Casey Wagner

<div id="highlights-block_6145019c02214" class="highlights">
 <ul>
 <li>DAS panelists agreed that miners are going to be at the forefront of innovation when it comes to sustainability.</li>
 <li>The industry must continue to innovate to insure that all miners are motivated to move to sustainable energy going forward</li>
 </ul>
 
</div>



Digital Asset Summit 2021, New York City — The sustainability of bitcoin mining has come under harsh criticism recently, but experts insist that the industry is on the right track toward sustainability.&nbsp;



“Miners are always going to go toward the lowest-cost energy, and that, long-term, is going to be sustainable,” Amanda Fabiano, head of mining at Galaxy Digital said during the mining panel at the Digital Asset Summit in New York City Wednesday.&nbsp;



A major misconception about the space, Fabinao said, is that mining energy is never renewable. She referenced a recent survey from the Bitcoin Mining Council, a joint group of leaders and miners committed to advancing the industry.&nbsp;



The <a href="https://www.hope.com/content/dam/hope-assets/collateral/Mining-Council-Press-Release-Q2_07-01-2021.pdf" target="_blank" rel="noreferrer noopener">survey</a>, released in August claimed that miners are currently utilizing electricity with a 67% sustainable power mix. The study has since been criticized for lack of transparency with regards to methods used and parties surveyed.&nbsp;



Other panelists largely agreed with Fabiano that there is a broader lack of understanding about where mining energy is sourced.&nbsp;



“I think it’s important to look at some comparables,” said Mason Jappa, CEO and founder of Blockware Solutions. “I assume that bitcoin mining is between 40% and 70% sustainable energy, and if you look at comparables of the US energy grid, the US energy grid is about 12% to 18% sustainable energy.”&nbsp;



The expectation that miners should reveal energy consumption and sourcing information is also flawed, Jappa said, although he agrees that further transparency would be helpful.&nbsp;



“I don’t think we have to share our energy consumption and sustainability, but I do believe in that, and I think we are headed in that direction,” said Jappa.&nbsp;



Miners, the panelists agreed, are going to be at the forefront of innovation when it comes to sustainability.



<blockquote class="wp-block-quote">“I think miners are some of the most creative people in energy,” said Juri Bulovic, vice president of strategy at Foundry. “We&#8217;re creating new technologies and influxing billions of dollars in ecosystems and areas within our economy that were desolate.”&nbsp;</blockquote>



Bitcoin mining operations often use energy that would have otherwise been wasted, Bulovic said. Other groups are converting landfills into energy as a way to fuel mines while eliminating waste, he said.&nbsp;



“Bitcoin, at its finest, is monetizing energy,” Bulovic said. “For miners, 90% of your mining costs are associated with energy.”&nbsp;



Mining operations with more cash to devote to sustainable practices, or those with investors that are interested in being sustainable are more likely to devote capital to these efforts. The industry must continue to innovate to insure that all miners are motivated to move to sustainable energy going forward, Bulovic said.



<hr class="wp-block-separator"/>



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<hr class="wp-block-separator"/>

DAS 2021: Galaxy’s Fabiano Says Most Mining Energy is Renewable

Morgan Chittum

<div id="highlights-block_61439b400a357" class="highlights">
 <ul>
 <li>US savings accounts earn an average APY of around 0.06%, according to the FDIC</li>
 <li>DeFi currently has a total value locked of over $177 billion, according to DeFiLlama</li>
 </ul>
 
</div>



As centralized and decentralized financial markets converge, traditional financial service offerings such as savings accounts could become obsolete, Vesper Finance Co-founder Matthew Roszak said during a panel at the <a href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/">Digital Asset Summit</a> Wednesday.



Roszak said DeFi could usher in a new era of optimization where many people will no longer solely use third-party intermediaries like retail banks to store their capital for an annual percentage yield. (Specifically, savings accounts earn an average APY of <a href="https://www.fdic.gov/regulations/resources/rates/">around 0.06%</a>, according to the <a href="https://www.fdic.gov/resources/bankers/national-rates/">FDIC</a>.)



