFT Marketplace and DeFi Dashboard. NFT Marketplace enables users to mint own NFTs to sell with royalty fee set by creator. 
  • Coinbase plans to allow U.K. customers to earn staking rewards with Ethereum 2.0 that is expected to fully launch in next few months. 
  • Monetary Authority of Singapore issued investor alert for Binance’s global website in list including entities unregulated by MAS, but may be erroneously perceived as licensed or regulated. MAS said in early July it would “follow up” with Binance’s Singapore entity, which is waiting for review of license application.

Fundraising

  • Offchain Labs, the developer of Arbitrum layer 2 scaling solution, launched mainnet Arbitrum One and also raised $120 million in Series B funding round led by Lightspeed Venture Partners. Other investors include Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital, and Alameda Research.
  • Blockchain-as-a-service firm SIMBA Chain closed $25 million Series A funding round led by Valley Capital Partners. Other participating investors included Notre Dame Pit Road Fund, Elevate Ventures, Stanford Law School Venture Fund, founders of Lightspeed Venture Partners and New Enterprise Associates.
  • BridgeTower Capital forming $20 million fund with Solana Foundation to develop blockchain network in European Union, U.K. and Switzerland.
  • Syndicate announced $20 million Series A fundraise led by Andreessen Horowitz. Other investors included Coinbase Ventures and Table Management.
  • Zipmex completed $41 million Series B funding round with participation from Krungsri Finnovate, the corporate venture capital arm of Thailand’s Bank of Ayudhya, Plan B Media and Master Ad. 
  • Lending startup Parallel Finance raised $22 million in Series A funding round that valued DeFi protocol at $150 million. Round led by Polychain Capital with participation from Lightspeed Venture Partners, Slow Ventures, Blockchain Capital and Alameda Research.

Defi / NFT

  • Sotheby’s announced sale of collection of 101 Bored Ape Yacht Club NFTs created by Yuga Labs in auction running from Sept. 2-9. Sotheby’s estimates BAYC sale will total $12-18 mil, and will accept Ether, Bitcoin and USDC as payment.
  • CryptoPunks signed with United Talent Agency for representation across film, TV, video games, publishing and licensing, along with Meebits and Autoglyphs, two other NFT projects created by Larva Labs.
  • Three Arrows Capital announced launch of NFT-dedicated fund, Starry Night Capital, along with NFT collector Vincent Van Dough, who said that in addition to investing in art and collectibles, the fund would launch an “NFT education portal,” promote emerging artists and launching physical NFT gallery space in “major city” before end of year.

Things to Watch This Week

  • Uniswap SEC Investigation / Binance SGD Product Removal 
    • It will be important to monitor any further word that comes from the SEC in regard to the investigation of Uniswap that was announced late last week. Although no wrongdoing has been alleged as of this time, it still marks the regulator’s intent for greater oversight on matters related to decentralized finance and could have an impact on markets should troublesome news emerge. Additionally, the regulatory pressure on Binance continues, as the exchange announced it will roll back product offerings in Singapore amid warnings from financial regulators that the company may have violated payments laws. Although markets continued to show signs of strength following both of these announcements, additional reports could weaken or potentially reverse momentum and should be watched closely. 
  • El Salvador Bitcoin Legal Tender – Sept 7
    • As mentioned last week, the run-up to El Salvador’s Bitcoin law coming into effect that will make Bitcoin legal tender in the nation has been met with a good deal of positive momentum in the market. In addition, word is coming out that a growing movement is happening on platforms such as Twitter and Reddit, where users are attempting to coordinate plans to buy $30 worth of Bitcoin en masse on Sept. 7 to commemorate the law. With the memories of Reddit’s GameStop price pump still fresh in our minds, the beginning of the week should be watched closely to see if the movement amounts to anything significant. Additionally, with the scrutiny that the aforementioned Reddit price pumps drew from regulators at the time, it should be noted that any effect could be coming at a bad time, as markets could do without any further uncertainty from regulatory crackdowns. 
    • Ryan Watkins@RyanWatkins_
      Path forward for Ethereum DeFi.
      – Institutional adoption (e.g Compound treasury)
      – Mass retail adoption (leading exchanges / brokerages like Coinbase providing abstracted DeFi access to users through their apps)
      – Layer-2 adoption (rollups making Ethereum accessible again)

      This is where Ethereum’s DeFi ecosystem currently has a significant advantage over competing chains – specifically on the institutional and mass retail fronts. Blue chip Ethereum DeFi protocols have a track record, and people trust them. They will be the first to be integrated

      This will also be a much needed shift in how many think about DeFi. It will no longer just be about speculation and money games, but rather real world usage. It’s all about widening the funnel for more users and capital to pour into our virtual reality.

