Shalini Nagarajan

Lawyers managing the FTX bankruptcy likened the firm to a “personal fiefdom” of former CEO Sam Bankman-Fried in Delaware court on Tuesday.



In the first hearing of what’s set to be a sprawling case, lawyers James Bromley and Sullivan Cromwell ultimately described FTX — previously one of the world’s largest global crypto exchanges by trade volume — as a “different sort of animal.”&nbsp;



They told the court that a “substantial amount of assets” held by FTX have either been stolen or are otherwise missing. FTX in total has a cash balance of $1.24 billion, and its restructuring experts are now working with financial investigators to locate the remaining assets.&nbsp;



A <a href="https://cases.ra.kroll.com/FTX/Home-DownloadPDF?id1=MjMxNDUwMA==&amp;id2=-1" target="_blank" rel="noreferrer noopener">court document</a> from Saturday shows FTX owes $3.1 billion to its 50 largest creditors, and the biggest creditor alone is out-of-pocket for $226.2 million. Each claimant is listed as a customer, not as a company insider. Ten have claims of more than $100 million each. 



Bankman-Fried has reportedly sought up to $8 billion to cover the company&#8217;s shortfall.



“We realize that there are many people that are looking to get their money back immediately. And we sympathize with that… and we are working towards being able to do that,” Bromley said.



After initial disagreement, Bahamas-appointed lawyers for FTX Digital Markets agreed to move their <a href="https://blockworks.co/news/ftx-bahamas-unit-filed-bankruptcy" target="_blank" rel="noreferrer noopener">chapter 11</a> to Delaware, bringing all FTX petitions together in one case. 



Veteran restructuring expert John J. Ray III, who sorted out Enron following its own demise, is spearheading FTX efforts as the firm&#8217;s new CEO.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="561" src="https://cms.blockworks.co/wp-content/uploads/2022/11/sbfsilos-1024x561.jpg" alt="" class="wp-image-39827" srcset="https://cms.blockworks.co/wp-content/uploads/2022/11/sbfsilos-1024x561.jpg 1024w, https://cms.blockworks.co/wp-content/uploads/2022/11/sbfsilos-300x164.jpg 300w, https://cms.blockworks.co/wp-content/uploads/2022/11/sbfsilos-768x421.jpg 768w, https://cms.blockworks.co/wp-content/uploads/2022/11/sbfsilos-1536x842.jpg 1536w, https://cms.blockworks.co/wp-content/uploads/2022/11/sbfsilos-428x235.jpg 428w, https://cms.blockworks.co/wp-content/uploads/2022/11/sbfsilos-470x258.jpg 470w, https://cms.blockworks.co/wp-content/uploads/2022/11/sbfsilos-389x213.jpg 389w, https://cms.blockworks.co/wp-content/uploads/2022/11/sbfsilos-80x44.jpg 80w, https://cms.blockworks.co/wp-content/uploads/2022/11/sbfsilos-50x27.jpg 50w, https://cms.blockworks.co/wp-content/uploads/2022/11/sbfsilos.jpg 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>FTX lawyers shared a map of Bankman-Fried&#8217;s business, with the former billionaire at the top (source: FTX counsel).</figcaption></figure>



Matters of alleged malfeasance are already apparent. Bromley detailed substantial purchases unrelated to the business. One of the US debtors purchased almost $300 million worth of real estate in the Bahamas, according to the attorney. 



Those houses were said to be mostly used as homes and vacation properties by senior FTX executives.



Bankman-Fried effectively controlled FTX ‘at all times,’ lawyer says



FTX’s <a href="https://blockworks.co/news/what-happened-ftx-hack" target="_blank" rel="noreferrer noopener">mysterious hack</a> shortly after it filed for bankruptcy was also covered. Around $477 million in various cryptocurrencies (valued at the time) was apparently drained from FTX hot wallets — including FTX US.&nbsp;



The Bahamas security regulator quickly moved to place some of FTX assets in cold storage via direct-custody startup Fireblocks. The decision, lawyers say, was directly actioned by Bankman-Fried and FTX chief technology officer Gary Wang.



The hacker recently swapped much of the siphoned ether for bitcoin via the RenBridge service — a platform Bankman-Fried’s Alameda Research acquired in 2021.



Bromley said FTX continues to suffer cyberattacks beyond that initial one. FTX’s new management has engaged “sophisticated expertise” to protect against incidents moving forward.&nbsp;



The team is now “working to bring order to disorder” by implementing controls, investigating core issues and providing transparency, Bromley said. Investigators are coordinating with debtors to collect all related business information.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="549" src="https://cms.blockworks.co/wp-content/uploads/2022/11/ftxcollapse-1024x549.jpg" alt="" class="wp-image-39828" srcset="https://cms.blockworks.co/wp-content/uploads/2022/11/ftxcollapse-1024x549.jpg 1024w, https://cms.blockworks.co/wp-content/uploads/2022/11/ftxcollapse-300x161.jpg 300w, https://cms.blockworks.co/wp-content/uploads/2022/11/ftxcollapse-768x412.jpg 768w, https://cms.blockworks.co/wp-content/uploads/2022/11/ftxcollapse-1536x824.jpg 1536w, https://cms.blockworks.co/wp-content/uploads/2022/11/ftxcollapse-428x230.jpg 428w, https://cms.blockworks.co/wp-content/uploads/2022/11/ftxcollapse-470x252.jpg 470w, https://cms.blockworks.co/wp-content/uploads/2022/11/ftxcollapse-389x209.jpg 389w, https://cms.blockworks.co/wp-content/uploads/2022/11/ftxcollapse-80x43.jpg 80w, https://cms.blockworks.co/wp-content/uploads/2022/11/ftxcollapse-50x27.jpg 50w, https://cms.blockworks.co/wp-content/uploads/2022/11/ftxcollapse.jpg 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>The apparent hacking incident isn&#8217;t labelled here. It happened after FTX Group filed for chapter 11s (source: FTX counsel).</figcaption></figure>



As that plays out, Bankman-Fried’s exact role in FTX’s alleged mismanagement no doubt will be front-of-mind for its creditors. It&#8217;s estimated up to one million users lost money with FTX, ranging from regular investors to blockchain startups and funds.



Lawyers presented a timeline of Bankman-Fried’s business activity. His trading outfit Alameda was founded in Nov. 2017 at the University of California, Berkeley, with FTX’s launch following in 2019 in Hong Kong.



“In effect, the company during that period of time, wandered the world. Started in Berkeley and went to Hong Kong… it went to Chicago, to Miami, went to the Bahamas, but at all times it was effectively under the control of Mr. Bankman,” Bromley said.



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FTX Run by ‘Inexperienced, Unsophisticated’ Traders, Court Hears

David Canellis

Cryptocurrencies are enjoying a major rebound this year, but one blue-chip digital asset is being left behind: XRP.



XRP is by far the worst performing top 10 cryptocurrency year-to-date, not counting stablecoins, having returned only 16% as of 6 am, ET, about the same as the broad, tech-focused Nasdaq 100 stock market index.



Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) and ether (<a href="https://blockworks.co/price/eth">ETH</a>) have both surged 38%. Cardano (<a href="https://blockworks.co/price/ada">ADA</a>) is up 57% and polygon (<a href="https://blockworks.co/price/matic">MATIC</a>) 67%. Even number-one meme coin dogecoin (<a href="https://blockworks.co/price/doge">DOGE</a>) has popped 25%.



One has to go all the way down to current market cap rank 24 to find a cryptoasset that has performed worse than Ripple Labs’ XRP — the Telegram-inspired <a href="https://blockworks.co/price/ton">TON</a> is only up 9%, although it has a far shorter track record than most of the majors.



<a href="https://blockworks.co/price/xrp">XRP</a> does fare better when zooming out, but only very slightly. Cryptocurrencies which featured in the top 25 either at the start of the year, six months ago or one year ago have on average returned 9% over the past three months — XRP has sunk 3%.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/12695556/embed#?secret=nzPmR30dC2" data-secret="nzPmR30dC2" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div></figure>



And over the past year, after removing outright failures, terra (LUNA) and FTT, those same assets dropped 43% on average. XRP fell 55%, about the same as shiba inu (SHIB).



Fellow prominent tokens of cycles past, ethereum classic (ETC) and litecoin (LTC), have shown much more resiliency, shedding 31% and 28%, respectively.



Ripple Labs’ ongoing SEC <a href="https://www.sec.gov/news/press-release/2020-338" target="_blank" rel="noreferrer noopener">lawsuit</a> over allegedly selling unregistered securities in the form of XRP does loom over the project. But at this point, it’s an easy scapegoat.



XRP’s lackluster growth may have more to do with dollar-pegged stablecoins undermining its primary value proposition: quick and easy settlement for cross-border transactions.



Ripple launched the token way back in 2012 — two years before leading stablecoin tether (<a href="https://blockworks.co/price/usdt">USDT</a>) first hit the market. Stablecoins now command a near-$138 billion collective market value, while XRP is struggling to maintain $20 billion.&nbsp;



Third-largest stablecoin binance usd (<a href="https://blockworks.co/price/busd">BUSD</a>) is even inching closer to flipping XRP, while top two dollar-pegged tokens USDT and <a href="https://blockworks.co/price/usdc">USDC</a> boast market caps multiple times larger than Ripple’s offering.



<h2>XRP struggles to find product market fit</h2>



Granted, stablecoins have more use cases than XRP. They support the lion’s share of crypto trade volumes and are used widely for borrowing and lending via decentralized finance protocols.&nbsp;



Ripple, on the other hand, has persisted with its plan to sell XRP to financial institutions and payment processors, pitching the token to ease friction in the cumbersome traditional remittance sector.



Market analysts willing to comment on XRP’s apparent stagnancy are rare. Blockworks reached out to multiple firms, including Arca and BitOoda, but none were open to comment.



“Ripple was out to solve cross-border payments and now they have zero product-market fit,” Blockworks Research analyst Sam Martin said. “That’s why nobody covers XRP, in my opinion.”



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/12695623/embed#?secret=ghGN7V3CKu" data-secret="ghGN7V3CKu" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div></figure>



Still, Ripple does seem to be notching growth. Ripple’s direct XRP sales — which it says directly support its remittance-focused liquidity product — have exploded over the past 18 months, jumping from $490 million in Q3 2021 to $2.96 billion last quarter.



As Blockworks previously reported, Ripple appears to have <a href="https://blockworks.co/news/ripple-xrp-sec-lawsuit-markets">recycled much of that revenue into buying back XRP</a>. The firm’s disclosures indicate it spent 75% of the cash generated by over-the-counter sales since the SEC filed charges in Dec. 2020 on acquiring XRP on secondary markets.



