Welcome to this 11th issue of the Chain Reaction newsletter for the week commencing 31st January 2022.
In the news last week we saw the FOMC announcement keeping interest rates at bay but fighting words for chairman Powell against inflation which had bitcoin investors spooked. We also saw more in regulation with a Russian backflip after President Putin stepped in to throw support to bitcoin mining at least. There was DeFi drama too with Wonderland founder Daniele and community ousting their doxxed CFO 0xSifu after he turned out to be a former crypto crook.
In better news, we saw NFTs for cultural heritage make their mark and crypto prices across the board didn’t go further negative over the last 7 days (at least for now).
If you like what you see and you're interested in continuing these awesome DeFi conversations, join us on our Discord: https://discord.com/invite/ZRCTDdsVEF
What you can expect in this newsletter
In the News
Videos of the week
Charts and Data
Around the world of social media
Education
In the news
Eth2 is no more after Ethereum Foundation ditches name in rebrand - In anticipation of the Ethereum network upgrade, moving from a proof-of-work to proof-of-stake model and providing more security and scalability solutions, things take a turn again as the Ethereum Foundation seeks to remove all references to “Eth1” and “Eth2” in favour of clarity with the names “execution layer” and “consensus layer” respectively.
AMBCrypto - Olympus DAO’s OHM down 97.97% from ATH; Can project’s 12-month action plan help? - Being accused of a ponzi isn’t fun especially when you’re considered one of the wunderkinds of the DeFi movement but that’s exactly what’s happened with Olympus DAO. To counter this, the team has published a 12-month action plan including more eco-friendliness, better dashboards and more. Time will tell if this actually works.
Sydney Morning Herald - Opinion - I created the Aboriginal flag as a symbol of unity and pride - In a major piece of news for fans of cultural heritage everywhere, the copyright holder for the Australian Aboriginal flag (Harold Thomas) struck a deal with the Australian government to ensure it can be used by all Australians. However, prior to doing this, Harold also created an NFT version stating the following:
Before assigning copyright, I created the authentic digital representation of the flag, which I have minted as a non-fungible token (NFT) on December 21, 2021, to commemorate the 50th year of the flag, acknowledging the potential of NFTs in the digital art world. I will hold the NFT on an ongoing basis, on behalf of Indigenous communities.
This NFT could provide amazing value for the indigenous community in Australia and signals the potential for other assets to follow suit.
TechCrunch - BreederDAO just raised funding from a16z and others to generate NFTs at scale - BreederDAO, from the Philippines, just closed a $10m Series A from a16z and Delphi Digital as demand for digital assets is starting to outstrip supply. They make NFTs for well-known blockchain games like Axie Infinity, Crabada and Pegaxy.
CoinDesk - BSN Introduces NFT Infrastructure Platform in China - The Blockchain-Based Service Network (BSN), China’s state-sanctioned blockchain infrastructure project, said it is releasing its platform for non-fungible tokens (NFT) in the country today.
CoinTelegraph - There’s a browser plugin that autoblocks Twitter NFT profile pictures - On the back of Twitter creating a way for users to show their NFTs as their profile photos, there has been the development of NFTBlocker. This is a browser plugin that stops others users from being able to see those with NFT profiles and is similar to the development of a plugin to add back the dislike button after YouTube took that away for users as part of an experiment.
Aus DeFi Association - NFTs Unabridged - One of our own contributors (Guru Sundaram) put this piece together on NFTs going through the different types available, the risks and why you should care. It's a great summary for anyone looking into this space.
New Money Review - Robinhood’s crypto party ends - trading revenue off crypto fell by 80% for Robinhood during Q3 going from $233 million to $51 million resulting in a price drop of 10% for the stock. Only 1 client paid for order information in Q2 and there’s an increase in negative sentiment form Wall St analysts on Robinhood shares. Headwinds indeed.
Crypto VC Firm Dragonfly Raising $500M for New Fund, Documents Show - Crypto Venture Capital Firm Dragonfly is looking to raise $500M for a new fund. The Dragonfly portfolio includes the Avalanche blockchain, Bybit and Cosmos, and the firm recently also joined the $150M funding round for the Near Blockchain.
CryptoNews - Meta’s AI Supercomputer to 'Pave the Way' Towards Building the Metaverse - Meta (the artists formerly known as Facebook) is building a supercomputer called the AI Research SuperCluster (RSC). They reckon it will be the fastest once completed in the middle of this year. They released an update on this in a post you can read more about here.
IMF urges El Salvador to drop Bitcoin as legal tender - Concerns still persist regarding the adoption of cryptocurrencies as IMF shows concerns and urges El Salvador to terminate the country’s status as a legal tender of Bitcoin, after Bitcoin’s price dropped down to half its value from a record high in November. Despite this, the idea of having an e-wallet to reduce costs of home remittances and improving financial inclusion has been backed.
