Morgan Creek Capital Management CEO Mark Yusko on Bitcoin ($BTC) and Dogecoin ($DOGE)

In a recent interview, Mark Yusko, the Founder, CEO, and Chief Investment Officer of SEC-registered investment advisor Morgan Creek Capital Management, LLC, shared his thoughts on $BTC and $DOGE.

According to a report by The Daily Hodl, on Thursday (March 2), while appearing as part of a panel that included David Duong (Head of Institutional Research at Coinbase) and Dan Gunsberg (Founder of Hxro) on Scott Melker’s podcast, Yusko had this to say about Bitcoin:

But I will argue spring, summer right around the corner, my guess is May-ish, June-ish, nine months before the halving. And that’s the way it goes... It’s hardcoded into Bitcoin that every four years, you’re going to cut the block rewards. If you cut the block rewards, in theory, a whole bunch of miners will go out of business unless the price adjusts. And the price adjustment creates movement... Bitcoin is the most uncorrelated asset I’ve ever seen in my career.

As for Dogecoin, he said:

The speculative nonsense like Dogecoin, why does it even exist? I mean, my mind hurts. And I said the bear market would be over when DOGE is zero, and I want to stand by that, but I can’t because stupid people are going to be stupid.


Last month, during an interview for the “Blockworks Macro” YouTube channel, Yusko said:

Every day I have to live with this, where I say the bear market in crypto will be over when DOGE and SHIB go to zero. They never got to zero. In fact, they’re going up again. And there’s no there, there. And the only there is the people who say: Well, you better watch out if they actually find a use case...

“What’s the value? What’s the underlying value? Could you turn it in to somebody to get something? Nope. At least Amazon … they generate profits and cash flow. They have found a way to produce return… Ok, so if I had a share of that company, I could give it back to the company, and I would actually get something for that. But a meme stock or a meme coin? There’s no value.


Coinbase Solidifies Leadership Position with One River Digital Acquisition

On Friday (3 March 2023), Coinbase announced that it had acquired One River Digital Asset Management (ORDAM), a digital asset management firm that provides institutional clients with exposure to digital assets through investment products.

According to Coinbase’s blog post, this acquisition will enable Coinbase to establish Coinbase Asset Management, offering investment advisory services to a range of institutional clients, and it fits in with Coinbase’s goal of filling the gap between institutions and the crypto economy.

Coinbase says it has a history of partnering with ORDAM, with ORDAM leveraging Coinbase Prime to provide investment solutions to sophisticated institutions.

ORDAM will continue to operate as an independent entity under Coinbase management, with Eric Peters, CEO/CIO of ORDAM, continuing as CEO/CIO of the company and CEO/CIO of One River Asset Management, an independent business.

The blog post also mentioned that Coinbase and ORDAM share a similar approach to prudent risk management, prioritizing safety and soundness in their operations with digital assets.

According to a report by CoinDesk, Greg Tusar, Coinbase’s head of institutional product, told Bloomberg:

This is about wanting to bring more institutional capital into the world of crypto… We expect to build – on the other side of this crypto winter – an awesome asset-management business.

Coinbase (Nasdaq: COIN) stock is up 2.15% today:

Source: Google

Cardano-Powered ‘Clay Nation’ NFTs Coming to Ethereum-Powered Metaverse ‘The Sandbox’

NFT startup Clay Mates says its highly successful Cardano-powered project “Clay Nation” will become the first Cardano project to be integrated into “The Sandbox,” thereby “pushing interoperability even further in Web3.”

Clay Mates describes Clay Nation as “a collection of 10,000 characters created from hand-crafted, randomly-assembled clay traits,” with each of these characters being “a one-of-a-kind digital collectible, stored on the Cardano blockchain.”

$CLAY is “the main utility and governance token of clay nation” and it is “poised to be deeply integrated in Clay Nation, where it will be used for any transaction within the virtual environment.”

And here is how Binance Academy describes The Sandbox ($SAND):

The Sandbox is a play-to-earn game that combines blockchain technology, DeFi, and NFTs in a 3D metaverse. Its virtual world allows players to create and customize their games and digital assets with free design tools. The virtual goods created can then be monetized as NFTs and sold for SAND tokens on The Sandbox Marketplace.

The SAND token is the native token of The Sandbox. It is used as the basis of all transactions and interactions in the game. SAND can be earned through playing games and contests in The Sandbox or purchased on cryptocurrency exchanges like Binance.

And it looks like the company helping with the creation of Clay Nation’s metaverse experience is Singapore-headquartered multimedia design agency Smobler Studios:

Xapo Bank Becomes First Fully-Licensed Private Bank To Offer Lightning-Fast Bitcoin Payments

Xapo Bank, a licensed private bank and leading Bitcoin custodian, has announced a partnership with Lightspark to integrate with the Lightning Network.

According to Xapo Bank’s press release, this integration aims to offer nearly instant Bitcoin payments for its members, enabling them to make small purchases of up to $100 USD at those vendors that accept Lightning payments without high transaction fees and long confirmation waiting times. The Lightning Network is a decentralized layer 2 network on the Bitcoin blockchain that enables scalable payments at millions of transactions per second across the network.

Seamus Rocca, CEO of Xapo Bank, cited the disadvantages of traditional Bitcoin payment methods for small daily purchases like groceries, which include long confirmation times and high fees. By integrating with the hyper-efficient Lightning Network, Xapo Bank aims to streamline the payment process and allow members to pay for small purchases with Bitcoin without converting to USD first.

Xapo, which was founded in 2013, claims to be “the first institutional holder of Bitcoin,” and also “the first crypto company in the world to obtain a banking license”. That’s how it evolved into Xapo Bank. It also has expanded its product range to include interest-bearing accounts for USD and BT. At Xapo Bank, members are in full control of their bitcoins, which makes it possible for them to receive, hold, and send $BTC directly.

David Marcus, Facebook’s former Head of Messenger and Head of Crypto (more specifically, the Head of the Novi digital wallet), is the CEO and Co-Founder of Lightspark (which was established in May 2022).

Marcus expressed his enthusiasm about his firm enabling the first bank on the Lightning Network to offer very quick and very low-cost Bitcoin payments to its customers. Xapo Bank’s customers will need to have some Bitcoin in the Xapo Bank App to pay using the Lightning Network.

Wences Casares, Chairman at Xapo Bank, stated, “We believe that Bitcoin is the future of money, and we are committed to helping our members navigate this new financial landscape. By expanding our services to include instant Bitcoin transfers, we can offer our members better usability and ultimately grow the cryptocurrency that many of our members rely on.”

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Ripple’s Stuart Alderoty Outlines Three Possible Outcomes in Ongoing Lawsuit with SEC

Earlier today, Stuart Alderoty, Ripple’s Chief Legal Officer, recently spoke about the U.S. SEC’s ongoing lawsuit against Ripple Labs over the sale of XRP tokens (which the SEC considers unregistered securities).

According to Blockworks’s report on their interview with Alderoty, he believes that companies facing regulatory hostility from American regulators should consider launching their projects in a jurisdiction where the rules are clear rather than launching in the US where the rules are unclear.

Alderoty shared his experience building Ripple’s case over the past thirty months and warned companies facing a subpoena, Wells notice, or an enforcement action to operate under the assumption that the SEC’s case is already decided.

“Don’t trust these guys,” Alderoty said. “It’s not a level playing field.” Alderoty’s comments reflected the challenges many companies face in navigating the uncertain regulatory landscape in the US.

Alderoty also criticized SEC Chair Gary Gensler for prejudging the outcome of unresolved issues in a recent interview, stating, “They should not be prejudging the outcome of unresolved issues” and “They certainly should not be doing so in a very, very public way because it corrupts the process. It corrupts the perception of the process.”

Despite the uncertainty of the ongoing lawsuit, Alderoty is confident that Ripple has a good chance of winning in the Supreme Court, citing the Court’s current conservative majority. “I would be supremely confident that this is a winner in the Supreme Court, not so much because of the crypto issues but because of the guarding against building an administrative state,” he said.

