The Web3 Rewind

A handful of the most interesting and current stories in the blockchain/web3 world not published on DeCential this past week in case you missed them

Hello and welcome back to the Web3 Rewind! Per usual with the industry, lots has happened this past week so without further adieu, let’s dive into this week’s news.

The Latest

Funding, funding and more funding. Though total numbers for the third quarter of 2022 have yet to materialize, according to Benzinga (with numbers pulled from Crunchbase, Dove Metrics, Pitchbook and The Block Research) venture specific funding slowed in the second quarter of 2022 to $9.77 billion, down from an all time high of $12.47 billion in the first quarter. Despite the decrease it’s important to note that the total amount of funds is more than 45 percent greater than the total amount funded in the second quarter of 2022.

With so many large raises it is important to identify some of the main submarkets that are receiving so much of the funding. According to Messari’s H1 2022 Crypto Fundraising Report, the largest amount of fundraising seems to be focused around Centralized Finance at around $10.2 billion, with Infrastructure at $9.7 billion, web3 & NFTs at $8.6 billion and DeFi at $1.8 billion. This trend is interesting as it presents a potentially conflicting narrative for the overall landscape as other reporting indicates that while centralized platforms are losing in popularity amongst some industry participants, they continue to attract large amounts of funding. This perhaps suggests that those funding the centralized platforms better understand centralized systems, as they more closely resemble elements of the traditional finance system.

Lastly, it is important to notice that Infrastructure and web3 & NFTs have received the largest amount of funding for H1 2022. This points to two areas that will dictate much of the attention in the space moving forward. While web3 & NFTs are undoubtedly bound to have success, especially as adoption grows across various gaming and social platforms, it is reassuring to see that Infrastructure is not falling by the wayside. Those who back infrastructure are looking forward to a more seamless and robust space.

The takeaway: it’s an exciting time with strong signals for growth and opportunity, even amidst a pending economic downturn. —Parker Dresdow, DeCential Media

Decentralize this! dept.

To ‘know’ or not to ‘know’? That is the question that’s frequently bounced around the proverbial water cooler: is know-your-customer (KYC) the way to go for exchanges? While regulators and various authorities claim that KYC rules ought to be a necessary facet of crypto exchanges, centralized exchanges (CEXs) have been the primary adopters. It’s important to acknowledge that daily users are moving away from platforms and exchanges that support KYC and are seeking new decentralized exchanges (DEXs) as their platform of choice, according to Citigroup.

This is not to say that the average Joe is looking to hide their identity in order to facilitate illicit activity, but rather that they value their privacy. In addition to this privacy comes the ability to independently custody one's assets without surrendering the freedom to an exchange. This attitude shows that many crypto-native users still care about the foundational principles of decentralization and are committed to them. Moreover, they do not want to adapt to the CEXs that in many ways simply mirror the older legacy financial systems.

What appears true in this case is that only time (and regulatory forces) will tell as to whether or not DEXs will continue to hold the heart of crypto users.—PD

Quick Bits

US senator bill seeks to cushion crypto exchanges from SEC enforcement actions

• With “clarity” being much desired amongst all participants in the crypto industry, Senator Bill Hagerty’s Digital Trading Clarity Act of 2022, has now been introduced. In addition to better defining what cryptos are and what sort of liabilities exchanges that trade them carry.

• This bill is important as its ethos is aimed at clearly defining regulations and giving key industry players the much-needed guidance to help make their platforms more accessible. In turn, this type of clarity will help the US to grow and maintain its role as the spearhead of development in space.

Web3 banking platform Juno raises $18 million, launches tokenized loyalty program

• Some of crypto’s most loyal followers are unfazed by the seemingly dubious “crypto winter”, as evidenced by Juno’s recent $18M round of funding led by ParaFi Capital’s Growth Fund, with participation from Greycroft, Antler Global, Hashed, and more.

• The startup, which allows users to accept some or part of their salaries in crypto and spend it with their Mastercard-powered debit card, has seen no slow down in traction even amidst the uncertain market (touting 75,000 users and growing). As part of the announcement, Juno also announced the launch of their optional loyalty program which features their “ERC20 token, called JCOIN…[and] will be rewarded to customers… based on their usage” according to TechCrunch.

Winklevoss Offers MakerDAO Deal But Christensen May Be Underwhelmed

• As MakerDAO looks to improve cash flow, a major CeFi player with big pockets has come to light in the form of Gemini with an offer to pay out 1.25% annual interest if MakerDAO will hold 100M of GUSD in their Peg Stability Module, per The Defiant.

• Though the deal is far from inked, it will be necessary that MakerDAO ratifies the proposal. It is key to note that the DAO itself is divided on how much exposure it should have regarding CeFi and coins tied to those systems. Moreover, with regulation looking increasingly unfavorable for CeFi stablecoins, it may prove to be the wrong time for Gemini to grow its presence on MakerDAO.

Uniswap Labs eyes over $100 million in new funding

• With a fresh funding round brewing and top-tier investors interested, this could be the moment for Uniswap Labs to become the real Unicorn we hoped it would be. The new round would raise between $100-$200M for a valuation of $1B, via TechCrunch reporting.

• The main thrust would be for the Uni to focus on growth as it looks to expand its market position. With new offerings being teased as well, Uni appears to be in good shape to secure the funding and further entrench itself as one of the main drivers of DEX trading.

Latest Podcast

DeCent People Podcast With ConsenSys Head Economist Lex Sokolin

In the latest DeCent People podcast, Lex Sokolin shares how he came to become the head economist at ConsenSys, the Ethereum developer studio created by Ethereum co-founder Joe Lubin. Having come to the U.S. from Russia at 10 years old, Lex has long been drawn to innovations that push financial technology, and is now leading efforts at ConsenSys that focus on token economics, DAO strategy and treasury management.

You can download and subscribe to the podcast here on Spotify, Apple Podcasts or Amazon Music and Audible.

Good Podcasts Outside DeCential

In part two of his first post-merge Bankless appearance, Vitalik Buterin shares his behind-the-scenes perspective on the Merge, covering the social/philosophical realm of “what is Ethereum”, and exploring his thoughts on artificial intelligence and its relationship to crypto.

And last but not least

Web3 Watch: SEC Approach Is ‘Threatening the Entire Ecosystem’: Former CFTC Commissioner

We’re sorry to keep beating this regulatory dead horse, but the stories just keep coming.

In an interview with Decrypt, Brian Quintenz outlined his views on a number of policy and similar issues that are front and center for the crypto industry, especially within the larger players and exchanges. With Quintenz’s unique background as a former CFTC commissioner, he understands all too well the current regulatory quagmire that we find ourselves in.

In particular, Quintenz notes that while some senators may be educated on crypto and blockchain technology, there is still more to be done. He believes that with additional education and therefore conviction amongst politicians there can be more beneficial policies put in place. Decrypt also notes that Quintenz views the punitive, unachievable moves by the SEC as more demonstrative of a general “approach to crypto that’s been more resistant to change, rather than paving the way for new technology to become adopted.”

Quitenz, who joined venture capital stalwart a16z last year as a part-time advisor, finished by saying that not all regulation is bad and that the industry as a whole could have the potential to flourish if “well-tailored, appropriately-calibrated legislation” came to the table. This in turn could have the potential to have far more constructive market effects and lead to unprecedented adoption. — PD

Out of the Ether: Special NFT Edition

Have you read the definitive history of Ethereum? No? Well then get your special edition of Out of the Ether while you can. There are only 1,000 that were printed and each copy is an NFT that can be registered on the Lukso blockchain’s Universal Profile protocol.