      So long as Ethereum gas prices remain this high, new users will continue to onboard into the cryptoeconomy through newer chains like Solana, Avalanche, and Terra that offer a far better UX. It sucks, but that’s just how it is until Ethereum’s L2s ecosystem fully rolls out.

      Btw this will also remain the case so long as users solely onboard just to speculate and experiment. Why go to the expensive slow chain with higher valuations when you can go to the cheap fast chains with low valuations and room to experiment? Unfortunate reality.

      Unfortunate reality for Ethereum that is. The winner in any case is users as competition heats up and each chain is pressured to provide a better experience.

      VincentVanDough@Vince_Van_Dough
      Excited to be working together with @zhusu and @kyled116 from 3AC to launch @StarryNight_Cap, a NFT fund. Our thesis is simple, we believe the best way to gain exposure to the cultural paradigm shift being ushered in by NFTs is owning the top pieces from the most desired sets.

      We are cognizant of the concerns many have about funds entering this space and we will seek to always do right by the community. Before year’s end we aim to launch a NFT education portal, explore ways to bring more exposure to up and coming artists, launch a physical gallery in…

      a major city, ensure works in our collection remain open to the public via virtual galleries, and experiment with various community building initiatives. We strive to be good stewards of the space at large and use our influence to uplift and empower others.

      The NFT space is not a zero sum game, it is driven by strong flywheel effects and functions best when the pie is growing for all. 

      Sam Trabucco@AlamedaTrabucco
      I went to school for math. I got trained in quant trading, and eventually shifted to quant trading in crypto. Over time, I’ve relied less on math and more on intuition, e.g. for analyzing Elon’s tweets. Yesterday I looked at … cartoons? for 4 hours. A thread about adapting.

      I’ve talked before about how Alameda really only has one goal: make money trading. We trade crypto because we have edge doing so and believe it to be the best use of our resources, but if e.g. sports betting became big enough we’d probably focus 1/3 of our time on it or whatever.

      “Crypto” is not monolithic, of course. Our edge has historically come from a few places — having infrastructure in place to execute short-timescale arbs and spreads and having good intuition about market structure -> make good delta bets have been two of the bigger sources.

      Occasionally, a big opportunity pops up which is nothing like that, though. A few examples: – 2020 election trading (relevant because it was on some crypto exchanges) – DeFi becoming huge
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      Daniel Ƀrrr@csuwildcat
      Can’t disclose details yet, but the major fight I’ve been anticipating between tech giants and the Decentralized Identity community may have just begun. We’re talking unprecedented opposition to decentralized systems (including Bitcoin) that these companies have never made public

      In the coming weeks, depending on what transpires, I may ask the decentralized identity, cryptocurrency (Bitcoin), and all others in the decentralized systems community to take action in response. The community’s response may decide the outcome, so please be ready if called upon.

      vitalik.eth@VitalikButerin
      Doing a random twitter experiment just on this day. Only the 268 people I follow can reply to this tweet. Feel free to ask things and I’ll talk about anything crypto or non-crypto related.

      Zhu Su  @zhusu
      What are some promising ideas for Ethereum / Doge cooperation? What was it about Doge that got you interested in the project

      vitalik.eth  @VitalikButerin
      Personally, I hope that doge can switch to PoS soon, perhaps using ethereum code. I also hope they don’t cancel the 5b/year annual PoW issuance, instead they put it in some kind of DAO that funds global public goods. Would fit well with dogecoin’s non-greedy wholesome ethos.

      Taylor Monahan  @tayvano_

      Which (Ethereum) use-case has surprised you most? (h/t @JYSquall)

      vitalik.eth  @VitalikButerin

      Spencer Noon @spencernoon
      The great unlock for NFTs is opening up your IP to your community permissionlessly and without restrictions—IP is a new type of platform.