Regarding Ripple and XRP’s potential future, Alderoty outlines three possible outcomes: the judge could side with Ripple, the SEC, or decide that there are disputed facts and the case needs to go to trial. A summary judgment is expected any day now, and Alderoty believes that winning in the summary judgment would mean that Ripple has room to expand domestically. “We [would] have this incredible business opportunity in the US — that is evergreen for us,” he said.

During an interview with Bloomberg Television earlier today, Ripple CEO Brad Garlinghouse said that “he expects a decision on the case this year.”


$BTC: Crypto Analyst Says Historically March Is ‘The Best Month’ for Buying Bitcoin

In a video update released yesterday, James Mullarney, the host of the popular YouTube channel “InvestAnswers,” talked about when people should buy Bitcoin to see the “biggest gains.”

Mullarney predicts a potential positive trend in Bitcoin’s price in the coming months, particularly in April and May, which are historically known for high returns on investment. According to Mullarney, buying in March is crucial to ensure gains in April, as the next 60 to 90 days usually bring the biggest returns.

Mullarney notes that there is heavy bullish action on Deribit, with many investors buying calls with strikes ranging from $25,000 to $32,000, indicating confidence in Bitcoin’s potential growth in the next few months. He cautions that market corrections are always possible, but his analysis suggests a potential positive trend in Bitcoin’s price in the coming months.


In a different video released on 20 December 2022, Mullarney said:

I’m sticking with a much more conservative price of $80,000 for the next cycle. That would be sometime in the year 2024... I do believe we could hit about $61,000, or $62,000 by April 2024 – and that is right at the halving of April/May 2024...

If Metcalfe’s Law holds, which it does for all other industries, the conservative model has Bitcoin reaching… 3.4 million [wallets] by the year 2030… But that assumes the increase in usage follows the trend we’ve had since the beginning of time over the past 11, 12 years. Now that also assumes over one billion users, active users, on the actual chain… Now cutting that in half, from one billion users down to 500 million, would get us to a $1.5 million Bitcoin price… Adoption is the key, and the adoption needs to go up 500x from today for that price [of $1.5 million] to be achieved.

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How to Maximize Your Profits: 10 Tips From Crypto Analyst Lark Davies

On Wednesday (March 1), New Zealand-based crypto analyst and influencer Lark Davies shared ten steps for successful investing in cryptocurrency.

According to Davies, the first step to investing in crypto is to get your finances in order. This means spending less and finding ways to earn and save more so that you can invest more in the crypto market.

The second step involves a steep learning curve, as Davies advises aspiring investors to learn everything they can about cryptocurrency. Understanding different chains, on-chain data, and emerging themes are crucial, especially if you want to invest beyond established coins like Bitcoin and Ethereum.

Davies encourages investors to become a “hunter of free shit.” This means taking advantage of free NFT mints, airdrops, and testnets. Investors can find life-changing opportunities by consistently testing different chains and experimenting with different strategies.

Step four involves studying narratives and investing in emerging themes. Much of the gains in crypto are centered around narratives, such as AI, metaverse, and on-chain perps. Davies advises investors to get in early, before the narrative takes hold, and get out before everyone else screams “new paradigm of money.”

Timing is crucial, as Davies advises investors to buy fear, oversold technicals, and pullbacks and to admit when they’ve missed a train and wait for the next one. Investors should also find a niche and stick to it, experimenting and learning as much as possible about their chosen area.

Davies also advises investors to rebalance their investments and take profits when low-cap altcoins pop off. Maintaining crypto exposure is important, but investors should dump profits into established coins like Bitcoin and Ethereum.

Finally, Davies urges investors to take profits and avoid holding on for too long. Most investors lose money by watching their coins plummet. By taking profits and making real gains, investors can protect themselves against losses and continue to grow their portfolios.

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Binance CEO Says You Can Now ‘Buy Fries With Crypto’

On Tuesday (February 28), “CZ,” Co-Founder and CEO of Binance, which is the world’s largest crypto exchange, made an announcement that should delight fans of both crypto and  American international fast food restaurant chain Wendy’s.

Binance Pay is a “contactless, borderless and secure cryptocurrency payment technology designed by Binance” that allows Binance users to “shop with crypto or send crypto to friends and family worldwide.” It features “zero fees”, “lightning fast payments”, and support for over 200 cryptocurrencies.

According to Binance, thanks to a partnership between Binance and crypto payment gateway, which “creates high-tech system for businesses enabling them to receive customer payments in cryptocurrency,” Binance users in former Soviet republic Georgia can now pay with crypto at Wendy’s restaurants and at “more than 600 other vendors, including major hotels, restaurants, and supermarkets.”

Last week, via another partnership, it became possible for Binance users in France to pay with crypto at retail stores.

According to Ingenico’s press release, this partnership integrates Ingenico’s AXIUM payment terminals with Binance Pay, allowing them to “accept more than 50 cryptocurrencies.” Ingenico has “the largest base of payment terminals installed in the world.”

The press release went on to say that “this partnership is broken down into several stages,” and that “this first step will allow merchants to be paid in cryptocurrencies.” Ingenico and Binance are “currently developing a crypto-to-fiat payment solution,” which will be tested in Q2 2023, in order to allow merchants to be paid in fiat currency.

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Floki Inu Team Says $FLOKI Is Now a Top 100 Crypto, $FLOKI Up 489% in 2023

 Floki Inu ($FLOKI), the highly popular Shiba Inu dog breed-themed cryptocurrency project, has achieved another important milestone.

The idea of creating this cryptocurrency was born on 25 June 2021 after Dogecoin ($DOGE) advocate Elon Musk tweeted that the name of his Shiba Inu dog would be “Floki.”

FLOKI is the utility token of the Floki ecosystem, which “offers a 3D NFT Metaverse, DeFi utilities, a crypto education platform, NFTs, a merchandise store, and more.”

Here is How Forbes recently described Floki Inu:

Floki is a cryptocurrency that initially started as a meme-coin based on Elon Musk’s dog but has evolved to become a fully fledged web3 project spanning decentralised finance, NFTs and the Metaverse. Now referred to as “The People’s Crypto”, the team behind the Floki project have turned a once useless meme-coin into something more.

The token associated with the project, FLOKI, is a multi-chain token that operates on both the Ethereum and Binance Smart Chain (BSC) blockchains, as it is both ERC-20 and BEP-20 compliant. FLOKI tokens can be bridged between the two chains easily, allowing FLOKI holders to use either blockchain to store and transact with their tokens.

It is worth noting that FLOKI has an encoded 3% tax imposed on buying and selling the token but not on the transfer between the two chains. This tax is directed to the Floki Inu treasury, which the project claims will be used to develop the ecosystem further and increase the adoption of Floki. According to the white paper, the team will reduce the tax once the treasury has accumulated enough funds. However, there is no specific target or indication of when this will happen, or how much it would be lowered by.

Anyway, yesterday, the FLOKI team thanked CoinMarketCap for “correctly” tracking $FLOKI’s market cap, as the result of which $FLOKI is currently the 97th most valuable cryptocurrency by market cap.

Source: CoinMarketCap

According to data from TradingView, $FLOKI is up over 489% in the year-to-date period.

Investment Strategist Lyn Alden: Bitcoin Is ‘By Most Metrics’ in ‘A Deep Value Zone’

In a recent interview, highly respected equity research analyst and investment strategist Lyn Alden shared her outlook for Bitcoin.

Alden, who provides equity research and investment strategies for clients, made her comments during an interview for the Swan Bitcoin YouTube channel.

According to a report by The Daily Hodl, Alden said:

I do have some concerns around the second half of the year because once they resolve the debt ceiling, you’re going to see the Treasury almost certainly try to suck back liquidity out of the market to fill back up its Treasury account and if the Fed is still withdrawing liquidity at that time, you can have a rapid decrease in liquidity. So you could get negative retests. You could get consolidations, corrections...

Professional traders are going to try to get what they can out of it, but I think for the vast majority of people, I would just point to that it’s by most metrics it’s kind of a deep value zone, based on a lot of different metrics. I think it is attractive in a three to five-year perspective. If you monitor the fundamentals of the network, if you think the network’s healthy, if you think all the aspects are still working as intended, if you don’t see that there are any sort of competitors that are anywhere near close to what Bitcoin offers, then I think it is a strong buy.


