EC Cryptocurrency

Here’s the rundown on the Binance and FTX fiasco • ZebethMedia

By zebethcontrolPosted on November 7, 2022Posted in Binance, Crypto, crypto markets, cryptocurrency, EC Blockchain, EC Cryptocurrency, FTX, marketsNo Comments

The largest crypto exchange by volume (Binance) and the third largest crypto exchange by volume (FTX) faced off in recent days after Binance CEO Changpeng “CZ” Zhao tweeted that his exchange would slowly withdraw billions of its holdings in FTX’s native token, FTT, “due to recent revelations that have came to light.” But first, let’s take a few steps back. Concerns surrounding FTX’s liquidity grew following a Thursday report from CoinDesk about the balance sheet of Alameda Research, a crypto trading firm once run by FTX CEO Sam Bankman-Fried. Alameda holds $14.6 billion in assets with $8 billion in liabilities as of June 30, CoinDesk reported. The report showed Alameda’s largest asset was about $3.66 billion of “unlocked FTT” and $2.16 billion of “FTT collateral.” (FTT is the token behind FTX.) This means the $5.82 billion in total FTT that Alameda owns is equal to 193% of the total known FTT market cap, which is about $3 billion, according to CoinMarketCap data. Image Credits: CryptoQuant (opens in a new window) “The issue is that Alameda cannot sell even small amounts of their FTT holdings without heavily impacting the price,” Marcus Sotiriou, an analyst at the publicly listed digital asset broker GlobalBlock, said in a note. “Data from CryptoQuant […] tells us that there are only around 200-300 active addresses trading the FTT token, which is very small in comparison to many other large caps. Hence, large sell orders would crash the FTT price, due to being illiquid.”

Why Robinhood and Coinbase gained ground after reporting earnings • ZebethMedia

By zebethcontrolPosted on November 4, 2022Posted in coinbase, Crypto, EC Cryptocurrency, EC Fintech, EC Newsletter, federal reserve, Fintech, Robinhood, Startups, The ExchangeNo Comments

You’d be forgiven for expecting public fintech companies that facilitate consumer trading to be under pressure this week. And yet, after reporting earnings, the share prices of two pandemic-era highfliers gained ground. Coinbase and Robinhood up? In this economy? Yes. Of the out-of-fashion tech sectors, consumer trading has to be among the most out of favor. And yet. ZebethMedia wanted to better understand investor response to results from both Coinbase (crypto-focused) and Robinhood (equities-focused) to figure out what drove each company’s shares higher in the wake of their reports. The answers, it turns out, are partially related. The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. In an ironic twist, some of the forces that have made consumer trading less attractive are the very same impulses helping the two companies derive more revenue from a previously less-critical part of their business. The Federal Reserve taketh away, and the Fed also giveth some back.

What’s going on with NFT royalties? • ZebethMedia

By zebethcontrolPosted on November 2, 2022Posted in Creators, Crypto, EC Blockchain, EC Cryptocurrency, looksrare, NFTs, raribleNo Comments

