Hi, I'm Conor Svensson, founder and CEO of Web3
Labs and this is your Week in Blockchain onMonday the 14th of June 2021. The highlights this week
include El Salvador making Bitcoin legal tender, the Bank of England outlining
regulatory approaches to stablecoins, blockchain firms make Forbes' Fintech 50 list,
Polygon announces a parachain like framework, Uniswap V3 gets cloned and a CryptoPunk
NFT sells for a record $11.8 million. El Salvador has become the first country ever to
make Bitcoin legal tender. The legislator there passed a bill to do this. This is the first
time that a country will actually recognize Bitcoin as a satisfactory form of payment for
any monetary debt. The proposal there will receive favourable opinion before they had the
official votes and it was on Tuesday night that the vote happened. 62 voted in favour out of
a potential 84. The president there has also called for a volcanic geothermal thermal Bitcoin
mining plan. The intent here is that they want to use LaGeo, the state-owned electrical company, to
help turn the country's unused geothermal energy to good use in mining Bitcoin. With this in
place plus the overall support for Bitcoin there it could help El Salvador emerge as one
of the larger places for mining Bitcoin.
Bitcoin tumbled at one point this week on fears that US
law enforcement had managed to hack the network. There was a US-based fund fuel pipeline system
that services the south eastern United States that fell victim to an attacker a little
while back which affected its billing systems. Colonial had to then freeze their operations
because of this and made a payment to the organization demanding ransom which was 75
Bitcoin or roughly $4.4 million. At the time, the Department of Justice announced that they've
managed to recoup $2.3 million of these funds after following the money and ultimately finding
a way to retrieve the private key associated with the wallet. It's an amazing bit of cyber
espionage that's been carried out on by the the US authorities in this instance. Microstrategy have
announced that they expect to see a $285 million loss but they still want to raise $400 million
in debt to buy more Bitcoin. They're obviously showing no signs of stepping back with their
commitment to the cryptocurrency and apparently with this $400 million fundraising they're
looking to obtain secure notes from a number of different institutional investors.
holdings are currently worth about $3.4 billion. Microstrategy have reported though that they have
attracted more than $1.6 billion dollars of orders for this latest deal to purchase Bitcoin. The
firm have said that they've been inundated with demand for orders including interest from a large
number of hedge funds. The Bitcoin network is set to integrate the privately focused upgrade known
as Taproot later on this year. This upgrade would be the first major upgrade to the Bitcoin network
since its Segregated Witness upgrade in 2017 and it's expected to occur sometime in mid-November.
Coinbase have updated their stablecoin offerings, they've updated their pricing for a number of
different stablecoin pairs which enables users to trade pairs such as DAI-USD, and USDT-GBP
at no cost if they're adding liquidity and at one basis point if they're taking liquidity.
This sort of structure was more common with traditional exchanges but the idea here is that
by incentivizing people to add liquidity to the market they don't have to pay for that as
such so they're trying to grow or grow out the actual stablecoin markets that they host on their
The Bank of England has outlined four regulatory approaches to stablecoins. They put out
a paper which they're seeking feedback for by the beginning of September. The questionnaire includes
both Central Bank Digital Currencies as well as stablecoins and thinking about not only how
the transition to CBDC's could happen but also how stablecoins might be regulated. The models
outlined by the Bank of England for stablecoins – first of all they say that they need to be
backed by assets that are at least 100 percent of the value of those stablecoins to mitigate in
against any potential loss should the stablecoin fail.
The other points are that the stablecoin
issuer should become a bank or hold high-quality liquid assets or hold central bank deposits or
deposit stablecoin assets at a commercial bank. Jack Dorsey, the co-founder of Twitter and Square,
is weighing a potential Bitcoin hardware wallet. It's not set in stone at the moment but he tweeted
in the week that they were considering making one and if they did it would be done very much so in
the open and they'd look to potentially integrate it as well with their widely used Cash App.
well, they might look at using Bitcoin's layer 2 Lightning Network to help with the scalability
challenges. Bloomberg have unveiled their June crypto reports and they've outlined a very
bullish perspective on both Bitcoin and Ethereum. Although they do see that Ethereum is likely to
challenge Bitcoin's market cap they've called out that they believe Bitcoin is going to continue
moving towards a hundred thousand dollars and Ether potentially twenty thousand. Elon Musk
during the last week, he's revealed support for Vitalik Buterin's amazing plan to upgrade
Dogecoin. He said that he agreed with Vitalik in an interview that's been widely circulated
which was with the well well-known podcaster Lex Friedman. Lex Freidman asked Vitalik if it
would be possible to get Bitcoin to beat Dogecoin hands down and Vitalik said if Doge wanted to
build a bridge to Ethereum in order to scale then people could trade Doge at a much higher
throughput that would that would be pretty cool. Elon Musk was obviously supportive of this.
