Liz Coyne

<div id="highlights-block_60f83cafaa2a7" class="highlights">
 <ul>
 <li>The monetary system of tomorrow could see a steady decline in unbanked populations toward zero. </li>
 <li>The monetary system of tomorrow could empower people to become their own banks and reduce or eliminate governmental influence over personal finances. </li>
 </ul>
 
</div>



In today’s monetary system, wage-earners never win, as fiat currencies depreciate faster than wages increase. While an ongoing debate about raising minimum wage rages, both sides often miss the bigger picture of why workers demand higher wages – their purchasing power has been eroded. Or rather, it has been stolen, some might say.



Inflation persists as an insidious form of stealth taxation. This is a feature of our present fiat monetary standard and not a bug.



In today’s system, wealth and income inequality often get blamed on capitalism, despite the fact that a centrally-planned and controlled economy represents the antithesis of a capitalist system.



Capitalism also requires capital, i.e. savings. When interest rates are at or near zero, the incentive to save vanishes.&nbsp;



Capitalism cannot happen under central banks enforcing zero interest rate policy (ZIRP).



Capitalism also ceases to function amidst an utter lack of free market competition. In a world where centralized oligopolies for services like social media, ridesharing, or investing dominate the landscape, the solution in the past has often been to move away from capitalism altogether.&nbsp;



But today, decentralization offers a better option. With peer-to-peer monetary networks, rideshare drivers can get paid directly. Social media platforms reward users for content creation and curation. Exchanges can function in the absence of centralized control.



What might the solution to all of this be? Is there any hope for the future?



<h3>Creating a solution</h3>



It’s somewhat of a misnomer to say that crypto is the lone solution.



The<a href="https://cms.blockworks.co/our-monetary-system-is-broken/" target="_blank" rel="noreferrer noopener"> monetary system</a> created by ruling elites, cherished by oligarchs and scorned by the rest of us can’t be fixed. Attempting to do so would only recreate some altered version of the status quo.



Instead, we can create something new entirely. There are a few potential options.



<h4>Adjusting the status quo</h4>



The first option would involve replacing the US dollar with a new reserve currency. The status quo would remain the same, albeit with a different currency in focus and a new superpower at the center. For example, the Chinese yuan could be made the world’s reserve currency. This would amount to rearranging chairs on the deck of the Titanic as it sinks into the depths of the ocean.



<h4>Re-engineering the system</h4>



The second option would involve some altered version of the current system. There has been some talk of the IMF potentially using its Special Drawing Rights (SDR) currency as a reserve currency, for example. Perhaps the IMF could absorb all the debts of every nation on Earth and become the central bank of central banks, issuing SDRs to all member nations. This would unite all nations under a single currency and system.&nbsp;



<h4>Rebuilding the system</h4>



Rebuilding the system is the third option and the one we’d most like to see the world shift toward.&nbsp;



The monetary system of tomorrow could be based on a deflationary bitcoin standard rather than an inflationary fiat standard. Workers could see their purchasing power increase over time as a result. Other cryptocurrencies could be allowed to compete freely on the market. Central banks would lose their monopoly on currency creation.&nbsp;



The monetary system of tomorrow could empower people to become their own banks and reduce or eliminate governmental influence over personal finances. Some economists have asserted that doing so could be key to creating a sound money standard.



Famed Austrian economist and 1974 Nobel Laureate<a href="https://mises.org/library/hayeks-plan-private-money" target="_blank" rel="noreferrer noopener"> Fredrick Hayek</a> once<a href="https://quotesonfinance.com/quote/118/friedrich-a-hayek-take-money-out-of-the-hands-of-government" target="_blank" rel="noreferrer noopener"> said</a>:



“I don&#8217;t believe we shall ever have good money again before we take the thing out of the hands of the government, that is, we can&#8217;t take them violently out of the hands of the government, all we can do is by some sly roundabout way, introduce something that they can&#8217;t stop.”



Cryptocurrencies seem to fit that bill quite well.



<h3>Putting ideas into practice</h3>



How would all of this look in practical terms?&nbsp;



One simple form it could take could be to replace the gold standard with the bitcoin standard. The Satoshi could be used as a unit of account, the Lightning network as a medium of exchange (or various altcoins tied to bitcoin, if individuals prefer), and bitcoin could be the ultimate store of value.



All other currencies, whether they be fiat, altcoin, stablecoin, metal, or something else, could be tied to bitcoin. The Bitcoin network’s scalability would become irrelevant in this case, as small transactions could either occur on layer-2’s like Lightning or using different currencies and networks.&nbsp;&nbsp;



<h3>A revolution overdue</h3>



Digital assets are an idea whose time has come. The worldwide appetite for a new monetary standard appears to be large and growing. Nations like El Salvador have already begun to integrate bitcoin into their financial systems, and this is only the beginning.



People everywhere want to be empowered and enabled to take control of their financial futures. Decentralized cryptocurrencies might be the most perfect vehicle created to-date that could make this dream come true for billions around the globe. The differences between the old way and the new way would be like night and day.



A currency backed by code. A system based on permissionless equality instead of privileged access or exclusion. And a monetary standard rooted in deflation and rising living standards as opposed to inflation and increasing impoverishment.&nbsp;&nbsp;&nbsp;



Such a reality is within reach. It’s our hope that the new<a href="https://cms.blockworks.co/events/brettonwoods/" target="_blank" rel="noreferrer noopener"> Bretton Woods conference</a> will sow the seeds for this new and brighter monetary landscape.



This article is part 5 in a<a href="https://cms.blockworks.co/?s=Bretton+Woods" target="_blank" rel="noreferrer noopener"> 5-part series</a> about Bretton Woods. Blockworks will be hosting a new Bretton Woods summit in the same location, 50 years later.<a href="https://cms.blockworks.co/events/brettonwoods/" target="_blank" rel="noreferrer noopener"> Find out</a> more about the conference and<a href="https://cms.blockworks.co/events/brettonwoods/" target="_blank" rel="noreferrer noopener"> apply</a> to attend today.

The Monetary System of the Future

Michael Bodley

Emerging DeFi lending protocol Granary Finance has rustled up more than $5 million of the stablecoin USDC in under two weeks, in a community-driven fundraise demonstrating homegrown decentralized interest persists despite cryptocurrency’s ongoing bear market.&nbsp;



The fundraise is designed to support the development of Granary V2, developed with assistance from the EVM-focused Byte Masons Group.



Granary, which started taking shape more than a year ago, was <a href="https://medium.com/byte-masons/why-granary-ff6745c09848">developed as a DeFi lending alternative</a> to conventional and centralized crypto lenders. Many of those once-powerful entities, including Celsius and Voyager, blew up last year in the debt liquidity crunch that gripped yield-bearing tokens and lenders alike in the first half of 2022.&nbsp;



Developers behind Granary are categorizing the fundraise as a “liquidity generation event” (LGE) intended in part to power the release of the upcoming launch of Granary’s governance token. The governance initiative is designed to power the team’s vision of&nbsp; becoming the “first truly user-centric decentralized lending platform,” Granary told Blockworks in an exclusive statement.&nbsp;



The Granary team initially had a $5 million USDC fundraising goal in mind and had slightly exceeded that goal by the time of publication. The raise, as of early evening ET on Friday, was set to continue into the weekend.&nbsp;



In the statement, the team said that Granary will “take center stage when it comes to frictionless lending experiences in Web3 finance.”



<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">1: What is Granary V2? It is DeFi’s first open-ended money market with the goal to open decentralised finance as the TRUE alternative to traditional finance infrastructure. Sounds bullish? It is. Question 1️⃣: What are the current barriers for DeFi open money markets? A: Low…&mdash; hoeem (@crypthoem) <a href="https://twitter.com/crypthoem/status/1639977402171289602?ref_src=twsrc%5Etfw">March 26, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



A growing number of decentralized alternatives — including protocols and layer-2 solutions powered by DAOs — have emerged in recent months as crypto natives look for opportunities to participate in grassroot initiatives while high-profile traditional financial institutions have taken a step back from the sector. 



The industry’s rough showing in 2022 has been a major contributing factor in slowing the torrent of capital flows from external funding sources, according to crypto traders and other market participants.



A significant contributing factor to Granary meeting its funding goal in short order: the team setting up a number of NFT and DeFi projects with discounted terms on their protocol investments, according to Granary developers and an online <a href="https://www.grain.sale/faq">outline</a> of the funding process.&nbsp;



That percentage discount on shares purchased in the protocol is contingent on connecting a wallet with an “associated NFT” to Granary’s ecosystem, the team said in the outline.&nbsp;



Granary’s LGE features vesting periods ranging from instant liquidity up to 20 quarters, with yield terms varying accordingly. A bonus is allocated to longer vesting periods.&nbsp;



“It’s clear that our community recognizes the potential of this next-generation DeFi solution,” Granary told Blockworks in its statement.

Granary Finance Gets $5M Funding From DeFi Community

Bessie Liu

Days after Arbitrum’s ARB governance <a href="https://blockworks.co/news/arbitrum-airdrop-faq">token airdrop</a>, the voting on a proposal to introduce a governing body for the freshly formed decentralized autonomous organization (DAO) has begun.



The proposal, named Arbitrum Improvement Proposal 1 (AIP-1), outlines steps to create what it calls The Arbitrum Foundation, a company that would be responsible for growing the Arbitrum ecosystem.



