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Crypto

Crypto bear markets are a ‘great time’ to launch startups, industry execs say • ZebethMedia

There are other things to look at beyond crypto prices, the COO of Uniswap, Mary-Catherine Lader, said at ZebethMedia Disrupt last week. “Right?” She asked rhetorically. “Especially if you’re building something and you’re excited about the technology and its potential and not [viewing] crypto necessarily as an asset class.” Even though the crypto market cap is below $1 trillion, down about 55% from $2.2 trillion at the beginning of the year, ideas, startups, and big players are still entering the space. “I think many of the products in the next phase could get to a point where consumers are using a product without knowing that there’s crypto behind the scenes.” Cuy Sheffield, head of crypto at Visa “If you look at crypto market prices and pull out all of the general market decline […] what are you left with?” Brett Harrison, former president of FTX, asked during the panel. “I think you’re left with how much institutions are trading crypto and actual applications that are being built on crypto.” Compared to the 2018 crypto bear market, things have changed, Cuy Sheffield, head of crypto at Visa, said during the panel. “At the time there were questions of would anything exist outside of Bitcoin?” Today, there’s so much more for people to look at and build upon, including stablecoins, crypto infrastructure, or building a bridge between traditional finance and decentralized finance, Sheffield said.

Apple says, ‘NFTs? Yes, fees’ • ZebethMedia

Image Credits: ZebethMedia Welcome back to Chain Reaction. Last week, we recorded our news episode live onstage at ZebethMedia Disrupt, in which we talked about the Aptos launch and shared our predictions for where we expect money to flow in the web3 world. This week, we dove into NFTs, examining Apple’s new App Store guidelines and Reddit’s recent success in the space. We also announced some personal news — one of our co-hosts, Lucas Matney, has moved on to new adventures outside of ZebethMedia, but Jacquelyn and Anita are still here and excited to keep bringing you the latest and greatest crypto stories each week. We’re also super busy prepping for our crypto event in Miami this November 17th, where we’ll be onstage chatting with speakers including OpenSea’s Devin Finzer, FTX’s Amy Wu and Yuga Labs’ Nicole Muniz. If you’re interested in joining us, you can use the promo code REACT for 15% off a General Admission ticket. Do you want Chain Reaction in your inbox every Thursday? Sign up here: techcrunch.com/newsletters. this week in web3 Here are some of the biggest crypto stories ZebethMedia has covered this week. Singapore may soon require retail investors to take test before trading crypto, prohibit credit cards The country may soon require retail investors to take a test and not use credit card payments and other forms of borrowing for trading cryptocurrencies, per a central bank proposal on Wednesday. It’s another stringent measure from the island nation’s government as it looks to make citizens aware of the risks surrounding volatile assets. Asset management firm Stone Ridge launches Bitcoin-focused accelerator program Asset management firm Stone Ridge has launched a startup accelerator, In Wolf’s Clothing (Wolf), that will be dedicated to growing Bitcoin-focused applications, the team exclusively told ZebethMedia. The program will bring four cohorts per year, each consisting of about eight to 12 teams, or about 30 to 50 founders, to New York City from around the world for eight weeks at a time to focus on building on the Bitcoin-centric Lightning Network and Taro protocol, Kelly Brewster, CEO of Wolf, told ZebethMedia. Apple cracks down on NFT functionality, social post boosts with App Store rules Apple introduced new App Store rules on Monday that limit features unlocked through NFTs. The company is prohibiting apps to use other mechanisms such as QR codes or cryptocurrencies to give special access to users. It’s also cracking down on cryptocurrency exchanges as it now mandates them to have “appropriate licensing and permissions to provide a cryptocurrency exchange” in all regions they operate in. Meta posts another revenue decline as investors voice metaverse concerns  Meta reported earnings this week, revealing that its net income was just $4.395 billion, down from $9.194 billion year over year. The decline is mostly due to Meta’s huge investment in the metaverse: Reality Labs, Meta’s virtual reality division, lost $3.672 billion this quarter. Image Credits: Meta the latest pod For this week’s Tuesday episode, we caught up with Andrei Brasoveanu, a venture capital investor at Accel, about his web3 investments. He talked to us about his investments in companies such as Nansen and Sorare and discussed how the firm competes with crypto-native VC players for top deals in the blockchain space.  In our Thursday episode, we unpacked two big stories in the NFT space — Apple’s new App Store guidelines for NFT purchases, which are less-than-friendly to exchanges, and Reddit’s surprisingly successful foray into this undeniably tough market. We also talked about the latest tea from across the pond in the U.K., where crypto proponent Rishi Sunak just became prime minister, and what that could mean for crypto companies and regulation in the country. Chain Reaction comes out every Tuesday and Thursday at 12:00 p.m. PT, so be sure to subscribe to us on Apple Podcasts, Overcast and Spotify to keep up with the action. Image Credits: HM Treasury follow the money DAO operating system Origami raised $6.2 million from investors, including Bloomberg Beta and Protocol Labs. NFT startup Exclusible bagged $5 million from FC Basel owner Dan Holzmann and Tioga Capital. ParaFi participated in Thala Labs’ $6 million seed round to build a DeFi stack on Aptos. Paragraph, a web3-native publishing platform, closed a $1.7 million pre-seed round led by Lemniscap with participation from Binance Labs, FTX Ventures and others. Blockchain identity and privacy startup Sealance emerged from stealth with an undisclosed amount of funding from Galaxy, Ribbit Capital and other investors. This list was compiled with information from Messari as well as ZebethMedia’s own reporting.

