Phala

Casey Wagner

The Bank for International Settlements knows it has to stay ahead of the curve, and that means getting its hands dirty, Cecilia Skingsley, head of the Innovation Hub at the BIS said.&nbsp;



“Our project portfolio is my biggest pride,” Skingsley said during a discussion at the New York Fed Conference on Fintech: Artificial Intelligence and Digital Assets in Manhattan on Friday. “I think that it distinguishes us from many similar operations because we actually get our fingers into the technology and report our findings to the community.”&nbsp;



The Innovation Hub is tasked with researching and investigating how new technologies, including crypto, are and can change how central banks operate. The BIS knows it cannot afford to ignore the digital asset space, Skingsley said.&nbsp;&nbsp;



“On the back of the Libra experience back in 2019, and all that followed, it really made everybody realize that there is too much going on in the tech space that we can&#8217;t just ignore.”&nbsp;



In the BIS’ most recent report, researchers found that tokenization has huge potential in increasing efficiency and transparency in financial markets. Cryptocurrencies themselves however have yet to demonstrate their value, the report added.&nbsp;



Read more: <a href="https://blockworks.co/news/deutsche-bank-crypto-custody-tokenization">Financial giant Deutsche Bank eyes crypto custody, tokenization</a>



“Crypto and decentralized finance (DeFi) have offered a glimpse of tokenisation’s promise, but crypto is a flawed system that cannot take on the mantle of the future of money,” researchers wrote in the report, titled “BIS Blueprint for the Future Monetary System.”&nbsp;



Regardless, central banks need to be prepared, Skingsley said.&nbsp;



“If the future is tokenized, if we&#8217;re going for a future where we will have <a href="https://blockworks.co/tag/tokenization">tokenized</a> assets on a broad scale, what would that mean for central banks?” Skingsley said. “What sort of infrastructure do you have to have?”



The <a href="https://blockworks.co/tag/bis">BIS</a> Innovation Hub has been in partnership with the New York Innovation Center (NYIC), which operates under the New York Federal Reserve, since 2021. Engaging with central banks is an important tool the Innovation Hub has to target problems facing the global financial system, Skingsley said.&nbsp;



The NYIC is currently in the process of exploring how distributed ledger technology can enhance cross-border payments, a program dubbed Project Cedar. Its first phase of research found that “blockchain could enable faster, simultaneous, and safer cross-border payments,” the NYIC said.&nbsp;



“We&#8217;re in the beginning of a beautiful friendship and a beautiful collaboration,” Skingsley said of the partnership. “Stay tuned, there will be more in the public eye in a couple of months.”



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Like crypto or not, central banks need to prepare, BIS innovate head says 

James Cirrone

Eight crypto startups raised $72.2 million this week, with the largest sum going to a firm that’s developing a cross-chain oracle solution.&nbsp;



Supra raised $24 million in early-stage private investing rounds from Animoca, Coinbase Ventures, HashKey and over a dozen others.&nbsp;



Supra’s cross-chain tools are available on over 40 testnets, including Aptos, Arbitrum, BNB Chain and others, its website says. Supra will also be airdropping a native token, which will be distributed to funds, investors and node operators.&nbsp;



Investors this week also capitalized on the marriage of NFTs and apparel.&nbsp;



Web3 startup IYK, which stands for “If You Know,” announced <a href="https://blockworks.co/news/a16z-funding-iyk">a nearly $17 million fundraise</a> from lead investor a16z Crypto, Collab Currency, Lattice Capital, 1kx, Synergis Capital and others.&nbsp;



IYK’s mission is to embed NFC (near-field communication) chips within merchandise or apparel items. This would allow customers to tap their smartphone on the chip and instantly confirm an item’s authenticity. IYK then gives them NFTs in exchange.&nbsp;



IYK’s clients so far include VÉRITÉ, an independent musician, 9dcc, and Adidas. Adidas and IYK <a href="https://twitter.com/iyk_app/status/1646705948327567362?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1646705948327567362%7Ctwgr%5Ed94c4b52ca949e1b557ccbf4bf99dfb078a00b07%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fblockworks.co%2Fnews%2Fa16z-funding-iyk">partnered</a> during NFT NYC 2023 for an exclusive limited shirt release that yielded 152 shirts.&nbsp;



<h2 class="wp-block-heading">Beacon chain explorer, upcoming layer-2 raise funds</h2>



Rated Labs <a href="https://blog.rated.network/blog/series-a">raised</a> more than $12 million in a Series A round. The firm is behind the Rated Network <a href="https://www.rated.network/?network=mainnet&amp;view=pool&amp;timeWindow=1d&amp;page=1&amp;poolType=all">Explorer</a>, which keeps tabs on Ethereum beacon chain validators and provides data on participation rate, inclusion delay, and correctness percentage.



Archetype led the round with additional participation from Placeholder, 1confirmation, Cherry and Semantic.&nbsp;



With the fresh cash, Rated Labs plans to improve its explorer tool, which was its first product. It also will develop a new API console and launch credentials for node operators.&nbsp;



Separately, the team behind the soon-to-launch layer-2 network Fhenix secured $7 million in seed funding. The round was led by Multicoin Capital and Collider Ventures with added support from Node Capital, Robot Ventures, Bankless, HackVC, TaneLabs and Metaplanet, among others.



Fhenix plans to launch its testnet, which will employ fully homomorphic encrypted smart contracts, in early 2024.



Read more: <a href="https://blockworks.co/news/fhenix-homomorphic-encryption">Encryption startup Fhenix raises $7M for private computation</a>



Fhenix CEO Guy Itzhaki told Blockworks FHE is different from zero-knowledge proofs, where data is moved off-chain where the decrypted message can be seen by a prover.&nbsp;



“With FHE, it’s really the first time that we can have data on-chain, encrypted, and being used as if it’s non-encrypted for the sake of confidentiality,” Itzhaki said.&nbsp;



<h2 class="wp-block-heading">Other notable fundraises</h2>



<ul>
<li>Avantis Labs, a DeFi derivatives trading platform, raised $4 million in a seed round led by Pantera Capital.</li>



<li>AnchorWatch, an institutional custody provider and insurer, <a href="https://www.prnewswire.com/news-releases/anchorwatch-raises-3m-to-solidify-bitcoin-custody-and-insurance-platform-301938468.html">got</a> $3 million to continue managing risk for&nbsp; firms holding bitcoin.&nbsp;</li>



<li>DeFi portfolio manager Bril Finance locked down $3 million from FalconX, Kosmos Ventures, and the Algorand Foundation.</li>



<li>Pimlico <a href="https://blog.pimlico.io/posts/pre-seed">raised</a> $1.6 million in pre-seed money to build infrastructure for smart accounts, a concept borne out of ERC-4337.&nbsp;</li>
</ul>



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Crypto funding: A $72M week for cross-chain oracles, NFT merchandise 

Daniel Batten

The earth is heating up —&nbsp;that’s a non-negotiable fact.



