Issue #31

Market Overview

As of the time of writing (Monday 5pm), the total market cap of the crypto asset market is $US1.07T, down 4.6% from last week.

Below is the weekly performance of the top crypto and NFT assets. 

News Headline Highlights

• A February 2023 survey of 2000+ American respondents commissioned by Coinbase and conducted by Morning Consult, suggests 20% own crypto and the vast majority see an urgent need to update the financial system.

• Yuga Labs, the company famous for creating Bored Ape Yacht Club, has launched their first Bitcoin Ordinal’s auction ‘TwelveFold’, an exclusive collection of 300 generative NFTs. The Ordinals standard is a new way of inscribing data on the Bitcoin blockchain that many are utilising for creating Bitcoin NFTs. 
• Major cryptocurrency firms including Coinbase, Galaxy and Paxos have halted transfers via Silvergate Exchange Network (SEN), Silvergate Bank's real-time payment platform. This began after Silvergate delayed its annual report (10-K report filing), commenting that it was evaluating its ability to operate as a going concern. 
• Jump Crypto has recovered 120,000 ETH (~$140m) from the 2022 Wormhole Bridge hacker. The hacker themselves was ‘hacked’ through collusion from Jump Crypto and the Oasis platform multi-sig controllers that enabled an exploit that allowed the stolen funds to be recovered. The order for the Oasis multi-sig to enable the exploit came via an order from the High Court of England and Wales. Magnet quick take: Whilst we applaud the efforts to recover stolen funds, if a decentralised protocol can operate like this without community involvement it is likely not all that decentralised.
• Leading game developer platform, Unity, has added a “decentralisation” category in its storefront for developers to integrate into their games. Unity is adding support for 13 different blockchain-based software developer kits (SDKs), from chains and products including Algorand, Aptos, Dapper Labs’ Flow blockchain, Immutable X, MetaMask, Solana and Tezos.
• Deribit, the world's largest crypto options exchange by volume, is set to launch bitcoin (BTC) volatility futures by the end of March, offering digital asset investors a simpler way than options to hedge against market volatility.

 Crypto Asset Project Updates

• Ethereum developers have launched a new standard, ERC-4338, which adds a feature known as ‘account abstraction’. Account Abstraction is a concept that turns a user's wallets into smart contract accounts, in order to make Ethereum wallets more user-friendly and to prevent any loss of crypto keys. This standard was launched via smart contract deployment, not requiring any changes to Ethereum’s protocol and thus not requiring a hard or soft fork.
• As commented a few weeks back, Yuga Labs’ Dookey Dash endless runner game winner would win the key to a mysterious box with unknown powers yet. After dashing through the sewers for a week, the winner of the key, 18 year old Fortnite pro ‘Mongraal’, sold the key for 1,000 ETH (US$1.6m).
• Lido Finance reported its largest ever daily stake inflow, with 150,000 ETH (worth almost $240m) being added by Justin Sun.

Regulation Station

• Dubai has unveiled a new crypto regulatory framework, giving locals a concrete licensing regime for digital asset issuers and service providers.
• The Australian Treasury Department’s Token Mapping Consultation Paper Submission window has closed. Magnet Capital provided a submission, focusing on the need to develop a framework for regulating crypto networks rather than retrofitting existing regulations designed for centralised businesses to decentralised ones.
• The Reserve Bank of Australia has announced the set of projects selected to take part in a pilot aimed at developing use cases for a digital dollar, the eAUD. The RBA’s partners for the pilot projects include the Australia and New Zealand Banking Group Limited (ANZ), Mastercard, Commonwealth Bank, Not Centralised, and others.
• The Bank of Japan has announced that their Central Bank Digital Currency (CBDC) program will enter into a ‘Pilot’ stage after 2 years of primarily internal proofs of concept testing. The goal is to understand the technical feasibility of a CBDC’s integration with banks, intermediary networks and other stakeholders.

The Weekly Deal Room

• Few and Far, a platform for experiences in Web3, including NFTs, DeFi, Gaming, raised $10.5m in a funding round led by Pantera Capital
• French DeFi exchange Mangrove DAO raised $7.4m in Series A funds, co-led by Cumberland and Greenfield Capital, for its order book-based platform.
• Helika, a Web3 gaming and NFT analytics platform, raised $4m in a Seed Round led by Diagram Ventures.
• Redeem, a Web3 technology that allows users to send and redeem non-fungible tokens (NFT) using their phone numbers, raised $2.5m in a Pre-Seed Round led by Kenetic Capital.
• Insrt finance, a web3 platform that fractionalises the ownership of NFTs, raised $2.2m in a pre-seed round led by Hashkey Capital.

Metric of the Week

Last week, Bitcoin’s mining difficulty adjusted positively for the third time in 2023, increasing 10% to a new all time high of 180T.

Of the last 42 adjustments in difficulty, 30 have been positive, which shows the exponential rate of hash rate in the past two years.

Since the adjustment, hashrate has continued to increase and the average Bitcoin block time has remained below 10 minutes, implying that the next adjustment, set to occur in the coming week, will also be positive.

Source: Glassnode