In recent months, conversations around NFT creator royalties shifted as some platforms abandoned royalties for other alternatives. Not everyone is happy about it. “Every platform had royalties about a year ago,” Alex Salnikov, chief strategy officer and co-founder of NFT marketplace Rarible, said to ZebethMedia. Then half a year passed and some marketplaces stopped implementing them, he added. Creator royalties were originally introduced across the NFT community as a way to pay artists for their work in both primary and secondary sales. In general, the content creator royalty is 2.5% to 10% of an item’s purchase price. Most royalties average about 5%, Salnikov said. A lot of creators’ initial income comes from primary sales, but over time, secondary sales can build out their income through royalties, Alex Fleseriu, CEO of fine-art-focused Solana NFT marketplace Exchange.ART, told ZebethMedia. “It holds up their success and it’s very important for them to make a living.” “Let’s pick one of these ways and get all of the NFT marketplaces behind it. We’re cursing the market by fighting over market share.” Rarible co-founder Alex Salnikov Royalties and rewarding creators are the foundations for building long-term value, Shiti Manghani, COO of web3 gaming and development studio Find Satoshi Lab, said to ZebethMedia. “The creators and artists will work with platforms that value their work, stop their exploitation and consequently empower them to create their best work.” Find Satoshi Lab launched a multichain NFT marketplace on Tuesday that enforces royalties. “Web3 was born in many ways to solve for the challenges faced by creators with centralized institutions that did not allow for fair rewards to be awarded,” Manghani said. “[We] would like to stay true to that ethos.” Separately, Exchange.ART on Wednesday launched its “Royalties Protection Standard,” which enforces creator royalties on secondary sales of NFTs on its platform. This means that new NFT collections on its marketplace can utilize the standard to ensure artists that their work won’t be traded on marketplaces without their consent. “We’ve seen royalties come under a lot of pressure lately,” Fleseriu said. “We’ve seen marketplaces, protocols, basically allow buyers and sellers to circumvent those royalties, which intensifies this predatory nature of the NFT ecosystem overall, especially in the [profile picture] market.”

Bitcoin miners struggle as energy prices rise and hash prices fall • ZebethMedia

By zebethcontrolPosted on November 1, 2022Posted in Bitcoin, bitcoin mining, Crypto, EC Blockchain, EC CryptocurrencyNo Comments

Bitcoin prices have continued to hold near $20,000 this past week, but some miners are crumbling as spiking energy prices and historically low hash prices cut into profits. Even though bitcoin’s price has been down for a while and has fallen about 56% year to date, the dominoes just began to fall for Bitcoin miners. What’s driving the implosion? “There are a lot of different issues in the motion. Obviously the global recession is looming, on top of inflation and rising prices of electricity,” Christopher Perceptions, founder of PerceptForm and CEO of NoCodeClarity (no-code web3 apps), told ZebethMedia. “Miners are struggling for a multitude of reasons right now,” Nick Hansen, CEO of crypto-mining firm Luxor, said to ZebethMedia. “We’re seeing historically low hash price, which means that miner revenues are at all-time lows.” Hash price is a metric to determine the market value for each unit of hashing power, which is set through changes in Bitcoin mining difficulty (which is currently high) and the price of the cryptocurrency. Image Credits: Hashrate Index The hash price is near a historical low, according to data on Hashrate Index. The current hash price is about $70.72, down 80.5% from $361.82 on the year-ago date. Additionally, energy prices have increased across many markets, which means miners’ expenses are at all-time highs, Hansen said. At a high level, the higher the hash rate the greater the difficulty to mine Bitcoin — meaning that it takes more electricity to do so, Perceptions said. “If the electricity price is high, it’s harder to make a profit.”

Immutable onboarded more web3 games in Q3 than any other quarter, co-founder says • ZebethMedia

By zebethcontrolPosted on November 1, 2022Posted in blockchain, Crypto, EC Blockchain, EC Cryptocurrency, ec gaming, Gaming, Immutable, web3No Comments

Earlier this year, Immutable, a web3 gaming firm with its own layer-2 chain, Immutable X, launched a whopping $500 million fund to boost gaming on its platform. Fast forward a few months and the company says things are going according to plan. “It has been super busy,” Robbie Ferguson, co-founder of Immutable, said to ZebethMedia. “In the last quarter, we’ve onboarded more games than the rest of the company’s lifetime combined. As far as we know, it’s been more than any other layer-1 or layer-2 [blockchains] in the world and nearly half of those games came from competitors in migrations.” In Q3, Immutable onboarded about 50 games and has over 1,000 games being built in a “testing environment,” Ferguson said. “These are ones we’ve actively gone after.” Some games, like Delysium and Ember Sword, were initially developed for the layer-2 blockchain Polygon but switched to Immutable X, the company’s NFT platform and layer-2 scaling solution for the Ethereum blockchain. Other games, like Deviants’ Factions and Undead Blocks, migrated over from the defunct Terra ecosystem after it imploded in May. Today, Immutable X launched GameStop’s NFT marketplace out of beta, which will provide GameStop players and customers across the U.S. access to NFTs tied to games on its layer-2 chain. This announcement follows GameStop and Immutable X’s partnership and $100 million joint grant fund from February. “The attraction we’ve already seen and interest from this community has been insane,” Ferguson said. “We recently shared something on Reddit and had 100,000 people sign up for Guild of Guardians’ waitlist in under two days, just from a single post. So the strength of this community is enormous compared to existing user bases in crypto.”