Apple doesn’t want you trading NFTs on your phone (unless it makes them money) • ZebethMedia

Apple is no stranger to asserting its dominance. That’s exactly what the tech giant did this week when it announced new, stringent guidelines for NFT transactions in the iOS App Store, marking the first time the company has taken any sort of substantial position on web3. We hopped on the mic for the Thursday episode of Chain Reaction to discuss the new rules and how they could make life harder for NFT exchanges and crypto companies looking to grow through mobile adoption. You can listen to the full episode below: On this Thursday’s show, we also discussed: Reddit’s surprisingly successful foray into the NFT space in light of new metrics the company shared on stage at Disrupt The U.K.’s new prime minister, Rishi Sunak, and whether he’ll live up to the hype he’s received from the crypto community BTW, we’re getting closer to our crypto event in Miami on November 17th! If you want to join us to hear from web3 leaders at firms such as OpenSea, FTX and Haun Ventures, you can use the promo code REACT for 15% off a General Admission ticket. If you can’t join us in person in Miami, you can use the promo code REACT to get 25% off an annual subscription to ZebethMedia+ for web3 deep dives, exclusive interviews and analysis. Chain Reaction comes out every Tuesday and Thursday at 12:00 p.m. PT, so be sure to subscribe to us on Apple Podcasts, Spotify or your favorite pod platform to keep up with the action.

