Avalanche Foundation showcases a six-figure ecosystem fund, wXRP set to launch smart contracts on Ethereum, and AllianceBlock joins forces with Flare — all coming to you in this week’s Finance Redefined.
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Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter.
For many years, Ethereum and XRP held the second and third-ranking spots in the crypto market. Read on to discover how wXRP will integrate into Ethereum to expand its utility to smart contracts.
What you’re about to read is the smaller version of this newsletter. For the full breakdown of DeFi’s developments over the last week, subscribe to our newsletter below.
Avalanche launch $200M fund to incentive developers
The Avalanche Foundation unveiled a new $200 million fund this week aimed at expanding the liquidity potential of startup projects with its ecosystem building decentralized finance, nonfungible tokens, enterprise and cultural applications.
According to the official blog post, the smart contracts platform will deploy the funds across a panoply of sectors, including “equity investments, token purchases, various forms of technology, business development and ecosystem integration support,” all of which will be overseen by an expert field of fund managers.
The fund, known as “Blizzard,” has been contributed to by an impressive list of participants from the DeFi space, including Ava Labs, Polychain Capital, Three Arrows Capital, Dragonfly Capital and CMS Holdings, among others.
Emin Gün Sirer, director of the Avalanche Foundation, shared his perspective on the recent growth of the project, as well as the potential implications for Blizzard:
“The last two months have shown incredible growth across Avalanche, with users, assets, and applications joining the community in record-highs. Blizzard will play a key role in further accelerating this growth, and solidifying Avalanche’s position as the premiere home for projects and people pioneering the next era in our space.”wXRP to launch on Ethereum blockchain
Wrapped XRP (wXRP) is expected to launch on the Ethereum blockchain in December, facilitated by multichain platform Wrapped.com. The integration will enable Ripple (XRP) holders to deploy smart contract functionalities of lending, borrowing and swapping for the first time in its history.
Wrapped tokens are digital assets stored in a vault on a separate blockchain and equally pegged to the value of another asset. For instance, Wrapped Bitcoin (wBTC) operates on the Ethereum blockchain. Therefore, wXRP will have a one-to-one exchange ratio to XRP, with the custody provided by insured provider Hex Trust.
In a tweet on Monday, Ripple chief technology officer David Schwartz advocated for a multichain, interoperable approach in the crypto space:
AllianceBlock partner with Flare to advance DeFi
Blockchain firm AllianceBlock announced a partnership with Flare Network this week to advance the capabilities and interoperability of the two platforms within the DeFi space.
The long-awaited launch of Flare Network, and its corresponding FXRP token airdrop, is expected to bring Turing-tested smart contracts functionality to the Ripple network by integrating the Ethereum Virtual Machine.
Commencing with XRP — due to its partnership connection to Ripple — the platform will also offer Dogecoin (DOGE), Bitcoin (BTC), Algorand (ALGO) and Stellar Lumens (XLM) before reportedly branching out to all native layer-one blockchains.
Rachid Ajaja, co-founder and CEO of AllianceBlock, spoke to Cointelegraph about the regulatory potential of the platform:
“With increased interest from traditional finance in DeFi, AllianceBlock’s regulatory and compliance layer will allow traditional institutions to access opportunities in DeFi in a variety of ways, such as creating compliant, tradeable certificate wraps out of liquidity mining tokens, yield farming or NFTs.”Token performances
Analytical data reveals that DeFi’s total value locked has increased 4.62% across the week to a figure of $167.42 billion.
Data from Cointelegraph Markets Pro and TradingView shows DeFi’s top 100 tokens by market capitalization considerably well across the last seven days.
Phoenix Global (PHB) secured the podium’s top spot with a colossal 3,230%. Loopring (LRC) came in second with 118.5%, while Basic Attention Token (BAT) came third with 30.94. Fourth and fifth places were claimed by Avalanche (AVAX) and Maker (MKR) with 20.74% and 18.5%, respectively.