And the best way to slow down the impending environmental disaster, according to the UN, is to urgently reduce the amount of methane emissions. And the best way to urgently reduce methane, funnily enough, just might be bitcoin mining.



Despite what you may have heard about the harmful effects of bitcoin mining on the environment, the cryptocurrency mining industry could actually be a ready-made way to reduce methane on a large scale.



Yes — in a twist worthy of a John Le Carré novel, what I and other environmentalists were led to believe was the villain, turns out to be the good guy.



It is my opinion as a climate tech investor that if you’re a manager of an ESG fund or a member of an ESG investment committee, failure to consider<a href="https://twitter.com/hashtag/BTC?src=hashtag_click"> </a>Bitcoin in the mix is gross negligence of your ESG obligations.



In a nutshell, Bitcoin offers a financial incentive to capture methane from landfills. Not only does Bitcoin mining require the large amount of energy that landfills can supply, this solution could also lead to updated infrastructure at landfills that in theory could benefit other uses of electricity.



My assessment of Bitcoin’s potential environmental impact for good is based on a two-month solid due diligence on bitcoin mining, and it’s only grown stronger during 2023 as I’ve seen new energy and environmental applications.&nbsp;



First, some context. According to a recent <a href="https://www.pwc.com/gx/en/news-room/press-releases/2022/awm-revolution-2022-report.html">PwC report</a>, there are 23 trillion ESG investments, much of which cannot deploy into Bitcoin because of the perception that Bitcoin doesn’t tick the ESG box. Nine out of ten asset managers believe integrating ESG into their investment strategy will improve overall returns, but demand is outstripping supply of good ESG propositions.



In recent months, endorsements by KPMG, the Institute of Risk Management, Bloomberg Intelligence and a peer-reviewed academic study have brought the spotlight on the true impact of Bitcoin as an enabler of renewable transition — and a key force in methane mitigation.&nbsp;



Two years ago, I was hearing very differing views on whether Bitcoin was good or bad for the environment, both in my role in the environmental movement and from my friends in the Bitcoin community.



I resolved this discrepancy by doing my own analysis. What I found surprised me: There were 41 bitcoin mining companies that were either exclusively or almost exclusively using renewable energy. I found that the argument “Bitcoin revives old fossil fuel plants” was not supported by Security Commission filings. Instead, these filings clearly showed that the one gas plant that was claimed to have been revived for bitcoin mining was in fact opened to provide additional power to the grid. It only started bitcoin mining three years later.&nbsp;



I found that the claims “Bitcoin’s major energy source is coal,” “Bitcoin’s emissions are 65 MT CO2e/year and rising,” “Bitcoin’s emission intensity is increasing” and “Bitcoin is struggling to go green” were all based upon a single bitcoin mining model from Cambridge University.&nbsp;



However, on close inspection, I learned that this model measured less than half of hash rate, did not factor in either offgrid mining or flare-gas mitigation, and had not updated its dataset since January 2022 (when fossil-fuel intensive Kazakhstan represented 13.2% of global hash rate, today it is 0.73%).&nbsp;



Once those three exclusions were factored in, the picture changed completely, and all four claims from Cambridge were invalidated: Bitcoin mining was revealed to be mainly powered by hydro, 52.6% sustainable-energy powered, dropping in emission intensity markedly, and emitting 34 MT CO2e — a figure which has not increased over the last four-year cycle.&nbsp;&nbsp;



Now we get to the issue of methane reduction — methane is 84 times more warming than CO2 over a 20-year period, and it&#8217;s growing at a parabolic rate.&nbsp;



How do you make mitigating methane from landfills profitable? Well, where possible, the best solution is to capture and scrub that landfill gas, then send it to a generator to create electricity — which removes almost 100% of methane emissions. You’re turning pollution into an asset.&nbsp;



Problem is, many landfills cannot sell that electricity back to the grid. Either the grid upgrade costs too much, or government policies prevent it.&nbsp;



Nuno Barbosa, CEO of Landfill Gas Carbon Consulting company Unicarbo, recently said to me that “50% of the world’s landfills have no option to sell their power back to the grid, but if they had an onsite customer, that would change everything.”



Who could be that user? Landfills are not popular places to set up a business. Furthermore, why would anyone invest millions in power generation, unless electricity is most of your running costs? This is where bitcoin mining company’s huge use of electricity —&nbsp;80% of their operating budget and once maligned by environmentalists — proves to be its biggest environmental asset.&nbsp;



Unless we make methane mitigation profitable, the methane mitigation our planet needs won’t happen and our climate efforts will be in vain. Bitcoin mining is already the most sustainable-energy powered major global industry, and it’s in a unique position to make methane mitigation profitable for half of the world’s landfills.



Taking all these facts into consideration, my opinion is that Bitcoin is the most important ESG asset of our time — and the fiduciary duty of every ESG fund manager and investment committee to evaluate.&nbsp;



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


<div class="wp-block-post-author-biography">Daniel Batten is a ClimateTech investor, Bitcoin environmental impact analyst, CEO advisor and author. He is most widely known for his data-driven approach to Bitcoin mining research.
</div>


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Want to help save the planet? Mine bitcoin

The most high profile hires at crypto firms this week were those tasked with regulatory matters.&nbsp;



For instance, Ripple Labs added former Obama Administration official Lauren Belive as head of US Public Policy and Government.&nbsp;



With Ripple still engaged in a court battle with the US Securities and Exchange Commission over alleged unregistered securities offerings, Belive will likely have her hands full. The SEC’s appeal of the July ruling was <a href="https://blockworks.co/news/judge-greenlights-sec-motion-to-file-appeal">granted</a> on Aug. 17.



Belive wrote a <a href="https://www.linkedin.com/feed/update/urn:li:activity:7112397888764162049/">LinkedIn post</a> announcing her new role and what it would entail.&nbsp;



“My role will be to lead our engagement in Washington and nationally,” she wrote. “With regulatory landscapes evolving, it&#8217;s paramount that we advocate for policies that not only support the crypto industry but also the countless individuals and businesses that could benefit from these advancements.”