G7 central bankers and financial ministers have discussed stablecoins and central bank digital
currencies at their most recent meeting. There wasn't really significant movement here as
such except they reiterated that there needs to be more legal regulatory and oversight requirements
for them, which kind of lines up with what was put out in a report they published in late 2019.
Block.one, the creators of the EOS blockchain, have settled the class action lawsuit filed by the
Crypto Assets Opportunity Fund. This was based on their four billion dollar token sale in 2018. The
settlement was for $27.5 million.
Block.one said there wa without merit but given how successful
they were with their fundraising for the EOS blockchain, I'm sure that this amount won't have
hit them too hard. This week Forbes launched their Fintech 2021 list and BlockFi, Anchorage, Alchemy,
Chainalysis, Kraken, Gemini, Fireblocks and Paxos all made the list. This list is published
annually by Forbes and it's for startups that are still private and have headquarters in
the US or substantial operations in the US.
It's a sign of the times given quite how many of the
Fintech lists had blockchain and crypto companies. Continuing our discussion of BlockFi, who made
the Forbes list, they're in discussions to raise several hundred million in their latest round
of funding at a valuation close to five billion. BlockFi are also looking to tap the institutional
market with a new platform targeting institutional investors. Bitcoin price was also affected
this week by Weibo, the social media platform. Censorship appeared to take place and a number of
crypto influencers had their accounts disabled. The auction house Phillips has announced that
they're going to be accepting Bitcoin for Banksy's million dollar painting which is currently being
This is following on from what we've seen with Sotheby's and Christie's with respect
to some of their recent auctions that they've had. Video game Grand Theft Auto 6 which is in the
works, is rumoured to be having an in-game version of Bitcoin available according to a reputable leak
that came out. They're talking about people being able to earn Bitcoin instead of cash while
playing the game and that it would feature in-game payments of Bitcoin but then they also
said it might be a spin-off currency because of limitations around people being able to spend this
outside of their ecosystem. It'll be interesting to find out more on that as it happens. A
report came out this week from The Block's data dashboard they're saying that 240 000 Bitcoin
have been wrapped into Ethereum which represents 1.3% of the current circulating supply.
the provider of the hardware wallets, have landed a 380 million dollar Series C investment.
Again, just given how widely used their hardware wallets are it's no surprise that there's
a lot of interest in the technology. Dapper Labs, the creators of the Flow blockchain and NBA
Top Shots have announced a native stablecoin for the Flow blockchain called FUSD. Apparently
there's going to be other ERC20 like tokens to follow as well. The Ethereum scaling provider,
Polygon, have announced that they're creating a parachain like technology to Ethereum to help
lower the gas costs. Parachains are something that the Polkadot blockchain provides that are chains
that are connected to what they call the main relay chain. Polygon have taken a similar approach
and they're creating a parachain like offering. This will make it easier to create interconnected
blockchain networks and lower the gas costs for users.
Polygon and 0x have also announced a
$10.5 million fund in order to get more users building on top of the Polygon network. The
intent here is just to increase the overall number of DeFi apps and innovations that people
are building. There's so many developer focussed funds emerging at the moment because of the big
shortfall of developers to develop on all the different blockchain platforms that are coming
out. The creators of Etherscan, the widely used block explorer, have also released Polyscan which
is an Etherscan like block explorer for Polygon. Atari have been continuing to push forward
innovations with their blockchain division. They're prioritizing the development of NFTs
and marketplaces and virtual universes and have now announced that they're entering into a new
license with Crypto Blockchain Industries SA, which is for the development of blockchain-enabled
They've already granted licenses to Sandbox and Decentraland so they're creating
these non-exclusive licensing agreements with a number of different blockchain providers to
grow their footprint in the ecosystem. The Spanish seafood firm, Nueva Pescanova Group, has announced
it's working with IBM to utilize their food trust platform which is a DLT platform for supply chain
traceability. Solana Labs, the creators of the Solana blockchain have raised $314 million dollars
in their latest funding round which was led by Andreessen Horowitz and Polychain Capital. We
spoke last week about how they are rumoured to be trying to close a funding round between the
$300 to $450 million range. It just shows how much interest there is in the technology
that they've created. Amazon have also created listed a job that's seeking DeFi experience. This
is for someone with the title of Head of Product in the Blockchain Division and they want people
who have got views on DeFi and can think about where it's going to be going.