Analysis and hot topics from the last week:
- Cointelegraph Consulting: Recounting 2021’s biggest DeFi hacking incidents
- Parabolic gains for OriginTrail, Maker and XYO Network rouse ‘altseason’ hopes
- Layer-2 and multi-chain DeFi platforms see record inflows as Ethereum fees soar
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.
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AllianceBlock partner with Flare to advance DeFi
Blockchain firm AllianceBlock announced a partnership with Flare Network this week to advance the capabilities and interoperability of the two platforms within the DeFi space.
The long-awaited launch of Flare Network, and its corresponding FXRP token airdrop, is expected to bring Turing-tested smart contracts functionality to the Ripple network by integrating the Ethereum Virtual Machine.
Commencing with XRP — due to its partnership connection to Ripple — the platform will also offer Dogecoin (DOGE), Bitcoin (BTC), Algorand (ALGO) and Stellar Lumens (XLM) before reportedly branching out to all native layer-one blockchains.
Rachid Ajaja, co-founder and CEO of AllianceBlock, spoke to Cointelegraph about the regulatory potential of the platform:
“With increased interest from traditional finance in DeFi, AllianceBlock’s regulatory and compliance layer will allow traditional institutions to access opportunities in DeFi in a variety of ways, such as creating compliant, tradeable certificate wraps out of liquidity mining tokens, yield farming or NFTs.”
Token performances
Analytical data reveals that DeFi’s total value locked has increased 4.62% across the week to a figure of $167.42 billion.
Data from Cointelegraph Markets Pro and TradingView shows DeFi’s top 100 tokens by market capitalization considerably well across the last seven days.
Phoenix Global (PHB) secured the podium’s top spot with a colossal 3,230%. Loopring (LRC) came in second with 118.5%, while Basic Attention Token (BAT) came third with 30.94. Fourth and fifth places were claimed by Avalanche (AVAX) and Maker (MKR) with 20.74% and 18.5%, respectively.
Analysis and hot topics from the last week:
- Cointelegraph Consulting: Recounting 2021’s biggest DeFi hacking incidents
- Parabolic gains for OriginTrail, Maker and XYO Network rouse ‘altseason’ hopes
- Layer-2 and multi-chain DeFi platforms see record inflows as Ethereum fees soar
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.
Enegra Group, a commodities trading firm based in Malaysia with a net asset value of $28 billion, has migrated its equity-tied EGX security tokens from to the Polygon (MATIC) blockchain from Ethereum (ETH). In 2019, Energra tokenized 100% of its equity, enabling shareholders to digitally exercise their dividend, voting, and governance rights. Both the initial tokenization and token migration were facilitated by Tokeny, an asset tokenization and compliance infrastructure provider.
Matthew Averay, managing director and CEO at Enegra, said:
We tokenized our equity to improve liquidity. And, now that the technology is available for faster, cheaper, and compliant transactions on the blockchain, we wanted our investors to take advantage of it. Polygon and Tokeny provided the complete infrastructure we needed to do so, and we are extremely pleased with the results.
Meanwhile, Sandeep Nailwal, co-founder at Polygon, commented:
The tokenization of real-world assets and financial securities is probably the next big wave in DeFi, and we are excited to see our partner, Tokeny, bring qualitative and compliant assets to the Polygon network. By leveraging our infrastructure with the right software provider, such as Tokeny, businesses can quickly deploy or convert their assets to Polygon. — Polygon | $MATIC (@0xPolygon) November 5, 2021 \n\n
Finally, Luc Falempin, CEO at Tokeny Solutions, added the following statement:
Issuers of tokens don't need to worry anymore about being blocked on a blockchain forever. Without losing any history, we now have the tools and processes for smooth migrations from one network to another.
Polygon is a protocol designed for scaling and developing infrastructure on the Ethereum blockchain. According to PolygonScan, the network processes over 3 million transactions per day and has approximately 105 million unique wallet addresses. Altcoin blockchains with low transaction costs continue to surge in popularity as of late, due to high gas fees on the Ethereum network — which currently hover around $153 per smart contract execution.
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In remarks given at the American Fintech Council’s 2021 Policy Summit, acting Comptroller of the Currency Michael J Hsu called for greater regulation of universal crypto firms.
