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

Development in the crypto space is relentless. Even with the dark clouds surrounding potential Securities and Exchange Commission (SEC) enforcement there is no shortage of innovators who are ready to step up to the plate, take a swing and carve out their piece of the market. Ethereum, for example, has been on a hot streak as of late and with the Shanghai upgrade seemingly imminent, the last thing that they are worried about is whether or not ETH is deemed a security. They are too busy building the fourth revolution! Innovation appears to even be coming from the likes of decentralized apps like Jack Dorsey’s Bluesky, which promises to create the next era of social media that is free from the restrictions of governing bodies and boards of directors.

Yet despite this growth and development, the specter of the old institutions looms large. Banks around the world are continuing to restrict access to the crypto markets using safety as a justification. A recent example is HSBC banning crypto transactions in the UK. In other parts of the world, Nigeria and Australia central bank digital currencies seem to have the potential to reach their citizens in the near future, but the question remains whether the people really want them.

The steady drumbeat of coming enforcement from the SEC and other regulators continues, and it seems hard to deny that the world now has its eyes fully turned to crypto. While it would be easy to take a more negative outlook and suppose that everything is bad with regulation, I’m personally trying to take the alternative perspective and focus on the progress still being made. It’s clear this ecosystem and this industry isn’t going anywhere; in fact, maybe this regulatory onslaught has the potential to be the catalyst for the next wave of solid and truly redefining growth that we all want to see in light of so many large disappointments (think FTX). – Parker Dresdow, Decential Media

Number go up dept.

What Effect Could Ethereum’s Shanghai Upgrade Have on Price?

With the Shanghai Capella upgrade having been successful on the Sepolia testnet earlier this week, the Shanghai upgrade on the ETH mainnet could take place as soon as the end of the month. As noted in prior newsletters, ETH’s price is expected to drop following Shanghai as validators begin withdrawing the Ether they have pledged to secure the network. Despite this, Blockworks reporting indicates that the impact to price may not be so bad. Financial analysts indicate that the first three days of trading post-upgrade could see selling pressure in the 2 to 6 percent range of daily trading volume. This pressure would then be expected to fall to 1 percent of daily trading volume, according to Arcana Chief Executive Officer Rich Falk-Wallace.

As a demonstration of its robustness, the ETH network is designed to increase the annual percentage yields for validators as their number shrinks, thereby incentivizing them to stick around. To provide a clearer picture it is key to note that unlocks and similar events in the tradfi world are predictable in the sense that directly following the event there are always market participants looking to exit their positions. As they do so, selling pressure increases but after this first initial release of pressure, trading and price stability generally begin to bring the market back in line. All this to say, ETH has proven itself to not only have a robust design, but a dedicated ecosystem and while price action may not always be “up and to the right,” people can have a tendency to get short sighted and not focus on all the good that’s to come. — PD

Quick Bits

eNaira is ‘crippled‘: Nigeria in talks with NY-based company for revamp

• The Central Bank of Nigeria created its central bank digital currency eNaira in 2021 and is now calling in reinforcements, according to Cointelegraph and reports from Bloomberg.

• CBN is reportedly in cahoots with R3, a New York-based tech firm, to help further system development. Cointelegraph notes that CBN has already been working with financial software company Bitt, but it doesn’t seem like the company is feeling crowded out as sentiments appear to be “the more the merrier.” Nigeria is just one of 90 countries looking into CBDCs, though the country certainly faces challenges of creation and adoption ahead.

Coinbase to Delist Binance USD Stablecoin Amid Regulatory Scrutiny

• Coinbase announced it will be suspending trading for Binance USD in mid-March. The decision is the result of an internal review by Coinbase on BUSD and the conclusion that it, “ no longer met [their] listing standards,” according to Decrypt.

• This is the latest domino to fall for Binance, as last month Paxos announced a similar termination following a lawsuit from the SEC over the issuing of Binance. The core of the situation is that Binance assured the public that BUSD (on Binance’s network) was fully collateralized with the Paxos-regulated BUSD but, in reality, “the backing…has slipped beyond $1 billion on multiple occasions.”

