Artisan – #7 Weekly: Oct 17 – 23

Crypto emotions shifting from fear to apathy, Venture capital investment trends in Q3, Aptos vs Sui, Avalanche Subnets vs Cosmos 2.0, Crypto adoption in Southeast Asia, Web3 growth tools, $frxETH Available to Mint on Frax, PancakeSwap expanding to Aptos, Tether reduces the amount of commercial paper, Reddit launched NFTs, OpenSea launched a new analytics function…

✍🏻 Editor: Ezreal Kung

🤔 Analysis & Thoughts

Emotion of the crypto market has shifted from fear to apathy (Read more)

• For early stage startups, 5%-7% growth week over week is a north star in a healthy market. However in the depths of a bear market, goal posts recede for traditional tech companies but go entirely out the window for most crypto companies.
• Winners of this past cycle often captured significant market share because they stayed around long enough for headwinds to change – not due to superior execution, though that sometimes played a part.
• When we look to emerging theses in crypto today, they include appchains, gaming, companies at the the intersection of NFTs x DeFi, and zkEVMs.

Aptos vs Sui (Read more)

• Sui’s iteration of Move and Aptos/Vanilla Move is Sui’s use of an object-centric model, as opposed to an address-centric model
• Almost all on-chain activity on Sui is done by modifying the data associated with each object, meaning that most transfers only require one update to the ledger
• Mira Finance, who have experience building on both blockchains, suggests that the developer experience on Sui is slightly more optimized due to the implementation of Sui’s SDK

Investment trends among venture capital firms in Q3 (Read more)

• Most active investors have collectively scaled down investment (-29% since Q2; -45% since Q1).
• NFTs/Gaming and DeFi categories are still the most dominant, but in Q3 the most active investors deployed more into Web3 and Infrastructure projects when compared to Q2 data.

Creating the App-Chain Internet: Avalanche Subnets vs. Cosmos 2.0 (Read more)

• Cosmos 2.0 introduces a vision for an interconnected, financially-aligned network with built-in economic drivers
• Cosmos’s software development kit, or SDK, reduces the time required to launch a new project making Cosmos an attractive ecosystem for developers
• Avalanche provides a faster time-to-finality, more decentralized smart contract platform that avoids risks associated with DAO governance and liquidity centralization. 

Crypto adoption in Southeast Asia in 2022 (Read more)

• A 5-step path to crypto that’s inspired by the AARRR funnel in web2: 1) Awareness – heard of crypto, but has not taken any action. The no-coiner. 2) Acquisition – heard of crypto enough to start a crypto wallet, but has not bought any crypto yet. The curious George. 3) Activation – purchased some crypto, but not an active trader. The HODLer. 4) Ambition – bought AND sold crypto in search for a profit (trading). The Flipper. 5) Advocacy – has traded crypto and is an active advocate of crypto to family, friends, and the Degen.
• Southeast Asia is right at the cusp of crossing the chasm, with 12% of the surveyed population having bought crypto. Singapore leads the charge at 18%, with the others not too far behind.

Monolithic v.s. Modular Blockchain (Read more)

• As more and more dApps switch to app-specific blockchains, monolithic blockchains could become the “Yahoo” of blockchains.
• Benefits of app-chains: sovereignty, performance, customizability.
• Drawbacks of app-chains: Fragmented Liquidity, Composability is limited, Unsecure bridging mechanisms, Weak security model (isolated security), Much harder to deploy than a smart contract and Independent developer ecosystem.

Alchemy: Web3 development (Read more)

• Smart contracts: From the gold rush to the smart contract rush, Web3 companies and protocols have never been so active. In 2022, developers deployed 117,922 verified smart contracts on Ethereum. That’s more than 1/3 of all the smart contracts ever deployed and verified.
• Chains: Blockchains are some of the fastest-growing platforms ever. Active developer teams grew >500% year over year on: Polygon, Optimism, Arbitrum and Solana.
• Libraries: Web3 libraries are overtaking traditional packages. Developers installed libraries like Ethers.js and Web3.js 1.5M+ times every week. That’s 3x more than 2021 – indicating a large and growing interest in building EVM-compatible applications.
• Dapps: Dapps are definitely going mainstream. ~50+ decentralized applications are deployed every month. In September this year, Dapp Radar estimated 12,495 active applications across multiple chains. That’s 12x since 2018 and ~3x more compared to Q4 2021.