Bloomberg - Putin Backs Crypto Mining Despite Bank of Russia’s Hard Line - Whilst Russia sent crypto markets shivering with their Central Bank talking about banning mining in this space, President Vladimir Putin seems to disagree. In 2021, Russia was the 3rd biggest crypto miner so let’s see if that continues.
Beincrypto - Gibraltar Could Set Up Hybrid Stock Exchange to Accept Crypto - Gibraltar-based Valereum announced plant to set up a hybrid cryptocurrency exchange given the territories first mover policy when it comes to crypto and the founders close ties to the area.
CryptoPotato - Bitcoin’s Drop Below $33K, FOMC Meeting and Russia’s Crypto Ban Debacle: This Week’s Recap - Amongst the main news in this update is Chairman Powell (of the US Federal Reserve) announcing at the FOMC the need to move away from being accommodtive to being not so accommodative with policy (e.g. interest rates go up). Other news highlights in this article too.
Videos of the week
The Defiant - Head to Head with Andre Cronje || a Defiant SPECIAL - Detailed discussion with Andre Cronje starting with his history of reviewing protocols to building in DeFi. A poignant timing with this video because not long before it came out with this Not so smart contracts piece on his Medium blog discussing the issues in DeFi (e.g. Wonderland). 1hr8mins
Folding Ideas - The Problem With NFTs - In this well received video by Dan Olson, he flags a good number of issues he sees not just with NFTs, but also GameFi, DAOs and other areas of DeFi. It is, for some, a 2 hour masterpiece and has certainly gained a lot of attention. Just like the critiques from other well known commentators (e.g. Jack Dorsey, Moxie Marlinspike and Professor Scott Galloway), this adds to the conversation of what needs to be improved. 2hrs18mins
For some further thoughts on this also check out this Twitter response from one of our own members https://twitter.com/CaptDeFi/status/1485111009899868167
Robert Breedlove - Bitcoin, Truth, and Power with Erik Cason (WiM122) - Another great video from this podcast which goes through some amazing philosophical discussions such as Satoshi Nakamoto as Homo Sacer, self ownership, nation states, and interestingly, the irony of bitcoin as being akin to truth wrapped in scammers clothing (given how easy it is for people to dismiss it yet peeling back the layers it showcases better financial opportunity than existing systems). 2hrs36mins
ausbiz - Crypto's reaction to the Fed | Talal Tabbaa of CoinMENA - In this first episode of their new crypto series (Cracking Crypto), the ausbiz team chat with Talal Tabbaa, CEO of CoinMENA. They chat about Bitcoin and Ethereum the gaps in the MENA (Middle-East, North Africa) market. 16mins
ausbiz - Bored Apes | nouns and the Australian Open - the world of NFTs - In this 2nd episode it’s all about breaking down the world of NFTs with Ian Love from Blockchain Assets, a crypto-investment firm. 17mins
The Compound - It’s Crypto Winter Again | The Compound and Friends #31 - In this episode Josh and Mike chat with Packy McCormick founder of the Not Boring substack newsletter which recently notched up 100k subscribers. They talk about the price crash in crypto, NFTs, early stage investing and more. 59mins
Charts and Data
CoinGecko
Top 10 cryptocurrencies by market cap as at the 30th Januuary 2021 1:59pm AEST on CoinGecko. Most coins are back in the green after the recent market drop but some (Cardano, Solana, Terra) are still down over the last 7 days. Check out the glassnode video below for some underlying reasons why.
Glassnode - The Week On-chain: Sizing Up a Bitcoin Bear - Week 4, 2022 - In this week’s review we see some interesting stats around NUPL (net unrealised profit and loss) which shows that overall, less than 50% of investors in the market are unprofitable. Additionally, with their metrics they can tell that whilst prices were climbing in late 2021, the NUPL measure was declining, meaning that those who owned coins, did so at a higher cost basis and were likely to be far more sensitive to price movements. This and other analysis in the video. 26mins
Social post of the week
In this week’s Tweet we look at Daniele, founder of Wonderland and the issues that have come about due to their polarising decision to business partner @OxSifu after allegations of fraud came out. The thread is here https://twitter.com/danielesesta/status/1486591436233404421
A double special as there’s this great thread from Thomson Reuters on Twitter looking at reasons why countries are looking to crack down on crypto. Follow along here https://twitter.com/i/events/1486710156587315203
Education
Rabbithole - It's not just play-to-earn out there but we also have learn-to-earn in this space and an education would be remiss if we did not mention it. The team at Rabbithole are doing exactly that teaches you how to build NFTs or become a treausry manager and more.
Thanks again to our various newsletter contributors
If you're interested in contributing to these newsletters in future - please join us on Discord or reach out to us on info@defi.org.au
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