Ripple has said it buys XRP to support healthy markets — but seems it has done little to inspire other market participants to keep up a bid commensurate with that on other cryptos’ so far this year.



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XRP Price Fails To Keep Pace as Majors Bounce

Luxury fashion house Hermes International won a US lawsuit against digital artist Mason Rothschild, with the jury ruling that his 100 “MetaBirkins” NFTs are not art.



But Rothschild and his legal team are already planning to appeal the decision, his publicist Kenneth Loo told Vogue Business.



On the third day of deliberation, the nine-person jury found Rothschild liable for trademark infringement, trademark dilution and cybsersquatting after hearing testimony from live witnesses including the defendant.



A <a href="https://s3.documentcloud.org/documents/23602050/verdict-form-hermes-wins-in-metabirkins-nft-trademark-case-no-1st-amendment-for-mason-rothschild-verdict-form-here.pdf" target="_blank" rel="noreferrer noopener">verdict</a> reached on Wednesday saw Hermes awarded $133,000 in total damages, and declared Rothschild’s NFTs do not count as protected speech under the First Amendment.&nbsp;



The case marked one of the first intellectual-property trials over NFTs and raised questions about whether creation can be protected in the tokenized digital art world.



It was also the first to legally discuss the relationship between digital art and the reproduction of physical fashion, <a href="https://www.voguebusiness.com/technology/hermes-wins-case-against-metabirkins-over-digital-nfts-rothschild-to-appeal" target="_blank" rel="noreferrer noopener">according</a> to Vogue Business.



Commercial litigator Emily Poler said the jury must have concluded that Rothschild’s argument, which claimed the MetaBirkins NFTs represented artistic expression, was not credible. Instead, they saw Rothschild attempting to capitalize on the Hermes brand.&nbsp;



“There is still room for artwork to be protected by the First Amendment, but this (according to the jury) isn’t it, she told Blockworks. “That’s not to say there aren’t other NFT projects out there that would be protected.”



In closing arguments on Feb. 6, Mason Rothschild’s lawyer said his client could have charged more for the MetaBirkins, per <a href="https://twitter.com/innercitypress/status/1622646486725951491" target="_blank" rel="noreferrer noopener">Inner City Press</a>. More than $1.1 million in MetaBirkin NFTs were <a href="https://blockworks.co/news/hermes-metabirkin-nft-lawsuit-begins-with-blow-for-creator" target="_blank" rel="noreferrer noopener">sold</a> shortly after their launch in Dec. 2021. Hermes sent a cease and desist shortly after and sued Rothschild in January.



“It was an artistic experiment. He wanted to see what kind of value people would ascribe to these two-dimensional pictures,” the lawyer said. 



“It is unlikely that people who would pay thousands of dollars on bags would be confused these <a href="https://twitter.com/hashtag/MetaBirkins?src=hashtag_click" target="_blank" rel="noreferrer noopener">#MetaBirkins </a>were from Hermes. He has a Constitutional right to create his MetaBirkins art work, and to make money from, as long as he doesn&#8217;t mislead people.”



Rothschild <a href="https://twitter.com/MasonRothschild/status/1623367118493257730" target="_blank" rel="noreferrer noopener">slammed</a> the verdict on Twitter, suggesting that Hermes does not care about art or artists, yet “feel they have the right to choose what art IS and who IS an artist.”



Blockworks has reached out for confirmation on their plans to appeal.



“What happened today was wrong. What happened today will continue to happen if we don’t continue to fight. This is far from over,” he said.



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NFTs Are Not Art: Judge Sides With Fashion Giant Hermès in MetaBirkins Case

Sebastian Sinclair

The crypto bear market has taken a toll on Robinhood, with the popular online brokerage reporting a 24% drop in associated revenues last quarter.



Crypto-linked revenues fell to $39 million in Q4 2022, down $9 million from Q3 2022.



Total net revenues — which includes options trading, crypto and equities — actually rose 5%, reaching $380 million.



Higher short-term interest rates and growth in interest-earning assets appeared to be Robinhood’s saving grace, with total net interest revenue jumping 30% to $167 million.



Still, the Menlo Park firm posted a net loss of $166 million last quarter (earnings per share of -$0.19), a slight improvement on the previous quarter, which saw $175 million lost.



Full year revenues, meanwhile, sank by about $460 million from 2021 — $1.815 billion to $1.36 billion.



CEO Vlad Tenev said both he and co-founder Baiju Bhatt were canceling close to $500 million of their share-based compensation to return what he termed “value to customers and shareholders.”



“We’re now starting to see meaningful traction on a number of the products we launched, which gives us confidence they can grow into significant business lines over time,” Tenev said.



Robinhood did see a small 50,000 rise in the cumulative number of funded accounts last quarter, now at 23 million overall. Monthly active users however dropped 800,000 to 11.4 million.



<h2>SBF&#8217;s Robinhood stock hangs in the balance sheet</h2>



Robinhood’s board of directors has also approved a proposal to buy back up to 55 million of its shares previously <a href="https://blockworks.co/news/ftx-wants-sbf-robinhood-stake-frozen-after-blockfi-sues" target="_blank" rel="noreferrer noopener">purchased by a Sam Bankman-Fried</a> holding company last May.



The US Department of Justice seized the shares in early January. Bankman-Fried bought more than 56 million shares for $648 million. Robinhood is now in discussions with the agency to facilitate the purchase, with the total valued at around $600 million at current prices.



Disgraced FTX executives Bankman-Fried and Gary Wang bought the shares via Emergent Technologies using loans taken directly from FTX sister trading firm Alameda Research.



In its earnings report, Robinhood said the timeline for the transaction remains unclear. Robinhood did not immediately return a request for comment.



“Since there is limited precedent for this type of situation, we cannot predict when, or if, the share purchase will take place. We will provide updates as appropriate,” Robinhood said



The shares are also involved in a <a href="https://blockworks.co/news/ftx-wants-sbf-robinhood-stake-frozen-after-blockfi-sues" target="_blank" rel="noreferrer noopener">legal dispute</a> between Bankman-Fried, FTX, BlockFi, and non-US entities.



For now, markets have reacted positively, with Robinhood stock jumping nearly 5% after hours on Wednesday.



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Crypto Bear Market Hits Robinhood As Founders Hunt SBF Stock

The head of the digital assets unit at BNY Mellon — the world’s largest custodian bank — has reaffirmed his bullishness on blockchain.



Speaking at a recent fintech and regulation conference, BNY Mellon’s Michael Demissie pointed to a study by the bank last year, which found 91% of its institutional clients were interested including tokenized products in their portfolios.



Those clients represented more than $1 trillion in assets under management.&nbsp;



The benefits of tokenization, as noted by survey respondents, include the removal of friction from the transfer of value (cited by 84%) and increased access for mass affluent and retail investors (cited by 86%).&nbsp;



Despite the interest, 60% of respondents agreed the large technological lift required was a hindrance. 



Demissie underscored the need for further industry regulation, reported <a href="https://www.reuters.com/technology/investors-absolutely-interested-digital-assets-bny-mellon-2023-02-08/" target="_blank" rel="noreferrer noopener">Reuters</a>, a bid to inspire responsible actors to provide reliable services that would bolster investor confidence.



&#8220;While crypto natives are looking forward to the day when all of capital markets infrastructure exists on an interoperable blockchain, the traditional Institutional Investor community has to date been less sure,&#8221; BNY Mellon wrote in its <a href="https://www.bnymellon.com/content/dam/bnymellon/documents/pdf/insights/migration-digital-assets-survey.pdf" target="_blank" rel="noreferrer noopener">report</a>. 



&#8220;This study shows that minds are changing, with traditional investors ready to imagine a world where up to one-third of their portfolios will contain digital assets.&#8221;



BNY Mellon <a href="https://www.bnymellon.com/us/en/about-us/about-bny-mellon.html" target="_blank" rel="noreferrer noopener">managed</a> $44.3 trillion under custody and/or administration as of Dec. 31, with roughly $1.8 trillion assets under management across 35 countries. BNY Mellon stock is worth around just under $42 billion, up nearly 12% year to date.



BNY Mellon began exploring crypto with the formation of a digital assets technology solutions unit in 2021, tapping blockchain analytics firm Chainalysis and crypto custody startup Fireblocks in the process.



In October of last year, BNY began offering clients the <a href="https://blockworks.co/news/bny-mellon-moves-to-let-institutions-hold-bitcoin-ether" target="_blank" rel="noreferrer noopener">ability to custody</a> bitcoin (<a href="https://blockworks.co/price/btc" target="_blank" rel="noreferrer noopener">BTC</a>) and ether (<a href="https://blockworks.co/price/eth" target="_blank" rel="noreferrer noopener">ETH</a>) via a platform spun out of the solutions unit.



Last week, the bank named <a href="https://blockworks.co/news/bny-mellon-names-digital-assets-ceo">Caroline Butler</a> as its CEO of digital assets in a newly created role designed to lead their enterprise-wide initiatives. Butler previously served as BNY Mellon&#8217;s CEO of custody services.



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Institutions ‘Absolutely Interested’ in Digital Assets: BNY Mellon Exec

Metaverse crypto projects are enjoying a healthy surge this year, easily outstripping the decentralized finance (DeFi) segment.



Tokens tied to metaverse and gaming projects Enjincoin, Axie Infinity, Decentraland, The Sandbox, STEPN and Apecoin have all soared over a 30-day and year-to-date basis.



Overall, crypto’s metaverse sector is up 105% year-to-date as of 8pm, ET and 62% over the last 30 days, according to Index Coop’s Metaverse Index (MVI).



“Investors are becoming increasingly interested in Web3 games and platforms that they believe can take a fair slice of the games market,” Simon Kertonegoro, CEO of MyMetaverse told Blockworks.



The success of a single Web3 game or platform will be great for both industries but even more so for investors holding the right tokens, he said.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/12693305/embed#?secret=3oagRZpmoh" data-secret="3oagRZpmoh" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Metaverse crypto projects are easily outstripping DeFi assets year to date</figcaption></figure>



Decentraland’s <a href="https://blockworks.co/price/mana" target="_blank" rel="noreferrer noopener">MANA</a> is leading the pack — up 150% this year while its 30-day performance is equally as impressive, gaining 90%.



For scale, bitcoin (<a href="https://blockworks.co/price/btc" target="_blank" rel="noreferrer noopener">BTC</a>) is up 39% year to date and around 30% over the last 30 days, while ether (<a href="https://blockworks.co/price/eth" target="_blank" rel="noreferrer noopener">ETH</a>) is at 38% and 25%, respectively.



