Artisan – #15 Weekly: Dec 12 – 18

Predictions for crypto 2023, Ethereum’s OFAC-compliant blocks decreasing, 2022 the year on-chain, Current state of DID, SUI Foundation released SUI token allocation, Maple released v2, Lido released VaNOM, Donald Trump’s NFT collection, Hong Kong’s New Bitcoin and Ether Futures ETFs, PayPal working with Metamask, Apple allowing external apps…

🤔 Analysis & Thoughts

Six predictions for the crypto industry in 2023 (read more here)

• Crypto has proven that it can survive unfavorable times. Because of this, the industry will enter 2023 with a level of strength and durability that 2022 has given it.
• The author shows 6 predictions for the crypto industry in 2023: 1) DeFi will continue to grow while CeFi consolidates 2) We will see tremendous zero-knowledge adoption and use cases 3) Institutions will increasingly tokenize financial assets 4) More companies will emerge to leverage blockchain data 5) The developer tooling stack will continue to grow as blockchain engineers increasingly seek easy and efficient ways to deploy Web3 projects 6) NFTs that provide some kind of value to their holder, such as gaming NFTs and identity NFTs, will expand.
• Our job as an industry is to make that technology accessible, reliable, and safe for users worldwide to usher in an era of financial transparency, dependability, and autonomy.

Ethereum’s compliance concerns are greatly exaggerated (read more here)

• Ethereum’s OFAC-compliant blocks have started to decrease after peaking in late November.
• This improvement is thanks to the efforts of Flashbots as well as the community prioritizing neutrality over profits.
• The relay market is still dominated by Flashbots’ MEV boost but is moving in the right direction. The builder market is more distributed
• Ethereum staking returns peaked in November at 11% as the FTX hacker traded with high slippage. Since then, the returns have fallen into a range of 5% to 6%.

Features of a premium execution layer (Read more)

• A premium execution layer is exclusively focused on high-value financial applications; target users: HNWIs, corporations, governments, high-value rollups, etc.
• The key requirement will be secure access to liquidity, so it’s gotta be an Ethereum L2 that has validating bridges with access to $350B worth of assets, plus inheriting full Ethereum security.
• It does not need to be easy to verify as the target user can easily afford to buy a supercomputer and hire someone to maintain it.

Vitalik Buterin: What in the Ethereum application ecosystem excites me (Read more)

• This post covers these specific categories of applications: Money, Defi, the identity ecosystem (ENS, SIWE, PoH, POAPs, SBTs), DAOs and Hybrid applications.
• Decentralized stablecoins are, and probably forever will be, the most important Defi product, but there are a few others that have an important niche.
• “Identity” is a complicated concept that can mean many things. Some examples include:Basic authentication, Attestations, Names and Proof of personhood. The network effects of these different services combine to create an ecosystem that provides some very powerful options for users and applications.

Glassnode: 2022 the year on-chain (Read more)

• For Ethereum, since the Merge, the number of active validators has increased by 13.3%, with over 484k validators now operational. This brings the total ETH staked to 15.618M ETH, which is equivalent to 12.89% of the circulating supply.
• The ETH supply change since the Merge has just turned net deflationary, with the current coin supply now -242 ETH lower than it was on at the Merge.
• After hitting a peak of $160B at the market ATH in Nov 2021, DeFi TVL has dropped by over $120.3B (-75%). This brings DeFi collateral values down to $39.7B, returning to Feb 2021 levels.
• Stablecoins redemptions reflect net capital outflows from the space of between -$4B and $-8B per month. However, it is also notable that this reflects just 8% of the peak stablecoin supply, suggesting that most of this capital still remains.

Bankless: Is web3 bad for the world? (Read more)

• The negative impacts include capital destruction via custodial systems like 3AC/FTX, worthless projects or Ponzi schemes, ransomware & money laundering, etc.
• The positive impacts include transparent ledgers that can help combat money laundering, removal of unnecessary third parties, the potential to reduce financial collapses, Web3 remittances are a game changer, etc.
• Web3 has the incredible potential to regenerate the world if we continue to build upon web3’s positive impact opportunities.