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Dogecoin ($DOGE) Getting Listed on a Major Exchange in This Emerging Market Country

On Wednesday (1 March 2023), $DOGE fans were given an interesting piece of good news.

Popular meme-based cryptocurrency Dogecoin ($DOGE) was initially released on 6 December 2013, as a “fun and friendly internet currency.” It was created by Billy Markus and Jackson Palmer. Dogecoin is “a decentralized, peer-to-peer digital currency” that has as its mascot “Doge,” a Shiba Inu (a Japanese breed of dog).

Since then, its popularity has substantially increased, especially in the past couple of years, mostly thanks to support from billionaires Elon Musk and Mark Cuban (the majority owner of the professional basketball team Dallas Mavericks, as well as one of the “sharks” on the highly popular reality show “Shark Tank,” to the point that it is currently the eight most valuable cryptocurrency, with a market cap of over $10.91 billion (as of 9:30 a.m UTC on 1 March 2023). In fact, in 2019, Musk said that $DOGE might be his favorite cryptocurrency.

Anyway, earlier today, crypto exchange (launched in 2014), which claims to be “the most established crypto brand in The Philippines” with over 16 million users, announced that it would be adding support for $DOGE later today

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Coinbase Institutional: Solana’s Technological Differentiation Key to Value Proposition

 A recent research report by Coinbase Institutional looks at the mechanics of the Solana ($SOL) protocol and its competitive positioning in the layer-1 blockchain space.

According to this report, which was written by Research Analyst Brian Cubellis and published on 22 February 2023, Solana has faced a turbulent few months, losing nearly 87% of its market capitalization and 97% of its total value locked due to a series of challenges, ranging from network outages to tightening financial conditions and crypto-specific insolvencies. However, this report claims that Solana remains a strong competitor in the L1 blockchain space.

The Coinbase analyst says that Solana’s focus on native scalability at the base layer sets it apart from many competitors, including Ethereum, which have had to scale their transactional capacity through second and third layers.

Cubellis goes on to say that Solana’s unique timestamping function — called proof-of-history (PoH) — augments its proof-of-stake (PoS) consensus mechanism and enables the processing of up to 65,000 transactions per second (TPS), which makes Solana one of the highest throughput blockchains in the industry.

Despite the current crypto bear market, the Solana ecosystem has maintained a focus on improving the resiliency of its infrastructure by implementing upgrades aimed at reducing spam transactions and eliminating network outages. The report asserts that Solana’s technological differentiation will continue to act as a foundational element of the protocol’s value proposition, and the ecosystem’s focus on performance for users and composability for developers may play an essential role in driving future adoption and network growth.

The native asset of Solana is $SOL, and validators can participate in network security by staking $SOL, for which they get rewarded in the form of newly issued $SOL and a portion of the transaction fees.

Solana’s low static fee structure makes most staking rewards come from new issuance. As the rate of new issuance declines, validators will increasingly rely on transaction fees for compensation, which suggests network activity will need to increase meaningfully over time to foster a more robust fee market.

Per the report, Solana’s activity in terms of transactions and active users, adjusted for market capitalization, compares favorably to Ethereum. As of the time the report was published, Solana’s market capitalization was just ~4.3% of Ethereum’s market capitalization.

However, Solana processes roughly ~17x the number of daily transactions as Ethereum and has ~43.7% of Ethereum’s daily active user base. This may be largely attributable to Solana’s overtly low-cost fee structure, which creates a more frictionless environment for user activity.

Looking ahead, the report suggests that Solana’s forward-looking value proposition is largely predicated on the technical merit of the protocol, which offers unparalleled transaction throughput at a very low cost combined with an architectural design allowing for native scalability on the base layer.

The reports author believes that the Solana ecosystem must maintain a focus on the technical capabilities of the platform and offer products and services that cannot be executed on other blockchains due to higher latency or less composability.

The report also looks at several key protocol initiatives that could help bolster Solana’s technical advantages, including Token-22, Jito-Solana, and Solana Saga.

It concludes by saying that “given the ecosystem’s relative strength in terms of current network activity (e.g. transactions, users, development),” Solana is “well positioned to reassert itself as a genuine layer-1 competitor.”

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$ADA, $SOL, and $MATIC Institutional Investment Products See Inflows Last Week

On Monday (February 27), CoinShares, a leading Europe-based digital asset investment and trading group, reported on last week’s inflows and outflows for digital asset investment products (crypto ETPs and ETFs).

According to the latest report from CoinShares, there was a slight outflow of $2 million from digital asset investment products in the week ending on February 24th. However, the report suggests that this does not represent the broader negative sentiment in the market, as the largest inflows were seen in short investment products.

CoinShares noted that opinions on digital assets remain divided, particularly in the U.S., with outflows totaling $14 million. Analysts believe this could be due to investors’ fears that the US Federal Reserve will adopt a more hawkish stance than expected.

The report also revealed that Bitcoin had seen outflows for the third consecutive week, totaling $12 million. Conversely, short-Bitcoin saw inflows of $10 million, mainly confined to the U.S. According to CoinShares, this could be due to nervousness amongst US investors, prompted by recent stronger-than-expected macro data releases, and highlights the sensitivity of the market to regulatory crackdowns.

However, Ethereum has been more resilient to negative sentiment, with only $0.2 million outflows last week. The report also noted minor inflows in Polygon ($MATIC), Solana ($SOL), and Cardano ($ADA), totaling $0.6 million, $0.5 million, and $0.4 million, respectively.

Blockchain equities were not immune to the negative sentiment either, experiencing outflows of $7.2 million, mainly affecting growth-focused companies that remain vulnerable to expectations on interest rates.

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Huge Popularity of Ordinals NFTs and Upcoming Stacks Upgrade Helps $STX to Go Up 328% YTD

Chris Burniske, Partner at venture capital firm Placeholder, has claimed that the release of Stacks’ upcoming features will enhance Bitcoin’s programmability, which will benefit Stacks ($STX), “an open-source platform to enable smart contracts, DeFi, NFTs, and apps for Bitcoin.” 

According to a Twitter thread posted by Burniske on February 26, applications built on top of Stacks will enable more programmable use of Bitcoin, and its upcoming releases will provide trustless BTC to the STX L2 with the introduction of hyperchains, allowing high-throughput and low-latency applications.

Burniske also pointed out that although L2s on Ethereum are currently booming, Stacks has little competition due to the community giving up on Bitcoin’s programmability. Meanwhile, he says, the largest L2 on Ethereum is Polygon, which has a fully-diluted network value (FD NV) of $12.4 billion or 6.4% of Ethereum’s NV, whereas Stacks has an FD NV of $1.36 billion or 0.28% of Bitcoin’s NV.

Burniske believes that a repricing to be on par with Polygon’s relative valuation to its L1 would suggest a potential ~23X increase in STX value, which does not take into account Bitcoin price appreciation.

He concluded by disclosing that his firm holds $STX tokens.

Currently (as of 2:20 p.m. UTC on February 27), $STX is trading around $0.921, up 23.17% in the past 24-hour period and up an incredible 328.30% in the year-to-date period.

On Saturday (February 25), North Rock Digital founder Hal Press posted a Twitter thread that suggested he is very excited about Stacks:

He went on to say:

This is the most excited we’ve been about a trade idea in a long time, as we believe $STX represents the best asymmetric upside opportunity in the market over the next 12 months. The foundation has been laid over the past few years and now the environment is right for Stacks to begin reaping the benefit. As we have gone deeper into the ecosystem it has been exciting to see what is being built, NRD will be looking to take a more active role going forward.

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Shiba Inu ($SHIB) Welcomes Developers and Businesses to Build on Shibarium

The Shiba Inu ($SHIB) project is gearing up for the launch of Shibarium Beta, and to help with Shibarium’s adoption, the Shibarium team has created a dedicated portal website.

On 6 July 2022, Shiba Inu’s pseudonymous lead developer Shytoshi Kusama published a blog post, in which he had this to say about Shibarium:

Shibarium is a key component in this uncanny war we find ourselves in as it will allow us to move assets on chain with minor BONE (gas) fees empowering micro transactions… As of now, everything is still on track, and we are moving as fast as we can to complete this core component to our ecosystem.