<ul>
<li>Enjincoin (<a href="https://blockworks.co/price/enj" target="_blank" rel="noreferrer noopener">ENJ</a>) has more than doubled since 2023 kicked off, as the token attempts to claw back a 90% drop from its November 2021 peak.</li>



<li>The Sandbox’s <a href="https://blockworks.co/price/sand" target="_blank" rel="noreferrer noopener">SAND</a> has also doubled this year alongside Web3 lifestyle project STEPN&#8217;s <a href="https://blockworks.co/price/gmt" target="_blank" rel="noreferrer noopener">GMT</a>. </li>



<li>Axie Infinity’s <a href="https://blockworks.co/price/axs" target="_blank" rel="noreferrer noopener">AXS</a> and Yuga Labs&#8217; apecoin (<a href="https://blockworks.co/price/ape" target="_blank" rel="noreferrer noopener">APE</a>) have returned less, up 48% and 73% over the same period, respectively.</li>
</ul>



<a href="https://www.blockworksresearch.com/" target="_blank" rel="noreferrer noopener">Blockworks Research</a> analyst <a href="https://twitter.com/swmartin19" target="_blank" rel="noreferrer noopener">Sam Martin</a> said while there was no one catalyst to explain recent performances, metaverse tokens were due for a bounce. The current move is a mean reversion to the upside.



“Metaverse-related tokens reached peak euphoria at the end of 2021 when Facebook rebranded to Meta,” Martin said. “In hindsight, it is now clear that the market priced in far too much growth in relation to the crypto niche’s underlying fundamentals.&#8221;



By comparison, DeFi assets such as uniswap (<a href="https://blockworks.co/price/uni" target="_blank" rel="noreferrer noopener">UNI</a>), aave (<a href="https://blockworks.co/price/aave" target="_blank" rel="noreferrer noopener">AAVE</a>), pancakeswap (<a href="https://blockworks.co/price/cake" target="_blank" rel="noreferrer noopener">CAKE</a>), curve (<a href="https://blockworks.co/price/crv" target="_blank" rel="noreferrer noopener">CRV</a>), thorchain (<a href="https://blockworks.co/price/rune" target="_blank" rel="noreferrer noopener">RUNE</a>) and synthetix (<a href="https://blockworks.co/price/snx" target="_blank" rel="noreferrer noopener">SNX</a>) are averaging around 42% returns over the last 30-days and 63% in 2023.



Nasdaq-listed index DEFX, which tracks the performance of prominent DeFI cryptocurrencies, is up 58% year to date.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/12693301/embed#?secret=1tYlfdshqa" data-secret="1tYlfdshqa" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Zooming out to one year shows metaverse tokens have had it rough</figcaption></figure>



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Metaverse Crypto Sector Bounces Hard, Outperforms DeFi

Casey Wagner

If the crypto industry wants to continue to grow, it&#8217;s going to have to rebuild its relationship with centralized institutions, according to Pantera Capital executives.



Following a rocky 2022 littered with <a href="https://blockworks.co/news/ftx-paid-bankruptcy-lawyers-before-filing">bankruptcies</a> and <a href="https://blockworks.co/news/fraud-winklevoss-silbert-dcg">accusations of fraud</a> — as well as <a href="https://blockworks.co/news/regulators-speeding-up-crypto-timeline">increased regulatory scrutiny</a> — the industry needs to start playing by the rules for adoption to increase, Pantera CEO Dan Morehead and staffers wrote in their latest blockchain <a href="https://panteracapital.com/blockchain-letter/the-seventh-bull-cycle/" target="_blank" rel="noreferrer noopener">letter</a>, published Wednesday.&nbsp;



Ryan Barney, a senior investment associate at the legacy cryptocurrency asset manager, said in the letter that the “original promise of crypto included complete decentralization, to fully disable the potential for bad actors to be involved in the financial system.”



Added Barney: “Although this may be true on the longest of horizons (decades not years), for crypto to become widely adopted and used by individuals, institutions, and governments, centralized entities still have a role to play.”&nbsp;



After FTX’s implosion and subsequent <a href="https://blockworks.co/news/sdny-wants-sec-cftc-to-postpone-cases">criminal proceedings for founder Sam Bankman-Fried</a>, crypto’s winners will ultimately be differentiators capable of establishing counterparty confidence, according to Barney.&nbsp;



Market conditions will undoubtedly improve morale around the digital asset industry, according to Sehaj Singh, an investment associate at Pantera — adding that the next bull cycle is here, “regardless of what happens in the interest-rate-sensitive asset classes.”&nbsp;



“The decline from November 2021 to November 2022 was the median of the typical cycle,” Singh said. “This is the only bear market to more than completely wipe out the previous bull market. In this case giving back 136% of the previous rally.”



Pantera’s latest letter comes weeks after Morehead penned his <a href="https://blockworks.co/news/bitcoin-has-bottomed-will-soon-make-yearly-gains-pantera-ceo">investor outlook</a>, where he doubled down on his view that the industry can only go up from here.&nbsp;



“Blockchain’s resilience in the face of a terrible macro market for risk assets and historic idiosyncratic disasters is impressive,” Morehead said. “I believe that it [bitcoin] has already bottomed and we will see blockchain assets continue their 13-year 2.3x per year appreciation trend soon.”



Despite the investment firm’s seemingly unwavering positive sentiment, markets seem to have been moving risk-off in recent weeks as <a href="https://blockworks.co/news/fed-chair-comments-spawn-volatility">traders continue to speculate on the Federal Reserve’s next move</a>.



Bitcoin (<a href="https://blockworks.co/price/btc" target="_blank" rel="noreferrer noopener">BTC</a>) and ether (<a href="https://blockworks.co/price/eth" target="_blank" rel="noreferrer noopener">ETH</a>) faltered Wednesday, erasing gains from earlier in the week, falling 1.5% and 1.3%, respectively.&nbsp;



Pantera’s predictions come as the company says goodbye to its co-chief investment officer Joey Krug, who had been with the investment manager since 2017. Krug initially joined to head the firm’s Liquid Token Fund.



That vehicle, which invests in 15-20 crypto tokens at any given time, lost 80% in 2022 but rebounded 47% in January 2023, Pantera <a href="https://panteracapital.com/investor-calls/liquid-token-fund-investor-call-jan-2023/" target="_blank" rel="noreferrer noopener">reported</a>, as market conditions deteriorated. Pantera did not give a reason for Krug’s departure.



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Buckle Up, The Bull Market Is Here, Pantera Says

Ben Strack

A developing and deepening partnership between Amazon Web Services (AWS) and Ava Labs is set to assist developers trying to “redefine the internet,” according to AWS’ global head of Web3. 



Jeff Hasselman, who has led AWS’ Web3’s efforts since 2017, said during a Wednesday webinar that he has had conversations over the past two years with some of the world’s largest banks and entertainment companies looking to develop their own Web3 initiatives.



Some need “101 level” education, he said, while others are further along in their digital assets journey. Either way, according to the executive, everyone is looking for the most straightforward path in doing so. 



“We’re starting to see a shift; we’re at an inflection point right now where more and more people are coming in,” Hasselman said. “How do you grab them? And how do you simplify it?”



The webinar comes a few weeks after Ava Labs <a href="https://blockworks.co/news/ava-labs-partnership-with-amazon-cloud-triggers-avax-rally">struck its initial partnership with AWS</a>. That, at the time, was said to be intended as an effort to accelerate blockchain adoption for enterprises, governments and institutions.



Ava Labs created the Avalanche blockchain. AWS offers an infrastructure platform in the cloud that powers hundreds of thousands of businesses in 190 countries.



The joint arrangement differs from the <a href="https://blockworks.co/news/amazon-nft-marketplace-web3">brewing NFT push undertaken by Amazon</a> proper, Blockworks previously reported. That effort, sources then said, is not led by AWS. 



While supply-chain companies are seeking to use blockchain tech for better track-and-trace processes, AWS and Ava Labs executives said during the webinar, potential future government use cases of blockchain include digital identity and on-chain documentation.&nbsp;



<h2>Ava Labs shifting focus</h2>



Nick Mussallem, head of product at Ava Labs, said the company’s focus has shifted from a single blockchain on which to launch apps, to having technology to allow for a variety of customized blockchains, which it calls subnets.&nbsp;



“All of the orchestration that needs to go underneath the subnet architecture, and all the supporting services that make them work, require a very strong, flexible partner who has high availability, elastic scaling and high throughput systems,” Mussallem said on Wednesday’s webinar. “By deepening our integrations and a lot of the automation on top of AWS, we’re really abstracting a lot of the complexities associated with getting your application to market.”&nbsp;



AWS supports Avalanche’s infrastructure and decentralized application (dapp) ecosystem — including one-click node deployment — through <a href="https://aws.amazon.com/marketplace" target="_blank" rel="noreferrer noopener">AWS Marketplace</a>, according to a <a href="https://medium.com/avalancheavax/ava-labs-and-aws-bring-scalable-blockchain-solutions-to-enterprises-and-governments-295040a34263" target="_blank" rel="noreferrer noopener">January blog post</a>.



Avalanche node operators can run in AWS GovCloud for compliance use cases — deemed a prerequisite for certain enterprises and governments. The partnership also includes Ava Labs joining <a href="https://aws.amazon.com/activate/" target="_blank" rel="noreferrer noopener">AWS Activate</a>, which extends the benefit of AWS credits to builders in the Avalanche ecosystem.



The ultimate goal is allowing individuals and institutions to launch custom subnets “with just a few clicks,” executives said.



Ava Labs President John Wu said a company considering deploying a subnet on Avalanche had many questions — including how to select validators, as well as which wallet to use. &nbsp;



“Between Ava Labs and AWS, we’re going to create this dashboard that allows people to do one click of a subnet and they can choose all their choices based on guidance from previous projects or companies and instantly come up with the answers for them,” Wu said.



An Ava Labs spokesperson declined to comment on potential other future offerings.&nbsp;



This isn’t the first time AWS has <a href="https://www.cnbc.com/2018/05/15/amazon-is-moving-into-blockchain-with-a-new-partnership.html" target="_blank" rel="noreferrer noopener">partnered</a> with a blockchain startup, considering the Amazon division teamed up with Consensys-incubated startup Kaleido in 2018 to offer simplified blockchain platforms.



Amazon Managed Blockchain, the tech giant’s blockchain-focused cloud service, already supports Ethereum and enterprise solution Hyperledger Fabric.



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After AWS Deal With Ava Labs, Web3 at ‘Inflection Point’

John Lee Quigley

What Is Tokenomics? The Investor’s Guide

Bessie Liu

The Bank of England, along with the United Kingdom’s Treasury, is exploring the possibility of a digital currency that would purportedly maintain monetary stability in the UK’s economy.&nbsp;



In a joint <a href="https://www.bankofengland.co.uk/paper/2023/the-digital-pound-technology-working-paper" target="_blank" rel="noreferrer noopener">paper</a> on Tuesday, the Bank of England (BoE) and the government’s HM Treasury said a digital currency is likely needed in the future — adding that it’s still too early to commit to building infrastructure that would underpin it. 