The current state of decentralized identity and reputation (Read more)

• Compared with Web2 digital identities, decentralized identity enables users to own their identity and the identity is portable and interoperable.
• POAP and Galxe are currently the largest on-chain issuers of reputation credentials. Unique wallets that have ever held a POAP have grown from ~600,000 in January to nearly 1 million today and MAUs on Galxe are more than 450,000 on Polygon in September.
• In the future, we need a curation layer that filters, aggregates, and presents credentials in a form that provides rich user information.

ConsenSys zkEVM is a giant leap forward for the Ethereum ecosystem (Read more)

• The developer experience is EXACTLY the same as Ethereum. They took zero shortcuts and designed the system to prove EVM bytecode “as-is”.
• Their novel zkSNARK implementation achieves massive performance with a target to prove 15m units of gas in 1 second, which means real-time proofs.
• 100% of Ethereum test suite tests are passing with ~90% (~16,000) of all possible tests implemented, paving the way to production-readiness for a Type 2 zkEVM.
• ConsenSys zkEVM is a modular rollup which can be chopped and changed to serve any purpose.

🌍 Layer-1 / Layer-2/Infrastructure

SUI Foundation released SUI token allocation, with 20% distributed to early contributors (Read more)

• Sui Foundation announced the initial allocation of its token $SUI. 20% will be distributed to early contributions, 14% to investors, 10% to Mysten Labs Treasury, 50% to the Community Reserve managed by Sui Foundation, and 6% to the Community Access Program and app testers.
• The Community Access Program will let Sui enthusiasts obtain SUI directly without having to participate in the Foundation’s programs.

Fuel to launch a full mainnet implementation for 2023 (Read more)

• The current roadmap for Fuel includes deploying on Ethereum mainnet. The beta-2 testnet has already been launched with a bridge to Ethereum’s Goerli testnet, and a full mainnet implementation is planned for 2023.

Metamask allows RPCs/infura to link all your addresses together (Read more)

• As soon as you unlock the extension, MM sends a server (your RPC) a full list of all addresses inside MM.
• By default the server that this gets sent to is infura, a company owned by the parent company of metamask, and who recently changed their privacy policy to start storing requests and IPs.

First phase of StarkNet’s governance launches (Read more)

• The first vote to approve or reject proposed changes to the StarkNet protocol will take place soon.
• The participants in the votes during the first phase will be: token holders, delegates selected by token holders who prefer to delegate their voting rights, delegates selected by the StarkNet Foundation to exercise some of its voting rights and a professional Builders’ Council, set by the StarkNet Foundation.

A proof-of-stake L1 Namada protocol to launch the first public testnet on the 20th of December 2022 (Read more)

•  The Namada protocol is a proof-of-stake L1 for interchain asset-agnostic privacy. Namada deploys zkps to enable a unified shielded set and shielded transfers for arbitrary assets that are created on Ethereum or fast-finality chains that are IBC-compatible.
• After genesis, anyone can join by operating a full node, a validator, or testing the network’s privacy features as a user.

Microsoft prohibits crypto mining on online services without permission (Read more)

• Microsoft updated its service terms this month to prohibit crypto mining without written approval.
• The update came into effect on Dec. 1 and applies to all users, including Microsoft’s paid customers.

💰 DeFi / CeFi

Maple Finance releases version 2.0 after $36 million default on platform (Read more)

• Maple Finance released version 2.0 a week after a $36 million default on the platform.
• The version update focuses on diversifying borrowers and improving risk management parameters.

Lido released VaNOM – validator and node metrics reports for Lido on Ethereum (Read more)

• The Lido on Ethereum validator and node operator metrics app (‘VaNOM’) allows users to view a variety of metrics related to the protocol’s validator distribution across specific points in time.
• VaNOM provides a more granular method for users to view the infrastructure distribution of Node Operators participating in the protocol, adding transparency and visibility into Lido’s status and health.