The foundation would be based in the Cayman Islands and would require $3.5 million — set to cover legal fees, as well as administrative and registration expenses.&nbsp;



Roughly <a href="https://arbiscan.io/address/0xF3FC178157fb3c87548bAA86F9d24BA38E649B58">3.5 billion $ARB</a> tokens — worth roughly $4.8 billion — have so far been transferred to an <a href="https://arbiscan.io/address/0xF3FC178157fb3c87548bAA86F9d24BA38E649B58">address</a> named “Arbitrum DAO Treasury1,” making it the <a href="https://dune.com/blockworks_research/arb-airdrop">largest</a> $ARB token holder.



“The ArbitrumDAO will have direct on-chain governance powers over the DAO Treasury in accordance with the AIP process as delineated in the ArbitrumDAO Constitution,” according to <a href="https://forum.arbitrum.foundation/u/Lemma">Lemma</a>, the entity behind the <a href="https://forum.arbitrum.foundation/t/aip-1-arbitrum-improvement-proposal-framework/30">proposal</a>.



A representative of the Arbitrum Foundation told Blockworks that Lemma is a service provider to the Arbitrum Foundation and is primarily focused on governance components of operations.&nbsp;



Lemma has also asked for an additional 750 million in $ARB tokens (roughly over $1 billion) to go to a secondary Administrative Budget Wallet, which The Arbitrum Foundation would control.&nbsp;



The proposal has so far named three initial directors for the would-be foundation: Campbell Law, Edward Noyons, and Ani Banerjee. There would also be a 12-member<a href="https://blockworks.co/news/arbitrum-airdrop-faq"> Security Council </a>Committee.



<a href="https://www.linkedin.com/in/campbell-law-5235b6128/">Law</a> appears to be the co-founder of digital assets compliance firm Provenance, while <a href="https://www.linkedin.com/in/edward-noyons/">Noyons</a> is a director at Marfire, a consultancy firm that works with DAOs. Banerjee’s background is unclear.



Although the proposal has not yet been approved, a multi-signature wallet with an address named “Arbitrum DAO Treasury2” was created and has since received <a href="https://arbiscan.io/address/0xc24e24383120669512a336fb3b5b19afb4cc2a56">nearly 700 million $ARB</a> tokens.



A representative for the Arbitrum Foundation confirmed to Blockworks this address is the Administrative Budget Wallet.



The proposal opened for votes on Snapshot on Monday. Voting is set to end on April 3 before being finalized on-chain. At the time of writing, almost <a href="https://snapshot.org/#/arbitrumfoundation.eth/proposal/0x3be7368a662d1cf12fa4da768d626edbc013be0dc7b994fef2e24d9a54e4033a">90%</a> of votes are in favor of the proposal, with <a href="https://snapshot.org/#/arbitrumfoundation.eth/proposal/0x3be7368a662d1cf12fa4da768d626edbc013be0dc7b994fef2e24d9a54e4033a">10%</a> against.



The Arbitrum Foundation did not immediately return a request for further comment.







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Arbitrum Foundation to Receive $1 Billion if Proposal Passes

Amazon is putting the finishing touches to its in-house NFT initiative, according to sources directly familiar with the matter. And at least one document suggests that Amazon is set to feature digital collectibles from top crypto-native creators including Beeple and Pudgy Penguins.



The Amazon NFT marketplace will run on a private and permissioned blockchain controlled by the e-commerce giant, according to a confidential terms of service agreement reviewed by Blockworks. A separate confidential Amazon deck reviewed by Blockworks confirmed the private blockchain, adding that Amazon Web Services (AWS) has been a major contributor to its formation. Neither document could be confirmed as presenting the most current version of Amazon’s plans.



Blockworks<a href="https://blockworks.co/news/amazon-nft-marketplace-web3"> exclusively reported the formation of the initiative</a> in January, <a href="https://blockworks.co/news/amazon-nfts-real-world-assets-token">as well as additional developments on March 3</a>, including the buildout of a private blockchain. Sources say Amazon has shifted its launch timeline several times, and an exact unveil date could not be verified.&nbsp;



The blockchain powering Amazon’s digital collectibles is gas-less and read-only, and imposes strict restrictions on NFT creators, partners and — eventually — Amazon customers after launch, per both documents. Blockworks agreed to not directly quote from either document to protect their provenance.



Amazon has inked a number of partnerships for the launch that have been kept under tight wraps, according to multiple sources. One deck, and a separate source, specified that in addition to day-one partnerships with Beeple and the creators of Pudgy Penguins, Amazon has told product partners that Artifact Labs will be involved, as well as Proof Collective.&nbsp;



Requests for comment to Beeple and Pudgy Penguins creators were not immediately returned. Proof Collective and Artifact Labs likewise did not immediately respond to requests for comment.&nbsp;



Amazon has imposed strict non-disclosure agreements around its dealings with current and potential Web3 partners.



This story is based on interviews with seven people familiar with the platform’s formation. A number of those sources have direct knowledge of the matter, and all seven sources were granted anonymity to candidly discuss sensitive business dealings.&nbsp;



<h2>Amazon tapping subsidiary streamer Twitch&nbsp;</h2>



Streaming service Twitch — the Amazon.com subsidiary that <a href="https://techcrunch.com/2023/03/20/twitch-says-it-will-lay-off-400-employees/?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAAC1bIc4byVLDHr0V76JrjXvjT0Ih4CfIF0Qbr_klDToxcVzslr6vOR2urgH_RBRwBMX_NEQbd_aiz9up46AfMFgqe0eZ0V13mONclGUBdCjvkdeg6H30u-mGBXqG7FqACVk6-n7cc-oDyZVehobtWyatFOsgJxPQIsv5WH_iY6o_">reportedly</a> made substantial staff cuts in March — has been tapped to promote the Amazon initiative. Several crypto gaming companies have either discussed or signed partnerships with Amazon to sell NFTs tied to their titles on the marketplace.&nbsp;



Representatives for Twitch did not immediately return a request for comment.



An example: a Web3 game developer signs up with Amazon to sell an NFT to the site’s customers, which then grants the customer access to play the game through Amazon and stream it live on Twitch.&nbsp;



On the fashion front, The Fabricant has agreed to be what two sources categorized as an anchor participant for the marketplace’s fashion vertical. The crypto company has its own partnerships in place with major fashion brands and hosts an NFT <a href="https://www.thefabricant.com/marketplace">marketplace</a> featuring digital collectibles tied to real world experiences.&nbsp;



The Fabricant has its own Discord community while Amazon, according to multiple sources, is planning to support premium Discord memberships for partners. The idea is that brands can hawk an NFT tied to membership to an exclusive Discord community. A spokesperson for The Fabricant declined to comment.



Other planned use cases on the marketplace, per multiple sources include exclusive drops of music, ebooks and movies or tv shows; physical goods shipped after an Amazon customer buys an NFT; access to a private club; or behind the scenes meet and greets with musicians or celebrities.



<h2>2023 Prime Day NFT promotion</h2>



The company is still planning to heavily promote its hosted digital collectibles on<a href="https://www.amazon.com/primeday"> Prime Day</a>, slated for July 22 and 23, according to multiple sources and one of the decks.That includes pushing messaging to Amazon Prime customers in the US, as previously reported by Blockworks.



All customers will be able to snap up available NFTs just as they would order any other product of Amazon, with supported credit and debit cards or any of the company’s assorted payment options — including using one-click checkout.&nbsp;



Three sources said Amazon has emphasized that its platform would result in Web3 adoption for its 300 million active customers, which would support the idea that the platform is designed for the 300 million or so worldwide customers that Amazon <a href="https://sell.amazon.com/blog/amazon-stats">says</a> it has.&nbsp;



Amazon’s NFT platform has been repeatedly delayed, according to three sources with direct knowledge of the matter who said it was supposed to hit the market as early as the fourth quarter of 2022.



The company has told at least two partners that there are no plans at launch to include multichain functionality that would allow Amazon NFT buyers to move or transact their digital wares off Amazon’s blockchain. Sources offered conflicting accounts of whether there may be future plans for such functionality, which would likely result in a major liquidity boon for the NFT market on different blockchains.



“Everything is going to be encouraged to be transactional and transferable,” one source told Blockworks this week. “You can’t build in things like digital identity on Amazon, digital reputation on Amazon.”



<h2>“Fishing for intelligence”?</h2>



Amazon representatives previously reached out to Americana NFT, a crypto-native startup that <a href="https://www.americana.io/">says</a> it offers a curated marketplace designed to set “the new standard for collecting” premium digital collectibles, according to two sources with direct knowledge of the matter.



The effort didn’t go anywhere for Americana, both sources said, and the startup is said to have thought that its much larger counterpart was fishing for intelligence to build out its own marketplace. Amazon representatives have on several previous occasions met with startups and then “launched competing products,” The Wall Street Journal <a href="https://www.wsj.com/articles/amazon-tech-startup-echo-bezos-alexa-investment-fund-11595520249%5C">reported</a> in July 2020.&nbsp;



A spokesperson for Americana said that “Although we did not have direct discussions with Amazon&#8217;s team, we can verify that we had a meeting with Amazon Ventures in 2022. We look forward to launching our platform in the coming days as we exit beta-testing. We extend our best wishes to Amazon as they launch their new marketplace and become a part of the rapidly expanding Web3 community.”



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Amazon NFT Marketplace Could Feature Beeple, Pudgy Penguins

Ben Strack

Bittrex is shutting down its US operations, the crypto exchange’s co-founder said Friday, citing “regulatory uncertainty” and an unwillingness by lawmakers to embrace innovation.&nbsp;



While Bittrex Global will continue to operate, Bittrex US is set to close on April 30. Customer funds are safe and can be withdrawn until then, Bittrex CEO Richie Lai said in a <a href="https://www.businesswire.com/news/home/20230331005339/en/Bittrex-Statement-on-U.S.-Operations">statement</a>.&nbsp;&nbsp;&nbsp;&nbsp;



“The sad reality is that while policymakers and regulators in jurisdictions around the world work with digital asset exchanges on shaping the future of the global economy, their US counterparts are seemingly committed to extinguishing the industry and sending it overseas,” Lai added.



