Weekly Web3 Workout — 11th October 22
Welcome to the Weekly Web3 Workout. This week we have McDonald’s, NFTs, DAOs, regulation, hacks, events and Do Kwon doing his best to not be in Alex Mashinsky’s shadow. Let’s get this show going!
$BTC $19,141 -3.92%
$ETH $1,293.28 -3.64%
$YOP $0.04173 -8.96%
$USDT Market Cap $68.42Bn
$USDC Market Cap $46.08Bn
The evolution of DAOs operationally, structurally, and legally is fascinating. DAOs are a powerful tool in the crypto space, epitomising the very essence of Satoshi’s whitepaper and the original ideals of crypto. DAOs are continuing to grow and turn mainstream, with this comes regulation and taxes, as they start playing with TradFi rails. However, as with all things in this space, what regulation looks like and what that means for investors is still being debated https://forbes.com/sites/seansteinsmith/2022/10/03/daos-continue-growing-in-prominence--what-investors-need-to-know/
McDonald’s is among the first to start accepting bitcoin and Tether (USDT) as a payment method in a crypto-friendly experiment in Lugano, Switzerland. Lugano is becoming a hotspot for crypto adoption in Western Europe https://cointelegraph.com/news/mcdonald-s-starts-to-accept-bitcoin-and-tether-in-swiss-town
On the 2nd November AtomicHub Live: London is taking place at Proud City near Fenchurch Street. This is the flagship event for the WAX blockchain, and a celebration of the WAX community. AtomicHub is one of the world’s busiest NFT marketplaces, growing from scratch in 2020. Check out the link below for details on this FREE event! https://live.atomichub.io/
EU Regulation — Innovation and Taxation
The European Commission is looking to implement blockchain technology into taxation programs…. that tax blockchain technology. Innovation to tax innovation, as the European Parliament voted in favour of using blockchain technology, to modernise the taxation processes in the European Union https://www.theblock.co/post/174633/eu-policymakers-vote-to-modernize-tax-with-blockchain-technology
Transfer of Fund — EU Regulation
Check out this great breakdown by Blockchain for EU (on Twitter) detailing the updated EU Transfer of Funds Regulation. There appears to be a more achievable result settled on, which is positive for general retail crypto users https://twitter.com/BlockchainforEU/status/1579736069574053894
NFTs are Dead, Long Live NFTs
This year has seen significant price drops across NFTs. Trading volumes in NFTs have tumbled 97% from the record highs of $17 Billion seen in January this year, to volumes we are now seeing now around the $465 Million mark. The NFT decline has been part of the wider crypto winter that has seen around $2 Trillion in declines in the space, caused by tightening monetary policy around speculative assets.
That said, there is more to the NFT price decline than the blow up of Celsius and Luna. The first wave of NFTs was born out of FOMO, like a lot of new technologies are. People aped in (excuse the pun) to whatever the latest NFT craze was, and not just CryptoPunks and Bored Apes. Jack Dorsey sold his first tweet for $2.5 Million to a Malaysian businessman, who then struggled to move it on with the top bid coming in at $280 (the owner was looking for about $48 Million)! It’s almost as if people have realised that JPEGs aren’t worth millions of dollars!
That said, the CryptoPunks and Bored Apes were significant players in the first wave, they are going to retain retro value even if they don’t all hit the prices they saw earlier this year. A lot of NFTs will die though.
This does not mean that NFTs are dead!
NFTs with measurable utility are starting to appear more and more now. It will take time for the volumes to get to the previous peak. We are in a crypto winter, and a lot of trust in the market has been lost, but people will start to see that NFTs are more than just JPEGs of monkeys. Maybe we will see more of these new NFTs but with lower values as there will be less FOMO, but they will have real utility!
NFTs have the potential to be so much. In the future they will allow us to reclaim control of our personal data, fulfilling a web3 promise after the web2 fallout. They will allow us to trade and settle transactions almost instantly, providing much more efficient opportunities in traditional banking. They will enable us to trade real world assets, such as property, on chain, reducing significant operational overhead. NFTs as we knew them might be a thing of the past, but they have paved the way for a great future. NFTs are dead, long live NFTs!
Repayment from the infamous Mt. Gox hack looks to be getting closer. The Mt. Gox Rehabilitation Trustee has recently released this announcement on the repayment plans https://mtgox.com/img/pdf/20221006_announcement_en.pdf…. So it looks like some time in H1 next year we could finally see this ordeal come to a conclusion. And hopefully not with the bitcoin market being flooded… fingers crossed.
A double whammy for Binance here! A nasty hack AND a “decentralised” chain stopped and started again… sounds very centralised. The exploit occurred by the hacker tricking the system into minting two lots of 1M BNB directly to the hacker’s address. Roughly $580 Million was stolen although the hacker’s final loot was limited to about $125 Million… but still! The hack aside, if a chain can be stopped and started at a moment’s notice, can it really be considered decentralised?
After noticing the “irregular activity”, the blockchain was paused for about 8 hours, before being restarted. All the innovation in the world, the oldest fixes are the best.
Checked out but not cashed out! According to authorities in South Korea, Do Kwon tried cashing out 3,300 bitcoin but the authorities ordered crypto exchanges OKX and KuCoin to freeze funds connected to the Terra founder. Playing the Mashinsky 101 playbook step by step https://bitcoinist.com/terra-co-founder-cash-3300-bitcoin-interpol-alert/
Talking of Mashinsky and his team, it transpires that Celsius’ top executives cashed out $17 Million in crypto shortly before the company’s bankruptcy. The team pulled bitcoin, ether, USDC and CEL holdings from their custody accounts in May, before the company suspended all customer withdrawals https://www.coindesk.com/business/2022/10/06/celsius-top-execs-cashed-out-17m-in-crypto-before-bankruptcy/
And the madness doesn’t stop there! Celsius have now published a 14,000-page document detailing every user’s full name, linked to timestamp and amount of each deposit, withdrawal, and liquidation! Completely crazy and surely a breach of GDPR. Why not, they have probably broken every other law, why not go the full monty.
If you want to know what regulation by enforcement is…
OK, that’s your lot. Thanks for reading the Weekly Web3 Workout and I look forward to sharing my thoughts and learnings with you next week. Please share this with all the web3 and crypto curioso out there.
Have a great week!