Tether vows to remove secured loans amid rush to show solvency (Read more)

• Tether claimed to make sure borrowers offer “extremely liquid” collateral for these loans, but now the operator plans to scrap them altogether.
• Tether intends to reduce secured loans in its reserves to zero in 2023.

The Quicksilver chain will go live on December 16th (Read more)

• Quicksilver is a sovereign Cosmos-SDK zone providing liquid staking for the Interchain, and unburdened by the constraints associated with the existing approaches to Liquid Staking.
• The Quicksilver chain will go live next Friday, December 16th with an expected total of 100 Genesis Validators.

Limit orders on CoW Protocol are officially live (Read more)

• Traders can set and cancel limit orders without paying gas fees, use one wallet balance to place multiple orders, and benefit from protocol-generated surplus above-and-beyond the prices they target.
• CoW Protocol generates surplus by matching CoWs and capturing favorable price movements before orders are settled on-chain. It takes execution fees from this surplus, and gives the rest back to users.

Former FTX CEO Sam Bankman-Fried’s bail application was denied (Read more)

• Former FTX CEO Sam Bankman-Fried’s bail application was denied by a magistrate judge in the Bahamas. Bankman-Fried to be sent to the Bahamas Department of Correction till Feb. 8, judge says.

The Block CEO resigns after failure to disclose loans from Bankman-Fried’s Alameda (Read more)

• The Block Chief Executive Officer Michael McCaffrey resigned after failing to disclose a series of loans from disgraced former FTX head Sam Bankman-Fried’s Alameda Research.
• McCaffrey received three loans in total, the first of which was in the amount of $12 million and was used in 2021 to buy out other investors in the crypto news, data and research provider. A second $15 million loan in January was used to help fund day-to-day operations, while another $16 million earlier this year was used to purchase personal real estate in the Bahamas.

Amber Group acquires Singapore crypto exchange Sparrow (Read more)

• Asian crypto investment firm Amber Group has acquired Singapore crypto exchange Sparrow.
• This comes as the Temasek-backed firm implements significant layoffs and retreats from global hubs to survive the crypto winter.

🖼️ NFT / 🎮 Gaming / 🎭 Metaverse

Former US president Donald Trump unveils NFT trading card collection (Read more)

• Donald Trump, the former president of the United States, announced a new NFT collection on his official Truth Social account.
• The digital trading cards are “only $99!” apiece according to the collection’s website.

Magic Eden bolsters gaming support by adding Polygon NFT minting and trading (Read more)

• Magic Eden, Solana’s biggest NFT platform, has added Polygon NFT minting and trading support.
• The move comes after several changes to bolster the platform’s blockchain gaming functionality.

Magic Eden will reward loyal traders with discounts, free NFTs (Read more)

• The top Solana NFT marketplace is rolling out a rewards program with freebies and perks alongside an upcoming fee model shift.
• The marketplace will introduce a “dynamic maker/taker” platform fee model starting in 2023, with heavy traders receiving larger discounts.

OpenZeppelin releases metaverse security service, signs up The Sandbox as client (Read more)

• OpenZeppelin has announced the launch of a security service for metaverse projects.
• The Sandbox has hired OpenZeppelin for comprehensive security analysis.

ParaSpace to create a governance token in Q2 2023 (Read more)

• After releasing the APE staking function, ParaSpace said that the initial timeline for creating a governance token and DAO was set for Q2 of 2023. However, they are going to be prioritizing this and targeting a Q1 2023 launch of the ParaSpace DAO.

Illuvium releases Overworld as it attempts to bring AAA quality to web3 gaming (Read more)

• Illuvium Labs has released a new private beta. The private beta for “Illuvium: Overworld” is the second game released by Australia-based Illuvium Labs to date.

Pendle provides APE compounder for APE token holders (Read more)

• The original $APE staking doesn’t compound. Users have to painstakingly claim and re-stake your rewards manually. But with APE compounder, users will be able to let $APE do all the work for you.
• The Pendle $APE Compounder is intended to be a free-to-use public good. No fees, no charges, just a tool built for apes.