Even so, an examination looking into how the currency could operate is in the works.&nbsp;



Jon Cunliffe, the deputy governor for financial stability for the BoE, said in a <a href="https://www.bankofengland.co.uk/speech/2023/february/jon-cunliffe-speech-at-uk-finance-update-on-central-bank-digital-currency" target="_blank" rel="noreferrer noopener">speech</a> that the consultation and development stage could take two to three years. The results of that process would inform the decision of whether to implement a digital pound. 



“The work … will reduce the lead time to launch should the decision at the end of this stage be to implement the digital pound in the UK, which could then be introduced in the second half of the decade,” Cunliffe said.



The British government will work closely on the development of a technical blueprint for the digital pound — and tap the private sector for research and development, he said.



<h3>Utilizing crypto tech</h3>



A future digital currency will not be similar to cryptoassets “such as bitcoin,” Cunliffe said in the same speech.&nbsp;



“The majority of cryptoassets are highly speculative assets, whose value is extremely volatile, because there is nothing behind them,” he said. “They have no intrinsic value. For that reason, they are not suitable and not used for general payment purposes.”



By contrast, he said that the digital pound would be a “safe, trusted form of money accepted for everyday transactions by households and firms, in the same way as Bank of England notes are today.”



Despite this, he does not dismiss the technology that has helped build cryptocurrencies and the role it could play in the development of the digital pound — especially with digital payment technology on the rise.&nbsp;



“There are already in existence new digital technologies that are being applied to the digital representation, transfer and storing of money like obligations,” he said. “Programmable money, for example, could enable the development of smart contracts which carry out specific actions based on predefined actions and conditions.”



<h3>What does the digital pound look like?</h3>



The digital pound would be designed to be used like a digital banknote for day to day payments — both in person and online — but would not replace cash outright.



Any issuance would incorporate public and private partnerships, the consultation paper said. UK’s Central Bank would provide the currency and central infrastructure, and private sector companies would look at ways to integrate it into their operations and interface — such as existing digital wallets.



“Users would interact with digital pounds by using their wallet to see their balance and instruct payments and transfers of digital pounds. It is likely most people would access the wallet via their smartphone, but there would be alternative options, such as a smart card,” the consultation paper said.



<h3>Global adoption of digital currencies</h3>



The UK is not the only country looking into adopting digital currencies.&nbsp;



According to the Atlantic Council’s CBDC <a href="https://www.atlanticcouncil.org/cbdctracker/" target="_blank" rel="noreferrer noopener">tracker,</a> 11 countries have already launched a digital currency, and 17 countries are already testing their own pilot version.



Notably, <a href="https://blockworks.co/news/china-debuts-digital-yuan-at-winter-olympics-amid-warnings-from-us-senator">China’s pilot of its digital yuan</a>, is on track to expand to the entire country this year.



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The Bank of England is Looking to Build a Digital Pound

Ethereum is entering its fourth consecutive week of deflationary issuance as activity on the network grows.



A deflationary issuance rate for cryptocurrencies means that the number of tokens being burnt is greater than the number of tokens being minted. This implies that the token is limited in supply compared to demand, giving the currency greater purchasing power.



Growing activity in decentralized platforms could indicate more people turning to DeFi after the collapse of its centralized competitors last year, Michael Bentley, CEO and co-founder of DeFi lending protocol Euler, told Blockworks.&nbsp;



“Following <a href="https://blockworks.co/news/eth-turns-deflationary-again">protocol upgrades</a> last year, Ethereum has an in-built fee burning mechanism that ensures that the more people transact on the network, the more ETH gets burned,” Bentley said.



At the time of writing, the annualized inflation rate for Ethereum currently sits at -0.01% according to information from <a href="https://ultrasound.money/" target="_blank" rel="noreferrer noopener">ultrasound.money</a>.



<blockquote class="wp-block-quote">
“There&#8217;s so much activity on Ethereum in early 2023 that ETH itself is becoming more and more scarce, and has even recently become a deflationary asset,” Bentley said. 
</blockquote>



Over the past seven days, Uniswap’s universal router has burned almost <a href="https://etherscan.io/address/0xef1c6e67703c7bd7107eed8303fbe6ec2554bf6b" target="_blank" rel="noreferrer noopener">2,500 ETH</a>, taking the top spot in the <a href="https://ultrasound.money/#burn" target="_blank" rel="noreferrer noopener">burn leaderboard</a> previously occupied by OpenSea.



Uniswap is the second-largest decentralized exchange in DeFi today in terms of total value locked, at <a href="https://defillama.com/protocols/dexes" target="_blank" rel="noreferrer noopener">$4.03 billion</a>, behind Curve Finance. But Uniswap is the clear leader when measuring 24-hour trading volume with <a href="https://defillama.com/dexs" target="_blank" rel="noreferrer noopener">​​$1.78 billion</a>, information on DefiLama shows. That volume is what’s driving Ethereum fees.



According to <a href="https://www.blockworksresearch.com/" target="_blank" rel="noreferrer noopener">Blockworks Research</a> analyst <a href="https://twitter.com/MattFiebach" target="_blank" rel="noreferrer noopener">Matt Fiebach</a>, “Ethereum gas fees hover around 40 gwei and a 7-day moving average over 25 gwei, the highest seen since July of last year.” 



“With Uniswap leading the pack as the largest gas guzzler by a mile over the last 7 days, it is clear that crypto market participants are risk-on and actively trading high beta bets,” Fiebach said.



This sentiment is shared by Brent Xu, CEO and co-founder of Umee, a Web3 bond-market platform for building DeFi utility, who told Blockworks that the increase in network activity on Ethereum is the primary reason that we see a deflationary issuance on the chain.



“This is a good sign. It means that Ethereum is doing well — notably since daily network fees are up substantially since their December lows,” Xu said.&nbsp;



Xu also notes that user activity is increasing not only on Ethereum but on other blockchains as well.&nbsp;



“More broadly, all this is indicative of positive signs for the broader crypto ecosystem,” he said.



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Network Activity on Ethereum Is Up, With Uniswap Leading the Charge

An Ad Hoc group of borrowers is hoping to get their hands on assets currently held up in legal limbo in Celsius’s bankruptcy case, according to a Tuesday court filing.&nbsp;



The group argues that cryptocurrency put up as collateral for loans should not be included in the bankruptcy estate, according to the <a href="https://ecf.nysb.uscourts.gov/cgi-bin/show_temp.pl?file=file0.628557088642509.pdf&amp;type=application/pdf">complaint</a> filed in US Bankruptcy Court for the Southern District of New York.&nbsp;



The group is looking for a declaratory judgment ruling that the collateral crypto be returned to the original owners. The group is also requesting <a href="https://blockworks.co/tag/celsius">Celsius</a> provide accounting documents.



The complaint makes the argument that “It is inequitable and unjust to permit the Debtors’ bankruptcy estates to continue to retain the Collateral.”



The filing alleges that Celsisus “engaged in deceptive trade practices,” committed fraud, and violated various consumer finance laws and licensing requirements.



The complaint lists eleven claims for relief including:



<ul>
<li>Declaratory Judgment Pursuant to Bankruptcy Rule 7001(9) that Collateral is Not Property of the Estate</li>



<li>Accounting and Turnover of Collateral</li>



<li>Deceptive Trade Practices</li>



<li>Consumer Fraud</li>



<li>Unlawful Provision of Money Services</li>



<li>Fraudulent Misrepresentations</li>



<li>Declaratory Judgment that the Loans are Void and Unenforceable Due to Fraudulent Inducement</li>



<li>Breach of Contract</li>



<li>Unjust Enrichment</li>
</ul>



Borrowers have not been able to access funds from their Celsius accounts since June 2022, the complaint alleges. Celsius filed its voluntary petition in relief with the bankruptcy court in July 2022.&nbsp;



The complaint comes shortly after it was revealed that it will likely be impossible to make all creditors whole.&nbsp;



A federal bankruptcy judge <a href="https://blockworks.co/news/not-enough-value-left-to-repay-celsius-customers">ruled in January</a> that Celsius Network owns the tokens customers deposited into its interest-bearing accounts before the lender went under. When <a href="https://blockworks.co/news/celsius-to-file-for-bankruptcy-imminently-report">Celsius filed for bankruptcy</a>, it had about 600,000 accounts in the company’s highest yield-bearing cryptocurrency products.&nbsp;



As of July 2022, such accounts totaled a scant $4.2 million, according to a January court filing.&nbsp;“There simply will <a href="https://blockworks.co/news/not-enough-value-left-to-repay-celsius-customers">not be enough value available</a> to repay all [Celsius customers] in full,” the <a href="https://cases.stretto.com/public/x191/11749/PLEADINGS/1174901042380000000067.pdf">filing</a> said.

Celsius Borrowers: Bankruptcy Estate Should Return Collateral

Michael Bodley

Cryptocurrency valuations have at least one thing in common with a long fly ball to center field: They’re going, going, gone.



The sentiment applies across the digital assets board, extending to spot assets, the cost of putting on overlying derivatives trades, stakes in startups and structured products. And the list goes on. And on. And on.&nbsp;



The next time Aaron Judge of the New York Yankees smashes a fastball over Fenway’s towering Green Monster, Red Sox fans are going to be up in arms — what else is new?



For institutional cryptocurrency traders and the allocators that back them, though, the MLB analogy equates to an entirely different outcome than the irate Bostonians. <a href="https://blockworks.co/news/bargain-basement-opportunity-for-crypto-volatility-traders">There’s abundant opportunity this quarter</a> and beyond to rake in substantial sums out of all the carnage, provided one has the capability, plus the connections, to sell the correct kind of strategy to seeders and limited partners.



Market participants told Blockworks that — by and large — there’s no shortage of silver linings, ones that smack the never-ending depressive sentiment squarely across the face. This analysis also relies on previous Blockworks reporting.



That’s not to say raising capital in this environment is an easy feat these days.



Digital asset’s epic, at times almost unfathomable, beating in 2022 backed crypto natives — and Wall Street’s top traders who have at least dabbled in the sector — into the tightest of corners. Success stories in the fourth quarter, at least in terms of performance and known notable capital raises, were hard to come by.



Untold billions of capital, especially Wall Street dollars, were still hanging in the yearend balance.



The metric is difficult to quantify, but every source arrived at the same general conclusion on the market’s rollercoaster-like volatility: There are virtually endless and lingering opportunities to derive alpha via strategies that are tailor-made for all the financial insanity.&nbsp;



But those opportunities are likely fleeting.



