On today's episode of Unchained, In his first-ever podcast interview, Punk6529 expounded on the historic Yuga Labs acquisition of CryptoPunks and Meebits, giving the full cultural context of both collections and why the deal was so significant. He also talked about why he wasn't so bullish on metaverse real estate in general and what he thought was interesting about $APECOIN (hint: it's not the new DAO that will be launched along with it), and why Punks owners were not fully happy with the acquisition news.
It's an interview well worth a listen! And now onto the rest of the news this week.
Alex Bornyakov, the deputy minister of digital transformation of Ukraine, reported last Friday that the country has begun to utilize the funds donated to Ukraine via crypto. According to Bornyakov, Ukraine has purchased, among other things, 5,500 bulletproof vests, 500 helmets, and 410,000 packed lunches for its army. Tweeted Bornyakov, “Crypto-assets proved extremely helpful in facilitation of funding flows to the Armed Forces of Ukraine.”
Source: @abornyakov
This week President Volodymyr Zelenskyy legalized crypto within Ukraine’s borders by signing the Law of Ukraine “On Virtual Assets.” By signing the bill, virtual assets officially come under the jurisdiction of Ukraine’s Securities and Stock Market Commission. According to Ukraine’s Ministry of Finance, the bill will also allow foreign and Ukrainian crypto exchanges to operate legally within the country – with support from Ukrainian banks.
Ukraine is also planning on launching a set of NFTs, reports The Guardian. Deputy minister Bornyakov told The Guardian that Ukraine’s NFT collection would be “like a museum of the Russian-Ukrainian war. We want to tell the world in NFT format.” Bornyakov added that each NFT would include a piece of art memorializing a news story. “We want it to be cool, good-looking, and it takes time,” he told The Guardian.
A week ago, Elliptic estimated that Ukraine has received over $63 million in crypto donations on-chain, while CoinDesk reported the number to be closer to $100 million.
The Ethereum merge occurred on the Kiln testnet this week, taking the smart contract network one step closer to its transition from a proof-of-work consensus mechanism to proof-of-stake -– a moment in time called “The Merge” by Ethereans. According to a blog post by Ethereum Foundation developers, Kiln is expected to be the last merge testnet created before existing public testnets are upgraded. From there, The Merge will go to mainnet, and Ethereum will be fully secured proof-of-stake.
That being said, a date for the merge on mainnet has yet to be set. Only once The Merge successfully occurs on the public testnets will an exact date be known.
Ethereum’s approach to The Merge comes as data from Etherscan shows that over 10 million ether have been staked to the official Eth2 Deposit address. This surmises a ~$29 billion bet by ETH stakers that Ethereum will successfully merge at current prices. With Ethereum’s market cap sitting around $337 billion, roughly 8% of all ETH is locked into the network’s “consensus layer” (formerly known as Eth2).
Source: Ethereum Foundation
With The Merge, analysts are expecting a drastic decrease in ETH issuance. For example, Hop Protocol’s Litocoen calculated that daily ETH emissions will drop 90% after The Merge – or the equivalent of three Bitcoin halvings in one.
Ethereum application and infrastructure builder ConsenSys announced a $450 million Series D funding round valuing the firm at $7 billion, more than doubling its November valuation. ParaFi Capital led the round, with TradFi behemoths like Softbank and Microsoft also participating. ConsenSys plans to add 300 employees with the funds.
The ConsenSys raise coincided with the Ethereum-focused company reporting that MetaMask had reached 30 million monthly active users (they did not define what a MAU is). The digital wallet, according to a Decrypt interview with ConsensSys founder Joe Lubin, will soon begin pursuing progressive decentralization.” Lubin revealed that a MetaMask-related DAO is in the works and confirmed that MetaMask intends to launch a token.
The raise comes at a contentious time, as 35 former ConsenSys AG shareholders recently initiated an audit regarding “serious irregularities” in a deal that saw MetaMask and Infura transferred from one ConsenSys entity to another at a low valuation. The shareholders claim this deal “was to the detriment of the minority shareholders of CAG and to the benefit of Lubin personally.” ConsenSys AG has since disputed these claims.