Bittrex Global remains regulated in Bermuda and Liechtenstein, the CEO said, noting that it would look to continue growing that business.&nbsp;&nbsp;



The company’s decision to wind down its US arm comes as regulators in the country have initiated a string of enforcement actions against crypto firms in recent weeks and months.&nbsp;



Bittrex itself had faced regulatory hurdles before, <a href="https://blockworks.co/news/bittrex-crypto-exchange-fined-30m-for-us-sanctions-violation">agreeing to pay $24.3 million</a> to the US Treasury last October for allegedly violating US sanctions.



A company spokesperson said at the time the company was “pleased to have fully resolved this matter with OFAC and FinCEN on mutually agreeable terms.”&nbsp;



More recently, the SEC <a href="https://blockworks.co/news/sec-serves-coinbase-in-latest-alleged-crypto-securities-violation">issued Coinbase a Wells Notice from the SEC</a> last week. The same day, the commission <a href="https://blockworks.co/news/sec-sues-justin-sun">launched a suit</a> against Tron network founder Justin Sun for allegedly selling unregistered securities. Coinbase said it doesn’t list securities, while Sun tweeted the complaint regarding Tron “lacks merit.”



A Coinbase <a href="https://www.coinbase.com/blog/new-report-shows-1m-tech-jobs-at-stake-in-us-crypto-policy">blog</a> published Wednesday argued a lack of crypto regulatory clarity in the US could cause its loss of developer share in the coming years “as web3 development moves overseas” — citing a<a href="https://blockworks.co/news/blockchain-developer-market-share-study"> report by Electric Capital</a>.



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Bittrex to Shut Down US Business Amid ‘Regulatory Uncertainty’

Natural gas producer PureWest is minting tokenized emissions credits in an effort to reduce the footprint of a methanol producer and other customers.



The Denver-based company’s certified environmental tokens (CETs) reflect aggregated data collected and verified by data company Project Canary.&nbsp;



PureWest is now transacting the tokenized credits with Switzerland-based Proman, the world&#8217;s second largest methanol producer, the energy firm announced this week.&nbsp;PureWest itself is the most prolific natural gas producer in Wyoming, per its website.



The CETs are each matched to one million British thermal units (MMBtu) of gas produced and are sold on an MMBtu basis, Kelly Bott, PureWest’s senior vice president of ESG, land and regulatory told Blockworks.&nbsp;



Using blockchain eliminates concerns about double selling and proves that each MMBtu of gas was produced with the Project Canary-verified attributes. PureWest <a href="https://purewest.com/news/purewest-energy-and-proman-sign-agreement-to-reduce-scope-3-methanol-footprint-through-digital-tokens/" target="_blank" rel="noreferrer noopener">describes</a> CETs as &#8220;purchasable credits stored on the blockchain for third-party users to achieve their emission reduction goals.&#8221;



“With the purchase of these tokens, Proman can now purchase gas from anywhere while taking credit for our low-methane, freshwater friendly, safely and responsibly produced/certified gas when calculating their own environmental footprint,” Bott said.&nbsp;&nbsp;&nbsp;



“These types of transactions serve to incentivize other producers to reduce their own environmental footprint and jump into this rapidly developing market.”



The tokens are transacted and stored on EarnDLT’s private blockchain, which was built using enterprise blockchain platform Quorum.&nbsp;



JPMorgan forked Ethereum to create Quorum in 2016 before selling it to blockchain software firm ConsenSys four years later.



<h2>Tokenization is becoming en vogue</h2>



The PureWest-Proman linkup comes after Gold Standard chose climate tech company Flowcarbon to help it finalize guidelines around tokenizing voluntary emission reduction (VER) credits.&nbsp;



Gold Standard CEO Margaret Kim said in a statement last September — when the company began <a href="https://www.goldstandard.org/blog-item/gold-standard-announces-proposals-allow-creation-digital-tokens-carbon-credits" target="_blank" rel="noreferrer noopener">exploring</a> how it should go about creating digital tokens — that “blockchain could bring innovation, transparency and greater finance to the carbon market.”&nbsp;&nbsp;



<a href="https://blockworks.co/news/2023-year-of-asset-tokenization" target="_blank" rel="noreferrer noopener">Tokenization has picked up steam</a> in recent months, with Goldman Sachs, investment firm <a href="https://blockworks.co/news/private-markets-investment-firm-hamilton-lane-to-tokenize-3-funds" target="_blank" rel="noreferrer noopener">Hamilton Lane</a> and Hong Kong’s government among those who have revealed such initiatives.&nbsp;&nbsp;



BlackRock’s Larry Fink, CEO of the world’s largest asset managers, said in a letter earlier this month that the tokenization of assets is <a href="https://blockworks.co/news/blackrock-ceo-us-lagging-innovation-tokenization" target="_blank" rel="noreferrer noopener">an attractive use case</a> for his company. He had previously called the tokenization of securities <a href="https://blockworks.co/news/blackrock-ceo-still-in-crypto-for-the-tech-despite-ftx-scandal" target="_blank" rel="noreferrer noopener">“the next generation for markets.”</a>



Most recently, <a href="https://blockworks.co/news/tokenized-home-nets-thousands" target="_blank" rel="noreferrer noopener">Roofstock sold a Georgia home to ReaIT</a>, a provider of fractional real estate investment in tokenized assets, in a transaction facilitated by an Ethereum-based NFT.



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Major Energy Companies Are Trading Tokenized Emissions Credits

Casey Wagner

Tether stablecoin <a href="https://blockworks.co/price/usdt" target="_blank" rel="noreferrer noopener">USDT</a> is enjoying a near two-year high in market share amid heightened regulatory fears across crypto, after Circle&#8217;s <a href="https://blockworks.co/price/usdc" target="_blank" rel="noreferrer noopener">USDC</a> shed almost $10 billion.



Since USDC <a href="https://blockworks.co/news/new-circle-bank-after-usdc-depeg" target="_blank" rel="noreferrer noopener">de-pegged earlier this month</a> in the aftermath of Silicon Valley Bank’s closure, where Boston-headquartered issuer Circle held $3.3 billion in reserves, traders took a step back from the stablecoin.&nbsp;



USDC’s market cap is down more than 5% over the past week and more than 24% over the past month, according to <a href="https://www.blockworksresearch.com/assets/usdc" target="_blank" rel="noreferrer noopener">data</a> compiled by Blockworks, representing $9.7 billion in reduced supply.&nbsp;



USDT’s market cap, by comparison, has gained nearly $9 billion, or about 12%, since the end of February.



Stablecoin issuers generally burn supply when processing cash redemptions, especially when there&#8217;s little demand for those tokens to be recirculated to other customers. When demand increases, they increase the supply by minting new stablecoins to distribute.



“The crypto community has become leery about anti-crypto sentiment in the US. As such, the censorship risk around USDC raises some concerns for those with a more libertarian bent in the community,” Darius Tabatabai, co-founder at decentralized exchange Vertex Protocol. 



“That has pushed a number of users towards Tether, which is deemed to have less risk in this regard.”&nbsp;Tether&#8217;s parent company iFinex is headquartered in Hong Kong and its asset treasuries are managed in banks across the Bahamas.



<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/13268278/embed#?secret=PDz4j9Etu4" data-secret="PDz4j9Etu4" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Tether has almost regained its supply lost in 2022&#8217;s second quarter</figcaption></figure>



Regulatory concerns and enforcement actions have driven liquidity in stablecoin markets lower, Tabatabai added.&nbsp;



“These matters have weakened liquidity and increased volatility, and pushed a number of crypto participants to heavier weightings of BTC and ETH and other tokens,” Tabatabai said. “We believe this may have contributed to recent rallies in prices.”



<h2>Tether set to make big bucks</h2>



The issue goes beyond just regulation, though. The macroeconomic condition surrounding banks and the current crisis is playing into the current stablecoin landscape as well, Noelle Acheson, author of Crypto is Macro Now and former head of market insights at Genesis, said.&nbsp;&nbsp;



“The real battle isn’t between digital asset investors and regulators but between banks and stablecoin issuers,” Acheson said. “Stablecoin issuers still depend on banks to keep their reserves, and banks have been very resistant to help a sector that is trying to put them out of business — which, of course, makes sense.”&nbsp;



Stablecoin issuers have benefited from higher interest rates for the past year, Acheson added.&nbsp;



Tether technology chief Paolo Ardoino <a href="https://blockworks.co/news/stablecoin-issuers-book-big-profits" target="_blank" rel="noreferrer noopener">estimates the company is set to book a $700 million profit</a> in the first quarter, Bloomberg <a href="https://www.bnnbloomberg.ca/tether-expects-first-quarter-profit-of-700-million-cto-says-1.1899916" target="_blank" rel="noreferrer noopener">reported</a>. This will be in addition to the $700 million Tether already added to its reserves via net profits during the fourth quarter of 2022, the company said last month.



Acheson said: “The very heart of the problem is that rising rates is great for stablecoin issuers since they keep all of the interest income themselves and pass none of it on to token holders, whereas rising rates cause a real problem for banks who lose depositors when they don’t pass along the interest, and also become underwater on their longer-term loans.”