<blockquote class="wp-block-quote">“I see DeFi as a treadmill for your capital. Your money is always working for you,” Roszak said, citing offerings such as yield farming. “So your capital is always running efficiently based on your risk profile.”&nbsp;</blockquote>



Roszak described the two coalescing as an “opportunity that’s just too great to dismiss,&#8221; but also said the surface area between decentralized finance and traditional finance has “a lot of bridges, roads and tunnels that need to be built.”



“DeFi looks at CeFi and says, ‘Look at all that liquidity.’ Then traditional finance looks at [DeFi] and says ‘20%, 30% yields and it’s sheltered from inflation?’” he said, during the panel. “This is a perfect combo of things to come together.”



The decentralized financial ecosystem still has a ways to go until it significantly changes traditional financial services, said CoinFund’s Head of Growth Vanessa Grellet.



“I want to stress the gap between the two before we try to combine them,” she said in the panel. “On one side, you have open software with developers who are creating innovation and access and in a totally decentralized and permissionless way, and then you have traditional finance who is looking at [DeFi] and saying, ‘Hey, how can I capture those returns? [Those returns] are pretty extraordinary.’”



In August, <a href="https://cms.blockworks.co/metamask-growth-shows-defi-cruising-into-mainstream/">MetaMask</a>, a popular wallet used by DeFi traders, surpassed 10 million monthly active users, growing 19X in a year. With a <a href="https://defillama.com/home">total value locked </a>of over $177 billion, capital flowing into the DeFi ecosystem has exponentially grown in recent months.



<hr class="wp-block-separator"/>



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DAS 2021: Could DeFi Make Savings Accounts Obsolete?

Ben Strack

<div id="highlights-block_61435b111102e" class="highlights">
 <ul>
 <li>Pantera CEO Dan Morehead noted that while bitcoin’s market cap could grow by 10 times in half a decade, he expects other crypto segments to go up even more</li>
 <li>Executives counter argument of Bridgewater Associates CIO Ray Dalio that governments will “kill” bitcoin if it becomes successful </li>
 </ul>
 
</div>



The cryptocurrency market capitalization could continue to roughly double in size each year over the next half decade to reach $40 trillion by that time, <a href="http://v" target="_blank" rel="noreferrer noopener">Pantera Capital</a> CEO Dan Morehead said during a panel at Blockworks’ Digital Asset Summit (DAS) on Wednesday.



While he noted that bitcoin could grow by 10 times during that span, he expects other crypto segments to go up even more. More than 100% of the returns in the cryptocurrency industry have come outside of bitcoin over the last six months, Morehead added.



“Money protection or a digital gold is one of the things blockchain does, but there’s hundreds and hundreds of different use cases — NFTs, DeFi, all that and that’s why it’s so exciting,” he said. “It’s going to go through so many different industries and end up being worth so much value because it’s disrupting things that weren’t touched. Basically all of finance wasn’t touched by the internet.”



The global cryptocurrency market cap today is $2.28 trillion, according to <a href="https://www.coingecko.com/en" target="_blank" rel="noreferrer noopener">CoinGecko</a>, as cryptocurrency trading volume in the last day was at $144 billion, as of 12:30 p.m. eastern on Thursday. The market caps of bitcoin and Ethereum were at about $900 billion (39.8% of overall market) and $425 billion (18.7%), respectively, the data shows.



Morehead was joined on the Manhattan event stage by Mark Yusko, founder and CIO of <a href="https://www.morgancreekcap.com" target="_blank" rel="noreferrer noopener">Morgan Creek Capital Management</a>, and Dan Tapiero, founder and CEO of <a href="https://10tfund.com" target="_blank" rel="noreferrer noopener">10T Holdings</a>.&nbsp;



Yusko, who estimates a $25 trillion crypto market in five years, said he expects a burst in the crypto market value over the next 24 months, followed by a bust.&nbsp;



“People will [say] it’s over, it’s the end,” he told the crowd. That’s the beginning.”



Yusko noted that he also expects the dominance of bitcoin to decline to about 20% of the overall crypto space, perhaps reaching $5 trillion by 2026.



Meanwhile Tapiero estimated that the crypto market value could hit $20 trillion and said bitcoin reaching a price of $500,000 is “very reasonable” within five years.