Meta CEO Mark Zuckerberg confirmed that Instagram will be supporting NFTs “in the near term” in a panel at South by Southwest, according to Engadget Senior Editor Karissa Bell. The Financial Times reported Meta’s intent to bring NFTs to both Instagram and Facebook in January. (Disclosure: I write a Meta Bulletin newsletter.)
Meta CEO Mark Zuckerberg speaking at SXSW (Credit: Samantha Burkardt / Contributor)
Instagram adding support would be a massive milestone for crypto, with CNBC reporting in December 2021 that the app engages 2 billion monthly active users.
On Wednesday, SEC Chair Gary Gensler received a strongly worded letter from eight members of the Congressional Blockchain Caucus. The letter claims that the Securities and Exchange Commission’s recent investigations into crypto firms are “inconsistent” with standard procedure and might be “at odds” with the Paperwork Reduction Act. The representatives asked Chair Gensler to answer thirteen questions pertaining to the burden of voluntary document requests on crypto companies, including how many voluntary document requests the SEC has sent to crypto entities and the associated compliance costs.
Representative Tom Emmer spearheaded the letter and did not hold back from directly addressing Gensler’s actions on Twitter. “My office has received numerous tips from crypto and blockchain firms that SEC Chair @GaryGensler’s information reporting ‘requests’ to the crypto community are overburdensome, don’t feel particularly… voluntary… and are stifling innovation,” he wrote. “Crypto startups must not be weighed down by extra-jurisdictional and burdensome reporting requirements. We will ensure our regulators do not kill American innovation and opportunities.”
In related news, on Thursday, Senator Elizabeth Warren introduced a bill during a hearing on digital assets and Russian crypto use that would grant Treasury the right to bar crypto service providers from doing business with any crypto address associated with Russia. As has been the trend with US legislation, the definition for a “digital asset transaction facilitator” is rather vague and will most likely spark protest from lobbying institutions like the Blockchain Association and Coin Center.
Source: @NeerajKA
The meme goes that the bear market is a time to build. And, this week, a slew of DeFi protocols proved the meme to be true.
SushiSwap launched phase one of its product Trident, a framework for deploying automated market makers, on Polygon. According to a press release, AMMs will build on top of and “synergize” with Trident without hard-coding a certain way to swap assets. SushiSwap was able to ship Trident despite a substantial leadership void in the wake of former CTO Joseph Delong’s departure.
Aave V3 is here. With the release of new code, the lending protocol is going cross-chain on Polygon, Fantom, Avalanche, Arbitrum, Optimism, and Harmony. In addition, V3 will offer L2-specific designs, gas optimization (to the tune of a 20-25% reduction), and new ways to borrow.
THORChain released a synthetic asset product this week. With THORChain Synths, users can mint over 20 different synthetic assets, including BTC and ETH, on the network without having to bridge, wrap, or atomically swap tokens. The RUNE price and TVL in THORChain have exploded in the wake of Synths going live.
Meme courtesy of @cmsholdings
This week, three friends led by Andrew Badr, found the private keys to a $25,000 NFT, in an impressive bit of sleuthing.
The story, as summarized by Badr on Twitter, began during the Grails drop last month, where 20 artworks by 20 anonymous artists were released – with the artist’s names being revealed post-mint.
As it turns out, Grail 11 was a piece designed by Larva Labs, the team behind Meebits, CryptoPunks, and AutoGlyphs. Interestingly, on the edges of the work were “two shapes: regular and upside-down Ls” that struck Badr as being “more than ornamental” – which led him to write a script that turned the assorted Ls into a message: “SECRET IS IN THE PIG NUMBERS, LL [as in Larva Labs].”
From there, Badr had to deduce what the “pig” was, leading him on a nine-day scavenger hunt with a couple of friends until he realized that the message was likely referencing Pig Meebit NFTs wearing jerseys. After that deduction, Badr was able to take the 64 Meebits with jerseys, concatenate a hex string out of the 46 jersey numbers, and, voila, he was able to claim the private key to an account with .025 ETH and a pig Meebit.
Source: @andrewbadr
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Cover photo credit: Petro Pokydko / 500px (and inspired by Vitalik Buterin)
