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

With The Merge now firmly in the rear-view mirror, it appears that Ethereum, the second largest market-cap blockchain, is waiting with bated breath (as is the rest of the market) to see how some of the larger regulatory narratives play out. With regulators around the world stepping up enforcement and probing into the markets now more than ever it’s seemingly harder to hold onto the notion that the crypto winter has seen its shadow. Moreover, as the macro landscape continues to be bleak for the bond and equities markets alike while the USD continues to strengthen.

But amidst this tricky background it’s apparent that the industry is on its way to maturity out of the Wild-West landscape that has been painted by recent events. What appears to be true, as we’ve been saying for a few weeks, is that the momentum in the industry is shifting from weak hands to stronger ones. What is also promising is that there are new milestones on the horizon. Ethereum, for example, having just completed one of its most technically complex upgrades, is now able to pivot to focus on a “fully rollup centric Ethereum” over the next couple of years, per Vitalik Buterin’s interview with Bankless. This is but one example of the underlying factors that’s driving the industry forward.

An exciting time to be alive no doubt.— Parker Dresdow, DeCential Media

Crypto winter dept.

While emphasizing the need to wash away the “dead wood”, Ryan Selkis, Messari CEO, noted that regulators have been an additive presence to this year’s Messari Mainnet event, specifically the Commodity Futures Trading Commission and the Department of Justice, according to Decrypt.

Regulators were anticipated at Mainnet this year and were even able to hold constructive conversations with a number of industry participants. While it is too soon to tell if any lasting change will come from these interactions, what appears to be developing is a rapport between industry leaders and regulators. Decrypt notes that Selkis still believes that there will always be some conflict between regulators and industry folks, as crypto by its very nature is reshaping the way that we live. There may have been a time where it seemed possible that crypto would have been able to self-regulate and that decentralization would prove a strong enough force to weed out the bad actors, but when reflecting on even the last six months it becomes clear that crypto will most definitely be regulated. —Parker Dresdow, DeCential Media

Quick Bits

California Gov. Newsom vetoes crypto licensing and regulatory framework

• California Governor Newsom has knocked down Assembly Bill 2269, with the aim of “establishing a licensing and regulatory framework for digital assets.” For reference, the bill passed through the state assembly with no opposition. The thrust of Newsom’s reasoning stated that the overall bill was “premature” and that further federal guidelines and regulations. should be announced before any such bill could be passed.

• While this could be a move of deference by Newsome to the feds as he contemplates a run for higher office, what it ultimately shows is that California under Newsom will be more regulation-forward then innovation-forward. This presents a potentially ominous position for the state as non-friendly initiatives have aided the departure of other innovative companies such as Tesla, Oracle and HP.

Interpol issues red notice for Terra founder Do Kwon

• After the misadventures of Terra, founder Do Kwon is now clearly in the sights of international authorities, who have struggled to locate him.

• While Kwon continues to maintain his innocence on various social media platforms, this “vanishing act” is not a good look. Shortly after the collapse of Terra and its algo stable coin UST, Kwon was called to make an audience before the South Korean Conservative Party in May. The eye of South Korean authorities was not however limited to Kwon as co-founder Daniel Shin’s home was raided as part of the larger probe. This behavior begins to paint Kwon as less of a Daedalus and more of an Icarus. The only thing that is clear in this narrative is that only time will tell what the full fallout of the UST collapse will be.

Crypto Lender NEXO Faces Cease-and-Desist Order From California

• NEXO is the target of the Department of Financial Protection and Innovation (DFPI) in a new cease and desist order pertaining to the company’s interest-bearing products. According to Cryptonews, New York, Kentucky, Maryland, Oklahoma, South Carolina, Washington and Vermont have also filed “administrative actions” against the company.

• The situation resembles the penalty that was levied against BlockFi for their interest-bearing products. This is perhaps one of the first major examples that shows the continuity of legal prosecution against crypto product offerings.

Microsoft Leads $20M Strategic Round in Web3 Data Warehouse Space and Time

• Space and Time, the company “solving Web3’s toughest data analytics challenges” per their LinkedIn, announced $20 million in funding. The round was led by Microsoft’s M12 fund and with participation from crypto investment firm Framework Ventures, HashKey, Foresight Ventures, SevenX Ventures, Polygon, Avalanche and more.

• The funding aims to deliver enterprise-grade use cases to smart contract applications and is clearly a strategic move by Microsoft as the software behemoth begins to focus on leveraging blockchain tech for their own products and services. Moreover, Space and Time will eventually be able to integrate with Microsoft’s “Azure to become a ‘go-to cloud service for building Web3 projects,” according to Decrypt.
  

Latest Podcast

The DeCent People Podcast With Love DAO Founder Ryan Breslow

In the latest DeCent People podcast, Ryan Breslow shares how he discovered Bitcoin and had an idea for a payments startup that would eventually become Bolt, the "buy now" button service competing with Amazon that's valued at around $11 billion. His newest venture is Love DAO, a collective to help find and develop cures for diseases in a way that's outside the traditional pharmaceutical industry.

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

Good Podcasts Outside DeCential

In his first Bankless appearance post-merge, Vitalik Buterin shares his behind-the-scenes perspective on the Merge, looking back—what he would’ve done differently, and most importantly—what’s next?

And last but not least

Web3 Watch: CFTC’s Ooki DAO Action Shatters Illusion of Regulator-Proof Protocol

In what has the potential to set the course of future litigation, the CFTC has filed and settled charges against bZeroX, and in a doubleheader also filed a federal civil enforcement against Ooki DAO, which had allegedly run the same software, according to CoinDesk.

Where this enforcement treads new ground is that it targets individual members of the Ooki DAO, who up until now had presumed a level of separation given that the DAO was structured in a decentralized manner. This move shows yet again that there is a disconnect between perception and the law. There is a sentiment that because a DAO looks and feels like a buffer given its decentralized structure, it must be impervious to regulation. This sentiment is now proving murky at best.

Furthermore, with the vast differences from one DAO to another, it can be difficult to nail down the actual level of decentralization. This obscurity presents another issue. It makes it more difficult to separate the various intentions of one DAO member versus another, without making the DAOs governance and voting public to non-members. While nothing is set in stone yet, it is important to remain optimistic and to remember that in the long run, it is the larger body of regulation that sets the tone. — 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.