“Large, universal crypto firms—especially issuers of highly-circulated stablecoins—should embrace comprehensive, consolidated supervision. At the same time, federal and state bank regulators should prioritize the development of policies, staff, and supervisory approaches to bring such firms safely into the bank regulatory perimeter. This would clearly differentiate safe and sound crypto firms from those that are regulated only partially and have a history of control lapses, such as Binance and Tether.”
The Office of the Comptroller of the Currency is responsible for regulatory oversight of federally chartered banks operating within the United States. Hsu further declared:
“The rapid expansion and mixing of wholesale and retail activities at some crypto firms raise the question of whether there ought to be Glass-Steagall-like separation of activities in the crypto space.\"
Glass-Steagall was a 1933 federal law that walled off investment and commercial banking, and was repealed in 1999. Hsu finally cautioned, “In the cryptocurrency space, the rapid growth in users and total market value has only been matched by the growth in scams and consumer complaints. 'Move fast and break things' is a common mantra in tech. In the financial services context, it is important to remember that those “things” are people and their money.”
In October, OCC nominee Saul Omarova was pressured to turn over her college thesis on Marxism by Senate Republicans. The OCC in coordination with other regulators is expected to issue guidance to banks on how to hold cryptocurrency assets soon. Hsu began scrutinizing Tether’s commercial paper reserves in January.
Kicking off the two-day event, Zaki Manian, co-founder of decentralized finance, or DeFi, project Sommel and former lead developer at Cosmos and Tendermint (Cosmos network's core contributor), discussed a number of technologies under development by the Cosmos ecosystem.
According to Manian, a development called ABCI ++ will enable the addition of consensus events on other blockchains to the block production process, improving the efficiencies of cross-chain bridges and oracles on the network. Next, developers can use dynamic IBC (dIBC) functionality to introduce governance proposals across different blockchains instead of only IBC token transfers. Thirdl, liquid staking would allow users to stake their ATOM while receiving a derivative of the asset that can be used in DeFi applications. Finally, interchain accounts are meant to help build multichain applications, where decentralized autonomous organizations, or DAOs, on one chain can directly control accounts or wallets on another.
Sunny Aggarwal, co-founder of Osmosis, a decentralized exchange, or DEX, on the Cosmos ecosystem, elaborated on the concept of liquidity staking further during the panel. Aggarwal explained that coin holders could soon earn better yields by simultaneously accessing multiple DeFi pools with the same underlying tokens. He raised the example of users pledging their Osmosis (OSMO) tokens to provide trading liquidity for the exchange, receiving OSMO liquidity provider tokens, and then depositing the same OSMO LP tokens back into a staking pool. So coin holders can harvest the yield in the LP pool and the staking pool all at once.
In another segment, Enrico Talin, co-founder of Commercio.network, claimed to have created the first legally-binding blockchain in the world. Its infrastructure stores encrypted versions of users' personal data, such as vaccine records, driver's licenses, passports, etc. Theoretically, users would be able to send their electronic signature and proof of identity over the blockchain when requested, such as when signing up for a new bank account. The verifier can then confirm, via decentralized consensus, that the signature is genuine and the documents are from a legit issuer.
However, no personal data is exchanged on the blockchain, only their proofs. Talin then discussed the possibility of creating legally binding nonfungible token, or NFT, contracts that confirm the ownership of real-world assets. Later this year, privacy-broadcast features, IBC, and legal document NFTs will all be available on Commercio.network.
A Shiba Inu token holder who invested thousands of dollars in the memecoin in February has partially cashed out to become a stay-at-home dad.
According to a Thursday report from Fortune, a 35-year-old supermarket warehouse manager identified only as Rob invested $8,000 into Shiba Inu (SHIB) when the price was roughly $0.0000001 — giving him an allocation of 800 billion tokens. In May, when the token price surged significantly to reach a then all-time high of more than $0.00035, Rob cashed out part of his holdings to deposit $500,000 into his bank account.