Bitcoin’s price was above $48,000 on Thursday afternoon, according to CoinGecko, up 4.3% in the last seven days.&nbsp;&nbsp;&nbsp;



“I don’t know that bitcoin dominance will fall … because there is a world in which things start getting built on bitcoin,” Tapiero explained. “There’s so much innovation happening at such a fast pace that, at least for me, I find it hard to be specific on the bet.” 



<h3 class="wp-block-heading">Can crypto be stopped?</h3>



Ray Dalio, CIO of hedge fund manager Bridgewater Associates since 1985, said Wednesday in an <a href="https://twitter.com/SquawkCNBC/status/1438122407965954054?s=19" target="_blank" rel="noreferrer noopener">interview</a> with CNBC that though he has a small allocation to bitcoin relative to other investments, the growth of crypto could lead to its end.&nbsp;



“It’s an amazing accomplishment to have brought it from where that programming occurred to where it is,” he said. “&#8230;I think at the end of the day if it’s really successful, they’ll kill it. They’ll try to kill it and I think they will kill it, because they have ways of killing it.



“It doesn’t have intrinsic value,” Dalio added. “If you put cryptocurrencies, or let’s say bitcoin, in the historical perspective, there are so many things in a historical perspective that didn’t have intrinsic value and had perceived value and then became hot, and then became cold.”



Taperio called Dalio’s comments “ridiculous” during the DAS panel, noting that older investors who are choosing to ignore the benefits of crypto are having their wealth devalued.&nbsp;



Yusko called bitcoin the “greatest money ever invented,” noting that it and gold are the only two forms of actual money.



“That money … will displace all of the bad, crappy money, and that is inevitable and there’s no way to stop it,” Yusko said. “Ray Dalio is crazy to say they can shut it down. No, you can’t.”



The Morgan Creek founder noted China’s first crackdown on bitcoin in 2013, which sent its price tumbling.&nbsp;



“The price fell from $1,400 to $1,000 in two weeks,” Yusko noted. “Where is it today? Is it higher than $1,000? Last time I checked it was, right?’



<hr class="wp-block-separator"/>



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<hr class="wp-block-separator"/>

DAS 2021: Crypto Market Could Hit $40T in Five Years

<div id="highlights-block_6141015bf959c" class="highlights">
 <ul>
 <li>Bitwise’s Matt Hougan said NFTs can expand beyond JPEGs of “digital rocks”. NFTs can revolutionize digital property rights</li>
 <li>Ikigai’s Kling believes that NFTs are “highly unlikely to go away” and will be a “major part of everybody’s life&#8221;</li>
 </ul>
 
</div>



Digital Asset Summit 2021, New York City — The non-fungible tokens (NFT) craze has taken the world by storm. In recent months, certain NFTs have sold for <a href="https://www.gq-magazine.co.uk/culture/article/beeple-nft-interview" target="_blank" rel="noreferrer noopener">$69 million</a>, along with their marketplaces such as <a href="https://cms.blockworks.co/opensea-hits-3b-in-monthly-nft-volume/" target="_blank" rel="noreferrer noopener">OpenSea</a> reporting monthly trading volumes of over $3 billion.



Skeptics question why someone would pay a large sum of money for what appears to be a digitized image, but Ikigai Asset Management Founder Travis Kling described holding the asset similar to “owning a layer of innovation” during a panel at the <a href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" target="_blank" rel="noreferrer noopener">Digital Asset Summit</a> Tuesday.&nbsp;



“If you&#8217;re heading in that direction, where people are spending more and more time in the digital world, then you&#8217;re going to start somewhere [and that’s with NFTs],” Kling said.