Updated Mar. 31, 2023 at 6:07 pm ET: Corrected date.



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US Crypto Crackdown Sees USDC Lose $10B, Tether Gain $9B

The chief operating officer at video game company Activision Blizzard will officially step into the CEO role at Yuga Labs tomorrow.&nbsp;



Yuga Labs is the startup behind Bored Ape Yacht Club. <a href="https://www.linkedin.com/in/daniel-alegre-a906954/" target="_blank" rel="noreferrer noopener">Daniel Alegra</a> is set to join the company after his stint as president of COO and president at Activision Blizzard, which began in April 2020. 



<a href="https://blockworks.co/tag/yuga-labs" target="_blank" rel="noreferrer noopener">Yuga Labs</a> first revealed Alegra’s upcoming appointment in December, noting he would succeed Nicole Muniz. A company spokesperson declined to comment further.



Before joining Activision Blizzard, Alegre spent 16 years at Google. He served in various leadership roles at the tech giant, ending his tenure there as president of global retail, shopping and payments.&nbsp;



<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">Today is my last day as President and COO of Activision Blizzard. Thank you to the incredible teams who create truly epic games. Tomorrow I officially start at CEO of Yuga Labs. Couldn&#39;t be more excited for this next chapter. <a href="https://t.co/eo3RfIyz0q">pic.twitter.com/eo3RfIyz0q</a>&mdash; Daniel Alegre (@dalegre) <a href="https://twitter.com/dalegre/status/1641793257293111296?ref_src=twsrc%5Etfw">March 31, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<h2>Cardano builder nabs leader for upcoming protocol</h2>



Software research and development company Input Output Global (IOG) has hired Eran Barak as CEO of its new data-protection protocol.&nbsp;



Dubbed Midnight, the protocol — currently in development — is set to use zero-knowledge proofs to safeguard personal and commercial data. Expected use cases include financial workflows, healthcare records and supply chain activities, according to the company.&nbsp;



Midnight will be a sidechain to the Cardano blockchain, for which IOG is a builder.&nbsp;



Barak was formerly the chief operating officer from 2014 to 2022 at markets technology platform Symphony. He has also worked in senior positions at Amdocs and Thomson Reuters.



<h2>Other notable hires</h2>



<ul>
<li><a href="https://www.linkedin.com/in/jenna-pilgrim/" target="_blank" rel="noreferrer noopener">Jenna Pilgrim</a> is now head of portfolio growth for CoinFund, an investment firm that holds a portfolio comprising more 100 crypto and web3 ventures. Pilgrim was most recently a managing partner at Canada-based web3 hiring firm Mayflower Strategic.</li>



<li>Coin Metrics hired Chris Overton as chief technology officer. It has also appointed <a href="https://www.linkedin.com/in/trevorvale/" target="_blank" rel="noreferrer noopener">Trevor Vale</a> and Gina Rubino as its senior vice president of sales and head of marketing, respectively. </li>



<li>PolySign has brought aboard Charles <a href="https://www.linkedin.com/in/ocheret/" target="_blank" rel="noreferrer noopener">Ocheret</a> as chief technology officer. The executive, who has held leadership roles as JPMorgan Chase and Deutsche Bank, founded ReadyPosition, a software and consulting solutions provider.  </li>
</ul>



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Crypto Hiring: Activision Blizzard Exec Steps Into Yuga Labs CEO Role

Jon Rice

The Lakeside Drive straight is the fastest section of the course at the Melbourne Formula One Grand Prix circuit, where drivers can accelerate to over 200 mph in less than a mile.



So if you’re going to read the Bitcoin white paper on the nose of the Williams cars, you’re going to have to be a serious speed reader.



Crypto exchange Kraken is a new sponsor of the Williams Racing F1 team, and to kick off the partnership the firm has pasted Satoshi Nakamoto’s seminal paper onto the nosecone of the Williams cars driven by Alex Albon and Logan Sargeant.



The Formula One series attracts 1.3 billion viewers per year, and Kraken is not the first to see the potential to reach one of the world’s largest sporting audiences. Rival exchange Crypto.com has also maintained an F1 presence with the Aston Martin team, Tezos sponsors McLaren, and Red Bull and Bybit have a sponsorship agreement. Mercedes-AMG drew the short straw and featured FTX during the 2022 season.



But Kraken Chief Marketing Officer Mayur Gupta hopes that the partnership with Williams will involve more than simply adding a logo to the car.



Gupta told Blockworks that “Featuring the bitcoin whitepaper on the Williams car is a symbol of our belief and commitment to crypto’s mission, and a celebration of how far we’ve come in the past 12 years. It’s an opportunity to showcase the original document that brought this entire movement to life.”



<h2>NFT art on a Formula One car?</h2>



Kraken is also looking to involve fans in their sponsorship, Gupta says, and intends to run competitions for future NFT holders to win the opportunity to feature their artwork on the rear wing of the car.



“In the coming weeks and months, we aim to showcase how NFTs can enable both creators and fans to engage in whole new ways in a sport they passionately love. This isn’t about sponsoring a sports team to acquire new clients, it’s about sharing the ethos and principles of crypto — such as financial freedom — and highlighting how critical it is to every community around the world.”



“We want this win for Kraken to be a win for the industry,” he added.



In a nod to the growing importance of overseas markets to US-domiciled exchanges, particularly at a time when regulatory authorities in the US arguably dominate news cycles more than the technology they are attempting to regulate, Mayur noted that “Like crypto, F1 transcends geographical boundaries and builds communities out of a shared passion for engineering excellence and speed. F1’s popularity has skyrocketed globally, especially after Netflix’s Drive to Survive, bringing a younger and more diverse fanbase to the sport, including from countries such as India, Spain and Mexico.”



Williams has a storied history in Formula One, with nine constructors’ championships and seven drivers’ championships over the years. The team’s roster currently features Albon, a Thai-British driver in the FW45 number 23 car, and Sargeant, an American, in the number 02 car.&nbsp;



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1200" height="630" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/Kraken-Bitcoin-White-Paper-on-Williams-F1.jpg?w=1024&amp;h=1024" alt="Close-up of the Williams F1 nosecone and the Bitcoin white paper pasted by Kraken" class="wp-image-50783" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/Kraken-Bitcoin-White-Paper-on-Williams-F1.jpg?w=1200 1200w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/Kraken-Bitcoin-White-Paper-on-Williams-F1.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/Kraken-Bitcoin-White-Paper-on-Williams-F1.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/Kraken-Bitcoin-White-Paper-on-Williams-F1.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/Kraken-Bitcoin-White-Paper-on-Williams-F1.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/Kraken-Bitcoin-White-Paper-on-Williams-F1.jpg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/Kraken-Bitcoin-White-Paper-on-Williams-F1.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/Kraken-Bitcoin-White-Paper-on-Williams-F1.jpg?w=80 80w" sizes="(max-width: 1200px) 100vw, 1200px" /><figcaption class="wp-element-caption">Close-up of the Williams F1 nosecone and the Bitcoin white paper pasted by Kraken / photo courtesy Kraken</figcaption></figure>



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Bitcoin White Paper Sets a Kraken Pace at F1 Australian Grand Prix

Richard Mico

The recent burst of legal action brought against celebrities over the promotion of various crypto assets underscores just how bewildering the regulatory environment for this transformative technology has become in the United States.&nbsp;



How can anyone engage with crypto with any degree of confidence when the CFTC throws its weight around in one direction as the SEC, along with other agencies, make moves in seemingly contradictory directions? Clearly, the regulators are fighting something of a turf war, and everyone else, celebrities included, is left scratching heads.&nbsp;



Before I go any further, let me be clear. This is not a blanket defense of celebrity endorsements of whatever coin or NFT project. Our industry certainly has been plagued by influencer-peddled pump-and-dump scams that have hurt retail investors. This fact is undeniable, and my colleagues and I welcome fair and rigorous regulatory oversight. And I should emphasize that it’s undoubtedly critical that to ensure protection of investors, celebrities should be transparent and in turn disclose any material connections when it comes to endorsements, including compensation received.



But the sheer lack of inter-agency consensus over crypto assets doesn’t seem to be doing much to help protect investors from scams. It’s mostly just raising questions, namely: Who’s actually in charge?&nbsp;



<h2>If it looks like a security, but it talks like a commodity</h2>



The fines imposed by the SEC against, among others, Lindsay Lohan, Akon and Kim Kardashian have largely centered on the purported failure to properly disclose payments received for crypto endorsements.&nbsp;



In a <a href="https://www.sec.gov/news/press-release/2022-183">release in October</a> explaining the agency’s $1.26 million fine against Kardashian over promoting a rather obscure coin, Chair Gary Gensler argued that penalizing her over non-compliance with the law served “as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities.”



There could be some merit to the SEC’s arguments, but a critical word used by Gensler is “securities.” Are crypto assets actually securities as defined by the law? Or are they something else and outside of the jurisdiction of the SEC, such as commodities, which is the classification that the CFTC seems to favor? For example, in its recent legal action against Binance, the CFTC seems to have defied the SEC by arguing ether, litecoin and stablecoins including USDT and BUSD are in fact commodities. Yet the SEC has declared the BUSD stablecoin as an unregistered security and has hinted that it considers ether to be the same.&nbsp;



There are nuances between the SEC and CFTC pertaining to endorsements, as well as with the Federal Trade Commission. Specifically, the nuances involve potential irregularities surrounding what constitutes an endorsement, what disclosure is required, legal liability and enforcement action.&nbsp;



Parsing through the various legal interpretations and penalties that could potentially be imposed in these situations is hard enough, but it’s headache-inducing when the agencies involved can’t seem to come to agreement on how to actually classify crypto in the first place.&nbsp;



<h2>Welcome to regulatory limbo</h2>



Globally, crypto is popular – not just among those living in countries with failing currencies and weak or non-existent banking systems, but also among young and tech-savvy audiences. It therefore makes sense that celebrities would seek to engage those audiences through something popular and highly useful like crypto.