The SHIB holder still has more than $1 million worth of crypto following the token’s price surge in October. The funds have allowed him to quit his job, which paid $68,000 annually, stay at home taking care of his son and participate in online discussions about projects related to SHIB. He plans to HODL his remaining tokens.
“We believe so strongly that there is more to achieve with Shiba,” said Rob. \"I will never take out our entire portfolio.”
The former warehouse manager is part of a new generation of crypto users achieving millionaire and even billionaire status in much the same way many Bitcoin (BTC) HODLers did following the 2017 bull run. At the time of publication, the price of SHIB is $0.000058, having gained more than 5,799,999,900% since October 2020.
Some token holders who made similar purchases to Rob when the project was listed last August are now billionaires and new whales in the crypto space. However, if holders were to liquidate such a large number of tokens in the future, it could potentially cause the SHIB price to plunge as it did in May.
Related: Shiba Inu now accepted as payment at a French bistro in Paris
The SHIB token is currently ranked as the eleventh largest cryptocurrency by market capitalization according to CoinMarketCap, with Dogecoin (DOGE) sitting at ninth. At the time of publication, the market cap of SHIB is roughly $32.6 billion with more than 549 trillion tokens in circulation.
United Kingdom-based crypto mining company Argo Blockchain’s plans to build an 800-megawatt data center in West Texas could cost anywhere from $1.5 billion to $2 billion.
According to a Friday regulatory filing from Argo, the $2 billion cost estimate for the Helios mining facility built on a 320-acre land plot in Texas was based on “the type of mining machines to be installed in the facility, the mix of owned and hosted machines, the cost of raw materials, labor and power required to construct the facility, the timing of build-out and machine purchase, and other factors.” However, the firm added that this was only an estimate and “future results could differ materially.”
Argo broke ground on the 200 MW crypto mining facility based in Dickens County in July, reporting the site will give the company “access to up to 800 MW of electrical power” for its future operations. Though the mining center doesn’t have a roof yet, the plot of land alone will cost Argo $17.5 million. The company plans to have the facility up and running by mid-2022.
— Peter Wall (@PeterGWall) November 4, 2021 \n\n
Peter Wall, the CEO of Argo, has cited Texas’ cheap renewable energy as well as its openness to innovation in new technologies as part of the reason for the construction of the data center. As of August, the company claimed that its crypto operations had become “climate positive” for some classifications of greenhouse gas emissions, part of its plan to eventually become carbon neutral.
Related: Bitcoin mining likely didn't contribute to Texas' power outages, says expert
Many Bitcoin (BTC) miners have set up shop in Texas as China continues to crack down on mining operations and the state stands out for its cheap electricity and seemingly crypto-friendly regulations. The state is currently home to Blockcap, Riot Blockchain and others.
Lawyers for major fast food chain Jack in the Box have filed a lawsuit against crypto exchange FTX US for copyright and trademark infringement of its \"Jack\" mascot.
According to federal court documents filed in the Southern District of California on Wednesday, Jack in the Box's legal team is requesting a jury trial, claiming FTX US’ Moon Man character — Lou Nar, an adult male typically dressed in polo shirts with the head of a moon used for Major League Baseball events — is a ripoff of the company’s current version of its Jack mascot. The fast-food company describes its character as “a typical adult human male, with the exception of his large spherical white head, blue dot eyes, nose, and curvy smile.”
“Rather than spending its vast financial resources to develop its own intellectual property, FTX brazenly and illegally copied or derived its ‘Moon Man’ mascot from JITB’s Jack,” the company alleged in court documents:
“Just like Jack, FTX’s Moon Man has a spherical white head also affixed to a talking human actor, with blue-dotted eyes, a nose, and a smile. The two characters are strikingly similar in both appearance and behavior. For example, the Moon Man also changes his facial expressions and clothing attire throughout advertisements and appearances, just like Jack.”
Jack in the Box’s legal team added that it considered the FTX US mascot a “far inferior version” of Jack, claiming it was tarnishing the fast-food company’s reputation among consumers. The documents list incidents of reporters and many on social media comparing the two characters’ appearance, sometimes describing the Moon Man as a “dirty” version of Jack.