<h2>Turning the (finance) corner</h2>



From a macro perspective, the corner, in more ways than one, is already turning — or has already turned — for the better.



Even if viewpoints on what’s to come vary, vary a whole lot.&nbsp;



The S&amp;P 500 and the NASDAQ have clawed back 2022 losses in a big way, inflation has cooled, and the <a href="https://blockworks.co/news/federal-reserve-raises-interest-rates-25-bps">Federal Reserve has not been ramping up interest rates</a> as aggressively.&nbsp;



The relative bullishness has extended to the world of Web3, albeit to a more measured extent.



Case in point: <a href="https://blockworks.co/news/altcoins-soaring-2023">Altcoins have taken off</a>.&nbsp;



The industry’s cumulative market cap clocked in at $754 billion on Jan. 1, according to TradingView data, far from its bull market standing in the trillions.&nbsp;



It’s now hovering around the $1 trillion mark, equating to a 25% recovery in a little more than a month’s time — handily outpacing the NASDAQ&#8217;s own bounce back of about 15%, as well as the S&amp;P 500’s approximately 8% rebound from 2022’s worst showing since 2008.&nbsp;



Longtime traditional finance players with sway have taken note. Cambridge Associates, in one example, has not stopped the institutional allocation adviser’s developing push into digital asset due diligence. Hedge fund multi-billionaire Steve Cohen’s Point72 has pushed onward in the same (buy-side) fashion, not to mention Cohen’s nascent and progressing proprietary trading firm that started taking shape last year.



Read More: <a href="https://blockworks.co/news/inside-crypto-lp-big-leagues">The inside scoop on what flailing crypto investors told their LPs in Q4</a>



Brevan Howard Digital — the <a href="https://blockworks.co/news/brevan-howard-scores-largest-crypto-hedge-fund-launch-ever">largest crypto hedge fund launch</a> on record at the time — is said to have dipped a bit in terms of the performance of its core strategy from time to time in 2022.&nbsp;Its more recent showing isn’t known.



The entity at the time represented one of the largest one-time commitments to digital assets by a traditional investment manager. It was heralded as a mammoth indicator of the seriousness of the world’s top macro investors taking the Web3 plunge.&nbsp;



The affiliate of the long-time multi-strategy manager <a href="https://blockworks.co/news/brevan-howard-crypto-layoffs">cut some underperformers</a> toward year-end 2022. Like so many of its peers did — or are in the process of doing now.



For many institutions, though, it’s been more of a pump-the-brakes effort, in many cases, not a get-us-out-of-here moment.&nbsp;



Attractive valuations are a big reason why.&nbsp;



Jeff Reed, global head of sales for crypto market maker Liquidity One, told Blockworks that “valuations across the board” from blue-chips like bitcoin and ether to stakes in sector startups, are “extremely attractive at this point” in the cycle.&nbsp;



“It really just comes down to what kind of experience you had [in the fourth quarter and in 2023 so far] — and how much dry powder you now have available,” Reed said.



Added Reed in an interview last week: “All the signs I’ve been seeing over the last three weeks are extremely positive.”



<h2>FTX? Moving on&nbsp;</h2>



Crypto traders of all ilks are really, really sick of talking about the saga revolving around FTX’s collapse in the fourth quarter. They’re also very much dealing with the aftershocks, in terms of volatility and liquidity (or lack thereof, given funds stuck on the bankrupt exchange in some cases).



“People got really spooked by FTX,” Reed said. “They wanted to let that play out and see what was going to happen and re-adjust. The more conservative [investors] that may be coming into crypto for the first time, they’re doing more due diligence. They’re taking more time before they invest their capital.”



Armando Aguilar, co-founder of venture startup Aztlan Capital — <a href="https://blockworks.co/news/latin-america-growing-crypto-hotbed">which focuses on Latin American blockchain plays</a> — told Blockworks that “a lot of people started relatively cash heavy” in 2022’s fourth quarter as the market took (yet another) dive.&nbsp;



Seed rounds raised in the last couple of months of last year, Aguilar spotted at the time, were clocking in around the $5 million (or less) valuation mark, typically on lower multiples — with net check sizes of less than a million dollars.&nbsp;



More recently, Aguilar said he’s picking up on “quite a few deals that are now [around] the $10 million to $25 million mark.”&nbsp;



Recent examples sourced from previous Blockworks’ reporting fitting that bill:



<ul>
<li>Block Joy, a Web3 infrastructure-focused startup, landed a Series A round of $12 million</li>



<li>Digital assets security specialist Hypernative locked in a $9 million seed raise led by IBM’s venture arm</li>



<li>Another crypto infrastructure provider, Spatial Labs, snagged $10 million in a round with Marcy Venture Partners, a firm affiliated with Jay-Z</li>
</ul>



The number of bets venture capitalists are taking on crypto startups of late has been up from the same period a year ago — though the individual check sizes have been down.&nbsp;



Companies <a href="https://blockworks.co/news/funding-roundup-investors-bidding-small">raising rounds last week took in a cumulative $185 million</a>, per <a href="https://defillama.com/raises" target="_blank" rel="noreferrer noopener">DeFiLama</a> data. That’s a far cry from the $578 million startups raked in over the same seven days in 2022.&nbsp;&nbsp;&nbsp;



But, according to the same data providers, 20 entities took in capital this time around. Just three did the same in 2022, including FTX…



There’s a recent and building appetite for risk assets, according to Aguilar, who attributed the sentiment shift to macro factors — including the Federal Reserve showing signs of cooling its quantitative tightening measures, inflation metrics dropping from near-historic 2022 highs, and top technology stocks booming.



Coinbase <a href="https://blockworks.co/news/coinbase-stock-soaring">has boomed even more</a>.&nbsp;



Consider that Meta’s stock had its floor fall out in 2022, dropping more than 40% at one point. Still, the share price of the social media giant — now <a href="https://blockworks.co/news/meta-metaverse-losses-q4-2022">focused on metaverse initiatives</a> — was down roughly 17% over the last 12 months through Tuesday afternoon in New York.&nbsp;



That’s because it was up about 55% in the five or so weeks since 2023 began alone.



Traders and analysts alike pay close attention to correlations between tech stocks and spot cryptoassets which, in turn, inform the valuations of crypto startups over the long haul. In other words, what’s good for Big Tech is often good for crypto getting big.



<h2>Venture, spot, NFTs…</h2>



NFT markets haven’t been immune to the market’s shifting winds.&nbsp;



Sasha Fleyshman — a portfolio manager for the established and <a href="https://blockworks.co/news/dodging-worst-of-ftx-arca-wont-stay-stagnant">digital assets-focused investment manager</a> <a href="https://blockworks.co/tag/arca">Arca’s</a> actively managed NFT vehicle — told Blockworks that the fourth quarter’s digital collectibles downturn was likewise driven by “the actual macro deteriorating” over the last six to 12 months. Arca’s NFT strategy takes a longer-term time horizon and imposes a corresponding lockup on the capital of its limited partners. Fleyshman, who is a crypto veteran, said the bullish buildup to the dropoff in some ways was reminiscent of the initial coin offering (ICO) era in 2017 — “where everything was getting funded” and “everyone was excited, [because] things were rocketing higher.”



Well-documented liquidity complications circa last fall, at least in part, triggered the “rapid fall,” which Fleyshman compared to an elevator rising and falling. But in a faster fashion.



Sounds a lot like Disney World’s <a href="https://youtu.be/3zo64_w0pyo?t=248" target="_blank" rel="noreferrer noopener">Tower of Terror</a>.&nbsp;



There was, for sure and at the time, a “level of despair” among big-money allocators, according to Joe Marenda, Cambridge Associates’ global head of crypto investing.&nbsp;



And it was a deep despair, the Cambridge partner told Blockworks, with a bleaker outlook than last year’s preceding down periods. But <a href="https://blockworks.co/news/brevan-howard-crypto-layoffs">things are looking up</a>.&nbsp;



“People were like, ‘Oh, boy, this is gonna’ be a bad one,’” Marenda said. “That was very similar to what the crypto winter’s bottom in the last round felt like, where people were beginning to question [if] they should go back to Big Tech, go back to traditional finance…I feel like we’re past that now. So, I feel like we’re past the bottom.”



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What’s Bad for Crypto May Be Good for Crypto Traders

The blockchain industry has evolved significantly from its early years. A novel move to provide the world with peer-to-peer digital cash has birthed several multi-billion dollar networks and applications with the potential to improve the global financial system.&nbsp;



However, the current state of blockchain technology is far from perfect and is akin to building multiple highways to a single destination. <a href="https://earthweb.com/how-many-blockchains-are-there/" target="_blank" rel="noreferrer noopener">Over 1,000 blockchain networks</a> offer the same use case: powering decentralized applications. Users interact with too many protocols and still pay ridiculously high fees to access the most popular blockchains. The rest of the networks are lonely highways with little to no user traffic or developer activity.



The idea of a multichain future has emerged in recent years as a solution to the highly-fragmented state of blockchain networks. This piece explores a new definition of the multichain future where one network is home to multiple chains. This is in contrast to the previously recognized definition of multichain where various dApps are designed to interact with a handful of layer-1 blockchains. A well-known example is the decentralized exchange Pancake Swap, which is on both the BNB Smart Chain and Ethereum.&nbsp;



To illustrate this new definition, the following article will dive into a cutting-edge project named <a href="https://skale.space/" target="_blank" rel="noreferrer noopener">SKALE</a> that adopts a unique approach to building high-performance networks fit for mainstream adoption.



<h2>The current state of blockchain networks</h2>



Blockchain networks provide the underlying infrastructure for users to access the myriad of decentralized applications built by developers. Yet, user experience on different blockchains varies dramatically, and the poor interoperability between these systems makes it difficult for developers and users to switch from one network to another seamlessly.



A classic example of such difficulty is when users try to interact with different blockchains by moving funds across different networks using bridge protocols. Aside from a confusing user experience on bridge protocols and limited interoperability, users take on immense security risks, as evidenced by the <a href="https://blog.chainalysis.com/reports/cross-chain-bridge-hacks-2022/" target="_blank" rel="noreferrer noopener">over $2 billion</a> stolen from blockchain bridges in the past year.