Read more: <a href="https://blockworks.co/news/ripple-abandons-plan-fortress-trust">Ripple ditches plan to buy Fortress Trust</a>



<a href="https://www.linkedin.com/in/lauren-belive-ba355246/">Belive</a> was a policy director at the White House from April 2012 to May 2015, but she was in Barack Obama’s orbit for far longer. She previously served on his 2008 campaign, the White House transition team and finally, the White House’s legislative affairs office for over three years.



Read more: <a href="https://blockworks.co/news/judge-rules-ripple-xrp-not-security">Judge rules in SEC case vs Ripple</a>



After that, she left the public sector and has been working as an advisor to large corporations on governmental matters. The role she’s taken at Ripple is similar to roles she’s had at Lyft, Zoom and SoftBank.



<h2 class="wp-block-heading">Kraken makes moves in Canada</h2>



This week was a busy one for Kraken, a San Francisco-based crypto exchange.&nbsp;



First, <a href="https://blockworks.co/news/kraken-licenses-spain-ireland">it received key crypto licenses in Ireland and Spain</a>. Just a day later, there were reports that <a href="https://blockworks.co/news/kraken-stock-trading">Kraken will offer stock trading by next year</a>, which will in no doubt put it in direct competition with Robinhood. 



Then on Thursday, Kraken publicly <a href="https://blog.kraken.com/news/kraken-bolsters-its-canadian-offering">announced</a> a new hire in Canada — one that’s focused on keeping in step with regulation in the country.



Dina Mainville will be joining Kraken’s board of directors in Canada, also known as Payward Canada.



Mainville has been a member of the Canadian Blockchain Consortium, a nonprofit lobbying group, since September 2020. Since then, she founded and chairs its regulatory committee.&nbsp;



She’s also the founder and president of Collisionless, a Toronto-based professional services firm that specializes in blockchain technology and digital assets.&nbsp;



Kraken added that she’s advised global Fortune 500 companies on blockchain initiatives and has “trained hundreds of government and law enforcement professionals on cryptocurrency forensic investigation strategies.”



As part of this announcement, Kraken also expanded access to Interac e-Transfer — Canadians&#8217; method of electronically transferring money — to all Canadians on the mobile and web platforms. The firm is also reducing the Interac e-Transfer fee to 0.95% down from 1.5%.



And in the coming days, there will be eight new digital assets that Candians can trade, including Sui, Audius and others.&nbsp;



<h2 class="wp-block-heading">Other notable hires</h2>



<ul>
<li>Wednesday was Alex Chriss’ <a href="https://twitter.com/acce/status/1707053986606465169?s=20">first day</a> as <a href="https://blockworks.co/news/hiring-roundup-silvergate-paypal">PayPal CEO and president</a>. He is taking control during <a href="https://blockworks.co/news/paypal-stablecoin-slow-uptake">the implementation of PayPal’s stablecoin PYUSD</a>.</li>



<li>Matteo Leibowitz, head of ventures at Uniswap Labs, said it was his last day after three years at the company in a Friday <a href="https://twitter.com/teo_leibowitz/status/1707789881752387704">post</a> on X.</li>



<li>Swan Bitcoin, a BTC-only trading platform, announced that pro basketball player Matthew Dellavedova would be joining the firm as vice president of business development. The Australian point guard won an NBA Championship alongside Lebron James while on the Cleveland Cavaliers in 2016.</li>



<li>Epic Games <a href="https://www.epicgames.com/site/en-US/news/layoffs-at-epic">laid off</a> 830 employees, or 16% of its staff, right as the game studio is trying to fashion Fortnite into a monetizable metaverse.</li>
</ul>



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Crypto hiring: Firms shore up operations with key regulatory hires

Katherine Ross

BlockFi&#8217;s Chapter 11 plan received approval earlier this week, supported by both the company&#8217;s management and the Committee of Unsecured Creditors.



According to a blog post, the plan got 90% approval across all voting classes. 



The former crypto lender filed for bankruptcy in late 2022 following the collapse of FTX. It followed in the footsteps of bankrupt lenders Voyager and Celsius.



<a href="https://blockworks.co/tag/blockfi">BlockFi</a> will continue to seek recoveries from the Three Arrows Capital and FTX bankruptcies as part of the plan, which would then increase recoveries for customers.&nbsp;



As Blockworks previously reported, BlockFi is also <a href="https://blockworks.co/news/blockfi-ftx-3ac-claims-creditor-funds">fighting claims from both FTX and 3AC</a>, which both seek to recover funds. The company alleged, however, that it fell victim to the former crypto exchange.



Read more: <a href="https://blockworks.co/news/how-blockfi-went-from-tech-unicorn-to-crypto-burnout">How BlockFi went from tech unicorn to crypto burnout</a>



Additionally, back in early September, <a href="https://blockworks.co/news/ftx-blockfi-sam-bankman-fried-oppose-bankruptcy-plan">FTX objected to BlockFi’s bankruptcy plan</a>, alleging that it “still suffers from certain fundamental shortcomings.”



The plan will ensure that digital assets are distributed to customers, including <a href="https://blockworks.co/news/blockfi-return-300m-some-customers">BlockFi Interest Account holders</a>.&nbsp;



Regarding the interest accounts specifically, the <a href="https://blockfi.com/blockfi-plan-confirmed/">blog</a> post said that “the company expects that this will be the first wave of distributions, which will be followed by additional distributions.”



BlockFi is still working to distribute “funds to clients with assets in the BlockFi Wallet product,” it said.



After the plan goes into effect, BlockFi will exit bankruptcy, and then start winding down the business. However, the timing is still uncertain due to being dependent on “a few factors, including the Bermuda court, which regulates our international clients, recognizing the US bankruptcy court’s approval of the plan.”



