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

In what has been yet another whirlwind week, the weight of a pending specter of economic recession is clearly perceived to be close at hand, and just like in the thriller The Invisible Man you may not be able to see it, but it’s definitely there. 👻

As earnings reports from around the market continue to trickle in, the hemorrhaging that has defined the tech markets as of late has not yet been stemmed. From Meta’s $3.672 billion loss to a16z’s 40 percent crypto haircut, digital asset markets are finding little breathing room in the latter half of 2022. Yet amidst these negative indicators, positive trends have begun to emerge. With regulation being a major headwind for the industry in countries like the UK, we are finally beginning to see some movement and acceptance at the highest levels of government. The House of Commons has approved changes that have the potential to bring crypto into the fold with other financial assets. Moreover, in developing economies in South America we are seeing that large neo and traditional banks (Nubank and Santander) have begun to test or roll out various blockchain products that have the potential to impact tens of millions. —Parker Dresdow, DeCential Media

About time dept.

In what has the potential to be remembered as the beginnings of galvanizing crypto policy framework, the UK’s House of Commons decided to ratify a list of amendments applying to the flagship Financial Services and Markets Bill. In case you missed it, the FSMB is meant to outline how the UK will move forward following Brexit.

Of key interest in the ratified amendments is the idea that crypto will be brought “within the scope of existing provisions,” meaning that rules and regulations that guide other securities will apply to crypto as well as the asset class is officially brought into the fold.

Prior to this, of course, there has been no official or overarching framework that has been applied to the industry, with no clear line of understanding as to which regulations apply. With the UK representing one of the West's largest financial hubs, it is clear that their flagship monetary policies regarding crypto will undoubtedly catch the eyes of other regulators around the world.

The bill would still need to be approved by the House of Lords before being signed by King Charles III. However, the overall attitude is positive as it indicates that even amidst financial struggles, the UK’s leaders are open to looking at new ways to move the ball forward for the crypto industry instead of retreating and stifling growth while the financial system at large comes under fire. — PD

Quick Bits

Incoming UK Prime Minister Is Pro-crypto

• In what has been described as a whirlwind term and, in fact, the shortest term of any UK PM at 45 days, Lizz Truss stepped down as figurehead of the government on Tuesday, October 25th. The Conservative Party tapped Rishi Sunak to step into the lead role. Sunak has served in various roles in the Party under Truss and former PM Boris Boris Johnson.

• While Sunak will no doubt have many pressing challenges on his plate from day one, what is important to note is that he has been an advocate for crypto usage and believes that adoption of the technology is the way forward for the UK. Blockworks reports that Sunak has been known for his crypto-forward views and has even tried to sway the Royal Mint to look into NFTs. It will be exciting indeed to see how Sunak looks to pivot the UK economy and its financial policies over the coming months and years, and see if he really will be the champion for crypto in the UK that many hope he will be.

NFT Royalties May Be ‘Dwindling,’ Galaxy Digital Researcher Says

• According to research associate Salmaan Qadir from Galaxy Digital Research, nearly $2 billion in royalties have been made on NFT marketplaces. While the number may sound remarkable at first, there’s a catch – 80 percent of that according to Galaxy Digital’s report was made by just 482 creators, and there are nuances that aren’t clear such as whether or not creators cashed out.

• The report raises a larger question about the direction of the NFT space. Royalty vs. zero-royalty platforms seem to be going head to head, with both looking to take on overall market share. According to CoinDesk, nearly 80 percent of NFT marketplace volume is with pro-royalty platform OpenSea. Others, however, like Magic Eden, are aiming to provide the best of both worlds and offer royalties as an optional feature.

Warren Buffett-backed neobank picks Polygon for Web3 token — MATIC price eyes 100% rally

• Earlier this year Polygon announced that it was ready to roll out modifications to its blockchain architecture in the form of “Polygon Supernets, Powered by Polygon Edge.” The goal of the Supernets is to silo applications into “dedicated blockchain networks” and takes a more “modular approach” to blockchain architecture. All this to say that Polygon has tailored blockchain architecture that is readily adaptable to a wide variety of projects and other types of uses.

• With that bit of background out of the way, we can transition to noting that one of Polygon’s latest clients is Nubank, Brazil’s largest fintech bank, which has plans to develop its blockchain and other web3 services via Polygon’s Supernets architecture. With airdrops planned for early next year, the Berkshire-backed “neobank” is looking to make waves as it continues to grow its user base in Brazil and South America in general. Brazil’s government has indicated that it will be looking to launch a digital Real CBDC as soon as 2024. Per CoinMarketCap, MATIC’s price has risen to a high of $0.9639 over the last few days in light of the Nubank news as MATIC continues to climb away from the low $0.30s that it found itself in June of this year.

MakerDAO moves ahead with $1.6 billion in Coinbase custody

• MakerDao has taken some big steps forward this week, ratifying both Maker Improvement Proposals (MIP) 81 and 82. These new ratifications will bring further partnership with Coinbase. Specifically, with proposal 81, the DAO “joined Coinbase in its institutional rewards pilot program to earn 1.5 percent on the USDC for which Coinbase acts as custodian,” according to The Block.

• Coinbase is also involved in MIP 82, which involves the issuing of a “$500 million USDC loan to Coinbase collateralized via ETH and BTC.” It has been a busy last few months for MakerDao as the protocol has looked at various investments. Last month, Gemini tabled an offer for a 1.25 percent annual return on over 100 million of its stablecoin GUSD held in MakerDAO’s vault, and earlier this month, MakerDao moved ahead with plans to invest 500 million DAI in US Treasury bonds.

Latest Podcast

DeCent People Podcast With Anthony D’Onofrio, aka texture

In the latest DeCent People podcast, Anthony D’Onofrio, better known in crypto as texture, his social media handle, talks about being present at the beginning of Ethereum, helping to design the blockchain’s first website, and his strong opinions about the protocol’s beginning and his fellow co-founders.

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

Good Podcasts Outside DeCential

On the Between2Chains podcast, James Healy, USC Marshall School of Business Professor, President of Digital Disbursements, and Economic Advisory Council Member for the Federal Reserve Bank of San Francisco, discusses how universities are adapting curriculum and creating new ways to introduce students to blockchain and foster new ideas in the space.

And last but not least

Meta posts another revenue decline as investors voice metaverse concerns

It’s safe to say that at the moment, things are not looking great for Meta. According to TechCrunch and Meta’s latest earnings call, the company’s revenue is down 4 percent, the virtual reality division (aka Reality Labs) lost $3.672 billion this quarter, and hiring is slowing with net new employees totaling 3,700 this quarter compared to 5,700 last quarter.

Zuckerberg seems determined though to hold fast to the company’s innovations, especially in the web3 metaverse space, essentially claiming the cost is high for those paving the way. Alongside plans to launch their “next consumer-grade Quest headset next year,” Zuckerberg also shared more about the company’s “early product” Horizon Worlds, which TechCrunch aptly described as an “underwhelming social VR platform”. Additionally, Horizon Worlds has been a tough sell for internal use at Meta, given the many bugs that still need to be worked out. On the bright side, the number of Reels on Facebook and Instagram are up 50 percent from six months ago. — 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.