These risks exist because every blockchain network and their respective bridges have its own sets of rules and protocols. Since there are so many blockchain networks with segmented developer communities, innovation is fragmented across those networks, which adds to a confusing user experience. In this reality, no one wins. When developers and users are spread across L1s and L2s, innovation is dispersed or hidden away in silos.&nbsp;



With all this in mind, it’s unsurprising that the Ethereum mainnet remains the most widely used blockchain despite its relatively high gas fees. The complexities of going cross-chain by adopting layer-2s or the newest layer-1 blockchains impedes on user adoption. The power of Ethereum’s network effects are hard to overstate for users and even harder to overcome for up-and-coming blockchains.&nbsp;



<h2>Is a new multichain model the key to scaling blockchains?</h2>



The perfect idea of a multichain future is one where developers and users can glide across different networks and applications seamlessly and intuitively. However, the prospect of such a multichain world grows increasingly bleak with each new blockchain that arrives on the scene. The diverse set of protocols and systems involved makes interoperability increasingly tricky. While blockchain technology depends on an inherently decentralized structure far from any singular governing authority, there’s still a long-ignored opportunity in the space for establishing <a href="https://www.investopedia.com/terms/s/standardization.asp" target="_blank" rel="noreferrer noopener">standardization</a> in the industry. An example of standardization in the traditional financial system is the requirement for publicly listed US companies to adhere to generally accepted accounting principles (GAAP). This enables investors to research two companies and know they’re comparing apples to apples.



Similarly, Web3 could benefit from the efficiencies enabled by standardization, and perhaps a new multichain model built from the ground up is the solution. SKALE is a modular blockchain network that offers a multichain experience to power mainstream-level applications. SKALE’s infrastructure consists of EVM-compatible, app-specific blockchains and hubs dedicated to different categories of Web3 applications. Hubs can be thought of as <a href="https://skale.space/blog/modular-skale-chains-and-the-new-hub" target="_blank" rel="noreferrer noopener">service stations</a> that, according to SKALE co-founder and CEO Jack O&#8217;Holleran, “provide liquidity, swapping, and marketplace services to dApp chains” dedicated to gaming, NFTs, and other use cases. This Hub Architecture connects each individual, yet still interoperable blockchains called SKALE Chains.



SKALE launched its mainnet in 2020 and has rapidly scaled its solution with a focus on providing <a href="https://blockworks.co/news/the-future-of-web3-needs-zero-gas-fees" target="_blank" rel="noreferrer noopener">zero gas fees</a> to users. The SKALE network taps into the Ethereum network’s security to achieve consensus through mainnet smart contracts, known as the SKALE Manager, that controls staking delegations, validator nodes, SKALE chain deployment, and other core functionalities. The network’s validator incentives are derived from the costs incurred by developers who pay a fee to launch and sustain application-specific SKALE chains.&nbsp;



While the multichain future is uncertain to industry observers, <a href="https://cointelegraph.com/news/a-multichain-approach-is-the-future-of-the-blockchain-industry" target="_blank" rel="noreferrer noopener">they acknowledge</a> that “it could revolutionize the way we use blockchain technology.” SKALE’s version of multichain is the perfect platform for developers and users to realize the desired outcome.&nbsp;



SKALE is an accessible platform for the broadest community of blockchain developers because each chain is EVM-native. Each application-specific chain’s high throughput and scalability enable developers to offer zero gas fees to users while building a wide range of compute-intensive dApps like <a href="https://exorde.network/" target="_blank" rel="noreferrer noopener">Exorde</a>, which is currently unimaginable with other blockchain networks. This zero-gas environment is enabled by SKALE fuel or <a href="https://docs.skale.network/learn/skale-chain-fuel" target="_blank" rel="noreferrer noopener">sFuel</a>. This unique approach to network security prevents spam transactions or DDoS attacks through this gas token. Because it’s valueless, it is a purpose-built tool to help developers focus on scaling on secure chains without the distraction of speculation.



Lastly, a uniform set of tools support all SKALE chains&#8217; interoperability, allowing users to freely move assets without the risks associated with contemporary multichain bridges. For example, <a href="https://skale.space/blog/what-is-skale-metaport" target="_blank" rel="noreferrer noopener">SKALE’s Metaport</a> is a UX widget that allows users to interact with underlying API layers and bridge their assets between SKALE chains. So if someone wants to transfer a game token from the <a href="https://nebulachain.io/">Nebula Gaming chain</a> to the <a href="https://blog.ruby.exchange/co-launching-the-europa-liquidity-hub-for-skale/" target="_blank" rel="noreferrer noopener">Europa Liquidity chain</a> to yield farm, and back again, Metaport allows them to do this safely and intuitively.&nbsp;



<h2>SKALE’s multichain model delivers huge benefits</h2>



The opportunities for a multichain network with mainstream-level capacity for dApp developers and users are limitless. SKALE’s current infrastructure brings the following outstanding benefits to users, developers, and businesses:



<h3>1. Ease of adoption</h3>



In 2022, SKALE <a href="https://skale.space/blog/skale-2022-year-in-review-building-the-foundation-for-the-future-of-web3" target="_blank" rel="noreferrer noopener">recorded more than</a> 30 million transactions spanning over 240,000 users. While these are strong numbers, the SKALE ecosystem is hoping to maximize the unique opportunities of the bear market to continue onboarding new users and empower developers to build high-performance dApps on the protocol.



The key to a protocol’s long-term success is continuous developer investment, and as such, SKALE is compatible with <a href="https://soliditylang.org/">Solidity</a> and the entire EVM suite of products. This uniform set of protocols and applications makes SKALE easier for developers to build on and ultimately benefits users with a better experience on more applications.&nbsp;



<h3>2. Sustainability</h3>



SKALE implements a highly sustainable proof-of-stake consensus model that allows each validator to serve as a sub-validator for up to eight SKALE chains. Furthermore, the adoption of application-specific chains allows the network to scale sustainably.&nbsp;



Adding new chains or increasing network usage does not impact hardware requirements for network validators. Existing validators are randomly assigned to new SKALE chains, while developers only add new chains as their user base increases. As dApps grow their user base and/or transaction count, their SKALE chain will be able to linearly scale without needing to worry about high costs or network congestion.



<h3>3. Predictable fees for developers and users</h3>



As mentioned earlier, SKALE is the only blockchain that guarantees <a href="https://blockworks.co/news/the-future-of-web3-needs-zero-gas-fees" target="_blank" rel="noreferrer noopener">zero gas fees</a> for end users. The network achieves this by using a two-way subscription model. Initially, developers pay a one-time fee (via staking SKL) determined by SKALE governance to launch their chain.



Next, each entity that creates a SKALE chain pays a monthly subscription fee (paid from the staked SKL) to cover the resources needed to operate the chain. Because the subscription fee largely depends on dApp usage on their chain, developers and businesses can predict costs while offering users a gasless experience. The staking of SKL and payment to validators are controlled by the SKALE manager on Ethereum.&nbsp;



<h3>4. Interoperability across SKALE chains and Ethereum (and other networks)</h3>



SKALE’s modular blockchain design allows for increased interoperability within the different chains in the ecosystem. SKALE unlocked this interoperability with its recent V2 upgrade, which among other things, enables the smooth transfer of assets across chains using its Metaport widget.



SKALE is already interoperable with Ethereum, hosting 25 of its core smart contracts on the legacy network. Additionally, users can mint Ethereum-generated tokens (such as ERC-20 and ERC-721) and use them directly on the SKALE network. SKALE’s interoperability with Ethereum and its Hub Architecture solves the persistent problem of liquidity fragmentation, as SKALE dApps can easily tap into liquidity from across the EVM ecosystem. The <a href="https://blog.ruby.exchange/co-launching-the-europa-liquidity-hub-for-skale/" target="_blank" rel="noreferrer noopener">Europa Hub</a> solves for this liquidity fragmentation seen so often through intensive on-chain applications such as gaming and NFTs.&nbsp;



<h3>5. Better user experience</h3>



So far, the lack of an intuitive user interface has held back much of Web3’s innovations from gaining the adoption of Web2 apps. But the future of Web3 must be user-friendly, offering the same level of convenience as its predecessor. SKALE’s multichain technology offers a clear roadmap to a drive at such an outcome by allowing multiple Web3 use cases to run in the background while users benefit from a simple yet capable interface.&nbsp;



Because SKALE users do not need SKL to pay transaction fees, they can focus on dApp experiences without worrying about fee spikes or network congestion. Users can also easily migrate assets across SKALE chains using Metaport, which replaces the current complexities posed by contemporary cross-chain bridges that connect different blockchains. These complexities are a common complaint lodged against Web3, and enterprises would benefit the most from a viable solution. A consensus is growing louder that Web3 won’t fully hit the mainstream until it provides an almost Web2 look-and-feel for users. The argument is well made that the average user doesn’t have the time or interest in learning a new suite of tools to interact with Web3. If that’s the case, enterprises would be smart to implement tools like Metaport that allow for “invisible” Web3 experiences where users don’t even know they’re necessarily using Web3.&nbsp;



<h2>The future is multichain&nbsp;</h2>



SKALE is setting the tone for the multichain future by pioneering a novel approach to scaling Ethereum. SKALE provides interconnected application-specific chains that tap into Ethereum&#8217;s security while supporting all EVM-compatible dApps and assets.



A multichain world where users adopt different blockchains simultaneously is highly unsustainable since diverse networks implement different protocols and rules, making them less interoperable. Plus, the user experience is greatly diminished with high transaction fees and the complexities of migrating from different blockchains.



But SKALE chains set themselves apart by being highly interoperable with full capacity to host dApps from different Web3 verticals. Everyone wins — users enjoy a gasless experience while developers are able to access a dedicated infrastructure with infinite scalability. SKALE’s network of networks delivers an unparalleled Web3 experience and provides the springboard for multichain technology to reach its full potential.



This content is sponsored by <a href="https://skale.space/" target="_blank" rel="noreferrer noopener">SKALE</a>.



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The Investor’s Guide to the Multichain Future

Swiss crypto-focused bank SEBA has hired a former JPMorgan banker to head its Asia Pacific division.



Amy Yu previously worked within JPMorgan’s prime brokerage services division for six years. She earlier held roles in other traditional financial institutions, UBS and Nomura.&nbsp;



Yu ventured into the world of crypto in 2018, joining crypto exchange BitMEX to develop services for institutional clients. Then she became head of sales for the Asia Pacific region at Genesis, which <a href="https://blockworks.co/news/genesis-in-chapter-11-wont-insulate-silbert-winklevoss-says">filed for bankruptcy</a> in January.



Her appointment to SEBA signifies the company’s intent to expand across Asia Pacific, and she will initially be based in Singapore, according to a <a href="https://www.seba.swiss/media-and-investors/SEBA-bank-appoints-amy-yu-as-apac-ceo" target="_blank" rel="noreferrer noopener">press release</a>. In November, Hong Kong became SEBA’s first strategic location to drive growth in the region, with a new office set up there. 



Yu joins the bank as someone with deep domain expertise in both crypto and traditional banking in the region, SEBA said.



“Following the recent opening of our office in Hong Kong, Yu has the successful track record and expertise to capitalize on this momentum and lead our business through the next pivotal phase of development in the region,” Franz Bergmueller, SEBA Bank’s CEO, said in a statement.