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="600" height="399" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/20210914_Blockworks_DAS_597.jpg" alt="Panel at Digital Asset Summit 2021" class="wp-image-7946" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/20210914_Blockworks_DAS_597.jpg?w=600 600w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/20210914_Blockworks_DAS_597.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/20210914_Blockworks_DAS_597.jpg?w=386 386w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/20210914_Blockworks_DAS_597.jpg?w=392 392w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/20210914_Blockworks_DAS_597.jpg?w=329 329w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/20210914_Blockworks_DAS_597.jpg?w=80 80w" sizes="(max-width: 600px) 100vw, 600px" /><figcaption>From left: Travis Kling, Ikigai; David Grider, Grayscale; Matt Hougan, Bitwise; Blockworks Digital Asset Summit 2021: Source: Photo by Mike Lawrence</figcaption></figure></div>



In the session, featuring Horizon Kinetics’ Peter Doyle and Grayscale’s David Grider, panelists touched on the future of the asset class as well, discussing its potential capabilities.&nbsp;



Matt Hougan, Chief Investment Officer of Bitwise Asset Management, said NFTs are far more than just “digital rocks”. They can revolutionize digital property rights. “As goofy as [paying] $3 million for a digital rock may seem, these are just the first instantiation of digital property rights,” he said.&nbsp;



Although NFT use cases are most commonly associated with the arts and entertainment industries, the same framework can transfer to healthcare as well. Using NFTs via a decentralized ledger and blockchain networks, holders can track health data like pharmaceutical drugs and blood donations, making tracking medical records potentially faster and more efficient.&nbsp;



“[NFTs] are the beginning of something that I think is highly unlikely to go away. In the future, I believe it’s going to be a major part of everybody’s life,” Kling said.



<hr class="wp-block-separator"/>



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<hr class="wp-block-separator"/>

DAS 2021: Owning an NFT is Like Owning a ‘Piece of Innovation’

<div id="highlights-block_614100d7510d3" class="highlights">
 <ul>
 <li>Different protocols will develop specialities over next decade based on the projects and apps that become native to that chain, Ava Labs President John Wu said</li>
 <li>Layer-1 protocols such as Avalanche — the blockchain behind Ava Labs — and others like Solana, Cardano and Polkadot, have sought to solve for scale, speed and cost issues on the Ethereum blockchain</li>
 </ul>
 
</div>



Digital Asset Summit 2021, New York City — The new wave of <a href="https://cms.blockworks.co/competition-in-layer-1-space-continues-to-heat-up/">layer-1 protocols</a> that are starting to more fiercely compete with Ethereum will be the home of economies, according to <a href="https://www.avalabs.org">Ava Labs</a> president John Wu.



Bitcoin is used as a store of value, Wu said during Blockworks’ Digital Asset Summit Tuesday in New York City. Ethereum helped create a smart contract capability that people were able to build on top of, he added, forming ecosystems of use.



“But I think Avalanche and the next generation of first layers are where the economies will be,” he explained. “You can have internet of value, you can have ecosystems, but you don’t have an economy unless transactions are easily done and affordably done.”



Layer-1 protocols such as <a href="https://www.avax.network">Avalanche</a> — the blockchain behind Ava Labs — and others like Solana, Cardano and Polkadot, have sought to solve for scale, speed and cost issues on the Ethereum blockchain.&nbsp;



“It’s kind of like before you had Facebook, you had Friendster and MySpace,” Wu said, “So this is now the Facebook generation of layer-1s.”



Meanwhile layer-2s, third-party integrations that can be used in conjunction with a layer-1 blockchain, also target scalability and lower costs, Wu noted.



“Layer-1s are probably more secure, they’re usually developed by people who are a little more technology-centric, and therefore probably have features that will be improved and enhanced over time,” Wu argued.



The executive said that among layer-1s, there will likely be a winner-take-most, such as Facebook in the social media realm. But, as there is also <a href="https://www.tiktok.com/en/">TikTok</a>, Snapchat and Twitter, there will be certain blockchains that develop specialties based on the features and applications built on it, he added.



“In the crypto, DeFi world, stickiness for users is an issue&#8230;so the competitive advantage for a protocol is going to be how fast can they innovate and how fast their business development team can get the best developers and best projects and decentralized apps onto their chain,” Wu said.



Wu’s comments come as <a href="https://www.avax.network/">Avalanche</a> announced Tuesday that Kalao, its NFT ecosystem, is set to launch its public beta version in the fourth quarter. The expansion will unlock the potential of metaverse experiences and combine NFT and virtual reality technologies to real-world use cases, according to the firm.