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BlockFi to move forward with Chapter 11 plan

The federal government’s budget is set to expire over the weekend, and lawmakers appear no closer to passing legislation that will prevent a shutdown. If Congress doesn’t come to an agreement soon, it could spell trouble for the crypto industry.&nbsp;



The odds of a government shutdown increased Friday afternoon when the House failed to pass its last-ditch attempt to extend the federal budget past Saturday, with the bill losing in a vote of 198-232. The last government shutdown in 2018 lasted 35 days.&nbsp;



“A government shutdown could cost taxpayers $1 billion to $2 billion per day,” Rep. Blaine Luekemeyer, R-Mo. said.&nbsp;



A government shutdown stops non-essential federal work. A shutdown leaves most federal agencies, including the US Securities and Exchange Commission, with a limited, ‘essentials-only’ staff. Crypto industry members and legal minds are all but certain this limited staff means zero movement on any digital-asset related agenda matters.&nbsp;



“I seriously doubt any of these agencies are going to be able to carry out any meaningful regulatory action regarding crypto in the event of a government shutdown,” Brian Evans, the CEO and founder of digital asset venture capital firm BDE Ventures, said.&nbsp;



The SEC has already pushed its <a href="https://blockworks.co/news/sec-decision-date-bitcoin-etf">decision date for the Ark 21Shares Bitcoin ETF</a> from Nov. 11 to Jan. 10. A shutdown could also result in paused litigation, SEC Chair Gary Gensler said, adding that his staff would be “skeletal.”&nbsp;



“The normal oversight we have on markets will not be possible,” Gensler said during an interview on Bloomberg Television last week.&nbsp;



But having the agency take a step back from crypto might not be the worst thing, Evans said.&nbsp;



“Given the extreme pressure applied by the <a href="https://blockworks.co/tag/sec">SEC</a> and other agencies on the crypto industry of late, a slowdown in such action resulting from a shutdown would be a welcome breather for crypto-industry participants,” Evans added. 



Read more: <a href="https://blockworks.co/news/invesco-spot-ether-etf-galaxy-digital-bitcoin">Invesco, Galaxy float latest spot ether ETF proposal</a>



A shutdown would also pause, or at the very least slow down, crypto legislation’s progress on Capitol Hill, political experts said. Several crypto-related bills have advanced through the markup period, but the odds of a floor vote during a shutdown are next to none.&nbsp;



Plus, a shutdown likely will shake up Congress’ priority list even after operations resume as normal, so crypto issues could face further delays.&nbsp;



<h2 class="wp-block-heading">What about pending legal matters? </h2>



Federal courts have said they are equipped to remain funded until Oct. 13, or about two weeks should a government shutdown last that long.&nbsp;



The US District Court for the Southern District of New York (SDNY), where Sam Bankman-Fried’s criminal trial <a href="https://blockworks.co/news/sam-bankman-fried-trial-starting-soon">is set to begin next week</a>, confirmed with Blockworks that his trial will not stop even if the shutdown extends beyond October 13.&nbsp;



The court will continue operating as their employees will be deemed essential. However, there could be hold-ups with other departments like the Department of Justice and US Attorneys office, a representative from the SDNY said.&nbsp;



Jurors could also be financially impacted, the representative added. If the judiciary runs out of money, jurors’ pay would be delayed until a budget is approved. US district court jurors are paid $40 per day of service, plus reimbursements for travel costs.&nbsp;



Jury selection for Bankman-Fried&#8217;s trial is slated for Oct. 3. Should a government shut down occur before then, attorneys are likely to question potential jurors regarding their feelings about delayed payments during the screening process.



Sam Dibble, partner at Baker Botts, added that criminal trials are protected under the Constitution, and will continue through a shutdown. However, the pace of these trials could be slowed depending on which employees are classified as essential. Bankruptcy cases could be another story, however.



FTX, Celsius, BlockFi and Voyager are just some of the crypto companies engaged in <a href="https://blockworks.co/tag/bankruptcy">bankruptcy</a> proceedings.&nbsp;



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Crypto industry braces for uncertainty as Federal shutdown looms

Andrew Thurman

The price of Open Exchange’s OX token fell as much as 50% on Friday following news of co-founder Su Zhu’s arrest.&nbsp;



Liquidators for Zhu’s fallen Three Arrows Capital (3AC) fund reported on Friday that Zhu was apprehended by Singaporean officials while attempting to leave the country. Zhu will reportedly be imprisoned for four months in an effort to compel him to cooperate with 3AC liquidation efforts.&nbsp;



Shortly following the news, the price of the governance token for Open Exchange (<a href="https://blockworks.co/price/ox">OX</a>), plummeted. At the time of publication, OX sits 43% lower on the daily at $.013, having recovered from lows of $.01035.&nbsp;


<div class="wp-block-image">
<figure class="aligncenter"><img decoding="async" src="https://lh6.googleusercontent.com/uwV7vXmcL_UdwagivZyIbBxSPwPgajvgomcGyTzDMK7hJunGbaZco8wrrscSHN8trO3GYUE8x_HM-v54CsfjRrademW2E5S049lGEM1n24b-gAKe3w-alWKgM6rb1bS37xlqqV1X0VeJlYAFRPrnQrU" alt=""/></figure></div>


Source: Aevo OX Perps chart



Part of the severity of the decline is attributable to limited liquidity for the asset. A single Uniswap v3 pool accounts for nearly 97% of the $5.88 million daily volume, which eclipses the $1.3 million in liquidity in the pool by a factor of four.&nbsp;



Read more: <a href="https://blockworks.co/news/three-arrows-capital-su-zhu-singapore-arrest">Three Arrows co-founder Su Zhu arrested in Singapore, says liquidator firm</a>



OX currently has a $33.2 million market capitalization.&nbsp;



The OX project was founded as an exchange to facilitate trade in crypto bankruptcy claims for entities like Celsius, FTX and 3AC. It was meant to play a crucial role in the public rehabilitation efforts of co-founders Kyle Davis and Zhu.



<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">The way Kyle and I choose to show remorse is to help build a global business <a href="https://twitter.com/OPNX_Official?ref_src=twsrc%5Etfw">@OPNX_Official</a> that makes the business models of 2018-2022 obsolete If we succeed, many creditors will be whole If we fail, we will keep trying again Kyle+I were nearly suicidal last year this same…&mdash; 朱溯 🐂 (@zhusu) <a href="https://twitter.com/zhusu/status/1668187671473295361?ref_src=twsrc%5Etfw">June 12, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Zhu and Davis often implied that the collapse of 3AC was moreso due to misplaced market bets rather than fraud or criminal actions. Open Exchange was part of their broader initiative to reestablish themselves in the crypto industry.



According to a statement from Teneo, Davis is also committed to four months in prison, but his whereabouts are currently unknown.



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OX token plummets after co-founder Zhu’s arrest

Polygon announced Friday that Google Cloud is officially a validator for the proof-of-stake sidechain.&nbsp;



This comes months after T-Mobile’s parent company, Deutsche Telekom, also became a validator, showing that Polygon is consistently attracting the interest of large technology firms.