Backed by Swiss wealth management group Julius Baer and founded in April 2018, SEBA operates a universal suite of regulated banking services in the digital economy. Ahead of the Merge last year, the bank implemented <a href="https://blockworks.co/news/seba-bank-enables-ether-staking-as-merge-nears">ether staking services</a> for large clients.



Yu acknowledged the crypto industry’s troubles of last year in an <a href="https://www.bloomberg.com/news/articles/2023-02-07/crypto-bank-seba-hires-ex-jpmorgan-banker-as-asia-pacific-ceo" target="_blank" rel="noreferrer noopener">interview</a> with Bloomberg, saying there are lessons to be learned from the recent crisis.



The bank currently has just three staff members in Singapore, and future hiring will depend on how licensing goes, she added.



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Ex-JPMorgan Banker Hired as Swiss Crypto Bank’s APAC Head

A new US Federal Reserve rule has further cemented the central bank’s wariness about cryptoasset activities.



A <a href="https://public-inspection.federalregister.gov/2023-02192.pdf" target="_blank" rel="noreferrer noopener">statement</a> issued by the board of governors of the Federal Reserve System on Tuesday clarifies Section 9(13) of the Federal Reserve Act, in response to inquiries and proposals from state member banks regarding engagement in crypto-asset activities.



The board issued two directives stating that it will “presumptively prohibit” member banks from holding most cryptoassets as principal, including bitcoin and ether, and those looking to issue a dollar token will have to demonstrate they have safe controls in place.&nbsp;



Further, the rules cited that the cryptoasset sector is “largely unregulated or noncompliant” with regulation from the perspective of market conduct, and that issuing tokens on decentralized networks raises cybersecurity risks.&nbsp;



“In practice, this presumption could be rebutted if there is a clear and compelling rationale for the Board to allow deviations in regulatory treatment among federally supervised banks, and the state member bank has robust plans for managing the risks of such activities in accordance with principles of safe and sound banking,” the board said.



Still, member banks can provide safekeeping services for cryptoassets in a custodial manner if they are conducted in a safe manner.&nbsp;



The Fed Reserve has 12 regional banks across the US, which each oversee member banks in their own state. These members are state banks that have chosen to join the Fed Reserve System. For instance, the Federal Reserve Bank of Dallas <a href="https://www.dallasfed.org/-/media/Documents/banking/memberbanks.pdf" target="_blank" rel="noreferrer noopener">oversees</a> several entities including American State Bank, Comerica, Texas National and Big Bend Banks.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">I don&#39;t want to alarm, but since the turn of the year, a new Operation Choke Point type operation began targeting the crypto space in the US. it is a well-coordinated effort to marginalize the industry and cut of its connectivity to the banking system &#8211; and it&#39;s working&mdash; nic carter (@nic__carter) <a href="https://twitter.com/nic__carter/status/1622973966360133634?ref_src=twsrc%5Etfw">February 7, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Concerns have been floating that the US is clamping down on the digital asset industry, with various financial institutions like the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency <a href="https://www.fdic.gov/news/press-releases/2023/pr23002a.pdf" target="_blank" rel="noreferrer noopener">highlighting</a> significant risks associated with the sector.



In another such incident, crypto-focused bank Custodia’s application to become a member of the Fed Reserve was recently <a href="https://www.forbes.com/sites/genegrant/2023/02/06/white-house-cools-on-crypto-and-custodia-bank-rejected-by-the-fed/" target="_blank" rel="noreferrer noopener">rejected</a> due to its “novel business model and proposed focus on cryptoassets.”  Separately, the White House issued a <a href="https://www.whitehouse.gov/nec/briefing-room/2023/01/27/the-administrations-roadmap-to-mitigate-cryptocurrencies-risks/" target="_blank" rel="noreferrer noopener">blog</a> called “The Administration’s Roadmap to Mitigate Cryptocurrencies’ Risks,” calling on Congress to step up efforts to enact cryptoasset legislation.



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Fed Board Prohibits Member Banks from Holding Cryptoassets as Principal

Dubai’s crypto regulator has published its eagerly-anticipated regulations for the local industry — including an effective ban on anonymity-focused digital assets known as privacy coins.



The emirate’s Virtual Assets Regulatory Authority (VARA) released its <a href="https://www.vara.ae/media/Virtual%20Assets%20and%20Related%20Activities%20Regulations%202023.pdf" target="_blank" rel="noreferrer noopener">rulebook</a> on Tuesday. It  includes 10 fundamental principles and goals including licensing requirements, anti-money laundering obligations, stipulations on marketing and promotion and offenses like insider dealing.



VARA describes anonymity-enhanced cryptocurrencies as assets which prevent the tracking of ownership or transactions — an impediment for which crypto service providers currently have no way to effectively mitigate.



Dubai’s new <a href="https://www.vara.ae/media/Virtual%20Assets%20and%20Related%20Activities%20Regulations%202023.pdf" target="_blank" rel="noreferrer noopener">rule</a> means cryptocurrencies such as <a href="https://blockworks.co/news/crypto-mixers-and-privacy-coins-can-they-resist-censorship">Zcash (ZEC) and Monero</a> (XMR) won’t be allowed, nor can local entities create such coins. 



Japan similarly banned privacy coins in 2019 while a string of <a href="https://www.coindesk.com/markets/2019/11/26/another-crypto-exchange-is-dropping-privacy-coin-monero-over-compliance-risk/" target="_blank" rel="noreferrer noopener">exchanges</a> have delisted some offerings over the past few years, including Huobi and BitBay. Coinbase shed ZEC in the UK in 2019 and has so far avoided listing XMR altogether.



Among other rules, entities can’t describe themselves as virtual asset businesses unless they are licensed by the VARA to do so. Large proprietary traders that actively invest $250 million or more in crypto must register with the VARA.



Reasons for license revocation include violation of any directive or if an entity is insolvent. The regulator also sets fees for various services, in the range of 40,000 dirhams ($10,889) to 200,000 ($54,449) dirhams.



Violating rules related to market conduct can lead to fines of up to 20 million dirhams ($5.4 million) for individuals and up to 50 million dirhams ($13.6 million) for a virtual asset service provider, such as exchanges or payment processors.



The VARA’s regulations apply to virtual asset businesses and activities within the emirate of Dubai, including special development zones and free zones, but exclude the Dubai International Financial Centre which has its own regulator.



A recent report showed Dubai has attracted more than <a href="https://blockworks.co/news/dubai-free-zone-now-home-to-more-than-500-crypto-startups">500 crypto companies</a> to its digital asset ecosystem. But crypto-friendliness hasn’t exactly meant that the wealthy Middle Eastern city has been easy on new businesses wanting to set up shop.&nbsp;



Tim Buyn, global government relations officer at OKX’s parent firm, <a href="https://blockworks.co/news/crypto-seeks-freedom-in-the-uae-is-it-a-regulatory-rug-pull">told Blockworks</a> in August that the due diligence process “has easily over 100 data items or documents” that need to be turned in.



The VARA’s ambitions include positioning Dubai as a regional and international hub for virtual assets in a manner that would boost its competitive edge locally and internally. It also hopes that its business-friendly regulatory landscape would attract investments and motivate businesses to set up their operations in Dubai.



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Privacy Coins To Be Banned in Dubai

0xpibblez

Solana's Redemption Arc

Permissionless is the brainchild of Blockworks and Bankless. Over 5,500 people attended the inaugural event in 2022, making Permissionless the world’s largest DeFi conference.&nbsp;



What sets Permissionless apart? It’s a crypto native’s paradise, crafted specifically for both builders and investors who are dedicated to scaling the industry.&nbsp;



Permissionless is headed to Austin in 2023, and you know what they say… Everything is bigger in Texas.&nbsp;



Permissionless 2023 will feature the biggest names in Web3, a gargantuan exposition hall filled with the top brands in the space, an awe-inspiring NFT Gallery, inclusive, community-focused parties and events, metaverse experiences, and so much more.



See you in Paradise.

Tickets

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General Admission Pass

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Student tickets will be launching in early 2023

Student Ticket 

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Speakers

Erik Voorhees

Mary-Catherine (MC) Lader is the Chief Operating Officer of Uniswap Labs, a developer of foundational web3-based products and applications. In this role, she oversees the company’s growth efforts, strategic initiatives, and operations. Previously, she held various leadership roles at BlackRock, including as the Global Head of the firm’s digital sustainability business, Chief Operating Officer of the firm’s digital wealth business, and leader of the firm’s strategic fintech investments and blockchain activities. MC began her career as an investor in Goldman Sachs’ Special Situations Group. She received her J.D. and M.B.A. degrees at Harvard Law School and Harvard Business School, respectively, and her B.A. at Brown University.

Mary-Catherine Lader

Zaki Manian is a Co-Founder of Sommelier, the most powerful coprocessor yet for DeFi traders and Liquidity Providers. He’s also a Co-Founder of iqlusion, which provides infrastructure like a data center and a Cosmos validator for next-gen crypto technologies. Previously, Zaki helped build the Cosmos ecosystem, including launching the first public Cosmos testnet, and served as a director of Tendermint. Zaki has been a leading developer in the blockchain space since 2014, when he taught himself cryptography and began contributing to projects including Bitcoin, Ethereum, Zcash, and Tendermint. Having studied history of science at the University of Pennsylvania, Zaki’s skill sets in software engineering, programming, and computer science are largely self-taught.

Zaki Manian

Justin Drake

At Alluvial, Chief Growth Officer Mara Schmiedt focuses on advancing industry participation and adoption of Liquid Collective, seeking out world-class partnership opportunities, and overseeing Business Development, Sales, and other strategic functions. Mara recently joined Alluvial as Chief Growth Officer from Coinbase, where she served as the Head of Sales for Coinbase Cloud, the leading developer platform for blockchain-based infrastructure products and APIs. She expanded Cloud's staking business, supporting large-scale organizations, enterprises, and institutional investors. Prior to joining Coinbase, she managed Business Development at Bison Trails, a leading provider of blockchain-based infrastructure acquired by Coinbase in February 2021. Mara also served as Strategy Manager at ConsenSys, where she supported the strategic development of Codefi, the blockchain application suite for Web3 Commerce and Finance.



Mara is passionate about open-source technology and has published multiple research reports and papers on liquid staking, such as <a href="https://drive.google.com/file/d/13-s15SvCIUBukhSZiNkpd0sTff3izQ5G/view">The Internet Bond</a> and <a href="https://consensys.net/insights/eth-2-staking-ecosystem-report/">Ethereum 2.0 Staking Ecosystem Report</a>.&nbsp;



Additionally, she has led various industry initiatives, including leading the working group with the Ethereum Foundation that developed the Ethereum Launchpad and the first distributed validator technology (DVT) PoCs. Mara's deep experience in bringing technology and blockchain-based products and services to market — as well as her track record of building world-class business and sales organizations — bolsters Alluvial's support of Liquid Collective.