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

By zebethcontrolPosted on October 28, 2022Posted in bear market, Crypto, crypto startups, EC Blockchain, EC Cryptocurrency, EC TechCrunch Disrupt 2022, Startups, TechCrunch Disrupt 2022, visaNo Comments

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.

Building the bridge between Web 2.0 and web3 • ZebethMedia

By zebethcontrolPosted on October 24, 2022Posted in Column, Crypto, EC Blockchain, EC Column, EC Cryptocurrency, ethereum, Ethereum Merge, Google, Startups, Web 2.0, web3No Comments

Devin Abbott was founder of Deco (acquired by Airbnb) and specializes in design and development tools, React and web3 applications, most recently with The Graph. It’s too early to predict all the implications of the recent Ethereum blockchain Merge, but it definitely addresses the most frequent (and valid) criticism of web3 regarding excessive energy consumption. Critics may still find a new reason to oppose ETH, but my hope is this Merge will lead to something else: A chance for us to also merge what’s best about Web 2.0 with what’s most exciting about web3. There’s seemingly a growing rift in Silicon Valley, with the traditional Web 2.0 industry and the burgeoning web3 ecosystem depicted as being in opposition to each other. And trapped somewhere in the middle are emerging startups. I’m active in all three groups, and I believe most of this controversy is based on wild pronouncements and hype by VCs and other evangelists who are not developers. Incessant celebrity promotions of NFT drops, for instance, have contributed to the impression that web3 as a whole is a Ponzi scheme. In fact, NFTs are only a small part of the web3 ecosystem, and, in my view, not even the most interesting or potentially transformative. While Web 2.0 and web3 may seem incompatible, I believe it’s better to see technologies like blockchain and ETH as potential back-end solutions for scalability challenges that all companies face. In a similar way, web3 advocates should recognize that Web 2.0’s maturity makes it indispensable for many core use cases. Despite web3’s great potential, it’s still much easier to develop a Web 2.0 app simply because the ecosystem is mature and enjoys a large and thriving developer community. Let’s consider a couple examples where each side has something to contribute: From web3: An emerging revolution in open source To capture what’s happening in web3 development now, we have to go back to before the Web 2.0 era. During the dot-com boom, there was quite a lot of buzz over open source, Linux and hot companies like Red Hat. While very few consumers would go on to install Linux as their operating system, this buzz helped contribute to something equally important. In the background, with few people noticing, Linux quickly became the go-to operating system for running the back-end servers of 96.5% of the top million web domains — not to mention the massive Android market.

Stablecoin demand maintains pace as other cryptocurrencies tumble • ZebethMedia

By zebethcontrolPosted on October 20, 2022Posted in Crypto, crypto ecosystem, cryptocurrencies, EC Blockchain, EC Cryptocurrency, stablecoin, stablecoinsNo Comments