More broadly, the crypto industry itself is more than just confused. We’re becoming rather concerned. Increasingly, there is suspicion that US authorities are deliberately and unlawfully attempting to snuff out the crypto industry in what’s been dubbed <a href="https://cms.blockworks.co/news/operation-choke-point-2-0/">Operation Chokepoint 2.0</a>. Many argue that as a result of the latter operation, crypto-friendly banks and crypto ventures themselves have been unfairly – or even unlawfully – targeted.&nbsp;



I’ll hold off on providing an opinion on whether Operation Chokepoint 2.0 is real or not – and whether the associated actions are actually lawful – but it certainly seems as though those like Lohan and Kardashian appear to have been caught up with the rest of us in the regulatory crossfire.



<h2>Pack your bags</h2>



Many of us in the crypto industry have long been willing to work with regulators and lawmakers to help formulate robust investor-protection laws, including technology-focused solutions that provide safeguards surrounding advertising and promotions.



But while our industry is more than ready to work diligently and in good faith with authorities to formulate safeguards, ultimately what’s needed is an overarching regulatory framework that clearly spells out the rules of the road. This would reinforce the rule of law in the United States and dampen the suspicion that authorities may be adopting unconstitutional means to stifle our industry.&nbsp;



If Washington’s end game is to crush the domestic crypto industry, then related startups and entrepreneurs will simply move abroad, thereby depriving Americans of the immense potential benefits of fostering Web3 and financial innovation at home. Already, it seems as though crypto-friendly jurisdictions are capitalizing on this situation, with Hong Kong and Dubai, along with the UK and the EU, opening their arms to American crypto innovators.&nbsp;



Whether celebrities will begin focusing their crypto-promotional activities abroad, joining what I fear will be a wave of industry startups decamping to other countries, is anyone’s guess.



But if there’s money to be made by advertising in our industry abroad — in a different regulatory environment that can actually give you yes or no answers — then don’t be surprised when you see more and more billboards popping up in Hong Kong or London showcasing your favorite singer or actor touting blockchains and exchanges, footloose and fancy free.&nbsp;



<hr class="wp-block-separator has-alpha-channel-opacity"/>


<div class="wp-block-post-author-biography">Richard Mico is the U.S. CEO and Chief Legal Officer of Banxa, a payment-and-compliance infrastructure provider to the global crypto industry. Prior to his role with Banxa, Richard worked with Lloyds Banking Group and Western Union Business Solutions. Throughout his career, Richard has helped to launch numerous products, including Ireland’s first buy now, pay later product and the world’s first buy now, pay later product on an open-looped digital card.</div>


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Gary Gensler: Stop Taking Out Your Crypto Problems on Celebrities

The US government sold off more than 9,800 BTC connected to the Silk Road darknet marketplace for about $215 million earlier this month, a court filing released Friday shows.&nbsp;



James Zhong pleaded guilty to hacking Silk Road in 2012 and stealing more than 50,000 BTC (worth less than $1 million at the time), which the government <a href="https://blockworks.co/news/us-government-now-has-more-btc-than-largest-crypto-holders" target="_blank" rel="noreferrer noopener">seized in November</a> 2022.&nbsp;



“In total from the Zhong investigation, the Government has obtained final orders of forfeiture for approximately [51,680.32 BTC], valued at over $3.4 billion at the time of seizure,” the court filing noted.&nbsp;



On March 14, the government sold about 9,861.2 BTC for around $21,800 per token. On this date, bitcoin was trading on most exchanges at a high of around $26,500 and a low of around $24,000, according to <a href="https://blockworks.co/price/btc" target="_blank" rel="noreferrer noopener">Blockworks Research</a>.



Government officials racked up more than $215,000 in transaction fees for the sale, court documents note. Officials added that they plan to sell the remaining 41,500 BTC ($1.2 billion) in a series of four batches this year. The method of sale wasn’t disclosed.



It is not the first time the US has sold off seized crypto. In 2014, officials unloaded around 30,000 BTC, also taken in connection with Silk Road, to venture capitalist Tim Draper.&nbsp;



The BTC was valued at around $17 million at the time of the auction, but today would be worth more than $850 million. A <a href="https://jlopp.github.io/us-marshals-bitcoin-auctions/" target="_blank" rel="noreferrer noopener">dashboard</a> tracking US government bitcoin auctions estimates more than $5 billion has been left on the table by selling BTC too early.



Bitcoin was trading about 1% higher Friday afternoon in New York following the release of the court filing, hovering around $28,450.



US authorities shut down Silk Road in October 2013, arresting maintainer Ross Ulbricht. He was given a double life sentence two years later without possibility of parole.



Updated Mar. 31, 2023 at 12:10 pm ET: Added auction dashboard.



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US Government Dumps Bitcoin Stolen From Silk Road, $1.2B To Go

Exotic derivatives protocol Cega Finance will be launching on Ethereum mainnet, branching out from its native Solana.



In traditional finance, exotic options fill the same role, more or less, as regular options — enabling leveraged longs and shorts on an underlying asset, but they can be used to achieve specific investment goals that cannot be accomplished with American or European options.



For example, Barrier options have a payoff that depends on whether the underlying asset price reaches a certain barrier level during the life of the option, while Asian options&#8217; payoff depends on the average price of the asset over a period of time.



“Exotic options are a natural evolution in an economic market,” Arisa Toyosaki, Cega Finance co-founder, told Blockworks. “They are a conditional option on top of a vanilla option.”



Seasoned investors can use exotic options to dial in risk preferences while trading a wider range of investment products.



<h2>Leveraged options vaults&nbsp;</h2>



Cega also supports structured vault products pitched to enable yields during volatile market environments.



The protocol will be offering a leveraged options vault (LOV) strategy, expected to launch within the second quarter. This option will be offered on top of the products which are already available to those on the Solana blockchain.&nbsp;



LOV is an options structured product that Toyosaki believes will resolve capital inefficiency in DeFi as it “does not require additional liquidity accessed through redemptions of user-funded margins or overcollateralization.”



LOV’s Gotta Go Fast offering, for example, offers a 21%&nbsp; to 30% APY. The underlying assets will be BTC, ETH and SOL, and Cega says it will offer a 50% principal protection barrier.



Toyosaki notes that in order to take a leverage position in the existing market, the amount of capital that must be staked — but never put to work — is significant.



“We created a method for our leverage options vaults that is extremely capital efficient and allows you to get a leveraged return by having a combination of options which can maximize your appetite for the market,” she said.



LOV liquidations work like this, <a href="https://www.blockworksresearch.com/">Blockworks Research</a> analyst <a href="https://www.blockworksresearch.com/research?author=ren">Ren Yu Kong </a>explains:&nbsp;



<ul>
<li>A user deposits crypto into a vault for a set time period of time — for example, 30 days; and&nbsp;</li>



<li>if BTC, ETH, or SOL drop by over 50% across that period, then;&nbsp;</li>



<li>the 50% principal protection barrier has expired, requiring collateral to be taken.</li>
</ul>



“From there, the vault takes the worst-performing asset. Say BTC decreased by 30%, ETH decreased by 45%, SOL decreased by 60%. Then the vault will return 40% (100-60) of your initial deposit,” Kong said.



On top of LOV, Cega is also launching a trading firm, Tras Mobian. The entity is designed to resolve one-sided demand issues in decentralized financial markets.



“If you look at every DeFi option vault in the market, everyone is focused on selling options. There hasn’t been a lot of demand for users buying options,” Toyosaki said.



This is where Tras Mobian comes in. It will be focused on research and development in the space, according to Toyosaki, with the hopes of creating more demand for both sides of the market.



Tas Mobian will run independently of Cega, the company notes. A third-party custodian will manage its multisig and oversee its balance sheets and audits.



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Solana Options Protocol Cega Comes to Ethereum

As regulation continues to heat up in the US, Genesis has teamed up with qualified custodian BitGo Trust on a tri-party solution for institutional clients, the companies announced Wednesday.&nbsp;



Under the agreement, BitGo Trust will provide qualified custody services and cold storage for assets held on behalf of Genesis&#8217; institutional clients, the companies said.&nbsp;



The teams are hoping to bring tried and true methods of security to the <a href="https://blog.bitgo.com/managing-counterparty-risk-importance-of-tri-party-collateral-management-in-crypto-714be0823590" target="_blank" rel="noreferrer noopener">crypto ecosystem</a>. 



“Institutions require a segregation of responsibilities. Trading, settlement, and custody need to be with separate institutions to minimize counterparty exposure,” Adam Sporn, head of prime brokerage at BitGo, told Blockworks. “In traditional finance, the credit crisis in 2008 led to a significant increase in tri-party relationships and we are seeing the same thing post-FTX in the digital asset space.”