The market for Web3 growth tools is heating up (Read more)

• Web2 Marketing Tech took off like wildfire. There were 150 companies in 2011 and there are 10K+ today. Web3 Growth Tech is growing even faster. It’s a HUGE opportunity for investors & builders.
• Communities come before markets in web3. Industry communities created the underlying structure for professionals to define their needs and form a market. More communities will be needed to support a growing industry.
• The rise of community-led growth (CLG) has drawn both web2 & web3 builders. CLG is powerful, yet community leaders spend 50%+ of their time on repetitive tasks that could be solved with automation.

Design deficit: Ribbon Finance (Read more)

• Firstly, Ribbon has a problem with capital inefficiency. One big question was why lenders to Wintermute’s LP only receive 6.4% APR on Ribbon Lend (before $RBN emissions) when they were paying out 11.5% APR on a 90 days loan at other platforms.
• If Wintermute faces a credit crunch, they will have a high incentive to simply borrow the entire liquidity from the LP. Lenders are essentially rugged since they can’t withdraw when the pool liquidity gets emptied.
• There is no predefined loan tenure as as long as Wintermute pays back min interest, they have technically not defaulted. This can go on for years, whereby lenders are unable to withdraw their capital without Wintermute being in default.
• In short, if you are lending on Ribbon Lend, you are getting paid a lower interest rate, while taking higher risks due to product design. While your liquidity is not locked normally, do not expect to be able to withdraw for a long time when the market gets nervous.

🌍 Layer-1 / Layer-2

Polkadot Co-Founder Gavin Wood Steps Down From CEO Role at Blockchain’s Builder (Read more)

• Gavin Wood is shaking off his CEO title at Parity Technologies, the key backer supporting the Polkadot ecosystem.
• Wood, a longtime crypto developer who co-founded Polkadot after exiting the Ethereum Foundation in 2015, will remain a majority shareholder in Parity Technologies. His co-founder, Björn Wagner, will become the new CEO.
• The Polkadot ecosystem is a network of blockchains running in parallel – known as ‘parachains’ – with a central relay chain which handles the governance of the system of blockchains.

Aptos mainnet is live (Read more)

• Aptos: We welcome everyone to participate in this movement aimed to bring the masses to web3. After more than four years of hard work, hundreds of contributions from builders, and hundreds of diverse community projects across the globe, we have arrived at Aptos Mainnet. We are proud to arrive here together, for the people.

The public chain, Sui, is rebranding itself as “Suinami” (Read more)

• Public Chain Sui declared on October 19 that it would be upgrading to Suinami; the term “Ready for Suinami” has been added to its media profile.

Mystem Labs introduced MIST, the smallest unit of a SUI Coin (Read more)

• This new SUI division allows greater flexibility for SUI transactions. This introduction means that a Coin<SUI> with value of 1 equals 1 MIST, and 1 MIST equals 10-9 of a SUI. In other words, 1 SUI equals 1 billion MIST.
• The introduction of MIST will offer better support for micropayments, including very low gas fees.

Nischal Shetty’s Blockchain Startup Shardeum Raises $18M in Seed Funding (Read more)

• Shardeum, a layer 1 blockchain co-founded by Nischal Shetty, a co-founder of WazirX, India’s largest crypto exchange by trading volume, has raised $18.2 million in a seed funding round from more than 50 investors, including Jane Street, Struck Crypto and the Spartan Group.

💰 DeFi / CeFi

$frxETH Available to Mint on Frax Finance (Read more)

• ETH in the Frax ecosystem comes in two forms, frxETH (Frax Ether), and sfrxETH (Staked Frax Ether). sfrxETH is a ERC-4626 vault designed to accrue the staking yield of the Frax ETH validators.
• Frax Finance page shows that $frxETH, Frax’s liquid $ETH staking derivative, has been available to mint. Users can deposit $ETH to mint $frxETH, and then stake $frxETH on Frax for $sfrxETH to earn yields.