In DeFi news, a
Binance Smart Chain project has cloned UniSwap V3 creating Holoswap. One of the things you might
recall when we spoke about UniSwap V3 previously was that they changed the licensing so although
the UniSwap V3 code is open source, it's not legal to actually use it for any commercial purposes.
This Holoswap platform that's emerged is in breach of this. Exactly what actions being taken
by UniSwap remains to be seen but the fact is a breach of license is probably not going to
end well for them. It highlights the fact that it's not possible to physically stop people taking
this code and spinning up clones of these things but again interesting to see that someone's done
it. The World Economic Forum, they've released a policy toolkit for DeFi regulations. The idea
with this toolkit is that it will provide useful guidance for regulators and government policy
makers concerning DeFi regulations. The World Economic Forum has put out a lot of useful content
on blockchain to help enterprises working with the technology and just companies working with it
positioning it in quite pragmatic ways.
It's great to see them putting out a policy toolkit to
help drive forward regulation in the DeFi space. Polkadot have announced that they're ready to
begin auctioning off their parachain slots. The main Polkadot chain have what are called
slots for parachains which are blockchains of blockchains. They have a limited number
that they can make available in the main Polkadot chain and they've opened up this slot
auctioning process. It's due to be happening on the 15th of June. They've wanted to make sure
that they feel confident that the technology works properly before doing this so it's a very big
milestone for them.
Kraken, the crypto exchange, has added support to allow users to vote on which
projects they want to see succeeding with these slot auctions. It's great to see Kraken innovating
here because of course, people tend to need to be quite savvy in order to do things like voting
for these on-chain governance protocols and so by doing it through the actual exchange it makes
it a lot easier for people to participate in it. The Curve DeFi project is looking at more tokens
launching more tokens with a white paper for their V2 platform. They want to challenge UniSwap with a
new model for adding volatile tokens. Their intent here is that they believe greater liquidity
could be achieved on a pool of more volatile assets using a dynamic peg. Exactly how or whether
UniSwap will respond remains to be seen but it's great to see just more innovation happening. NFT
news, Paris Hilton has joined the Ethereum NFT project Origin as an advisor. They're looking
to bring NFTs to mainstream consumer audiences through education marketing and creating new use
cases such as making them redeemable for physical fashion and accessory items and access to unique
experiences or premium content.
The Dogecoin creator is selling 420 dodge collectibles.
He's created a number and he wants to see how the market responds to these. Mythical Games,
the crypto gaming startup focussed on NFT items that was created by former Activision, Oculus and
EA executives, has announced that they've managed to raise a $75 million Series B to continue
developing their NFT driven games platform. Boson Protocol have bought $704,000 in digital
real estate in order to build a digital mall. They've done this on the Decentraland platform
and the intent is that they want to have a mall for global brands to open up shop in this digital
real estate that they've created.
There's a number of different firms that are finding ways to create
these digital experiences on Decentraland so again this idea of virtual malls will certainly be
a fun one to see how it evolves. A CryptoPunk has sold for $11.8 million at Sotheby's.
The CryptoPunk Covid Alien has achieved this record-breaking sale and although it's not a
record-breaking NFT sale, it's a record-breaking sale for the CryptoPunk. They're one of the
leading NFT collectible platforms. Finally, the Guild of Guardians pre-game registrations
have hit 133 thousand since going live earlier this week. Guild of Guardians NFT sale has raised
over $3 million and the sale featured a collection of playable in-game NFTs which ranged in price
from $200 to $100 000 in value. These will be playable once Guild of Guardians launches
on mobile devices in the first half of 2022. Moving on to our metrics, the crypto market cap
is down just over 8% to $1.52 trillion, the assets locked in DeFi are down just under 13% to $57.5
billion, the seven day NFT sales are down 8.34% to just over $11 million with an average price of
$466 dollars which is down 13%.
That's all we have for this week, if you like what you hear please
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available in the show notes and at our website weekinblockchain.com. We also host a Clubhouse
session every Monday at 5 p.m UK 12 p.m eastern to discuss the the big news that happened in the
last week. Thanks and I'll see you next week..