According to a blog post published yesterday by Kusama, to support individuals and businesses interested in building on Shibarium, the development team has created an intake system that will allow them to find and support the best projects. In addition, the system will help the team stay organized, grow Shibarium’s reach, and reset relationships with businesses they’ve connected to in the past.

Although anyone can build with Shibarium, the intake system will allow projects wishing to build on Shibarium to let the development team know what they want to do with the platform.

Shiba Inu’s development team looks forward to releasing the beta version of Shibarium soon. They have been updating the Wiki and releasing documents to inform the community about the upcoming launch. However, they point out that, during the beta, all tokens and products on the beta network are for testing purposes only. They warn the community to be cautious and not to purchase anything until the Shibarium mainnet launch.

Earlier this month, crypto exchange Bitget explained “what’s got everyone hyped about” Shiba Inu ecosystem’s $BONE token, the governance token of decentralized exchange (DEX) ShibaSwap and the gas token of layer 2 blockchain Shibarium.

Bringing NFTs to Bitcoin: The Innovation of Casey Rodarmor’s Ordinals Protocol

In a recent interview, Casey Rodarmor, the creator of the Ordinals project, shared his thoughts about one of the hottest projects in the crypto space.

According to a report by George Kaloudis, a senior research analyst and columnist for CoinDesk who recently interviewed Rodarmor, the Bitcoin developer began working on Ordinals in 2022, drawing inspiration directly from Bitcoin’s pseudonymous founder, Satoshi Nakamoto. The Ordinals protocol is apparently based on Satoshi’s original inclusion of references to something called “atoms” in the Bitcoin codebase. By sequentially numbering satoshis, the smallest unit of Bitcoin, users can inscribe data onto those satoshis to create digital artifacts.

Unlike most other types of NFTs, which tend to store the actual image or text file somewhere else and then put a link to that data on the blockchain, inscriptions on Ordinal NFTs are always immutable, which Rodarmor views as an upgrade to the immutability of NFTs.

While some in the Bitcoin community have criticized Ordinals as a threat to the sovereignty of Bitcoin users and holders, Rodarmor believes that engaging in one-on-one conversations with critics can lead to finding common ground.

Kaloudis is unsure whether Ordinal NFTs will solve Bitcoin’s security budget problem, so the CoinDesk analyst and writer asked Rodarmor what he thought.

Rodarmor’s response was, “YOLO. Let’s find out.”

The Ordinals creator said in a blog post published on 20 January 2023 that the Ordinals protocol supports putting “inscriptions” on the Bitcoin blockchain, and then went on to explain how inscriptions are different from NFTs:

Inscriptions are digital artifacts native to the Bitcoin blockchain. They are created by inscribing sats with content using ord, and can be viewed with the ordinals explorer. They do not require a separate token, a side chain, or changing Bitcoin. Inscriptions are created by including content, like an image, text, SVG, or HTML, in an inscription transaction. The content is included in the transaction witness, which normally contains signatures and other data proving that a transaction is authorized. Along with the content, the inscription transaction contains a content type, also known as a MIME type, identifying the type of content to be inscribed…

Inscriptions are digital artifacts, and digital artifacts are NFTs, but not all NFTs are digital artifacts. Digital artifacts are NFTs held to a higher standard, closer to their ideal. For an NFT to be a digital artifact, it must be decentralized, immutable, on-chain, and unrestricted. The vast majority of NFTs are not digital artifacts. Their content is stored off-chain and can be lost, they are on centralized chains, and they have back-door admin keys. What’s worse, because they are smart contracts, they must be audited on a case-by-case basis to determine their properties. Inscriptions are unplagued by such flaws. Inscriptions are immutable and on-chain, on the oldest, most decentralized, most secure blockchain in the world. They are not smart contracts, and do not need to be examined individually to determine their properties. They are true digital artifacts.

On 7 February 2023, Binance Research said that “in recent weeks, the Ordinals protocol has gained widespread popularity, with users experimenting by embedding JPEGs, videos, and even PDFs onto the blockchain. It also mentioned that while some Bitcoin community members have raised concerns about the Ordinals protocol potentially driving up transaction fees by consuming block space on the Bitcoin network, there is an ongoing debate about whether this is a positive or negative development for the blockchain.

On the same day, independent developer and consultant Udi Wertheimer listed some of the benefits of Bitcoin NFTs:

$BTC: ‘Rich Dad Poor Dad’ Author Explains Why He Invests in Bitcoin

In a recent interview, Robert Kiyosaki, the highly successful author of the “Rich Dad Poor Dad” series of personal finance books, explained why he trusts Bitcoin, silver, and gold more than fiat money.

Rich Dad Poor Dad, “which is one of the top 10 personal finance books of all time, “advocates the importance of financial literacy (financial education), financial independence, and building wealth through investing in assets, real estate investing, starting and owning businesses, as well as increasing one’s financial intelligence (financial IQ) to improve one’s business and financial aptitude.”

At various times during the past three years, Kiyosaki has been criticizing the Federal Reserve’s response to the resulting economic fallout and strongly urging his large following on social media platforms to protect themselves from what he feels is inevitable high inflation (and possibly hyperinflation) in the future by using their fiat holdings to buy silver, gold, and Bitcoin.

Episode #263 of Anthony Pompliano’s “Pomp Podcast,” released on 7 April 2021, featured an interview with Kiyosaki.

During that interview, Pompliano asked Kiyosaki about “traditional inflation hedge” assets.

Kiyosaki said:

Gold and silver are God’s money. Bitcoin is open source people’s money.

On 30 December 2022, Kiyosaki told his 2.3 million followers that he is bullish on Bitcoin because, unlike most other crypto assets, it is a commodity and therefore not impacted by future actions of the U.S. Securities and Exchange Commission (“SEC”):

In the medium term, he believes that the Fed will be forced to print so much money in the future that the Bitcoin price will reach $500K by 2025.

Anyway, according to a report by The Daily Hodl, on February 22, while speaking with Michelle Makori, Kitco’s Lead Anchor and Editor-in-Chief, at the 2023 Vancouver Resource Investment Conference, Kiyosaki had this to say about Bitcoin:

“When I saw Bitcoin go to $20,000, I don’t know when it was, then it dropped down… But then it came roaring back. So when it hit $6,000, I bought 60 Bitcoin at $6,000. I think today it is at $20,000… so the more I’m in it, the more I realize it has sustainability. So the reason people buy Bitcoin is the same reason I buy this [silver]. And I buy this [gold]. I don’t trust this [dollar bills].”


Majority of Retail Bitcoin Investors Likely Lost Money in Last 7 Years, Finds BIS Report

The Bank for International Settlements (BIS) has published its Bulletin No 69, titled “Crypto shocks and retail losses,” which investigates the behavior of crypto investors and whether the sector has impacted broader financial markets.

BIS was established in 1930 and is based in Basel, Switzerland. Its aims are “to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.”

The report analyses trading behavior in response to the two recent episodes of market turmoil – the Terra/Luna and FTX collapses – building on a new database on retail use of crypto exchange apps from August 2015 to mid-December 2022.

The data reveals that the adoption of crypto apps has risen in lockstep with Bitcoin prices, with most global investors losing money on their investments. What made things even worse was that more prominent investors were able to sell their assets to smaller ones before the steep price decline.

The BIS notes the largely self-referential nature of DeFi and crypto and suggests the need for better investor protection in the crypto space. The report recommends a coordinated global response to address risks in the sector, including options such as banning specific crypto activities, containing crypto, regulating the sector, or a combination of these.

BIS uses data to show that 30 million global users were active in crypto during the rapid price increases in late 2017 and early 2021, which saw around 100 million and 500 million new users join the crypto space.

BIS also found that the two episodes of market turmoil led to a reduction in Bitcoin holdings by the larger wallets, the “whales,” at the expense of smaller investors.

In nearly all economies in the BIS sample, over the period studied by the BIS researchers, a majority of investors likely lost money on their bitcoin investment. Furthermore, the report reveals that the collapse of the crypto sector has — thankfully — not significantly impacted broader financial conditions.

Nonetheless, BIS points out that had crypto been more intertwined with the real economy and the traditional financial system, the aggregate impact of a shock in the crypto world could have been much more significant. The report suggests that societies must decide on the appropriate policy response to address risks in crypto before they become systemic.