The goal is to combine security with deep liquidity and trading expertise, Genesis added.&nbsp;



“Institutional clients are increasingly looking to trading partners that can mitigate their



concerns about counterparty risk exposure in the current environment,” Derar Islim, Genesis interim CEO, said. “With demand for a solution rising, we quickly understood that the clear path to meet this demand was to segregate credit and capital risk with regulated and qualified custodians.”&nbsp;



It’s not the first time Genesis and BitGo have teamed up. In 2019, Genesis Global Trading formed an agreement with BitGo to provide trading services from custody accounts.&nbsp;



Custody security and regulation concerns have ramped up since 2019, though, but both companies are confident in their level of compliance and transparency.&nbsp;



BitGo Trust offers a $250 million insurance policy and holds SOC 1 Type 2 and SOC 2 Type 2 certifications; compliance tools to measure risks associated with technology solutions.&nbsp;



“Institutional-grade custodial solutions are now expected to offer a suitable blend of the best available technology and the strongest reputational standards,” Gordon Grant, co-head of trading at Genesis, said. “Multi-signature, multi-party computation with hardware isolation, and cold-storage facilities have been part of an opening gambit for service offerings in this respect.”



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Genesis, BitGo Trust Collaborate on Custody Product for Institutions

Layer-1 blockchains have recovered strongly from December market lows, underlining their prominence as a paramount sector of the cryptocurrency industry. The native assets for key players like Ethereum, BNB Chain, Solana, and Avalanche have posted massive gains across the board, with investors weighing up the possibility of a continued uptrend.



Tellingly, adoption metrics for the underlying networks have emerged as a crucial indicator for predicting the price action of layer-1 (L1) projects. <a href="https://www.bloomberg.com/professional/blog/ethereums-moat-reinforced-in-bear-market-solana-has-value/">On-chain data reveals that an L1 asset&#8217;s value tends to increase or decline based on user activity and demand for blockspace.</a> Therefore, tracking the relationship between active addresses and the price of an L1 asset can enable investors to spot potential opportunities. These insights also deliver a gauge for measuring the competitive moat of a layer-1 network.



The <a href="https://www.bloomberg.com/professional/solution/bloomberg-terminal/">Bloomberg Terminal</a> provides actionable trading data from on-chain activity across leading L1 networks. Analyzing these data sets gives investors the competitive edge to make calculated investments into L1 ecosystems.



<h2>The year so far for L1s</h2>



Market valuations for L1 projects has rebounded from the harsh conditions created by the fallout of several centralized crypto companies, including FTX, Celsius, BlockFi, Genesis Capital, and several others. As of late December 2022, most L1 assets traded more than 90% below their all-time highs.



Nonetheless, the collapse of centralized entities emphasized the need for blockchain-based alternatives powered largely by L1 networks. This has, in turn, led to an increase in user demand for L1 assets to own a stake in these networks and access decentralized applications.&nbsp;



Unsurprisingly, the market value for a subset of L1 assets (ETH, BNB, SOL, AVAX) tracked by Bloomberg Intelligence has risen by an average of 79% year-to-date. Solana&#8217;s SOL token is the biggest gainer, with nearly 150% gains since the turn of the year. The most widely used networks, Ethereum and BNB Chain, have also recorded 38% and 28% gains, respectively.


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="534" height="396" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-17.png" alt="" class="wp-image-50707" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-17.png?w=534 534w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-17.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-17.png?w=347 347w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-17.png?w=352 352w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-17.png?w=295 295w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-17.png?w=80 80w" sizes="(max-width: 534px) 100vw, 534px" /><figcaption class="wp-element-caption">Source: Bloomberg</figcaption></figure></div>


Regardless of the recovery of L1s, the year ahead is likely to be volatile. Unlike the recent increase linked to a broader market recovery from oversold levels,  Bloomberg Intelligence Senior Market Structure Analyst Jamie Douglas Coutts <a href="https://www.bloomberg.com/professional/blog/ethereums-moat-reinforced-in-bear-market-solana-has-value/">predicts that</a> &#8220;price momentum [for L1s] will need to be matched with strengthening fundamentals [while] pointers such as user adoption and protocol monetary policy” will be crucial, especially as the L1 wars resume in the coming months.



<h2>Competitive moats for L1 networks</h2>



The 2022 bear market provided a stern test for L1 ecosystems, with user activity recording a steep decline throughout the year. At the same time, the downturn provided a yardstick for measuring the competitive moat of each L1 network.&nbsp;



For instance, Ethereum and BNB Chain showed greater resilience to the lower blockspace demand than competing L1s Solana and Avalanche. The number of active addresses on Solana and Avalanche dropped by 69.9% and 26.46%, respectively, while Ethereum and BNB saw less than a 2% decline under the same user metric.


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="532" height="539" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-14.png" alt="" class="wp-image-50704" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-14.png?w=532 532w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-14.png?w=296 296w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-14.png?w=254 254w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-14.png?w=258 258w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-14.png?w=216 216w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-14.png?w=80 80w" sizes="(max-width: 532px) 100vw, 532px" /><figcaption class="wp-element-caption">Source: Bloomberg</figcaption></figure></div>


The number of active addresses on an L1 is a crucial metric as it represents the number of actual users on each chain. Hence, the sustained demand for Ethereum and BNB Chain blockspace underlines their position as the leading destination for Web3 users.&nbsp;



In contrast, the decline in active addresses on Avalanche and Solana amid the bear market suggests user interest in these L1s is connected to short-term plays within the respective ecosystems. Moreover, the active addresses metric delivers other actionable insights for investors to optimize their L1 portfolio.



<h2>The power of active addresses </h2>



Bloomberg&#8217;s analysis demonstrates that the number of active addresses heavily impacts the price action of L1 assets. The study utilized the widely-trusted &#8220;R-squared&#8221; methodology to uncover that the <a href="https://www.bloomberg.com/professional/blog/ethereums-moat-reinforced-in-bear-market-solana-has-value/">correlation between price action and active addresses on the top three L1s</a> (Ethereum, BNB Chain, and Avalanche) ranged from moderate to strong.



Understandably, Solana&#8217;s price action correlated less to the number of active addresses distorted by heavy venture capital interest in the network and the collapse of its biggest backer, Alameda Research. The price of SOL recorded a linear regression of 0.01 over 33 monthly samples.


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="537" height="241" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-15.png" alt="" class="wp-image-50705" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-15.png?w=537 537w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-15.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-15.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-15.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-15.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-15.png?w=80 80w" sizes="(max-width: 537px) 100vw, 537px" /><figcaption class="wp-element-caption">Source: Bloomberg</figcaption></figure></div>


Investors derive from the above metrics that price action for ETH and AVAX relies more heavily on an uptick in active addresses, while BNB is subject to other market forces. Accessing such invaluable on-chain data in real-time through the Bloomberg Terminal equips market participants to allocate trading capital efficiently and amplify returns on investments. Monitoring the trend on active addresses is especially crucial to investors as L1 activity begins picking up again in a post-bear market environment.



<h2>L1 activity trends in 2023</h2>



The rebound in the market value of L1 assets does not directly reflect a resurgence in user activity on the underlying chains. Instead, it is more closely linked to a less-hostile macro environment where investor appetite gradually returns after a devastating year for financial markets.&nbsp;



L1 activity trends remain relatively low, with BNB Chain the only network seeing an increase in active addresses in 2023. The Ethereum L1 failed to add new active users but has seen an uptick in new addresses onboarding layer-2 solutions such as Optimism, Arbitrum, and Polygon. The Ethereum-native ecosystem has grown by over 20%, with addresses jumping from 330,000 to more than 420,000 in the past year. Such growth demonstrates Ethereum&#8217;s competitive moat and increasing significance as more L2 solutions come onto the scene.


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="532" height="310" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-18.png" alt="" class="wp-image-50708" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-18.png?w=532 532w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-18.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-18.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-18.png?w=448 448w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-18.png?w=376 376w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-18.png?w=80 80w" sizes="(max-width: 532px) 100vw, 532px" /><figcaption class="wp-element-caption">Source: Bloomberg</figcaption></figure></div>


As the above Bloomberg Intelligence analysis further shows, Solana and Avalanche are the biggest underperformers, with unique active addresses relatively flat since the turn of the year. Both L1s inarguably require an uptick in the number of users and transaction activity to stage a comeback to 2022 highs.



<h2>Using the active address ratio to spot potential mispricing opportunities</h2>



Data and analysis available on the Bloomberg Terminal also tap into the active address ratio to address one of the biggest challenges for digital asset investors – evaluating an L1 project. Efficiently comparing active addresses to an asset&#8217;s market cap allows investors to identify mispricing opportunities.



Ethereum leads the ranking for L1 assets by market cap to active addresses ratio, owing to its high level of decentralization and network properties. The switch to PoS would also help Ethereum scale its ecosystem faster through L2 solutions.


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="541" height="363" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-16.png" alt="" class="wp-image-50706" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-16.png?w=541 541w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-16.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-16.png?w=383 383w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-16.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-16.png?w=326 326w, https://blockworks-co.imgix.net/wp-content/uploads/2023/03/image-16.png?w=80 80w" sizes="(max-width: 541px) 100vw, 541px" /><figcaption class="wp-element-caption">Source: Bloomberg</figcaption></figure></div>


However, Bloomberg&#8217;s findings reveal that Solana may be mispriced despite having a significantly higher number of active users than Avalanche. Avalanche&#8217;s market cap to active address ratio trades at a 500% premium vs. Solana. The EVM-based chain boasts only 12% of Solana&#8217;s active addresses. The metric also indicates that SOL may be undervalued and primed for an increase as bear market effects wear off.