The comments also follow the July launch of Avalanche Bridge, which allows users to transfer DeFi tokens and programs from the Ethereum network to Avalanche. There had been more than $1 billion in assets transferred in the first month, the firm reported.&nbsp;



Ava Labs also announced the launch last month of a <a href="https://cms.blockworks.co/avalanche-to-add-defi-protocols-aave-and-curve/">$180 million liquidity mining incentive program</a> intended to add more applications and assets to its growing DeFi ecosystem.&nbsp;



Called Avalanche Rush, the program initially brought DeFi protocols <a href="https://u7061146.ct.sendgrid.net/ls/click?upn=4tNED-2FM8iDZJQyQ53jATUTy-2BORT2jbNG7jEOqPUJVoQ-3Djj2f_AtBOqtbz2wW6S0rSGnE7surmL2HP9eJM7-2F3Q6xGwu6sE3WjGc9HndL-2FskgH4k61EigRf9MfCGJvjQ7rkatSq5cegFYk-2FfVWZRFOYxlYptgCUP9PizJHpP15YX0Srecmvh3NRgRQ0jVSgb5cdgFGrj8sQwJgxFIBg7W5aDwbQFcEjUUg9pnxeMg3q7gnAU1eKNU-2BS2p70APepaSOIz34MtTm9F75N1go1T7osrKbwqc2HjmujxcKmOZaTtwiWilf490m9K7ssyEOQDtRu0oigyvlNTd8AsIdTunjrlnKdLshJDiKwcBRL0QE0X5Mf0P9Pud-2Bq0T8j0zdwz10QVizc2Q-3D-3D">Aave</a> and <a href="https://u7061146.ct.sendgrid.net/ls/click?upn=4tNED-2FM8iDZJQyQ53jATUXx6OAnsSLW4matVJPTR1aQ-3DSD-9_AtBOqtbz2wW6S0rSGnE7surmL2HP9eJM7-2F3Q6xGwu6sE3WjGc9HndL-2FskgH4k61EigRf9MfCGJvjQ7rkatSq5cegFYk-2FfVWZRFOYxlYptgCUP9PizJHpP15YX0Srecmvh3NRgRQ0jVSgb5cdgFGrj8sQwJgxFIBg7W5aDwbQFcEjUUg9pnxeMg3q7gnAU1eK-2FR2arMfq7DbCFQraYh7ediKxzbj214TSeaC8JMd4piB0qBQ5Khoqu-2F9Lc85YNqFf2c-2Bj98hqqcBDUZ5-2B4SHQpf3XK7hi7SzJkHDIQdxTvJxDTJJedmeCVtP1cm7C6772T0Qnh4W9lcu7wGNSU8Iqyg-3D-3D">Curve</a>. The blockchain <a href="https://cms.blockworks.co/avalanche-to-add-sushi-to-mining-incentive-program/">later added</a> protocol <a href="https://sushi.com">Sushi</a> as part of the program, a deployment the firm said would provide DeFi traders access to products with high-yield farming rewards and near-instant finality.&nbsp;



Bringing aboard the two distinct communities of developers and users in tandem is critical for Avalanche and its competitors.&nbsp;&nbsp;



“The protocol that can basically create both of those communities at the same time will experience a double compounding loop of success,” Wu said, “and therefore have far more network capability and scale than anyone else.”



<hr class="wp-block-separator"/>



Are you a UK or EU reader that can&#8217;t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a>&nbsp;in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.



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DAS 2021: Ava Labs’ Wu Says Economies will Depend on Next-Gen Layer 1s

Liz Coyne

<div id="highlights-block_613fab56321c7" class="highlights">
 
</div>



Digital Asset Summit 2021, New York City — Blockworks&#8217; Digital Asset Summit 2021 is our flagship US-based institutionally focused crypto <a href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" target="_blank" rel="noreferrer noopener">conference</a> for asset managers and financial services professionals.



Hosted Tuesday and Wednesday, Sept. 14 &#8211; 15, this in-person event features leaders from the world of finance and digital assets discussing crypto from the perspective of industry practitioners.



While the event is sold out, we are thrilled to be able to bring you all the main stage content via livestream.



<a href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/#form0" target="_blank" rel="noreferrer noopener">Follow this link and log-in to watch now.</a>