As the tweet below shows, Galaxy Digital Founder and CEO Mike Novogratz does not seem too impressed with the BIS report:

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Inventor of the Web Tim Berners-Lee Explains Why Believes Crypto Is ‘Really Dangerous’

During a recent interview, British computer scientist Sir Timothy John Berners-Lee, who is best known as the inventor of the World Wide Web, explained why he thinks that cryptocurrencies are “really dangerous.”

He wrote the first web browser, web server, and web page, and his work paved the way for the development of the modern internet as we know it today. Berners-Lee is also known for his net neutrality advocacy and work promoting an open and decentralized web accessible to everyone. In addition, he has received numerous honors for his contributions to the field of computer science, including a knighthood from Queen Elizabeth II and the Turing Award, often referred to as the “Nobel Prize of Computing.”

According to a report by CNBC, in a recent episode of CNBC’s “Beyond The Valley” podcast, Berners-Lee, who is the director of the World Wide Web Consortium (W3C), criticized cryptocurrencies, calling them “really dangerous” and comparing them to the dot-com bubble. Berners-Lee expressed his concerns about the speculative nature of digital currencies and called it a form of gambling. He argued that investing in purely speculative things differs from where he would like to spend his time. However, Berners-Lee did acknowledge the potential of cryptocurrencies for remittances, provided that they are immediately converted back to fiat currency when received.

Along with John Bruce, Berners-Lee aims to reshape the future of the internet through their startup Inrupt to give people more control of their data. In a wide-ranging interview with CNBC, both spoke about the future of the internet, and Berners-Lee emphasized that the future of the internet is “Web 3.0,” which he distinguished from Web3.

While some proponents see Web3 as a decentralized internet that takes away some power from tech giants such as Facebook and Google, Berners-Lee stated that Web 3.0 is his proposal for reshaping the internet, and it’s not blockchain, as he considers the technology needs to be faster and more secure.

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The Matrix Star Keanu Reeves Expresses Support for Cryptocurrencies

Keanu Reeves, famous for his role in “The Matrix” media franchise, has called cryptocurrencies “amazing tools for exchanges and distribution of resources.”

According to a report by Stephen Graves for Decrypt, in a recent interview with Wired, the actor said he found “amazing” the “ideas behind an independent currency.”

Reeves went on to say:

To pooh-pooh crypto, or the volatility of cryptocurrency, it’s only going to make it better in terms of how it’s safeguarded.”

Reeves has always been associated with technology, being a part of a franchise that has predicted several emerging tech trends, from artificial intelligence to the metaverse.

Reeves is particularly interested in the implications of AI and NFTs in digital art technologies, stating that people are growing up with tools such as NFT digital art and music made using AI. However, despite the cool factor of these tools, Reeves is worried about the corporatocracy behind them that’s looking to control them.

In “The Matrix,” Neo fights for what is real, and the actor says that “culturally, socially, we’re gonna be confronted by the value of real, or the nonvalue.”

Reeves has recently become involved in the NFT space, becoming an adviser for The Futureverse Foundation, a digital art charity backed by NFT projects Non-Fungible Labs and Fluf World. The foundation aims to provide opportunities to artists with different viewpoints, making the metaverse accessible to more people, particularly from disadvantaged backgrounds.

When asked about the metaverse, Reeves responded that companies such as Meta had created more land, wealth creation, and opportunity, but it’s still a system of control and manipulation.

Reeves has not been very active in the crypto space, stating in December 2021 during an interview with The Verge — for the promotion of the movie “The Matrix Resurrections” — that he has “a little HODL” after a friend purchased some crypto for him, but he has not done anything with it because he had not needed to do.


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Coinbase CEO on Current Narrative in Crypto: “We’re in One of Those Despair Phases Right Now”

Coinbase CEO Brian Armstrong discussed the company’s Q4 2022 earnings call on 21 February 2023, highlighting three key themes in his opening remarks.

According to the transcript provided by The Motley Fool, firstly, he discussed how the company had reduced its operational expenditure (“opex”) to “operate more efficiently and better generate EBITDA in the future.” This includes reducing headcount by an additional 20% in January 2023 and adjusting compensation policies to manage dilution better. Armstrong believes these changes will ensure a healthier balance sheet and allow Coinbase to continue investing in the future to become the global leader in the crypto space.

Secondly, Armstrong talked about the recurrent regulatory environment, explaining that increased regulatory scrutiny is ultimately good for the crypto space and that legitimate companies like Coinbase, which prioritize trust and compliance, will be beneficiaries. Coinbase has proactively put in place appropriate controls and is well-positioned to manage the changing regulatory landscape.

Lastly, Armstrong addressed the state of the crypto cycle, emphasizing that the market tends to flip every two years between irrational exuberance and despair. Coinbase is focused on the fundamental indicators, separating the signal from the noise, and sees an opportunity in the despair phase. Armstrong notes that the number of software developers working in crypto has doubled since 2020, and many major brands have started integrating Web3 and NFT technology into their products, which will require customers to use a crypto wallet. Coinbase is positioned to benefit as a result.

Armstrong believes Coinbase can play a big role in achieving its goal of getting crypto to one billion people globally, thereby increasing economic freedom. He believes scalability and usability are key areas where Coinbase can make an impact, making crypto easier to use and more intuitive. Armstrong also believes Coinbase has a role in the regulatory environment around education, advocacy, and policy.

Armstrong also addressed Coinbase’s work with lawmakers to shape U.S. crypto regulation, highlighting that policy is his top priority for this year. He has been spending a lot of time in D.C. and believes there is a lot of bipartisan support for comprehensive crypto legislation. Coinbase is working with various trade groups, donating to key crypto advocates, and has a detailed petition sent to the SEC requesting more clarity on regulation.

$BONE: Major Crypto Exchange Explains What Makes Shibarium’s Gas Token ‘Unique’

Earlier this month, crypto exchange Bitget explained “what’s got everyone hyped about” Shiba Inu ecosystem’s $BONE token, which is the governance token of decentralized exchange (DEX) ShibaSwap and the gas token of layer 2 blockchain Shibarium.

Here is what Binance Academy says about Shiba Inu ($SHIB):

Shiba Inu (SHIB) is a dog-themed meme cryptocurrency named after a Japanese dog breed. It was created in 2020 by an anonymous developer named Ryoshi, who designed SHIB to be an alternative to Dogecoin (DOGE) on the Ethereum blockchain.

SHIB is an ERC-20 token with a decentralized exchange called ShibaSwap. The SHIB roadmap and ecosystem also features an NFT art incubator called Shiba Artist Incubator, 10,000 ‘Shiboshi’ NFTs, and an NFT game Shiboshi Game.

Shiba Inu had an initial circulating supply of 1 quadrillion tokens. Ryoshi locked 50% of the token in Uniswap to create liquidity, and sent the other 50% to Ethereum co-founder Vitalik Buterin’s wallet. However, Vitalik decided to burn 90% of the coins and donate the remaining 10% to charity.

In a blog post published on 15 January 2023, the Shibarium team explained that Shibarium’s mission is twofold: to offer a resource for the community to construct and expand the project on their terms, and to invite new crypto users and educate them on the development process of a ground-up project.

To the developers, the question of when to begin the phased rollout is secondary to their importance on building Shibarium properly and presenting it responsibly. Also, they stress the importance of being patient since some may mistake Shibarium for a tool to artificially boost the price of $SHIB and $BONE tokens.

Shibarium’s Layer 2 blockchain is built atop the Ethereum blockchain. It is intended to function in tandem alongside the preexisting blockchain network, enabling off-chain processing of faster, cheaper, and more private transactions while depending on the Ethereum blockchain’s security.