<h3>Optimize L1 portfolios with data-driven insights from Bloomberg&nbsp;</h3>



Layer-1 chains play a crucial role within the digital asset industry and represent a sizable portion of many investment portfolios. Investors can optimize their exposure to the L1 ecosystem with data-driven insights from Bloomberg Intelligence, available exclusively for Bloomberg Terminal subscribers. The <a href="https://www.bloomberg.com/professional/solution/bloomberg-terminal/">Bloomberg Terminal</a> grants users access to actionable on-chain data across different L1 networks, including Ethereum, BNB Chain, Solana, and Avalanche. For instance, analyzing high-value data on active addresses equips users to gauge an L1&#8217;s competitive moat and spot potential mispricing opportunities in real time. Investors can thus optimize short-term and long-term portfolios to maximize returns on the L1 bets.



This content is sponsored by <a href="https://www.bloomberg.com/professional/solution/bloomberg-terminal/">Bloomberg</a>.



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What the Strong Recovery of L1s Means — and How Active Addresses Will Be Key To Know Where They’re Going

Shalini Nagarajan

The US Office of the Comptroller of the Currency (OCC) has established a new fintech office to adapt to technological evolutions in banking, including crypto assets.



The Treasury said the office will add to its knowledge of digital assets, fintech partnerships and other emerging technology models that have an impact on OCC-supervised banks. It will also contribute to oversight of partnerships between traditional institutions and fintech firms.



Prashant Bhardwaj, who has worked in several roles across the financial sector for 30 years, has been appointed the new fintech office&#8217;s deputy comptroller and chief financial technology officer. His tenure begins April 10.



“To ensure that the federal banking system is safe, sound, and fair today and well into the future, we need to have a deep understanding of financial technology and the financial technology landscape,” Michael Hsu, acting comptroller of the currency, said in a <a href="https://www.occ.treas.gov/news-issuances/news-releases/2023/nr-occ-2023-31.html" target="_blank" rel="noreferrer noopener">statement</a>.&nbsp;



The OCC is a department under the Treasury in charge of executing laws relevant to national banks. Some of its powers include supervisory actions against banks, removal of bank directors and rejecting applications for new bank branches.



Hsu has previously urged the crypto industry to introduce stablecoin standards in the same vein as the World Wide Web Consortium and Internet Engineering Task Force’s approaches to guiding internet development.



In December, the OCC reiterated its stance on taking a <a href="https://blockworks.co/news/us-treasury-occ-crypto-problem" target="_blank" rel="noreferrer noopener">cautious approach</a> to crypto, pointing to various events that roiled digital asset markets in 2022.&nbsp;



One year earlier, Hsu had issued a reminder to federal savings associations and national banks to not participate in “certain cryptocurrency, distributed ledger, and stablecoin activities” without a non-objection notice from their regulatory supervisors.



“The events of this year in the crypto industry have revealed a high degree of interconnectedness between certain crypto participants through a variety of opaque lending and investing arrangements,” the agency said in a semi-annual Risk Perspective report.



Just before his recent retirement, Senator Pat Toomey pushed legislation that would see the OCC <a href="https://blockworks.co/news/lame-duck-senator-leaves-stablecoin-bill-legacy" target="_blank" rel="noreferrer noopener">gain direct oversight</a> of stablecoin issuers by way of a specialized licensing charter.



The agency was among three powerful US financial regulators to express skepticism over financial institutions holding crypto assets in January. Along with the Federal Reserve and the Federal Deposit Insurance Corporation, the OCC <a href="https://www.fdic.gov/news/press-releases/2023/pr23002a.pdf">warned</a> that risks associated with crypto should not spill over into the banking system.&nbsp;



“Based on the agencies’ current understanding and experience to date, the agencies believe that issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices,” the agency said.



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Fresh OCC ‘Fintech Office’ Tasked With Keeping Up With Crypto

Sebastian Sinclair

SEC Chair Gary Gensler voiced his support of President Joe Biden’s request to fund his agency to the tune of $2.4 billion, claiming the funding would go a long way to taming the “wild west” of the crypto markets.



“I am pleased to support the President’s [financial year] 2024 request of $2.436 billion for the SEC, to put us on a better track for the future,” Gensler said during a House Financial Services subcommittee hearing.



Rapid technological innovation in the financial markets, particularly crypto, has led to misconduct in emerging areas, he added in his <a href="https://docs.house.gov/meetings/AP/AP23/20230329/115576/HHRG-118-AP23-TTF-GenslerG-20230329.pdf" target="_blank" rel="noreferrer noopener">published remarks</a>.



<a href="https://blockworks.co/news/gary-gensler-bait-switch-coinbase">Critics argue</a> the agency, under Gensler, has unfairly targeted the industry, which has led to a series of high-profile enforcement actions through litigation — most recently with crypto exchange Coinbase’s receipt of a <a href="https://blockworks.co/news/sec-serves-coinbase-in-latest-alleged-crypto-securities-violation">Wells notice</a> earlier this month.&nbsp;



The regulator is alleging Coinbase violated US securities through its spot market, staking service, Coinbase Prime and Coinbase Wallet. Weeks prior, rival exchange <a href="https://blockworks.co/news/kraken-settles-sec-crypto-staking-program">Kraken agreed</a> to settle with the SEC for $30 million over similar allegations, without admitting wrongdoing.



The funding, if approved by Congress, would allow the agency to double its headcount, allowing the division handling crypto affairs “to investigate misconduct on a larger scale.”



“Addressing this requires new tools, expertise and resources,” Gensler said. It would also speed up the pace of enforcement investigation through “resolutions.”



The SEC did not immediately respond to a request for comment.



“These additional resources would strengthen the division’s ability to protect American families by addressing risks in the crypto markets, cyber and information security, and the resiliency of critical market infrastructure,” he said.



Crypto is “rife with noncompliance,” Gensler added, seemingly ignoring Coinbase’s accusation it has attempted to engage with the regulator on multiple occasions for a clear path to registration.&nbsp;



“Investors have put hard-earned assets at risk in a highly speculative asset class,” he said.



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Gensler Cheers $2.4B Funding Proposal for SEC in Biden Budget

The world’s largest asset manager, BlackRock, said Thursday it believes the US Federal Reserve would continue its campaign of future rate hikes, despite market expectations of a freeze.



It could mean a volatile road lies ahead for digital assets in the short-term, based on prior performances throughout 2021 and 2022 and present-day announcements from the central bank, experts say.



Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>), which has so far managed to climb a wall of worry in the wake of the Fed’s <a href="https://blockworks.co/tag/interest-rates">aggressive rate hikes</a>, benefited from uncertainty in the banking sector as investors sought to hedge via a <a href="https://blockworks.co/news/institutions-bullish-on-eth-price">flight to quality</a>.&nbsp;



The biggest headwinds now facing the US and global economy are not immediate, Dmitry Lapidus, of crypto-native investment fund Dragonfly, told Blockworks.



The Fed “did a great job bailing the banks out” and the effect on GDP is likely to be exaggerated for the remainder of the year, he said.



“I think they cluster somewhere around Q3/Q4 when excess savings are drawn down and housing data is likely to accelerate to the downside.”



Despite the Fed’s recent dovish stance of easing rate hikes, as evidenced by its 25 basis point rise instead of the previously anticipated 50, market uncertainty still lingers.



Lapidus said for crypto, “it’s tough to decouple” from the macroeconomic environment, with the “pain trade” continuing to be up in all risk assets as long as liquidity was supported.



In the near term, he predicts the trend of higher prices for digital assets to continue.



<h2>Future rate hikes?</h2>



The Federal Reserve will next convene to determine short-term interest rates on May 3, with analysts predicting a split chance between a 25 bps increase or the decision to maintain current rates, data from CME Group’s <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html" target="_blank" rel="noreferrer noopener">FedWatch</a> tool shows.



BlackRock <a href="https://www.bloomberg.com/news/articles/2023-03-28/markets-are-wrong-on-us-rate-cut-bets-blackrock-says" target="_blank" rel="noreferrer noopener">believes</a> the central bank will avoid rate cuts this year and opt to continue curbing inflation, albeit at a less aggressive pace than the year prior. Lapidus agrees, pointing to&nbsp; “stubborn” and “sticky” core inflation, as well as the contained banking crisis. In that world, rates would continue to rise.



Previous hikes show the impact on digital assets has had mixed results, particularly at a time when the industry was dealing with several major bankruptcies and declining valuations.



The two largest drops in bitcoin’s price on rate hike announcements occurred on May 5, 2022 (-7.9%) and June 16 of the same year (-9.6%), taking the federal funds rate from 1.5% to 1.75%. Both came before the larger interest rate hikes of 75 bps in the latter half of 2022.



If the Fed reaccelerates its pace with indications of significantly more rate hikes to come, then the crypto rally will falter, Markus Thielen, Matrixport&#8217;s head of research, told Blockworks.



“The debate about a higher terminal rate would also have negative implications for tech companies and start-ups,” he said.



<h2>Change of pace</h2>



Still, the environment in which digital assets now operate has significantly changed from two years ago, when rates had come off historic lows which sustained a decade of cheap borrowing costs.



The price of bitcoin actually rose about 8% on a rate hike of 75 bps <a href="https://blockworks.co/news/fed-raises-rates-75-basis-points-again">on July 27, 2022</a>. Other instances, including the hikes on <a href="https://blockworks.co/news/fed-ends-0-75-streak-opts-for-lower-rate-increase-in-december">Dec. 14</a>, <a href="https://blockworks.co/news/federal-reserve-raises-interest-rates-25-bps">Feb. 1</a>, 2023, and, most recently, <a href="https://blockworks.co/news/federal-reserve-interest-rate-25-bps-march">on March 22</a>, resulted in moderate increases in bitcoin’s price.



Research-focused digital assets brokerage firm K33 <a href="https://k33.com/research/analysis/analysis/correlations-are-declining-and-it-makes-sense" target="_blank" rel="noreferrer noopener">said</a> in a Thursday post that growth had been the main priority amid the zero-interest rate regime, which had kicked into high gear from the outset of the COVID-19 pandemic.