More investors are swapping cryptocurrencies for stablecoins, signaling a potential shift toward the less risky asset. Stablecoin dominance is near 16%, about 2.7 percentage points away from an all-time high set in mid-June. (This percentage is determined by how much of the total crypto market capitalization is made up of stablecoins; it is, from one perspective, a bearish indicator the stronger it becomes.) “Stablecoins have been growing independently of market cycles simply because of their ability to improve financial inclusion,” Paolo Ardoino, chief technology officer of the world’s largest stablecoin by volume, Tether, said to ZebethMedia. “Stablecoins are also created based on market supply and demand, so when some crypto prices fall, traders may see this as a buy opportunity to use stablecoin to move in and out of positions.” The total stablecoin supply peaked in early April around $182.6 billion but has since fallen about 22% to $141.3 billion as of October 18, data from The Block shows. Even with that said, stablecoins have expanded in volume vastly over the years, and will continue to grow as the crypto market develops, Ardoino added. “Stablecoins are able to make the economy much more efficient by bringing digital dollars to the real world, putting U.S. dollars on a blockchain, attracting liquidity to the currency and allowing it to increase its dominance.”

Developers pour into crypto space despite stagnant markets • ZebethMedia

By zebethcontrolPosted on October 17, 2022Posted in Crypto, developers, EC Blockchain, EC Cryptocurrency, ethereum, Polygon, sdk, SolanaNo Comments

This year was huge for the crypto developer space even though the digital asset market continues to wallow in a downturn, according to a new report by web3 developer platform Alchemy. Although the crypto market capitalization is down about 58% year to date, web3 developers are pouring into the space. The report found that developer activity increased based on the number of crypto software developer kit (SDK) libraries being downloaded, smart contracts being stored on blockchains, and the growth in the number of decentralized applications (dApps) in the market. “It’s a really exciting time in web3 overall and especially in the web3 development space,” Jason Shah, head of growth at Alchemy, said to ZebethMedia. “We were shocked at the results [because they run] counter to the narratives out there with token prices being down, pullbacks in investments, and even layoffs. But in the data with libraries, smart contracts, and dApp growth, all those numbers are up year over year.” Despite the bear market, crypto has become a “builder market,” with many clearly undeterred, Shah said. “Crypto bear markets are often when the best projects get built,” Francesco Melpignano, CEO of layer-1 blockchain Kadena, said to ZebethMedia.

Crypto VC deployment still slow as investors wait for even lower valuations • ZebethMedia

By zebethcontrolPosted on October 13, 2022Posted in Crypto, Crypto Economy, cryptocurrencies, EC Blockchain, EC Cryptocurrency, EC venture capital, Startups, venture capitalNo Comments

Ongoing volatility in the crypto markets is leading to mismatched conversations between venture capitalists and founders — and entrepreneurs aren’t often finding themselves on the winning side. While some crypto-native and general funds are actively deploying capital into the digital asset world, others are taking a slower approach. Over the summer, some market participants anticipated deals would ramp back up in September, but that still seems to be on hold as we move into mid-October and crypto market conditions remain shaky. “A lot of VCs paused deployment over the summer and there’s a record amount of cash right now sitting on the sidelines; that’s not just specific to crypto,” Alex Marinier, founder and general partner of fintech and blockchain-centered firm New Form Capital, said to ZebethMedia. “My sentiment is that the pervasive feeling in crypto right now is fear.” However, Marinier said that the more bearish climate is an attractive time to keep investing, adding that “now is the time to be allocating.” “My sentiment is that the pervasive feeling in crypto right now is fear.” New Form Capital founder Alex Marinier New Form has allocated about 30% of its $75 million Fund 2 to date, Marinier shared. The majority of New Form’s deals for its second fund have been in its target “sweet spot” of crypto startups valued in the range of $15 million to $35 million. But not every fund is going full steam ahead. “Many of us were expecting September to be a gangbuster type of moment where sentiment would be fully back and the events that happened with LUNA, Celsius and BlockFi would have been moved on from,” David Nage, venture capital portfolio manager at the crypto-focused firm Arca, said to ZebethMedia. “But what you’re seeing with these events, while they’re in the past, they still come back to bite us in the proverbial ass.”