Polygon took to X to share the news, saying that the same infrastructure that powers YouTube and Gmail, both products boasting billions of users, will now be helping secure its own network.&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">This month, <a href="https://twitter.com/googlecloud?ref_src=twsrc%5Etfw">@GoogleCloud</a> became part of the decentralized validator set for Polygon PoS. The same infrastructure used to power <a href="https://twitter.com/YouTube?ref_src=twsrc%5Etfw">@YouTube</a> and <a href="https://twitter.com/gmail?ref_src=twsrc%5Etfw">@gmail</a> is now helping to secure the fast, low-cost, Ethereum-for-all Polygon protocol. With 100+ validators securing the Polygon PoS…&mdash; Polygon (Labs) (@0xPolygonLabs) <a href="https://twitter.com/0xPolygonLabs/status/1707747034973757815?ref_src=twsrc%5Etfw">September 29, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Google Cloud has staked just over $5,300 worth of <a href="https://blockworks.co/price/matic">MATIC</a> on Polygon so far, according to Polygon’s staking <a href="https://staking.polygon.technology/validators/157">dashboard</a>.  



Besides being another big tech name being attached to Polygon, Google’s involvement could have implications for <a href="https://blockworks.co/news/polygon-validum-zk-tech-future">Polygon’s anticipated switch from a PoS chain to a validium</a>.



Read more: <a href="https://blockworks.co/news/deutsche-telekom-polygon-validator">T-Mobile parent joins Polygon blockchain as validator</a>



Validiums are similar to zero-knowledge proofs, but they diverge in how they store data. Instead of storing data on Ethereum, validiums rely on off-chain storage solutions, which makes the blockchain less clogged and more efficient.&nbsp;



Polygon did acknowledge the need for off-chain storage as a decentralization tradeoff in a June <a href="https://polygon.technology/blog/polygon-2-0-polygon-pos-zk-layer-2">blog</a>. Plus, since only the proofs are stored on-chain, rather than the underlying data, validiums don’t benefit from the security of Ethereum.



Still, when the transition to a zkEVM validium goes through, <a href="https://blockworks.co/news/polygon-pos-to-validium">perhaps by early 2024</a> according to Polygon Labs, Google Cloud will be among 100 other validators securing the chain and guaranteeing data availability.



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Google Cloud is now a Polygon validator

Jack Kubinec

CryptoPunks, the pixelated NFT collection that helped drive 2021’s NFT art craze, is now the subject of a documentary five years in the making.&nbsp;



Indie filmmaker Sherone Rabinovitz has been working on a CryptoPunks film since March 2018 when he sat down for an interview with the collection’s founders, John Watkinson and Matt Hall. Rabinovitz released an extended trailer on Thursday for the forthcoming documentary, which contains a four-minute cut from the 2018 interview and previews the film’s other themes. 



In the trailer, Watkinson recounts creating the punks’ accessories over the course of a month before launching the project. According to Watkinson, CryptoPunks weren’t a finished product when they launched.



“I had a few more things [to change] and all of a sudden it was like, ‘Oh wait, we’re kind of through a one-way door here. We deployed the contract already,’” Watkinson says in the 2018 interview.



The <a href="http://vimeo.com/user73645899">trailer</a> goes on to nod to the cultural phenomenon that was to come just a few years later: the conferences, celebrity adoption, spinoff projects and <a href="https://blockworks.co/news/sothebys-cryptopunk-auction-canceled-after-seller-withdraws">auction house intrigue</a> that comprised the rise of CryptoPunks. 



Yuga Labs, the company behind Bored Ape Yacht Club NFTs, acquired CryptoPunks’ intellectual property from Watkinson and Hall in 2022, with the pair <a href="https://www.larvalabs.com/blog/2022-3-11-18-0/yuga-labs-acquires-cryptopunks-and-meebits">writing</a> at the time that they weren’t well-suited to the “day-to-day management that these kinds of projects require and deserve.”&nbsp;



The CryptoPunks floor price has trended sideways since April of this year, sitting at 45.19 ether (<a href="https://blockworks.co/price/eth">ETH</a>) or around $75,000 at the time of writing.&nbsp;



Rabinovitz’ documentary does not yet have an official release date, and it comes as early interest in NFT-inspired films has cooled off: Coinbase’s Bored Apes <a href="https://nftlately.com/coinbase-puts-bored-ape-movie-trilogy-on-hold/#:~:text=It%20has%20yet%20to%20get,the%20team%20behind%20the%20project.">movie</a> is currently on hold, and Reese Witherspoon’s <a href="https://www.protocol.com/bulletins/reese-witherspoon-nfts">partnership</a> with World of Women is yet to yield any releases.&nbsp;



Rabinovitz’ documentary is meant to bring CryptoPunks’ story outside of the cryptosphere.



“[W]hile many of you crypto-natives might know a bit of it, the rest of the “normie” population out there *still* does not,” the filmmaker <a href="https://x.com/Sherone33/status/1707292545204596987?s=20">wrote</a> on X.



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Trailer released for CryptoPunks documentary 

Bessie Liu

The launch of MetaMask Snaps brought expanded functionality to MetaMask wallets, allowing users to access different layer-1 blockchains without needing to install different extensions or wallet applications.&nbsp;



These features enabled the primarily Ethereum-based wallet app to become interoperable with other layer-1 blockchains, such as Bitcoin, Solana and Cosmos chains.&nbsp;



Snaps achieves this by deriving addresses from other blockchains, according to Christian Montoya, the global product lead for MetaMask Snaps.&nbsp;



“We can derive from a Cosmos address, so rather than going to a bridge that allows you to transfer tokens from Ethereum to <a href="https://blockworks.co/tag/cosmos">Cosmos</a>, you can just do that within MetaMask and the Cosmos Snap that you install into MetaMask,” Montoya told Blockworks in an interview. “The addresses you’re using to bridge from one way to another are within MetaMask and fully self-custodial.”



As a result, Snaps could <a href="https://blockworks.co/news/metamask-snaps-interoperable">expand cross-chain traffic by giving users simple access</a> to bridges.&nbsp;



There are currently 36 open Snaps in Open Beta, and the Cosmos MetaMask Snap is one of them that has been made available during this time.&nbsp;



MetaMask is currently one of the most popular crypto wallets today. According to a <a href="https://www.coingecko.com/research/publications/most-popular-crypto-hot-wallets">report</a> by CoinGecko, as of Aug. 1, 2023, a total of 22.66 million users had installed the MetaMask wallet. Making it the most used crypto wallet. Coinbase Wallet, the second largest wallet by installation, only had 11 million users.&nbsp;



Why Agoric’s hardened Javascript for Cosmos Snaps?



Connecting <a href="https://blockworks.co/tag/metamask">MetaMask</a> to Cosmos was no easy feat, and the development team chose Hardened JavaScript for its ability to operate with third-party applications without compromising security.&nbsp;&nbsp;



Agoric CEO and founder Dean Tribble told Blockworks that his team dug into research about how to make JavaScript applications more secure, having previously worked with the founders of MetaMask on extensibility projects.