Proposal for PancakeSwap’s deployment to Aptos (Read more)

• PancakeSwap just introduced their first native multichain proposal, where CAKE will be deployed on another chain – to deploy PancakeSwap natively to Aptos.
• PancakeSwap proposes to deploy 4 of its main features (Swap, Farm, Pools and IFO) on Aptos quickly to establish PancakeSwap as the leading DEX on Aptos, and to ensure that Chefs can bring PancakeSwap’s best features to the Aptos ecosystem.

Maker has proposed to transfer $1.1 billion in USDCs to Coinbase Custody (Read more)

• Stablecoin DAI issuer, MakerDAO, is voting on a new proposal “Maker Improvement Proposal 81” which proposes moving approximately $1.1 billion of USDCs into Coinbase Custody in order to generate revenue.
• Coinbase will calculate monthly earnings based on a weighted average of assets on the platform, which is estimated to generate ~$15 million in annual revenue. Maker will not pay any hosting costs to Coinbase.
• As of time of writing, 85.77% of voters are in favour of this proposal.

Tether eliminates commercial paper from reserves (Read more)

• Tether has eliminated $30 billion of commercial paper from its reserves, the stablecoin issuer said on Thursday.
• For months, Tether has said it would improve the quality of its reserves by reducing the amount of commercial paper it holds.

The DeSo blockchain announced the launch of the new gasless, 1:1 fiat-backed stablecoin DesoDollar (read more)

• The DeSo blockchain is pleased to announce the launch of their new gasless, 1:1 fiat-backed stablecoin DesoDollar.
• This breakthrough coin allows millions of Ethereum MetaMask users to enter the DeSo ecosystem with USDC. DAODAO is the first app in the DeSo ecosystem to leverage the DesoDollar by allowing founders to raise capital for their startup with USDC.  

🖼️ NFT / 🎮 Gaming / 🎭 Metaverse

Reddit has launched NFTs for its users (Read more)

• Reddit has launched NFTs for its users and it has onboarded ~3m users (vs OpenSea 1.5m MAUs – not apples to apples but staggering proxy).
• NFT = Collectible Avatar; Crypto Wallet = Reddit Vault, All the blockchain technology, none of the nomenclature. Pretty obvious where we’re headed, abstracting the crypto layer is key to on-boarding mainstream users.
• Building communities around NFT projects are entirely possible, but have to know odds are stacked against you. Reddit is building an NFT project around its community – it’s the other way round. Approach matters.

NFT Royalties Top $1.8 Billion: Galaxy Digital (Read more)

• Royalties are not currently programmed into smart contracts, putting the responsibility on marketplaces to collect the fees for artists.
• To date, Ethereum-based NFT creators have raked in more than $1.8 billion in royalties, according to data compiled by Galaxy Digital.  
• Royalty payments, the percentage that creators collect on secondary sales, are mostly concentrated to a select number of NFT projects, with 428 collections accounting for 80% of the royalties earned. 

OpenSea launched a new analytics function (Read more)

• Most collections now include an analytics tab where you can browse trends, metrics, and collection activity. OpenSea shows three core metrics (volume, sales and floor price) across time windows and different views.

Playing Card Maker Bicycle to Feature Bored Ape #1,227 in Upcoming Collectible Deck (Read more)

• Bicycle and parent company Cartamundi Group announced on Tuesday that the playing card firm plans to launch a classic Bicycle card deck featuring the company’s Bored Ape.
• Last year, when the non-fungible token (NFT) industry was frothing over, the 137-year-old playing card manufacturer Bicycle issued NFTs called the Genesis Collection and in June, Bicycle purchased Bored Ape Yacht Club #1,227.

Horizen Labs provides staking details for ApeCoin (Read more)

• Horizen Labs, which is responsible for developing the ApeCoin DAO stake system, issued the staking technical documentation on October 19.
• The ApeCoin stake contract has been implemented on both the Goerli test network and the Ethereum main network. There will be four pools: the ApeCoin pool, the BAYC pool, the MAYC pool, and the BAKC pool.
• ApeCoin Holders can stake their ApeCoin in various pools to gain rewards. Anyone holding ApeCoin can participate, however additional pools are available to holders who own NFTs within the Bored Apes ecosystem.