“In crypto, the growth focus was perverse. This is the source of the yearlong correlated hangover that was 2022,” the firm said.



The abundance of capital available to startups via private fundraising led to a prioritization of growth over everything else, with lower interest rates further fueling that trend, K33 said.



While the impact on digital asset performance over the short term appeared sensitive to future hikes, the longer-term implications of “high-interest rates are unknown,” it said.



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BlackRock Predicts More Rate Hikes, Possible Short-Term Volatility for Crypto

Sam Martin

Bitcoin Update

Digital Asset Summit (DAS) is returning March 2024.



This year&#8217;s event will be held in our nation’s capital, where industry leaders, policymakers, and institutional experts will come together to discuss the latest developments and challenges in the ever-evolving world of cryptocurrency.



What you can expect:



<ul>
<li>Insights on the impact of regulatory implications and the need for realistic policy</li>



<li>Access to institutional dinners and exclusive networking events,</li>



<li>Unparalleled insights from industry leaders</li>
</ul>



And more! Don’t miss out on the opportunity to be in the room when the future of crypto is decided.



Join us and help shape the future of our industry.

Get Involved

GET NOTIFIED 

Provide your email to be the first to know when tickets go on sale

INTERESTED IN ATTENDING? 

LEARN MORE

Provide your email below to learn more about sponsorship opportunities

INTERESTED IN SPONSORING? 

March 18-20 | Washington, D.C.

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DAS2024_Thumb_d

Digital Asset Summit 2024 | Washington, D.C.

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

Buy Tickets

Prices increase every 2 weeks. Only 250 tickets available in each drop. Register today and save!

General Admission Pass

30% off available to Bankless Premium Subscribers aka Bankless Citizens. Discount code is required.

BANKLESS CITIZENS

Get notified 

Student tickets will be launching in early 2023

Student Ticket 

Prices increase every 2 weeks. Only 250 tickets available in each drop. Register today and save!

Presenting Sponsor 

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

Kristin is the CEO of the Blockchain Association, the Washington, D.C.-based trade association representing more than 100 of the industry’s leading companies. She also serves as a board member of the Filecoin Foundation for the Decentralized Web. Kristin serves as a liaison between policymakers and the cryptocurrency industry to assist in the creation of legislation and regulation that promotes the growth of the cryptocurrency ecosystem in the U.S. She is also a leading, public voice advocating for the cryptocurrency and blockchain industry through top-tier media interviews, op-eds and letters to the editor, and global speaking engagements. Kristin is a renowned voice for the industry, having been featured on Fortune’s 2020 40 under 40 list, CoinDesk’s 2021 50 people who defined the year in crypto, and CoinTelegraph’s 2022 top 100 Influencers in Crypto and Blockchain. Prior to leading the Blockchain Association, Kristin helped blockchain and technology companies achieve their public policy objectives in Washington. She served as a Senate and congressional aide on Capitol Hill for nearly ten years, much of which was spent focusing on technology policy.

Kristin Smith

Avichal is a successful entrepreneur with executive experience at Google and Facebook, which acquired his previous company. As an angel investor, Avichal has invested in 15 unicorns and 5 decacorns including Airtable, Boom Supersonic, Color Genomics, Cruise, Deel, Figma, Newfront Insurance, Notion, Nova Credit, Pulley, and others. He co-founded Electric Capital in 2018 and has grown it to one of the largest crypto venture firms globally. Electric is an investor in many of the leading web3 protocols and companies such as Bitwise, Bitnomial, dYdX, Frax, Kraken, Magic Eden, NEAR, and Solana.

Avichal Garg

Matt Hougan is one of the world’s leading experts on crypto, ETFs, and financial technology. He is Chief Investment Officer for Bitwise Asset Management, a pioneer in cryptoasset index funds with more than $1.2 billion in assets under management. He was previously CEO of ETF.com, where he helped build the world’s first ETF data and analytics system, the leading ETF media site, and the world’s largest ETF conference, Inside ETFs. Hougan is co-author of both “A Comprehensive Guide to Exchange-Traded Funds” and “Cryptoassets: The Guide to Bitcoin, Blockchain and Cryptocurrencies for Professional Investors” from the CFA Institute’s Research Foundation. He is a crypto columnist for Forbes, and a three-time member of the Barron’s ETF Roundtable.

Matt Hougan

Li Jin

Ethan is the co-founder of the Cosmos network and serves as the CEO of Informal Systems. Informal Systems is a member-driven worker’s cooperative building software that enables trustworthy relationships between protocols and people to flourish. Ethan also serves as the President of the Interchain Foundation which funds and coordinates development of public goods in the Cosmos ecosystem. Ethan sees local money systems as the basis for self-sufficient local economies to prosper. With a background in cell biology, neuroscience, mathematics, machine learning, and distributed systems, his goal is to build systems that encourage humans to work cooperatively through methods of self-organization. He is currently focused on blockchain technology as a means to bring greater political and economic sovereignty to local communities around the globe. Prior to Informal Systems, Ethan co-founded the Tendermint and Cosmos projects, and served as CTO of Tendermint Inc. Today, dozens of projects are adopting technology conceived in the original Cosmos whitepaper, including the Inter-Blockchain (IBC) Communication protocol – an industry-standard for permissionless communication between sovereign blockchains. Today, the Cosmos ecosystem continues to pioneer technological paradigms for building interoperable application-specific blockchains.

Ethan Buchman

Tyrone leads J.P. Morgan’s Blockchain team and is responsible for creating innovative Web3-focused products &amp; solutions for J.P. Morgan’s businesses and clients, and for engaging with the industry at large in order to provide a holistic blockchain strategy for the firm. Tyrone is also the Head of Onyx Digital Assets, a multi-asset tokenization platform that enables the exchange of value for various types of digital assets. Tyrone was previously a Senior Blockchain Product Manager in J.P. Morgan’s Blockchain Center of Excellence and was also the Head of Product for Quorum, an open-sourced Ethereum-based blockchain platform built for Enterprise use. Prior to moving into the blockchain industry in 2015, Tyrone was a software engineer within J.P. Morgan's Credit Markets business, and before that he spent several years in Product transformation, managing and delivering large strategic programs across various businesses within J.P. Morgan, across Front, Middle and Back Office risk and trading systems. Tyrone sits on the Board of Directors of The Enterprise Ethereum Alliance and The Hyperledger Foundation.

Tyrone Lobban

Rich is a Co-Founder and President of GSR and leads the group across strategic initiatives and growth. He began his career at Goldman Sachs where he spent 11 years between New York and London in commodities trading as a Managing Director and Global Head of Crude Oil and Derivatives Trading. Prior to joining GSR, he spent a few years on the buy-side, running energy trading teams at two New York-based hedge funds. Rich earned a bachelor’s degree in Mathematics from Columbia University.

Rich Rosenblum

Kain Warwick is an Australian cryptocurrency entrepreneur most-known as the founder of Synthetix protocol. Synthetix is a financial primitive that enables the creation of synthetic assets, offering unique derivatives and exposure to real-world assets on the blockchain.&nbsp;In 2020, Kain popularised the concept of yield farming that sparked the 2020 DeFi boom, earning the moniker: ‘the father of modern agriculture.

Kain Warwick

Brian Quintenz is the Head of Policy for a16z crypto, where he helps to translate between the crypto and policy communities.



Brian has long stood out as an innovative thinker in crypto and DeFi and was one of the earliest leaders in Washington to recognize the value of crypto. Brian initially joined a16z crypto as a senior advisor. In December 2022, he moved to the full-time role leading its policy team.



Prior to joining a16z, he was nominated by both Presidents Obama and Trump to serve as commissioner of the Commodity Futures Trading Commission (CFTC) and, in August 2017, was unanimously confirmed by the U.S. Senate. He also led the agency’s Technology Advisory Committee, which hosted the most comprehensive set of public crypto-related policy discussions and briefings of any federal financial regulator. During his service, the CFTC oversaw the listing of the first U.S. regulated Bitcoin and Ether futures contracts on derivatives exchanges, and the rapid expansion of DeFi. All the while, he was a champion for tailored, risk-calibrated regulation.



Prior to his appointment to the CFTC, Brian was the Founder and Managing Principal of Saeculum Capital Management, LLC where he developed and implemented Saeculum’s long term, momentum-based investment process for both traditional discretionary accounts as well as a managed-futures, commodity pool hedge fund.



Brian began his career on Capitol Hill, where he worked for 6.5 years and served as senior policy aid to a Member of Congress. He received his B.S. from Duke University and M.B.A. from Georgetown University.

Brian Quintenz

Robby Yung, Animoca Brands’s CEO of Investments, partner at Animoca Capital, a leader in digital entertainment, blockchain, and gamification with a portfolio of products and games including the REVV and SAND tokens, as well as investment and partnerships with companies like Axie Infinity,  OpenSea, Dapper Labs, and Alien Worlds and subsidiaries like The Sandbox, Gamee, Quidd, and Lympo. Robby has been in gaming since 2012 and blockchain gaming since 2018. He served as the first CEO of Animoca Brands after taking the group public in 2015. Prior to that, he cofounded magazine publisher, One Media Group, which he listed on the Hong Kong Stock Exchange. He also founded Chinese television and outdoor media concern, Redgate Media Group, which was acquired by  Inno-Tech Holdings . He began his career in technology, building wireless telecom networks in China and Indonesia with Metromedia.

Robby Yung

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<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>
&nbsp;