NFTs could make a lot of sense as affiliate links (Read more)

• Each affiliate link is a unique digital item that generates a stream of (variable) future cash flows.
• Each link could be an NFT, and those NFTs would likely be fractionalized (to increase the number of people that could participate).
• The price of the NFT might reflect predictions about those future cash flows, including if someone thinks a particular creator and/or brand will increase in prominence.
• Allowing the audience to buy a share of ownership might result in low “margins” but much higher volume – in total, making the pie much larger and actually resulting in something more profitable for the creator.

Binance Research: GameFi tokenomics deep dive (Read more) 

• Ownership over your assets, the ability to earn rewards while playing, and decentralized governance power are just a few.
• Web3 games will likely do for blockchain technologies what solitaire did for the computer in the 1990s – drive further adoption and education.
• Fun and entertainment remain key elements to consider – tokenomics should add to this rather than distract from it.
• One of the obvious challenges with creating sustainable web3 games is tokenizing all game assets without sacrificing control of the game’s economy. It is important to keep in mind that just because an in-game asset can be turned into an NFT or fungible token, it doesn’t mean it should be made into one.

🏢 Institutional Adoption / DAO

Hong Kong’s New Bitcoin and Ether Futures ETFs Raise $79 Million in Trading Debut (Read more)

• Asset manager CSOP says its bitcoin and ether ETFs have raised nearly $79 million as they debut today on the Hong Kong stock exchange.
• The fund manager launched new bitcoin and ether futures exchange-traded funds (ETF) that began trading on the Hong Kong Stock Exchange on Dec. 16. They will be the first listed bitcoin and ether futures ETFs available in Asia, according to CSOP.
• The launch is notable since the Chinese government officially banned crypto trading and mining in September 2021, though Hong Kong currently maintains an autonomous financial and legal system. The two new funds will be actively managed to invest in Chicago Mercantile Exchange (CME Group)-listed bitcoin and ether futures to track their respective prices.

PayPal working with Metamask to offer easy way to buy crypto (Read more)

• PayPal will integrate its buy, sell and hold crypto services with MetaMask Wallet as the companies look to broaden users’ options to transfer digital assets from their platforms.
• The partnership is intended to enable users to select their PayPal accounts as a payment option to buy ether (ETH) from within the MetaMask app.

BlockTower Credit and MakerDAO to fund $220 million of Real-World Assets through Centrifuge (Read more)

• Maker will deploy four vaults to fund investments in real-world assets (RWA), originated by BlockTower and issued on-chain through Centrifuge.

🧑🏻‍⚖️ Regulations

Apple plans to allow external iOS Apps in potential boon for Crypto, NFTs (Read more)

• Apple plans to allow the installation of iOS apps from external sources due to impending EU regulations, Bloomberg reports.
• The move could make it easier for developers to build apps around NFTs and broaden the ability to make crypto payments through iPhones and iPads.

FTX founder Sam Bankman-Fried arrested, Bahamas says (Read more)

• The Royal Bahamas Police Force arrested FTX founder Sam Bankman-Fried, a press statement said.
• The arrest came after the U.S. filed criminal charges against Bankman-Fried, the statement said, and the nation expects the U.S. to request The Bahamas extradite Bankman-Fried in short order.
• A tweet from the U.S. Attorney’s Office for the Southern District of New York confirmed that prosecutors in the U.S. indicted Bankman-Fried, though the indictment remains under seal.

U.S. Justice Department weighs charging Binance and its executives (Read more)

• U.S. prosecutors looking into crypto exchange Binance are split on how to move forward with the case, according to a Reuters report.
• Binance and some of its executives are under scrutiny for possible money laundering and criminal sanctions violations.

Coinbase released its 2022 transparency report (Read more)

• The goal of the report is to provide customers with data about requests for their information that we receive from government agencies and law enforcement.
• There were a total of 12,320 law enforcement requests during the reporting period, a ~66% increase over last year’s report.
• ~80% of law enforcement requests were from the U.S., U.K., Germany, and Spain.

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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.