Telegram announces username auctions on TON blockchain • ZebethMedia

Telegram announced today that will it hold an auction for usernames — for both individual accounts and channels — through a marketplace built on top of the TON blockchain. In August, Telegram founder Pavel Durov first mentioned the idea by noting the possibility of adding “a little bit of Web 3.0 to Telegram in the coming weeks.” At that time, he said he was impressed by the success of the TON Foundation’s auction of domain names. “I’m really impressed by the success of the auction TON recently conducted for their domain/wallet names. Wallet.ton was sold for 215,250 Toncoin (~$260000) while casino.ton was sold for ~$244000. If TON has been able to achieve these results, imagine how successful Telegram with its 700 million users could be if we put reserved @ usernames, group and channel links for auction,” he said. Now the company is putting this plan into action. Telegram and TON Foundation are using a separate website Fragment.com as a hub for these auctions. Users will be able to log into the site using Telegram, the tonkeeper app, or their TON-based wallets. The website will also help users link their Telegram accounts to the handles that they have bought. At launch, the chat app is auctioning four and five-character handles that will be available for everyone. Telegram users can also put up their own existing handles for auction. Each handle put up for auction will end in a week with an extra hour for final bidding. The company is setting a minimum auction value for four character handles at 10,000 toncoins — which converts to roughly $18,400 at the time of writing. “As the partnership between TON and Telegram deepens, the synergy between the two projects will enable the continuedcreation of tangible use-cases of blockchain technology. For the first time, social media users will be able to transparently prove that they own their handles thanks to their tokenisation on the TON blockchain,” Andrew Rogozov, Founding Member of the TON Foundation said in a statement Telegram had big ambitions in the web3 world but it had to ditch those ambitions. In 2018, the company hatched up plans for Telegram Open Network (TON) blockchain project and an initial coin offering (ICO). The project got backing from big-name investors including Benchmark and Lightspeed Capital, which put up $1.7 billion. However, after a legal battle with the U.S. Securities and Exchange Commission (SEC), Telegram was forced to forsake the project. After Telegram stopped working on TON, various independent groups continued the development with Toncoin getting backing from Durov and winning the rights to ton.org website in 2021. But the Telegram founder has tried to distance himself from direct involvement with the project. Telegram has been trying various methods to earn money to keep the company sustainable. Last year it introduced ad spots on public channels. Earlier this year, the company introduced a paid plan that allows large file transfers, exclusive stickers and reactions, and the ability to convert voice messages into text. The new announcement of username auction on the blockchain is another step to get some more moolah in the bank.

Yuga Labs’ Nicole Muniz to talk about NFTs and Bored Apes at TC Sessions: Crypto • ZebethMedia

As the NFT ecosystem continues to waver, superfans and blue-chip holders are still holding on strong. But how can the digital asset sector reignite growth and appeal to new audiences? The number of NFT sales is down almost 90% from the year-ago date, according to data on NonFungible market tracker. But still, the hype is growing across platforms like Reddit, which saw that millions of crypto wallets were created to mint NFTs or on layer-1 blockchains like Cardano, which hit new all-time highs for NFT volume. NFTs are one of the most talked about topics in crypto, which is why we’re excited to have Nicole Muniz, CEO of Yuga Labs, onstage at TC Sessions: Crypto on November 17 in Miami. Earlier this year, Yuga Labs raised $450 million in a round led by Andreessen Horowitz, hitting a $4 billion valuation. The Miami-based NFT startup is the firm behind Bored Ape Yacht Club and Mutant Ape Yacht Club and that has acquired other popular NFT projects like CryptoPunks and Meebits. It also launched ApeCoin, a token that gathered a multibillion-dollar market cap on its first day of trading that is now around $1.4 billion to date. The company wants to build something that “expands the universe” of Bored Ape Yacht Club but “invites the larger NFT community” in at the same time, ZebethMedia previously reported. With all that said, there will be plenty to talk about with Muniz, ranging from the fine-tuned details of Yuga Labs to where her thoughts are for the broader NFT ecosystem and where things stand. We’d like to hear her thoughts on the challenges and opportunities in the NFT marketplace and what areas she sees as most promising when it comes to scaling the ecosystem. Prior to Yuga Labs, Muniz founded an agency called Something New, which has worked with mega-brands like Nike, Google, EA and Square, to name a few. TC Sessions: Crypto takes place on November 17 in Miami. Save $150 with early bird pricing and buy your pass today, and then join the web3, DeFi and NFT communities to keep up with the ever-evolving and always exciting crypto world.