“Agoric was founded around this: how do you harden JavaScript, how do you safely run confined components written by other people when you don’t trust them,” Tribble said.&nbsp;



Hardened JavaScript, previously referred to as SES, is what Tribble refers to as the “JavaScript you thought you were programming in.”



JavaScript itself is mutable, so different libraries could change the programming language, Tribble explained. Hardened JavaScript locks down the programming language in the way the spec says it is programming in.



“It gets rid of a few things like non-determinism, but it makes it much better suited for blockchain uses, and it was really the hardening in the ability to run third-party components that got [MetaMask co-founders] excited about it,” Tribble said.



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Inside the code choice that connects MetaMask with the Cosmos ecosystem

Ben Strack

Invesco is the latest fund group to pursue an ETF that would hold ether directly.&nbsp;



The fund giant, which manages nearly $1.6 trillion in assets, shared plans for its Invesco Galaxy Ethereum ETF in a Friday filing.&nbsp;



Galaxy Digital Funds is set to to serve as execution agent for the proposed ETF and facilitate the sale of ether by the trust, the <a href="https://www.sec.gov/Archives/edgar/data/1995569/000119312523246762/d470525ds1.htm">disclosure</a> notes.



Unlike various <a href="https://blockworks.co/news/valkyrie-etf-ether-futures-unwind">ether futures ETFs expected to launch</a> in the coming days, the Invesco Galaxy Ethereum ETF would hold ether directly — mirroring other proposals made this month.&nbsp;



<a href="https://blockworks.co/news/21shares-ark-filing-for-spot-ether-etf">Ark Invest and 21Shares revealed plans</a> for a spot ether ETF on Sept. 6. VanEck, which first filed for a spot ether ETF in 2021, also has an active filing in front of the US Securities and Exchange Commission, while Hashdex seeks a fund that would blend ether futures and spot ether exposures.&nbsp;



Read more: <a href="https://blockworks.co/news/ark-invest-etf-battle">Ark anticipates win in US crypto ETF battle with ‘deepest’ suite, COO says</a>



People familiar with the filing by Ark Invest and 21Shares said recent developments suggested it was an opportune moment to start expanding conversations around ether products. That disclosure came about a week after <a href="https://blockworks.co/news/grayscale-sec-spot-bitcoin-etf">Grayscale Investments won a court case against the SEC</a> in what many segment watchers called a victory for the broader crypto space.&nbsp;



Invesco is not new to the digital assets realm.



Perhaps best known for its QQQ ETF that invests in Nasdaq 100 companies, <a href="https://blockworks.co/news/invesco-and-galaxy-team-to-build-suite-of-crypto-etfs">Invesco partnered with Galaxy Digital</a> in September 2021 to create physically backed crypto ETFs.&nbsp;



“We believe the combination of an institutional, crypto native asset management business alongside a global ETF pioneer will drive the entire crypto space forward,” Steve Kurz, Galaxy’s head of asset management, said at the time.&nbsp;



Invesco was <a href="https://blockworks.co/news/bitcoin-etf-invesco-wisdomtree">among the fund groups that filed for a spot bitcoin ETF</a> in June just days after asset management giant <a href="https://blockworks.co/news/blackrock-clout-bitcoin-etf-approval">BlackRock jumped into the race</a>.&nbsp;



<a href="https://blockworks.co/news/us-spot-bitcoin-etf">Though spot crypto ETFs trade in a number of other countries</a>, the SEC has never allowed such funds to launch in the US. The securities regulator on Tuesday <a href="https://blockworks.co/news/sec-decision-date-bitcoin-etf?utm_source=CryptoNews&amp;utm_medium=app">extended its deadline to rule on the Ark 21Shares Bitcoin ETF</a> to Jan. 10.&nbsp;



Spokespeople for Invesco and Galaxy declined to comment.&nbsp;



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Invesco, Galaxy float latest spot ether ETF proposal

A day after Valkyrie Investments became the first to offer ether futures exposure in an ETF, the crypto-focused firm is getting rid of those holdings.



At least for now.&nbsp;



The Valkyrie Bitcoin Strategy ETF (BTF) will not purchase ether futures contracts “until the effectiveness of an amendment to the fund’s registration statement contemplat[es] the addition of ether futures contracts to the principal investment strategy of the fund,” Valkyrie said in a Friday filing. 



“Until such time, the fund will unwind any existing positions in ether futures contracts,” the <a href="https://www.sec.gov/Archives/edgar/data/1877493/000138713123011727/valkyrie-497_092923.htm">disclosure</a> adds.&nbsp;



A Valkyrie spokesperson did not immediately return a request for comment.&nbsp;



Valkyrie had filed with the US Securities and Exchange Commission in August <a href="https://blockworks.co/news/valkyrie-eth-futures-etf">to change the investment strategy of its bitcoin futures ETF</a> to one that also allows it to invest in ether futures.&nbsp;



A firm representative told Blockworks Thursday that <a href="https://blockworks.co/news/ether-futures-etfs-launch-soon">BTF began adding exposure to ether futures contracts</a>, noting that the new investment strategy was set to become formally effective on Oct. 3. The fund is set to be renamed the Valkyrie Bitcoin and Ether Strategy ETF that day.



Bloomberg Intelligence analyst James Seyffart said in an X <a href="https://twitter.com/JSeyff/status/1707754634033476073">post</a> Friday that Valkyrie’s latest filing could indicate that the SEC asked the firm to reverse its ETH futures positions until the official effective date as competitors also prepare ETFs with such exposures.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



“The SEC does not want to be a kingmaker via their policies and will do whatever they can to prevent someone from launching on their own like BITO in 2021,” Seyffart added in a separate X post.&nbsp;



The <a href="https://blockworks.co/tag/sec">SEC</a> did not immediately return a request for comment.