Warner Bros Releases Ethereum-Compatible ‘Lord of the Rings’ NFTs (Read more)

• Warner Bros. is releasing NFTs for its iconic 2001 film “Lord of the Rings: Fellowship of the Ring,” at web3.wb.com, the studio announced Thursday.
• The NFTs effectively function as an all-in-one digital experience and each include a 4K copy of the film, hours of bonus behind the scenes footage, lots of behind the scenes stills, and exclusive AR collectible assets inspired by the film. 

🏢 Institutional Adoption / DAO

Fidelity Digital Assets will begin offering ETH to institutions later this month (Read more)

• Fidelity Digital Assets will start offering institutional customers the ability to buy, sell and transfer ether starting Oct. 28.
• Fidelity companies have also posted several roles for crypto jobs in recent months, with open positions including a crypto wallet product owner at Fidelity Digital Assets.

Tether USD₮ Available in Over 24,000 ATMs Across Brazil on 3 November (Read more)

• Tether Operations Limited (“Tether”), the company operating the blockchain-enabled platform tether.to that powers the largest stablecoin by market capitalization of over US$68 billion, is pleased to announce that SmartPay plans to launch tether tokens (“USD₮”) in over 24,000 ATMs across Brazil. 

Solana’s web3 phone is an opportunity against Google and Apple (Read more)

• It’s been almost four months since the layer-1 blockchain Solana announced its web3-focused smartphone Saga and as the phone is approaching its official release date, the plan has shifted.
• “Our goal isn’t to sell 10 million units,” Anatoly Yakovenko, co-founder of Solana, said onstage at Disrupt 2022. “We would be very happy with 25,000 to 50,000 units sold in the next year, that would be awesome.”

a16z launched a new accelerator, Crypto Startup School (Read more)

• The program will include: Investment from @a16zcrypto($500k), Mentorship from leading founders, Advice from domain experts, and Network of fellow builders.

👫 SocialFi

Jack Dorsey-Backed Decentralized Social Network Bluesky Gets 30,000 Signups in 48 Hours (Read more)

• Bluesky, the decentralized social network initiative backed by Twitter founder Jack Dorsey, has already received 30,000 signups over the past 48 hours – and that’s just for its waitlist.

🧑🏻‍⚖️ Regulations

CFTC Racked Up Crypto Enforcement Record in Past Year (Read more)

• The CFTC said Thursday that 20% of its 82 enforcement actions for the 2022 fiscal year dealt with crypto industry.
• Around 18 digital-asset-related actions have been undertaken from June 2021 to June 2022, the regulator said.
• The CFTC’s posturing highlights an ongoing power struggle between itself and the SEC over how crypto should be regulated.

UK Proposes Bringing Crypto Under Regulatory Eye (Read more)

• The proposed amendments come after the UK sought to regulate stablecoins as a form of payment in July.

SEC Hands Over Key Documents in Case Against Ripple (Read more)

• In a small victory for Ripple Labs, the SEC has complied with an order to hand over internal emails.
• The documents — internal SEC drafts and emails — relate to a speech given by a former agency director in 2018.
• The SEC fought hard to resist turning over the files, though their contents remain under wraps for now.

South Africa: crypto assets are now classified as financial products (Read more)

• South Africa’s Financial Sector Conduct Authority released a notice to declare crypto assets as financial products with immediate effect. Unathi Kamlana, the commissioner of the FSCA, signed the declaration.

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The Artisan Narrative is an educational resource intended for informational purposes only. It covers all things Web3 and may discuss assets that the Artisan Collective, ArtisanDAO or writers have financial exposure to. Views are on ours own. None of Artisan Collective, ArtisanDAO, its registered entity or any of its affiliated personnel are licensed to provide any type of financial advice, and nothing on newsletter, website and social media should be construed as financial advice. Artisan Collective, ArtisanDAO, writers might also receives compensation from its sponsor; sponsorship messages do not constitute financial advice or endorsement.