They went on to say:

This blockchain (L2) runs on top of the Ethereum blockchain, which the SHIB ecosystem tokens (SHIB, LEASH & BONE) utilize. A Layer 2 blockchain provides the benefits of scalability, faster transaction times, lower fees, and an expanded development framework…

So how do we remove the barrier to entry for the small transactions that occur in day-to-day living? In L2 blockchains like Shibarium, transactions occur ‘off-chain’, meaning transactions occur outside of the Layer 1 (Ethereum) blockchain, and are communicated back. Allowing the L2 blockchain to do the majority of the processing work alleviates bandwidth which results in lower costs (gas fees) and processing time for the end users…

As previously announced, $BONE is the native token selected to pay for gas transactions and reward Validators and Delegators within the Shibarium protocol. Since its birth in July 2021, its main function has been linked to governance, but now also the much anticipated Shibarium launch… With a total supply of 250 million, of which 20 million have been reserved to reward Validators and Delegators in the coming years, and voted in by the Shiba community through our DAO process…

In Shibarium, Validators are instrumental members of the network who contribute to operability security by locking up a certain number of $BONE tokens and operating Heimdall Validator and Bor block producer nodes.”

Earlier this month, crypto exchange Bitget explained in their own words what makes $BONE exciting for the Shib Army:

Currently (as of 12:10 p.m. UTC on February 24), $BONE is trading around $1.93.

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Arbitrum Becomes First Rollup To Surpass Ethereum Mainnet in Daily Transactions

On Wednesday (February 22), Ethereum layer 2 (L2) scaling solution Arbitrum announced that it had reached a significant milestone.

According to Offchain Labs, the startup developing this popular Ethereum L2 scaling solution, Arbitrum is an “optimistic rollup” that offers the following benefits:

  • Trustless security: security rooted in Ethereum, with any one party able to ensure correct Layer 2 results
  • Compatibility with Ethereum: able to run unmodified EVM contracts and unmodified Ethereum transactions
  • Scalability: moving contracts’ computation and storage off of the main Ethereum chain, allowing much higher throughput
  • Minimum cost: designed and engineered to minimize the L1 gas footprint of the system, minimizing per-transaction cost.

Arbitrum’s developers’ documentation goes on to explain what the term “optimistic rollup” means:

Arbitrum is a rollup, which means that the inputs to the chain — the messages that are put into the inbox — are all recorded on the Ethereum chain as calldata. Because of this, everyone has the information they would need to determine the current correct state of the chain — they have the full history of the inbox, and the results are uniquely determined by the inbox history, so they can reconstruct the state of the chain based only on public information, if needed.

This also allows anyone to be a full participant in the Arbitrum protocol, to run an Arbitrum node or participate as a validator. Nothing about the history or state of the chain is a secret.

Arbitrum is optimistic, which means that Arbitrum advances the state of its chain by letting any party (a “validator”) post a rollup block that that party claims is correct, and then giving everyone else a chance to challenge that claim. If the challenge period (roughly a week) passes and nobody has challenged the claimed rollup block, Arbitrum confirms the rollup block as correct. If somebody challenges the claim during the challenge period, then Arbitrum uses an efficient dispute resolution protocol (detailed below) to identify which party is lying. The liar will forfeit a deposit, and the truth-teller will take part of that deposit as a reward for their efforts (some of the deposit is burned, guaranteeing that the liar is punished even if there’s some collusion going on).

Because a party who tries to cheat will lose a deposit, attempts to cheat should be very rare, and the normal case will be a single party posting a correct rollup block, and nobody challenging it.

On 13 October 2022,

Binance Research said this about Arbitrum:

Arbitrum is an L2 solution designed to boost the speed and scalability of Ethereum smart contracts while adding additional privacy features. Arbitrum further allows developers to run unmodified EVM contracts and transactions without compromising on layer 1 security… Around a month ago, Arbitrum updated its platform to ‘Nitro’ – introducing changes to the platform that bring along long-term improvements…

With the introduction of Nitro, transactions are now handled in two stages. In the first stage, Nitro puts transactions into a sequence in which they will be processed. It then publishes the sequence and applies a deterministic state transition function to each transaction…

Just looking at transactions on Arbitrum, we can observe a positive trend since the beginning of the year. We saw the Arbitrum Odyssey as a key event, driving further adoption, but expect that long-term growth will need to come from further integration of centralized exchanges… While DeFi TVL has been initially bigger on Arbitrum, TVL is now almost equally split between Arbitrum and Optimism. As such, despite recent developments to Arbitrum, we have not seen substantial market share gains. However Arbitrum has more TVL when considering token balances…

Not only did OpenSea announce its support for Arbitrum and its NFT ecosystem, but the combination of new infrastructure, incoming users with new NFTs from Odyssey, and a token launch created a perfect storm for the continued growth of Arbitrum… We can conclude that while being in constant competition with Optimism and other scaling solutions, Arbitrum’s ecosystem has still been on a consistent rise throughout the year… While centralization is still a key risk factor that we want to point out – Arbitrum is not alone in this, as most L2s are, in one way or another, still mainly exposed to some form of centralization risk.

On February 22, the Arbitrum team announced that on 21 February 2023, Artbitrum had 1,103,398 transactions.

Meanwhile, according to Etherscan, Ethereum had 1,084,290 transactions on that day.

This was the first time any rollup had managed to beat Ethereum in daily transaction volume.

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Colombia Hosts Its First Virtual Court Hearing in Metaverse With Meta’s Technology

Virtual reality technology has taken a step forward with its recent use in a Colombian court hearing, marking a new era for legal proceedings.

According to a report by Mat Di Salvo for Decrypt, Colombian lawmakers have recently held one of the first court hearings in the world using virtual reality technology provided by Meta, the parent company of Facebook.

The two-hour hearing saw lawyers don virtual headsets and participate in the meeting as computer-generated avatars. The event was streamed live on YouTube and marked the first full virtual hearing held by Colombian lawmakers. The meeting was reportedly a success, and those in attendance praised using information technology to expedite judicial proceedings.


However, not all those who tuned into the stream thought using virtual avatars was appropriate, with some viewers feeling that it took away from the seriousness of the hearing. While hearings using Meta’s technology have taken place elsewhere, Colombia’s use of Horizon Workrooms to conduct a virtual court hearing represents a landmark moment in the technology’s use.

Virtual meetings and court hearings became more common in 2020 as the COVID-19 pandemic forced professionals to switch to video conferencing technology like Zoom to conduct business. While some entertaining incidents, like the Texas lawyer who accidentally became a kitten during a video call, were reported, the virtual court hearing in Colombia marks a significant milestone in using virtual reality technology for serious purposes.

Despite Meta’s virtual reality division losing significant money in Q4 2022, the company’s CEO, Mark Zuckerberg, has pledged to continue investing in the technology, stating that the metaverse will be a significant part of the company’s technological roadmap.

While it remains to be seen whether the technology will become a significant revenue stream for Meta, the success of the virtual court hearing in Colombia suggests that virtual reality technology may have significant potential in the legal sector and beyond.

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$MATIC: Polygon Labs President: Web3 Could Spawn the Next Jeff Bezos

Ryan Wyatt, President of Polygon Labs, spoke to Decrypt about his transition from gaming to the crypto world.

Polygon is “a decentralised Ethereum scaling platform that enables developers to build scalable user-friendly dApps with low transaction fees without ever sacrificing on security.” The Polygon Lightpaper describes Polygon as “a protocol and a framework for building an connecting Ethereum-compatible blockchain networks.”

On 18 May 2021, Independent Ethereum educator, investor and advisor Anthony Sassano took to Twitter to clear up some of the confusion around Polygon (e.g. some people refer to Polygon as a sidechain to Ethereum, while others call it an L2 blockchain). Below are a few highlights from that Twitter thread:

  • There is the Matic Plasma Chain and the Polygon PoS chain. The vast majority of the activity is happening on the PoS chain.
  • The PoS chain is what people refer to as a ‘sidechain’ to Ethereum because it has its own permissionless validator set (100+ who are staking MATIC) which means it doesn’t use Ethereum’s security (aka Ethereum’s PoW).
  • The PoS chain goes beyond a standard sidechain and actually relies on and commits itself to Ethereum (what some people may call a ‘commit-chain’). It relies on Ethereum because all of the validator/staking logic for the PoS chain lives as a smart contract on Ethereum.
  • This means that if the Ethereum network went offline, the Polygon PoS chain would also go offline. Secondly, the PoS chain actually commits/checkpoints itself to Ethereum every so often.
  • This has 2 benefits: it provides Ethereum-based finality to the PoS chain & it can help the chain recover in case of catastrophic event. This also means that Polygon is paying Ethereum to use its blockspace (in ETH) & paying for it to secure the contracts & checkpointing.