5 tips for launching in a crowded web3 gaming market • ZebethMedia

The first wave of the play-to-earn (P2E) gaming boom seems to be coming to an end. There are still plenty of blockchain studios staging successful multimillion-dollar raises around the globe, but competition for funds has tightened to the point where only standout projects are winning backers. With great strategy more important than ever, here are a few tried-and-true steps you can take that will help set you apart when you’re seeking capital and preparing for liftoff. Leverage experience in the traditional gaming studio sphere The blockchain gaming market is full of builders who are experienced in crypto but haven’t built traditional games. I’m a prime example. Pegaxy was the first game I worked on and the first I launched. Like many other web3 games of its time, its mechanics and graphics were fairly basic at the start. But while simplicity was fine with the web3 gaming crowd, it has become increasingly clear that P2E will need to attract traditional Web 2.0 gamers if it is to scale, and these gamers demand much more. To please this demographic, builders will need games that have it all: superb graphics, strong mechanics and rich lore. You can have the best team and the best game, but without a solid monetization strategy, those mean little. That’s why a founding team that pairs an understanding of web3 fundamentals with experience in building and monetizing Web 2.0 games for mobile, desktop and console platforms will set you apart in this market. It’s also why, after Pegaxy was launched, we founded Mirai Labs. We wanted to assemble an expert team to build games that appeal to the traditional gaming community. Develop a clear, straightforward monetization strategy Most traditional P2E games have fairly simple revenue models that rely on users buying and holding the token that serves as the in-game currency. This means that when large groups join and play a game at once, token prices and revenues rise in tandem. But when market conditions change — or when players just lose interest in a game — there can be a mass exodus of users. This is bad for revenue and can be catastrophic for token prices. Therefore, building a game that succeeds in the long term means developing monetization strategies that can weather market ebbs and flows, those that couple the best of web3 tech with proven Web 2.0 revenue models.

Google Cloud gets into web3 act with managed blockchain node service • ZebethMedia

Five years ago the blockchain was blossoming in the enterprise, or so many companies had us believe. Back then, companies like SAP and IBM were trying to build blockchain practices, but while the technology sounded good to solve myriad problems in the enterprise, it never really took off. Fast forward to 2022 and the blockchain comes under a new guise with the name web3 as an umbrella term and lots of VC money behind it. So perhaps it shouldn’t come as a surprise that the cloud platform companies want to get into the act. To that end, Google Cloud announced today that it’s launching Blockchain Node Engine, which it’s billing as “a fully managed node-hosting for web3 development.” Earlier this year, the company announced that it was launching a new team dedicated to digital assets, and this tool is part of what has come out of that team’s work. In a blog post announcing the new service from Amit Zavery, GM and VP of engineering and platform and James Tromans, director of cloud web3, the two wrote that blockchain nodes have to work hard, constantly exchanging the most recent blockchain data, so that all nodes stay in sync. It’s a data- and resource-intensive process. Google Cloud hopes to make it easier by offering a managed service to handle node creation, while providing a secure development environment in a fully managed product. From Google’s perspective, it’s a heck of a lot easier to let them do the heavy lifting while you concentrate on building your web3 application. In the pair’s own words, “While self-managed nodes are often difficult to deploy and require constant management, Blockchain Node Engine is a fully managed node-hosting service that minimizes the need for node operations. web3 companies who require dedicated nodes can relay transactions, deploy smart contracts and read or write blockchain data with the reliability, performance and security they expect from Google Cloud compute and network infrastructure,” they wrote in the post. This is nuts and bolts stuff, helping companies to set up a node on supported blockchains and then managing it for the user, so they don’t have to worry about all the management overhead involved. For starters, the company will support Ethereum blockchain, so developers deploying nodes on Ethereum could do it themselves or pay Google to do much of that work for them. Presumably there will be other supported blockchains in the future. While it may feel like a pure crypto play, Tromans says the service is ultimately agnostic and developers can build anything they wish. “We are building foundational primitives to help developers innovate more quickly. Accordingly, Blockchain Node Engine is focused towards [multiple] developer use cases: smart contract development, reading from and writing to the blockchain, etc. How different developers use their fully managed, dedicated blockchain node engine infrastructure will be dependent on their individual use cases,” Tromans told ZebethMedia. The product is available starting today in private preview.