<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">As we&#39;re watching things now: <a href="https://t.co/qQTvrOGX5R">https://t.co/qQTvrOGX5R</a>&mdash; James Seyffart (@JSeyff) <a href="https://twitter.com/JSeyff/status/1707763519708369266?ref_src=twsrc%5Etfw">September 29, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Seyffart is referring to the ProShares Bitcoin Strategy ETF (BITO) — the first bitcoin futures fund to launch in the US, which hit the market in October 2021. Though similar products by Valkyrie and VanEck launched in the following days, BITO gained the lion’s share of assets into these types of funds, <a href="https://blockworks.co/news/bito-on-track-to-be-first-fund-in-history-to-hit-1b-in-aum-in-two-days">quickly amassing $1 billion</a> in assets under management.&nbsp;



VanEck, ProShares and Bitwise have submitted updated prospectuses over the last 24 hours for their own ETFs that invest in ether futures contracts — with expense ratios ranging from 66 basis points to 95 basis points. Bloomberg Intelligence analysts said they expect these funds could go live as soon as Monday.&nbsp;



VanEck posted a <a href="https://twitter.com/vaneck_us/status/1707419473337033075?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1707419473337033075%7Ctwgr%5E2944f8bab5605f486fa8429b85307f1b9a9ee0c9%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fblockworks.co%2Fnews%2Fether-futures-etfs-launch-soon">video</a> on its X page Thursday — in tandem with a press release — teasing the “upcoming launch” of the VanEck Ethereum Strategy ETF. The company declined to comment further.&nbsp;



Volatility Shares, which kicked off the latest wave of ether futures ETF filings in July, said last month it planned to launch its Ether Strategy ETF (ETHU) on Oct. 12. Its website continues to show that date. A representative for the firm did not immediately comment.&nbsp;&nbsp;



Spokespeople for Bitwise and ProShares declined to comment.



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Valkyrie ETF to ‘unwind’ ETH futures position — at least for now

CommEX released an open letter early Friday morning addressing concerns raised in the wake of Binance&#8217;s recent exit from Russia.



<a href="https://blockworks.co/news/binance-exits-russia-sale-commex">Binance fully withdrew from Russia</a> earlier this week, stating that it had sold off its business there to local exchange CommEX for an undisclosed amount.



What has alarmed industry watchers, however, is that CommEX seems to have launched only just this week, something that was essentially confirmed in the <a href="https://commex.zendesk.com/hc/en-us/articles/8011097433999-A-Letter-to-the-CommEX-community-">letter</a>. Notably, CommEX only became a member of X in September 2023 and has a modest online presence with just seven posts.



These revelations have stoked suspicions that <a href="https://blockworks.co/tag/binance">Binance</a> or CEO <a href="https://blockworks.co/tag/changpeng-zhao">Changpeng Zhao</a> remain in control of the new exchange.



Zhao denied the swirling claims that he owns CommEX on Thursday, but said a few former Binance-CIS employees may join the CommEX team.&nbsp;



“I am not their [ultimate beneficial owner], nor do I own any shares there. The deal does not have any buy back options,” Zhao wrote on X.



<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">Some answers about Binance/CommEx. There will be crypto transfers between Binance &amp; CommEx as users migrate with their funds. There are also older transactions during the testing phase of the integrations. This is expected. A few ex-Binance CIS team members may join their team,…&mdash; CZ 🔶 Binance (@cz_binance) <a href="https://twitter.com/cz_binance/status/1707293387001307551?ref_src=twsrc%5Etfw">September 28, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Adam Cochran, a partner at Cinneamhain Ventures, expressed skepticism about CommEX&#8217;s independence. In an X thread, he highlighted that CommEX&#8217;s login page still offers an option to log in using Binance credentials.



<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">3/25 Instead, Commex is a new Seychelles company (so new it doesn&#39;t show up in registers yet) and it seems to run on Binance Cloud. Even letting you login with Binance as the main call to action. <a href="https://t.co/XeLjK3ng8x">pic.twitter.com/XeLjK3ng8x</a>&mdash; Adam Cochran (adamscochran.eth) (@adamscochran) <a href="https://twitter.com/adamscochran/status/1707052164009402718?ref_src=twsrc%5Etfw">September 27, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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CommEX said it&#8217;s been developing its platform for six months and has a team comprising “dozens of passionate individuals.” Some of those individuals are “former Binance veterans,” according to the letter.&nbsp;



What wasn’t disclosed, however, is information detailing CommEX’s owner, despite the fledgling exchange wanting to converse with customers “in the spirit of transparency.”



“Although we do not disclose our [ultimate beneficial owner], we want to make it clear that we are not owned by Binance,” CommEX wrote. “Our leadership may choose to maintain a low profile, but their extensive skills significantly shape our strategic growth and contribute to our achievements within the cryptocurrency industry.”



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CommEX won’t reveal ownership, says Binance isn’t in control

Digital asset infrastructure platform Fireblocks is acquiring smart contract firm BlockFold.



Details on the acquisition were not disclosed, though Fireblocks noted it would be integrating the BlockFold team. Co-founder Terence Signakis will also stay on as head of Tokenization Products.



The deal will expand Fireblocks&#8217; tokenization abilities, allowing it to offer advisory services, customization, and distribution to clients.



Additionally, the company said that tokenization project demand rose 350% between 2022 and 2023. The goal is for BlockFold to allow Fireblocks to expand the tokenization opportunity, which it believes could grow into a multi-billion dollar market.



BlockFold most recently was <a href="https://blockworks.co/news/australian-bank-nab-stablecoin-ethereum">involved with National Australia Bank’s first cross-border intra-bank stablecoin</a> transfer. BlockFold assisted with the smart contracts and direct custody of the tokens.&nbsp;&nbsp;



&nbsp;“We already speak a common language in understanding these customers’ requirements at an architectural level. Bringing BlockFold’s expertise in-house means that we can better serve tier-1 financial institutions to quickly and seamlessly bring tokenization projects into production and new assets onto the blockchain,” Michael Shaulov, <a href="https://blockworks.co/tag/fireblocks">Fireblocks</a> CEO, said in a statement.&nbsp;



“In addition, we can continue to innovate and expand our offerings and tailor our approaches as the market continues to mature and evolve.”



The company has been involved in stablecoin projects, including a tokenization project with the Israeli Ministry of Finance and the Tel Aviv Stock Exchange which plans to tokenize the Israeli debt market over the next few years.



&#8220;Fireblocks’ acquisition of BlockFold stands to strengthen its tokenization capabilities and bridge the gap between [centralized finance] and DeFi by allowing financial institutions like TASE to build robust and scalable infrastructures and support well-governed digital asset ecosystems,” said Orly Grinfeld, EVP, head of clearing at the Tel Aviv Stock Exchange.



At the <a href="https://blockworks.co/tag/permissionless">Permissionless</a> conference, <a href="https://blockworks.co/news/fireblocks-ceo-michael-shaulov-fortune-500-mpc">Shaulov said that institutions are focusing</a> on an audience that has not interacted with crypto or Web3, which adds a complicated layer for any company looking to launch a Web3 venture.