As a prominent figure in the gaming industry, Wyatt’s entrance into the blockchain realm was fueled by his interest in digital ownership. According to a Decrypt report by Andrew Hayward published on 18 February 2023, in a recent episode of Decrypt’s “gm” podcast, Wyatt stated that people want more ownership and autonomy over their digital items as spending and affinity grow, and blockchain technology enables that.

Wyatt believes there is infinite potential in the space. Gamers have already been spending money on digital items they can’t resell or use in other games or worlds. Blockchain-based games have the potential to give players more control over their digital assets with broader advantages.

Wyatt sees Web3 as an interconnected world beyond just gaming. He was drawn to Polygon Labs because of the opportunity to “work with creators and builders across a wide array of verticals.” As Polygon Labs President, Wyatt hopes to help elevate Polygon by bringing his experience from the Web2 world and add value to the platform by helping with scaling and making it more multifaceted.

Wyatt, who previously worked as the Global Head of Gaming at YouTube, believes the next huge tech giant or luminary will come from the crypto industry. He feels that the next Jeff Bezos is already working in the Web3 space, hopefully “building on Polygon.”

Recently, Mike McGlone, a Senior Macro Strategist at Bloomberg Intelligence (Bloomberg’s research arm on the Bloomberg Terminal”), shared his thoughts on the impact of layer 2 (L2) scaling solutions on Ethereum.

According to the February 2023 edition of Bloomberg Intelligence’s “Crypto Outlook” report, 2022 was a defining year for Ethereum, despite declining activity on the base chain. McGlone attributes this success to the widespread adoption of NFTs and Web3 applications on Layer-2 (L2) chains.

L2 chains, which are blockchain-scaling solutions that address Ethereum’s constraints, have reportedly stepped in to improve the user experience and prevent users from moving to other layer-1 chains such as Solana and Avalanche. McGlone notes that the number of daily active addresses on rollup or L2 chains increased by 86% in 2022, while Ethereum saw a 33% decline.

One L2, Polygon, has made a particularly significant impact on the Ethereum network, according to McGlone. Originally a sidechain, Polygon has now shifted its focus to zero-knowledge (zk) rollups. McGlone touts zk proofs as a “blockchain game-changer” that improves privacy and speeds up transactions.

Despite potential regulatory issues posed by traditional companies issuing their own tokens, McGlone believes that the involvement of companies like Coca-Cola, Starbucks, Reddit, and Meta bodes well for Polygon’s adoption potential. These companies have launched NFTs as an introductory Web3 product or integrated with Polygon’s NFT marketplaces.

On 6 January 2023, payments giant Mastercard announced at CES 2023 that via a partnership with blockchain startup Polygon ($MATIC) it was launching a Web3-focused incubator to help artists.

According to a report by TechCrunch, Raja Rajamannar, chief marketing and communications officer at Mastercard, told TechCrunch:

The core of this program is providing emerging artists with the web3 tools and skills they need to excel and advance their music careers in this digital economy. By providing access to experts and innovators in the space, the artists will be guided on how to incorporate web3 into their work throughout the entire program and then beyond… We see that web3 holds tremendous promise for artists and creators to create, own and monetize their content, but only if they know how to leverage it… This past year was big for us, with experimental web3 activations around the world.

The TechCrunch report went on to say that according to Rajamannar, “after joining the incubator, participating artists should know how to mint NFTs, represent themselves in virtual worlds and establish a community.”

As for the Polygon team, in their blog post about this collaboration, they said that the Mastercard Artist Accelerator program — which launches in Spring 2023 — will “prepare five emerging artists—such as musicians, DJs, producers—with the tools, skills, and access to forge their own musical paths in the digital economy” and that “the artists will gain exclusive access to special events, music releases and more.” Apparently, “a first-of-its-kind curriculum will teach the artists how to build (and own) their brand through Web3 experiences like minting NFTs, representing themselves in virtual worlds and establishing an engaged community.”

Polygon Studios CEO Ryan Watt had this to say:

Web3 has the potential to empower a new type of artist that can grow a fanbase, make a living, and introduce novel mediums for self-expression and connection on their own terms. The Mastercard Artist Accelerator not only shows the power of brands embracing this new space, it provides tools that can educate consumers on how to participate. This is an important step forward in opening up the benefits of Web3 to more people.

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IMF’s Discussion of How Crypto Should Be Regulated Sparks Fear of a Total Ban

On Thursday (23 February 2023), the International Monetary Fund (IMF) issued a press release on crypto assets that has some crypto enthusiasts worried.

The IMF, established on 27 December 1945, “works to achieve sustainable growth and prosperity for all of its 190 member countries” by “supporting economic policies that promote financial stability and monetary cooperation, which are essential to increase productivity, job creation, and economic well-being.”

According to the IMF’s press release, on 8 February 2023, the Executive Board of the International Monetary Fund (IMF) discussed a board paper on “Elements of Effective Policies for Crypto Assets.” This seems to have resulted in mixed reactions from the crypto community. Although a few welcome the guidelines and see them as a step towards greater legitimacy and acceptance of crypto, others fear that the IMF’s ultimate goal may be to clamp down on and even ban cryptocurrencies altogether.

This paper proposes a framework consisting of nine key elements of effective policies for crypto assets that member countries should adopt, including safeguarding monetary sovereignty, analyzing and disclosing fiscal risks, and developing prudential, conduct, and oversight requirements for all crypto market actors.

Regarding a future potential ban on crypto, the press release said:

Directors agreed that strict bans are not the first-best option, but that targeted restrictions could apply, depending on domestic policy objectives and where authorities face capacity constraints. A few Directors, however, thought that outright bans should not be ruled out.

The major concern of the crypto community appears to be that the IMF wants greater control over crypto and, ultimately, a crypto ban, possibly due to its fear of crypto either jeopardizing the stability of the global monetary system or successfully bypassing it entirely. Another concern is that by requiring member countries to adopt these policies, the IMF could stifle innovation in the crypto space and make it harder for new and smaller players to enter the market.

Critics of the IMF’s guidelines also argue that the paper fails to recognize the potential benefits of crypto and blockchain technology, such as financial inclusion and greater transparency. They also point out that the paper does not adequately address issues related to the adoption of crypto assets by developing countries, which could be seen as a missed opportunity to promote financial inclusion in these regions.

While the IMF’s paper is not legally binding, it could serve as a model for member countries’ policies on crypto assets. As the crypto industry continues to evolve and gain greater mainstream acceptance, it remains to be seen how the IMF’s guidelines will impact the future of cryptocurrencies and the regulatory landscape in which they operate.

Last June, the IMF’s managing director, Kristalina Georgieva, shared her thoughts on crypto assets in general and stablecoins and central bank digital currencies (CBDCs) in particular.

The IMF Chief’s comments about crypto were made on May 23 while she was speaking at a panel titled “Central Bank Digital Currencies” (moderated by CNN International anchor and correspondent Julia Chatterley)

The IMF chief had this to say about crypto:

Well, when somebody promises you 20% return on something that is not backed by any assets, how would we normally call this thing? We would call it a pyramid; in other words, this is a pyramid in the digital age, but we should not be mistaken to immediately classify everything in the digital money world in a negative way because there are three categories.

The first one is central bank digital currencies. They are backed by the state, and they offer finality when transactions are settled. This is a universe that, as you said, 90% of countries are exploring. Who crossed the finish line first? The Bahamas with the Sand Dollar, but now we have Nigeria stepping there. And there are many pilots, of which the largest universe of a pilot, which actually made me wake up and say ‘well, this thing is moving so fast that the international monetary fund has to embrace it’… China, a pilot with 128 million participants.

Now the second group — these are the stablecoins. Some of them deserve the name because they are backed by assets, and when they’re backed by assets 1:1, they’re really stable. They look a little bit like many market funds, but they are money market funds in this digital space.

And then we have a lower degree of stability. The less there is a backing, the more you should be prepared to take the risk of this blowing in your face, which is what happened some days ago. I want to be very, very direct that I do feel for the people who lost money because part of the reason they lost money is not really being well-educated on this new investment world.