      2/I predict we are going to look back at yesterday’s Larva Labs deal with UTA as a the beginning of the end for Punks as the top #NFT project. The smoking gun: it appears economic rights in this deal do not trickle down to Punk collectors.

      3/So Punks might be on a billboard or a Happy Meal someday, but does the Punk collector community who created all of this value see any of these cash flows? It doesn’t appear so — they simply get “wider exposure”. This would be extremely value-destructive for Punks long-term.

      4/Elsewhere in NFTs, projects like @nounsdao are taking a decidedly Web3 approach with open source IP. A community of owners will decide how to leverage its IP, plus accrue all of its economic benefits. Permissionless, just like crypto and the internet.

      5/Open IP enables strong incentive alignment across all stakeholder groups in NFT projects, from creators to collectors, resulting in more defensibility for their brands over time.

      6/The problem is that LL is a centralized company; not a DAO. Even if they share revenue with Punk holders, this is still the weak tech approach. It can’t scale like the strong tech, approach of community-owned IP. We’ve yet to even scratch the surface of these possibilities.

      7/ @Blitmap is another project pioneering this approach, allowing its original collection to be used freely for any reason and w/o restriction. There is more work to be done on the legal side of things, but for me the future end-state of brands is clear.

      Mike Alfred@mikealfred
      A lot of large and important institutions bought #bitcoin over the summer. They will announce their purchases between September 7 and November 19. Enjoy the fireworks.

      dave the wave@davthewave
      Price has never come back to the Gaussian Channel [on the weekly] without then going on to go deep into that channel. Syncs with the LGC nicely, and shows a picture of reducing macro volatility.
      twitter.com/MagicPoopCanno…

      As far as the comparison with 2013 goes, the better comparison is this side of that peak – 2014.

      Travis Kling @Travis_Kling
      #Bitcoin in an interesting spot ATM. A couple thoughts-

      44 days ago, the BTC chart was in big trouble. It had broken all sorts of support levels and had many people seriously doubting whether $30k could hold again.

      In the subsequent 44 days, BTC covered a tremendous amount of ground. It did that thing it does sometimes where it just runs away from people. Oh you thought you were going to buy $30 or even lower? How about $48?

      A massive amount of damage has been repaired to the chart. We punched major Fibs ands points of control, retested and held S/R flips, battled with the 200D and then firmly reclaimed it. Impressive stuff.
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      Daniel Cheung @HighCoinviction
      The L1 incentive war happening in crypto reminds me of the landgrab situation taking place with US online sports betting. For the first time, we are seeing strong activity take place outside of ETH leaving some to question who the LT winner will be. Here are my thoughts

      Here are the parallels between the current smart contract wars and US OSB mkt: 1) Massive TAM with large greenfield 2) Market structure where share accrues to top 3 players 3) Both in landgrab situation where competitors are burning tons of $$ to win share

      Below is a chart of price action for $DKNG (Draftkings), an American daily fantasy sports contest and sports betting operator. The DKNG story will likely somewhat resemble what will happen for the fundamentals of ETH as these contract wars progress. Allow me to explain.
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      Alessandro Paluzzi@alex193a
      #Twitter is working to allow you to add your #Bitcoin and #Ethereum address to your profile to receive tips via the Tip Jar feature \ It is not necessary to link a Strike account to add them to your profile.
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      QCP Capital@QCPCapital
      𝗤𝗖𝗣 𝗠𝗮𝗿𝗸𝗲𝘁 𝗨𝗽𝗱𝗮𝘁𝗲 𝟬𝟮 𝗦𝗲𝗽 1/ This week, ETHBTC cross started moving towards our 0.0850 target level [view from 03 Aug Market Update The outsized move higher in ETHUSD has been largely spot and vol driven (rather than leverage in futures)
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      2/ Spot demand from unprecedented transaction amounts in NFTs along with the constant buying of calls in large blocks. All this on the back of the EIP-1559 catalyst. With this recent push through 3800 we are starting to see some funding pressure as leveraged players..

      3/ ..join in on the move higher. In spite of the decisive rally, the market remains wary of potential downside risk. We can see this from the risk reversal levels: (a) BTC risk reversals have not broken out of range and remain close to par in spite of the call buying onslaught

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      4/ (b) ETH front-end risk reversals have flipped violently to the put side. With the speed of this move higher, a sharp mean reversion move would not be too surprising.
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