Yuga Labs Joins Bitcoin Ordinals Fever With NFT Collection ‘TwelveFold’

• There’s news on the horizon from Yuga Labs that could make even the Bored[est] Ape interested. The NFT studio announced the release of a new 300-piece NFT collection: TwelveFold. The limited edition pieces, “inscribed on satoshis” and “created [by] algorithmic construction, and high-end rendering tools,” are being released on the Bitcoin network thanks to the recently popular Ordinals protocol, according to BeInCrypto.

• NFT activity on Bitcoin has more than doubled recently and is expected to continue to grow with the Yuga Labs release. However, some are more convinced that the network is simply seeing a peaking trend and is bound to see a decline soon, especially when considering “concern for the crowding out of monetary transactions.”

SEC chair Gensler confirms “everything other than Bitcoin” is a security: Implications and analysis

• After a statement that caused much dismay this past summer, SEC Chairman Gary Gensler has doubled down on his agency’s stance that “everything else other than Bitcoin is a security.” This declaratory statement is broad and sweeping, to say the least, and has serious implications should the SEC follow up with the wide-sweeping actions that the statement implies.

• CryptoSlate goes on to note that this attitude is nothing new for the SEC and may be yet another indicator that the SEC plans to continue its more aggressive stance. What’s important is that this statement is broad and sweeping in nature and does not highlight any specific areas that the SEC will be targeting. While the potential implications are discouraging, the situation is not dire, nor does it indicate a full-court press on the industry as a whole.

Latest Podcasts

Decent People Podcast With Caitlin Long

On the latest DeCent People podcast, we sit down with Caitlin Long, who founded Custodia Bank in Wyoming to bridge the divide between businesses using or accepting cryptocurrencies and the traditional U.S. dollar based economy. Custodia was denied two applications to become a member of the Federal Reserve banking system and to have what's called a "master account" at the Fed. In response, Custodia has sued the Federal Reserve, claiming it discriminated against it because of its ties to crypto. We talk to Caitlin about how this all came about and what she thinks of her chances of succeeding in court.

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

Lights Camera Crypto With Tyler Morrison

On the latest episode of Lights Camera Crypto, Comedian and Co-Founder of Decentral Comedy Tyler Morrison discusses his journey to becoming a stand-up comedian, starting one of the first comedy shows in the Metaverse, and what Metaverse comedy means for the future of live comedy shows and the comedy industry as a whole.

You can listen and subscribe Apple Podcasts and Spotify.

Big Brother and the Hodling Company With Kat Rodgers

On the latest episode of Big Brother and the Hodling Company, we talk with Kat Rodgers, a music journalist and the community lead of Water & Music, a music research decentralized autonomous organization, or DAO. We chatted about her music journey – one that started and continues with Bjork – and the evolving or perhaps not yet existent role of music journalists in web3. And we get an inside look at the cogs and inner machinations of Water & Music, whose important research and potent, bleeding edge analysis is creating a more transparent and better informed music industry.

You can listen and subscribe Apple Podcasts and Spotify.

And last but not least

Blur Bidding Pools reach new ATH of $143.51M in TVL

As with any new technology, there will always be periods of evolution as those who are developing it make tweaks and adjustments to fine-tune their products and ultimately determine what the consumer wants. Enter Blur, which appears to have realized what the NFT consumer wants and how they think. Blur came to the stage as a new NFT exchange in late 2022, and since then has risen to rival the incumbent exchanges, especially OpenSea, as they not only circumvented OpenSea’s attempted block of their royalty-less NFTs, but they forced OpenSea to make royalties optional on all of their NFTs. Moreover, Blur has taken a more savvy approach to liquidity mining via airdrops, as would-be beneficiaries have to actually put in bids to earn loyalty points. This contrasts with other exchanges like X2Y2 and Looksrare, which Bankless notes, “tied airdrop qualification to mere product usage.”

Though Blur and its competitors still have much to learn about the fledgling market, the upstart exchange seems to have captured the “zeitgeist” of more niche players in the NFT markets. Evidence of this can be seen in that their biffing pools have hit an all-time high of $143.51 million in total value locked, per CrytpoSlate reporting. Blur’s dynamic incentive system “is designed to reward early adopters and long-term holders of the token and to broaden the overall viability of those who are vested in seeing the platform grow and compete with its main competitor, OpenSea.” From what we can see it appears that Blur has gone from strength to strength. —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.