And I want to go to the third universe, the crypto that is really not pretending to be backed up by anything, not designed to be backed up by anything. It is really the trust that is built in a way that brings value. It is an investment class… I get occasional hate tweets when I say that Bitcoin maybe called a coin, but it’s not money.

Why? Because a prerequisite for something to be money is to be a stable store of value. So, you actually can turn around it, and when the first country embraced Bitcoin and I was asked, ‘what did we think at the fund?’, I said, ‘well, it’s a sovereign decision, doesn’t make it a good decision’…

So, my point here is that there are very important responsibilities for the central banks and also for other regulators — regulators of financial services, regulators of this asset class — to make sure that everybody can step into this world with some confidence, that we understand that for CBDCs the biggest question is interoperability, how are they going to connect to each other, but for stablecoins, for crypto assets, it is responsibility for some regulation and financial education.

I would beg you not to pull out of the importance of this world because of what Julia said it — it offers us all faster service, much lower cost, and more inclusion, but only if we separate apples from oranges and bananas, and that is our job. We have a huge responsibility to do it well.

Coinbase’s Based Approach to Onboarding Over a Billion People Into the Crypto Economy

On Thursday (23 February 2023), Coinbase has announced the testnet launch of Base, an Ethereum Layer 2 (L2) blockchain that provides a cost-effective and developer-friendly platform for building decentralized applications (dApps) on-chain.

According to the company’s blog post, it aims to onboard over a billion users into the crypto economy and sees Base as a critical part of its strategy to achieve this goal.

Coinbase says that Base is “decentralized, permissionless, and open to anyone with the vision of creating a standard, modular, rollup agnostic Superchain powered by Optimism.” 

According to Coinbase, Base is designed to be an attractive destination for developers to build on-chain, offering scalability and security powered by Ethereum. Coinbase is incubating the project, leveraging its experience in building crypto products, with plans to decentralize the chain over time.

Base is designed to be interoperable with other chains, including Ethereum L1, other L2s, and L1 ecosystems like Solana. The platform is seen as a bridge to onboard users into the crypto economy, with Coinbase aiming to make dApps easier, cheaper, and safer to interact with.

Coinbase is joining Optimism as a Core Dev on the OP Stack. Base developers can build using the RPC testnet endpoint or choose from the following Node providers: QuickNode, Infura, and Blockdaemon.

Coinbase also announced the Base Ecosystem Fund, which aims to help eligible “early-stage projects” that are powered by Base.

Coinbase has yet to specify when Base will be available on mainnet, but the company plans to provide more resources for developers in the near future.

Binance and Ingenico Team Up to Introduce Cryptocurrency Payments in French Retail Stores

Binance users in France can now pay with crypto at retail stores thanks to a new partnership between the world’s largest crypto exchange and Ingenico, a leading provider of in-store payment terminals.

According to Ingenico’s press release, this partnership integrates Ingenico’s AXIUM payment terminals with Binance Pay, allowing them to “accept more than 50 cryptocurrencies.” Ingenico has “the largest base of payment terminals installed in the world.”

Binance Pay is a “contactless, borderless and secure cryptocurrency payment technology designed by Binance” that allows Binance users to “shop with crypto or send crypto to friends and family worldwide.” It features “zero fees”, “lightning fast payments”, and support for over 200 cryptocurrencies.

The press release went on to say that “this partnership is broken down into several stages,” and that “this first step will allow merchants to be paid in cryptocurrencies.” Ingenico and Binance are “currently developing a crypto-to-fiat payment solution,” which will be tested in Q2 2023, in order to allow merchants to be paid in fiat currency.

Jonathan Lim, Director of Binance Pay and Binance Card, had this to say:

One of the major advantages of this partnership is that it offers companies a new approach to the market. Their dominant position in the market and their innovative payment solutions allow us to accelerate our access to consumers, without having to create our own terminals or software.

Furthermore, Ingenico will in the near future “include Binance on PPaaS, its payments platform as a service,” which means that “merchants whose payment service provider is connected to PPaaS will be able to quickly and easily accept in-store payments from customers using the Binance Cryptocurrency Wallet.”

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Crypto Analytics Firm Looks at Recent Whale Interest in $ADA, $HEX, $SAND

On Tuesday (21 February 2023), crypto analytics firm Santiment took at whale activity involving Cardano ($ADA), HEX ($HEX), and The Sandbox ($SAND).

Santiment’s blog post highlights the market’s increased volatility this year, with “key stakeholders” seemingly more excited than usual. It points out that some famous investors have said that volatile markets present the perfect opportunity to make big moves and separate yourself from the average investor.

The post notes that, despite a 5-day anomaly gap in the data, Cardano has seen a significant price increase this month. According to Santiment, this price surge suggests substantial interest from whales at these levels.

Apparently, $HEX has also been on the rise, with February 20 seeing “the highest level of whale transactions”, with the exception of February 9th, which was followed by a mid-sized correction.

As for $SAND, Santiment says that on February 20, the altcoin saw “the third highest whale spike” in the past three months, which took place when the price was going up, and Santiment takes this to mean we should not be surprised by at least a short-term correction.

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$GMX: A Closer Look at the Avalanche and Arbitrum Powered Decentralized Exchange GMX

This article looks at $GMX — the governance and utility token of GMX, a popular decentralized exchange that runs on Arbitrum and Avalanche — and some notable names that have been accumulating it lately.

Here is what Binance Academy says about this DEX as well as its utility and governance token:

GMX is a decentralized spot and perpetual exchange that enables users to trade BTC, ETH and other popular cryptocurrencies directly from their crypto wallets… GMX aims to provide a better trading experience with low swap fees and zero-price impact trades. The trading happens through its native multi-asset pool, GLP, which earns fees for liquidity providers. In addition, GMX uses Chainlink Oracles for dynamic pricing to aggregate prices from other high-volume exchanges.

GMX first launched on the Arbitrum One blockchain when the network went live in September 2021. Arbitrum is an Ethereum layer-2 Rollup, a solution designed to boost the speed and scalability of Ethereum smart contracts. Later, in January 2022, the deployment of GMX continued on Avalanche, which is also a high-speed EVM-compatible blockchain… The GMX token is a utility and governance token. Token holders can use it to vote on proposals to help decide the exchange’s future direction.

The token holders who stake their GMX also get three other rewards, which the protocol uses to reward users. Firstly, 30% of all generated protocol fees are distributed to GMX stakers. These fees are collected from market making, swap fees, and leverage trading, and are paid in ETH or AVAX.

Secondly, the stakers earn escrowed GMX (esGMX) tokens. These esGMX tokens can be either staked for rewards as well, or vested. The tokens get converted back into GMX over 12 months when a user vests them. Therefore, esGMX emissions are a form of locked staking that prevents inflation and people from immediately selling their GMX.

Lastly, stakers earn Multiplier Points that boost their yield and reward long-term holders without contributing to token inflation. These dual incentives stimulate commitment to GMX and further the platform’s decentralized ownership.

The GMX token has a maximum supply of 13.25 million, with 8.2 million circulating. More than 83% of the circulating tokens are currently staked.

Currently (as of 9:05 a.m. UTC on 22 February 2023), $GMX is trading around $72.60, and it has a market cap of around $617 million, making it the 77th most valuable cryptoasset by market cap. In the year-to-date period, $GMX is up 78.44%.

On Tuesday (21 February 2023), blockchain activity tracker “Lookonchain” said that it had noticed that Amber Group, which acts as “liquidity providers, miners, and validators on 70+ exchanges, applications, and networks”, and crypto-focused asset management firm Arca are accumulating $GMX:

It went on to say:

On 9 December 2022, BitMEX Co-Founder Arthur Hayes published a blog post in which he called $GMX a “super-powered” asset:

My ideal crypto asset must have beta to Bitcoin, and to a lesser extent, Ether. These are the reserve assets of crypto. If they are rising, my asset should rise by at least the same amount – this is called crypto beta. This asset must produce revenue that I can claim as a token holder. And this yield must be much greater than the 5% I can earn buying six or 12-month treasury bills. I have a few super-powered assets such as GMX and LOOKS in my portfolio.