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Fireblocks acquires tokenization firm BlockFold

Teneo, the liquidator of Three Arrows Capital (3AC), said Friday that Su Zhu, the failed crypto hedge fund’s co-founder, has been apprehended by authorities in Singapore.



Teneo, in a statement shared with Blockworks, announced Zhu’s apprehension and stated that the former hedge fund founder faces four months in prison under a committal order.



The arrest is said to have occurred as Zhu sought to leave Singapore by airplane. News of the arrest has yet to be independently corroborated by Singapore authorities.



The order was applied for and obtained by Teneo on Sept. 25 after <a href="https://blockworks.co/tag/su-zhu">Zhu</a> refused to comply with a court order requiring him to cooperate with the liquidators. Teneo added that “a similar committal order was granted against the other co-founder of 3AC, Mr. Kyle Livingston Davies.”



Singapore <a href="https://blockworks.co/news/3ac-zhu-davies-securities-violations-monetary-authority-singapore">recently issued a multi-year market activity ban</a> against both Zhu and Davies, which went into effect on Sept. 13.&nbsp;



The Monetary Authority of Singapore said that 3AC misled the regulator and committed multiple violations between August 2020 and January 2022.



“MAS takes a serious view of Mr. Zhu’s and Mr. Davies’ flagrant disregard of MAS’ regulatory requirements and dereliction of their directors’ duties. MAS will take action to weed out senior managers who commit such misconduct,” Loo Siew Yee, assistant managing director of payments and financial crime at MAS said in a statement at the time.



<a href="https://blockworks.co/tag/3ac">Three Arrows</a> collapsed in the summer of 2022 following the infamous depegging of the <a href="https://blockworks.co/price/ust">UST</a> stablecoin.



Updated Sept. 29, 2023 at 10:48 am ET: Added additional context.



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Three Arrows co-founder Su Zhu arrested in Singapore, says liquidator firm

Paul Dylan-Ennis

It’s a hard and brutal truth to accept, but Sam Bankman-Fried single-handedly nuked the opportunity for crypto. This really hit home for me watching a recent BBC Panorama documentary about the collapse of FTX. I watched it hoping a talking-head might suggest SBF’s actions had undermined the positive potential of crypto. I didn’t expect the majority to mention this, but there’d be at least one advocate in the mix. 



But not once did the idea of crypto as good ever turn up. And while I’ve had this feeling for a while, the <a href="https://www.bbc.com/news/technology-66892685">documentary</a> made it crystal clear: We are cooked, done for, to the mainstream. And if you’re no longer likely to be part of the mainstream culture, then where else can you go, but back to your roots, to subculture. 



Crypto is a subculture that got out of hand — but I also believe that crypto will survive to the extent it accepts its status as a subculture. But to get back to our subculture roots, we need to extricate ourselves from a poisonous dynamic: Our reliance on the social media platform X.



Read more:  <a href="https://blockworks.co/news/sam-bankman-fried-trial-starting-soon">Sam Bankman-Fried’s trial starts Oct. 3: What you need to know</a>



Marshall McLuhan’s famous insight that the medium is the message means that the media we use shapes the content we consume. Or the other way around, the content we consume obscures the media we use. The history of crypto is one shaped by its social media, and today we appear trapped in a toxic relationship with one in particular, X (the artist formerly known as Twitter).&nbsp;



When Bitcoin launched in 2009, the discourse around the first cryptocurrency happened on what was already an ailing platform, the bulletin board discussion forum. Bitcointalk was not Athens, far from it, but the discussion forum format did enforce a slower pace and a more traditional call-and-response dialogue tree.&nbsp;



By around 2015, crypto had mostly transitioned over to Reddit. Reddit’s format enabled crypto projects to establish their own niches. The most overarching subreddit, /cryptocurrency, superficially suggested a cohesive movement, while the posts often saw projects sniping at one another in the comments. Reddit as a medium ramped up the antagonism and rivalry by both enabling segregation into echo chambers and then, to pour oil on the fire, gave us one giant messy Parliament, where everyone could mutter under their voices while representatives from the other side gave their speeches.&nbsp;



The current stage was the move toward X.&nbsp;



X is a medium that has had three main corrosive effects on crypto. First, X brought all the absurdity and drama of crypto culture to the eyes of the mainstream. X is not an isolated discussion forum or relatively obscure subreddit, but a global public square where all our shenanigans are magnified. Silly, over-the-top claims about the metaverse could now be shared for likes by an Average Joe looking for an easy dunk. Second, X algorithmically rewards adversarial content. Influencers hell bent on building a following have turned topics as mundane as what consensus mechanism is best into viable careers. You could spend your time analyzing interesting nuances between mining and staking, but it&#8217;s far more lucrative — quite literally since monetization — to spin a conspiracy theory or two for your audience. Third, X as a platform seems almost entirely indifferent to stemming the relentless flow of fake giveaways, airdrops and shady links polluting everyone’s posts.&nbsp;



For most people, this is all they see of crypto, and it shapes their attitudes, hardening them to the thesis that crypto has failed. Not that crypto has potential if it can just get rid of the scammers, but that whatever crypto was supposed to be, what it actually is is Scam City. The medium is the fake airdrop under your friend’s post.



Read more from our opinion section: <a href="https://blockworks.co/news/web2-data-web3-threads" target="_blank" rel="noreferrer noopener">Dear Web2, we want our data back</a>



Moving away from X, there’s a more subtle point about the mediums we choose to communicate with. If we ourselves insist on using Web2 social media platforms rather than our own, then why would anyone really buy into our ideas around decentralization, permissionlessness, the ownership economy, etc.?&nbsp;



Because these platforms exist. We already have Lens (similar to Meta), Console (similar to Discord) and Farcaster (similar to X) on Ethereum. These <a href="https://blockworks.co/news/web3-social-media-apps-to-watch">exist now as perfectly functional Web3 alternatives</a>. 



These are our mediums and they offer an escape route. However, psychologically, a transition away from “Crypto Twitter” and its millions of users to any one of these much quieter Web3 platforms would be admitting that crypto is a subculture once again.



But this might be exactly what we need for crypto to succeed.



We have to build out our own Web3 platforms, hopefully eliminating the worst excesses of the Web2 platforms we are currently dependent on. Then maybe, just maybe, when people come across us again, they’ll find a group of people living according to their values and be able to see the good in those values for themselves.



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<div class="wp-block-post-author-biography">Dr. Paul Dylan-Ennis is Lecturer/Assistant Professor in the College of Business, University College Dublin. He is the author of the forthcoming book “The Absolute Essentials of Ethereum” with Routledge. </div>


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