Hey, @FTX_Official , your mascot doesn’t look like the moon. He looks like Jack-In-The-Box with skin cancer.
— Aunt Clara (@Ms_Apprehension) October 15, 2021 \n\n
Though the original version of Jack in the Box’s character was created in 1951, the current ‘Jack’ or ‘Jack I. Box’ voiced by Dick Sitting was developed in 1995 and appeared in more than 300 television and radio commercials. Crypto exchange FTX was founded in 2019 and introduced the Moon Man this year.
The filing shows lawyers for Jack in the Box sent FTX a cease and desist letter to stop using the character on Oct. 15, to which FTX refused, claiming “Jack in the Box has only narrow protection limited to the behatted ping pong‐headed clown who exploded out of a box to sell burgers.” Jack in the Box’s case includes allegations related to copyright infringement, trademark dilution, trademark infringement, false designation of origin and unfair competition.
Related: Copyright infringement and NFTs: How artists can protect themselves
Many pictures, symbols and memes have often been used by figures in the crypto space to pump or create FUD around some tokens, including Pepe the Frog, and even the Bitcoin (BTC) logo, itself, attributed to Satoshi Nakamoto. In June 2020, someone anonymously registered the BTC name and logo with the Spanish Patent and Trademark Office claiming they wanted to “protect Bitcoin.”
Jane Castor, the mayor of Tampa Bay, Florida, has announced that she will begin accepting her paycheck in Bitcoin (BTC), according to multiple sources who attended Florida’s Bitcoin Blockchain Summit.
Castor made the announcement Friday morning on Day Two of the Summit, which is being held at Amalie Arena in downtown Tampa. According to people who attended the event, crypto lending platform Celsius Network will facilitate the mayor’s BTC payments.
BREAKING NEWS: #Tampa Mayor @JaneCastor just announced she's accepting @FrancisSuarez challenge of taking her pay in #Bitcoin with the help of @NukeGold @CelsiusNetwork at the #FL Bitcoin Blockchain Summit.@APompliano @CoinDesk @Cointelegraph @LedgerInsights
— Gabe ₿ Higgins (@GabeBHiggins) November 5, 2021 \n\n
The news quickly spread across Crypto Twitter, with Bitcoin evangelist Anthony Pompliano noting that a total of four United States mayors have begun accepting at least a portion of their paychecks in BTC.
Another mayor has decided to take their salary in bitcoin.
The running count is now 4 mayors across the United States this week.
Tag your mayor and ask them if they are bitcoin-friendly :) https://t.co/pXzyd661NM
— Pomp (@APompliano) November 5, 2021 \n\n
Castor’s decision appears to have been influenced by Miami’s Francis Suarez, who recently became the first mayor to accept a portion of his salary in Bitcoin. Newly-elected New York City Mayor Eric Adams quickly followed suit by announcing that he will accept his first three paychecks entirely in the cryptocurrency.
Suarez and the newly-elected Adams have been vocal about turning their respective cities into crypto hubs. Following his election, Adams declared that New York City will become the “center of the cryptocurrency industry.”
In New York we always go big, so I’m going to take my first THREE paychecks in Bitcoin when I become mayor. NYC is going to be the center of the cryptocurrency industry and other fast-growing, innovative industries! Just wait!
— Eric Adams (@ericadamsfornyc) November 4, 2021 \n\n
Related: NFL quarterback Aaron Rodgers will accept part of $22M salary in Bitcoin
Despite experiencing several bouts of extreme price volatility this year, Bitcoin returned to record highs in late October and continues to trade above $60,000. Its price appreciation has been accompanied by growing mainstream acceptance from regulators and financial institutions, as well as merchants and payment processors.
The issues surrounding social media giant Facebook were the focus for many at the largest tech conference in the world. The company has been the subject of intense media scrutiny following the release of internal documents by whistleblower Frances Haugen, in addition to its decision to enter the metaverse with its rebrand to Meta.