Mara Schmiedt

Stani Kulechov

Hasu

Christine is a Partner and Head of Digital Asset Strategy at Apollo Global Management, Inc. In this newly created position, Christine leads digital asset strategy across the firm, exploring more ways to apply blockchain technologies to Apollo’s business. She also plays a key role in Apollo’s strategy to invest in some of the most innovative digital asset companies and founders, with a specific focus on those transforming the financial services sector where Apollo can serve as a validator and enabler of new technologies. Previously, she was a Managing Director at J.P. Morgan and led its Blockchain/Crypto/Metaverse program through initiatives in digital assets, tokenized payments, internet of-things, decentralized identity, NFTs, and virtual worlds. She is a graduate of Brown University. Christine was named in Fortune’s The Ledger 40 Under 40 list of “the most impressive, young superstars transforming business at the leading edge of finance and technology.”

Christine Moy

Santiago Roel Santos (CryptoPunk #9159) is an investor focusing at the intersection of DeFi and the Web3 metaverse (NFTs/gaming). Most recently was a Partner at ParaFi Capital, one of the largest crypto funds specializing in DeFi. Prior to that, he was at Sageview Capital investing in Internet and software and, before that, at JP Morgan investment banking. Santiago began investing in crypto in 2012.

Santiago Roel Santos

Michael Anderson is the co-founder of Framework Ventures, one of earliest and largest VC firms to enter the “DeFi” or Decentralized Finance industry. With over $1B in AUM, the firm has since expanded into additional maturing verticals like blockchain gaming and social crypto. Prior to Framework, Michael and his co-founder Vance Spencer launched Hashletes, a digital collectible startup with official licensing from the NFL. Before entering crypto, Michael served as a product manager at both Snapchat and Dropbox, where he helped build out their monetization platforms.

Michael Anderson

Soona Amhaz is founder and GP of Volt Capital, a venture firm that focuses on pre-seed and seed companies in the digital assets space. Soona is also an advisor to On Deck, Forbes 30 under 30 in VC, and an alum from the University of Michigan School of Engineering.

Soona Amhaz

Colleen Sullivan is Co-Head of Ventures at Brevan Howard Digital. Prior to joining Brevan Howard Digital, Colleen co-founded and served as CEO of CMT Digital, where she was also a partner with the broader CMT Group and commenced activities in the crypto industry in 2013. Prior to starting CMT Digital, Colleen co-founded Sullivan Wolf Kailus, a boutique law firm that specializes in hedge fund, private equity, venture capital, digital assets, and other alternative investment products. Colleen also previously practiced law in the Investment Funds and Derivatives group at Sidley Austin LLP and, at age 25, co-founded a company called iOptions Group LLC, which developed hedging and monetization strategies for holders of employee stock options. Ms. Sullivan currently serves on the Advisory Board of the Chamber of Digital Commerce.

Colleen Sullivan

Tarun is an alumni of D. E. Shaw Research (DESRES), Vatic Labs, an HFT firm, and Cornell. He fell into the blockchain world in 2011, when he was working on ASICs at DESRES and observed Bitcoin ASIC mining rigs substantially delay DESRES’s ASIC production. He has spent the last seven years working on simulation-based R&amp;D at the intersection of high-performance computing and AI and is applying this knowledge to the blockchain ecosystem.

Tarun Chitra

Kevin Owocki is the founder of Gitcoin.co — Where builders &amp; funders come together to build the open web.  Gitcoin has delivered <a href="http://gitcoin.co/results">$50mm worth of value</a> to OSS devs in the last several years. He has a BS in Computer Science, 15 years of engineering leadership experience in Open Source Software and Web Startups. Kevin is a community organizer in the Boulder Colorado Tech Scene.

Kevin Owocki

Meltem Demirors is Chief Strategy Officer of CoinShares, a publicly listed investment firm that manages over five billion in digital assets on behalf of a global investor base, and is a trusted partner to investors and entrepreneurs navigating the digital asset ecosystem.



 An established veteran of digital asset investing, Meltem draws on her substantial experience and widespread influence to accelerate growth and acceptance of the asset class. Prior to joining CoinShares, Meltem helped build and grow Digital Currency Group, raising capital from the world’s largest corporations and managing a portfolio of 120 companies and 4 subsidiaries. Before she was bitten with the bitcoin bug, Meltem worked in the Oil &amp; Gas industry in trading, corporate treasury, and M&amp;A roles. 



Meltem has been recognized for her personal contributions to the industry and serves as an outspoken advocate. She is a founding member of the World Economic Forum Blockchain Council. Meltem teaches at her alma mater MIT as well as Oxford, and is passionate about privacy and civil rights.

Meltem Demirors

Vance is the co-founders of Framework Ventures, a thesis-driven venture capital firm whose team of technologists, researchers, and investors partner with founders and teams to build token-based networks and develop the requisite cryptoeconomics, governance, and community to scale.

Vance Spencer

Jim Bianco is President and Macro Strategist at Bianco Research, L.L.C. Since 1990 Jim’s commentaries have offered a unique perspective on the global economy and financial markets. Unencumbered by the biases of traditional Wall Street research, Jim has built a decades long reputation for objective, incisive commentary that challenges consensus thinking. In nearly 20 years at Bianco Research, Jim’s wide ranging commentaries have addressed monetary policy, the intersection of markets and politics, the role of government in the economy, fund flows and positioning in financial markets.



Jim appears regularly on CNBC, Bloomberg and Fox Business, and is often featured in the Wall Street Journal, Bloomberg News, Grants Interest Rate Observer, and MarketWatch. Prior to joining Arbor and Bianco Research, Jim was a Market Strategist in equity and fixed income research at UBS Securities and Equity Technical Analyst at First Boston and Shearson Lehman Brothers. He is a Chartered Market Technician (CMT) and a member of the Market Technicians Association (MTA). Jim has a Bachelor of Science degree in Finance from Marquette University (1984) and an MBA from Fordham University (1989).

Jim Bianco

Mr. Forman is the Founder and Managing Partner of ParaFi Capital. ParaFi is a leading investment firm focused on the blockchain and digital asset markets, and an early pioneer in decentralized finance (“DeFi”). ParaFi is one of the largest investors, users, and governance participants within the DeFi ecosystem, spanning the full network lifecycle from pre-launch to full decentralization. Mr. Forman serves as the Chief Investment Officer across the firm’s strategies, which include investing in public and private cryptoassets, systematic credit and market neutral DeFi strategies, and blockchain-focused venture capital and growth equity investing.



Prior to founding ParaFi in 2018, Mr. Forman spent 10 years at leading alternative investment managers, including KKR and TPG. While at KKR, Mr. Forman served as a Director in the Credit business, investing across a wide array of industry sectors and strategies, including distressed special situations, private credit, and opportunistic and liquid credit. Prior to KKR, Mr. Forman served as a Vice President with TPG’s former credit business, Sixth Street Partners, as one of the first investment professionals to join the platform, helping scale its private credit vehicle, TPG Specialty Lending, which listed publicly in 2014. Earlier in his career, Mr. Forman worked in private equity at Littlejohn &amp; Company and investment banking at Rothschild &amp; Co. Mr. Forman graduated with a B.A. in Philosophy, Politics and Economics, magna cum laude, from the University of Pennsylvania.

Ben Forman

Haseeb is a Managing Partner at Dragonfly. He was previously a partner at Metastable Capital, and has a background in software engineering at Airbnb and Earn.com (acquired by Coinbase).

Haseeb Qureshi

Vanessa Grellet is a Managing Partner at Aglaé Ventures. Vanessa is a Global Executive with over 20 years of expertise in the Financial Services and Tech industry. At Aglaé Ventures she manages the Web 3 focused fund. Prior to joining Aglae she has Head of Portfolio growth at CoinFund and Executive director at ConsenSys where she focused on driving adoption for Ethereum based products,  Strategic initiatives, Alliances and Channels.  She was involved in setting up the Enterprise Ethereum Alliance (EEA), the Accounting Blockchain Coalition (ABC) and the Blockchain for Social Impact Coalition (BSIC). Prior to ConsenSys she was a Strategy Executive at NYSE focused on investments and M&amp;A and a key member of PwC’s global wealth management team. Vanessa is a Founding Board member of AABC focused on Blockchain and Art, a member of the Advisory Council of ConsenSys, a Milken Institute Associate, a contributor to the  World Economic Forum Digital Future Council and part of <a href="https://cointelegraph.com/top-people-in-crypto-and-blockchain-2022/vanessa-grellet">Cointelegraph’s list of 100 most influential people for 2022</a>. Mrs. Grellet graduated Cum Laude from Law School (Paris II Assas) and Business School (HEC).

Vanessa Grellet

Mihailo Bjelic received his MSc in CS from the University of Belgrade. Prior to entering Web3/blockchain industry, he co-founded an AI/ML-powered platform for automotive industry and several other smaller startups and side projects. In 2017, he decided to join the Web3 movement full-time, primarily as a researcher interested in Ethereum scaling and multi-chain paradigms. In parallel with his work, he became one of the prominent Ethereum proponents and community members. In 2019, he started working on Polygon and conceptualized its architecture, vision and brand. In 2020, he joined hands with the Matic Network team and they have been working together on Polygon since then.

Mihailo Bjelic

Ben is a co-founder of Optimism, a leading Ethereum L2 ecosystem. He served as Chief Scientist before becoming a director at the Optimism Foundation. In his free time, he makes Ethereum-based parody songs under his stage name, Weird ETH Yankovic.

Ben Jones

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Speaker applications can be submitted <a href="https://form.asana.com/?k=L3gwAY1GRAX-RRAGDZYc0g&amp;d=1199885946213540">here</a>. Due to the high volume of submissions, we will not respond to all applicants. We anticipate &lt;2% of applicants being selected.
Blockworks&#8217; content team will reach out in the event you are accepted to speak. Please do not follow up directly.

Speaker Application

<h2>Why Sponsor Permissionless 2023?</h2>
If you’re serious about crypto, you have to be at Permissionless. Permissionless brings together DeFi builders, DAO participants, protocol developers, crypto companies, funds and institutions, and more. It’s a true crypto-native’s paradise, where you’ll have the opportunity to showcase your offerings and form lasting connections with the community.
We’ll work with your team to define the perfect sponsorship opportunity that best fits your needs and budget. Want to do something completely revolutionary? Our team can help design a bespoke package that brings your vision to life.
Get in touch with us at <a href="mailto:sales@blockworks.co">sales@blockworks.co</a>
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