Crypto and earn a free pass to ZebethMedia Disrupt 2023 • ZebethMedia

It takes a lot of people to bring a tech conference to life, and we’re looking for a few amazing volunteers to support our events team and help make TC Sessions: Crypto an awesome experience for our attendees. If you’re amazing, crypto curious, a DeFi die-hard, big on blockchain, wild about web3, interested in event planning — or all of the above — apply to volunteer at TC Sessions: Crypto, which takes place on November 17 in Miami. We expect around 1,000 people at this event, and volunteers will handle a variety of tasks. At any given time, you might help with registration, wrangle speakers, direct attendees, scan tickets or help with general event setup. What’s in it for you? Fair question. If you’re selected, not only will you get a behind-the-scenes look at how events are produced, but you’ll also earn a free pass to attend ZebethMedia Disrupt 2023 next year in San Francisco on September 19–21. Plus, when you complete your volunteer shift, you can attend the interviews and presentations. You’ll hear some of the leading voices in the crypto universe, including Nicole Muniz (Yuga Labs), Amy Wu (FTX Ventures), Changpeng “CZ” Zhao (Binance) and many more. Volunteer spots are limited. If you want to gain valuable event experience; take in all the blockchain, crypto, DeFi, NFT and web3 goodness; and earn a free pass to ZebethMedia Disrupt 2023, then apply to volunteer before November 7 to be considered! Not interested in volunteering? Buy your TC Sessions Crypto pass now and save $150 — before the early-bird pricing disappears. Either way, we’ll see you on November 17 in Miami! Is your company interested in sponsoring or exhibiting at TC Sessions: Crypto? Contact our sponsorship sales team by filling out this form.

Asset management firm Stone Ridge launches Bitcoin-focused accelerator program • ZebethMedia

Asset management firm Stone Ridge has launched a startup accelerator, In Wolf’s Clothing (Wolf), that will be dedicated to growing Bitcoin-focused applications, the team exclusively told ZebethMedia. The program will bring four cohorts per year, each consisting of about eight to 12 teams, or about 30 to 50 founders, to New York City from around the world for eight weeks at a time to focus on building on the Bitcoin-centric Lightning Network and Taro protocol, Kelly Brewster, CEO of Wolf, said to ZebethMedia. The Lightning Network is a layer-2 payment system built on top of Bitcoin that aims to enable faster payment transactions. Separately, Taro is a protocol that launched in April of this year to help issue digital assets on Bitcoin’s blockchain that can then be transferred to Lightning Network instantly in low-fee transactions. “They’re both generic and usable enough in such a wide range of applications that it’s like saying you’re starting an accelerator focused on HTTP,” Brewster said. “It’s a specific technology but the business use cases can be incredibly broad ranging. The fact that we’re very focused is a big part of the leg up and can be a big draw for founders.” Teams in the accelerator will range from small startup teams to early-stage companies. They will receive individual investments of $250,000, while one winner of the cohort will get an additional $500,000 for a total of $750,000, Brewster said. Some themes Brewster is interested in seeing startups expand upon include micropayments and tipping through Lightning and Taro. NYDIG, a subsidiary of Stone Ridge, is also supporting the accelerator, alongside mentorship and investments from Bitcoin-focused venture capital firms and operating companies. The names of companies providing outside capital will not be released, Brewster said. However, he added that all investors and mentors are already working with Bitcoin and Lightning. “That ranges from specialized VCs dedicated to Lightning up through public companies in fintech and banking.” Prior to this role, Brewster was NYDIG’s chief marketing officer and he has worked for Stone Ridge for about six years. Before that, Brewster spent almost 10 years at Goldman Sachs “in a variety of roles,” he said. “Over the past six years, I’ve had the opportunity to help start a number of businesses and I’ve fallen in love with the process of taking an idea and turning it into a real thing.” Lightning Network is a layer-2 payment protocol built on top of Bitcoin that aims to provide instant payments and scalability at a low cost for the blockchain. It allows users to send or receive Bitcoin quickly by making transactions off the main blockchain network or, as Coinbase said, “like an HOV lane on a highway.” “At Stone Ridge, we’ve been watching Lightning for quite a while now,” Brewster said. “The network has hit critical mass over the last 12 months and there’s enough capacity now you can do real-world things pretty robustly on the network.” In the past, the network has been implemented by Twitter for users to send and receive Bitcoin “tips” through Lightning Network-focused payments app Strike. It has also been implemented in the El Salvador government-created wallet, Chivo, so citizens can complete cross-border transactions. “The growth in Lightning over the past year has been extraordinary,” Brewster said. “In some ways, it’s the perfect moment to step back and see where there is signal or just noise. Some of the clearest signals are coming from Lightning. The growth and network capacity has been hockey-sticking.” The news comes at an interesting time for NYDIG, which recently laid off about 33% of its staff, according to a Wall Street Journal report last week. In December 2021, NYDIG raised $1 billion, which valued the company at over $7 billion it said. Brewster declined to comment on the layoffs, but said, “The launch of Wolf should be a clear signal of Stone Ridge’s long-term belief and investment in Bitcoin. It’s obviously a difficult environment out there, but this is the time to make investments looking a couple years out.” There are a number of crypto accelerator programs budding across the ecosystem. Some range from layer-2 blockchain-specific accelerators like Polygon’s to general web3-focused programs like Alliance DAO. While some offer capital like Wolf plans to, others invite investors to demo days in hopes that they invest in the startups’ projects. “In times like this, the companies that get built will capture these secular trends and really take hold as they accelerate,” Brewster said. “So we think this is the perfect moment to build rather than try to do something ourselves at Stone Ridge — we want to help and empower hundreds of other founders.”