Facebook investor Roger McNamee said he believed executives at the social media firm should face criminal charges due to their alleged role in pushing divisive and misleading content on the platform. Haugen echoed this point in her own speech, saying the company had been “putting lives in jeopardy” in cases such as posts concerning Ethiopia, where a civil war is currently building between Tigrayans and government forces.
\"There should be more transparency, more research, more regulation,\" said Nick Clegg, vice president of global affairs and communications at Meta.
Digital assets, climate change and the situation surrounding the pandemic were also under discussion in the tech industry. The conference opened with Lisbon Mayor Carlos Moedas saying his dream was to make the city “the capital of innovation in the world\" and ended with Portugal's President Marcelo Rebelo de Sousa issuing a call to action on economic inclusion, climate change and the “digital revolution.”
Perhaps due to the crypto and blockchain space rising as an economic force in 2021, the topics of digital assets, nonfungible tokens and the metaverse were on full display — even in panels unrelated to the industry. Major speakers, including Nicholas Julia, co-founder and CEO of nonfungible token (NFT) gaming platform Sorare, venture capitalist Tim Draper, Yahoo Finance editor-in-chief Andrew Serwer, Celsius Network CEO Alex Mashinsky and others in the crypto space, were in attendance.
In a soon-to-be-released interview with Cointelegraph, Mashinsky said the internet will eventually become another “app on the blockchain” as the space grows.
\"Web 3.0 will move all the money in the world into digital finance,” said the Celsius CEO, adding his prediction of a $1 million Bitcoin (BTC) price by 2027.
Cointelegraph editor-in-chief Kristina Lucrezia Cornèr participated at Web Summit along with team members including Ting Peng, Vadim Krekotin, Giovanni Pigni, Anna Kalcheva, and Ana Dawson. Cornèr moderated four separate panels: impact investing, inclusive finance in the time of COVID-19, “how to build community in a fragmented world,” and the new era of commerce.
Related: Sorare CEO shares bold vision on NFTs during Web Summit 2021 opening night
Though many people still face challenges with international travel during the ongoing pandemic — Portugal requires proof of vaccination or testing prior to entry — 42,751 people attended the summit. According to the conference’s communications team, the event drew the highest-ever participation by women in its 10-year history: 50.5%, or more than 21,000 people.
Some of blockchain’s biggest venture firms have spearheaded a new investment fund dedicated to Web 3 gaming, also known as GameFi, potentially opening the door to a highly lucrative industry that sees cryptocurrency and blockchain merging with the traditional gaming sector.
On Friday, Solana Ventures, Lightspeed Venture Partners and derivatives exchange FTX announced the launch of a $100 million GameFi ecosystem fund. The funds will be used to invest in gaming studios, technology companies and other projects “at the intersection of blockchain and gaming,” the companies said.
Lightspeed Venture Partners executive Amy Wu described gaming as a massive opportunity to “bring the next billion users to Web 3,” a broad concept that refers to a more decentralized internet. Lightspeed has already invested over $300 million into late-stage gaming and cryptocurrency companies, including Epic Games, Wintermute, FTX and Offchain Labs.
Although estimates vary, the global gaming market is said to generate well over $100 billion in annual revenue — a figure that is expected to cross $200 billion in the next two years, according to gaming data provider Newzoo.
Blockchain technology and cryptocurrency are increasingly merging with the gaming landscape, creating new user experiences and forms of monetization. This intersection has given rise to GameFi, a broad term that describes the financialization of gaming through DeFi and nonfungible tokens.
Related: Former Activision, Disney and Lucas Films devs reveal NFT-powered video game
GameFi is also gaining traction as a concept within the so-called “metaverse,” which describes a futuristic version of the internet comprised of virtual reality, social media and business. Multiple investment funds have allocated capital to this emerging vertical, including Sanctor Capital, which recently raised $20 million, and Huobi Group, which launched a $10 million fund.
When asked about the long-term value proposition of the metaverse concept, Amy Wu told Cointelegraph that \"the metaverse is a potential digital world where people build identity, reputation, make friends, play, and transact in.\" She further explained:
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