Singapore may soon require retail investors to take test before trading crypto, prohibit credit cards • ZebethMedia

Singapore may soon require retail investors to take a test and not use credit card payments and other forms of borrowing for trading cryptocurrencies, the central bank proposed on Wednesday in a series of measures as the island nation looks to make citizens aware of the risks surrounding volatile assets. The Monetary Authority of Singapore said in a set of consultation papers that it’s worried that many retail customers may “not have sufficient knowledge of the risks of trading” digital payment tokens, which may lead them “to take on higher risks than they would otherwise have been willing, or are able, to bear.” Several popular crypto exchanges already require their customers to periodically sift through questionnaires before they are allowed to trade crypto and participate in derivatives trading. The central bank acknowledged [PDF] that a number of industry players are supportive of some form of assessment on the retail customer’s knowledge of risks. The central bank has also proposed that stablecoin issuers make adequate disclosures about their tokens and hold reserve assets in cash, cash equivalent or debt securities that are “at least equivalent to 100% of the par value of the outstanding” tokens in circulation “at all times.” The debt securities, the proposal says, should be issued by the central bank of the pegged currency or organizations that are both a governmental and international character with a credit rating of at least AA—. “SCS [single-currency pegged stablecoins] issuers must obtain independent attestation, such as by external audit firms, that the reserve assets meet the above requirements on a monthly basis. This attestation, including the percentage value of the reserve assets in excess of the par value of outstanding SCS in circulation, must be published on the issuer’s website and submitted to MAS by the end of the following month (for the month being attested),” the proposal says [PDF], adding that issuers also must appoint an external auditor to conduct an annual audit of its reserve assets and submit the report to MAS. The proposal marks a major shift in Singapore’s stance on crypto. Once a preferred global crypto hub for its policies, Singapore authorities have toughen their views of digital assets following the collapse of a series of firms including Terraform Labs’ stablecoin UST and native token LUNA, and hedge fund Three Arrows Capital. (More to follow)

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