W3J Weekly (10/4): EOS, Sia settle with SEC, US exchanges launch Crypto Rating Council
Editor’s Commentary
I attended a meetup in SF this week with Alex Masmej, member of MetaCartel DAO, Roneil Rumburg, CEO at Audius, Yaniv Tal, Project Lead at The Graph, Zhuoxun Yin, COO at dYdX. It was interesting that the most common questions from the audience were about how each of the projects were thinking about capturing value via equity vs. tokens. The answers were to focus on product and build value first in dYdX's case, and with Audius and The Graph was to build token value and a widespread protocol use case. Audius raised $5.5M to build a Dapp version of SoundCloud with investors including General Catalyst, Lightspeed, Kleiner Perkins, Pantera, 122West and Ascolta, with additional backing from Deadmau5, Rezz, 3LAU and The Stafford Brothers, and recently cross 20k+ users with popularity among electronic music artists.
- Andrew
SEC settles charges with Block.one for conducting an unregistered ICO with a light $24M civil penalty. - Link
SEC settles with decentralized cloud storage project Sia for raising $120k in 2014 in a registered security sale with a $220k penalty. - Link
Coinbase, Kraken, Poloniex and Bittrex create the Crypto Rating Council to rate how likely a cryptocurrency is a security, in an effort for the exchange members to have a consistent framework to review assets, and to create a public reference for operators, developers and the public. - Link
A16Z announces plans to launch a free crypto startup school to teach entrepreneurs on best practices for launching cryptos-specific startups, according to Chris Dixon. - Link
Ohio business can no longer pay taxes with Bitcoin as the state looks into making sure accepting BTC via BitPay is in accordance with Ohio law. - Link
Vega raises $5M seed from Pantera, Xpring, Hashed, and RSK Ecosystem Fund to build a protocol for non-custodial derivatives trading. - Link
In light of recent IPOs like WeWork and Peloton, Fred Wilson comments on IPO market:
• Valuations in the private markets can be irrational, while public market valuations are much more rational
• If a company is a software company and has 75% or more gross margins, then it should be valued as a software company; if it cannot product software gross margins then it should be valued like other similar businesses
- Link
IKEA settles invoice using Ethereum, in partnership with Monerium and Tradeshift. - Link
InstaDapp, which creates interfaces to interact with DeFi services, raises $2.4M seed from Pantera, Naval, Balaji Srinivasan, Coinbase Ventures, IDEO Colab, Robot Ventures, Loi Luu and others. - Link
Hashgraph hires a consulting firm they say is specialized in the distributed ledger space, founded by “Harvard trained economics,” to re-evaluate their “token economics model.” - Link
Bitmax delists Deepcloud token and marketing and research firm LDA accuses Bitmax of illegally pumping and dumping its token. - Link
Ethereum scaling network SKALE Labs raises $17.1M from Arrington XRP, ConsenSys Labs, Winklevoss Capital, Multicoin Capital, Blockchange, Hashed, HashKey and Recruit Holdings. - Link
RSK acquires Latin America’s 4th largest social network Taringa, which has 30M users. - Link
Gitcoin Grants raises a total of $563k to fund open source projects, paid in recurring ERC-20 token contributions such as ETH or DAI powered by the EIP 1337 Ethereum subscription standard. - Link
Ian Balina joins class action lawsuit against Sparkster, which has been delisted on all exchanges after raising $30M. - Link
Matter Labs raises $2M seed led by Placeholder with participation from 1kx, Hashed, Dekrypt, Dragonfly to bridge the gap between Zero-Knowledge Proofs and usable products. - Link
Coinbase to pay 1.25% interest on USDC holdings. - Link
Smart contract for FairWin ponzi game gets emptied when it had approximately $3M in ETH. - Link
Top Tweets of The Week
In response to Meltem’s tweet on how majority of value in the industry is being captured by "intermediaries”: “How could it be any different when, as of now, there are no use cases? Who -isn't- an intermediary today? No one relevant, because there are no end users. There are some promising use cases out there but they happen to need the most regulatory approval or scaling to work.” - Adanthar (@adanthar)
“Example in the crypto space: Bitcoin prints >$100m into the hands of miners weekly, whereas printing $100m even once into the hands of developers would greatly accelerate dev. Why not do this? Certainly reasons much more subtle than an extra $100m printed causing hyperinflation.” - Vitalik Buterin (@vbuterin)
“Many still searching for an answer for the $BTC crash
Sequence is simple
#1 Larger time frame consolidation (the 2019 triangle)
#2 Stops consolidate at the edges of the range
#3 Range awaits resolution, to see who wins
#4 Bakkt disappointment is a trigger to move lower” - Alex Krüger (@krugermacro)
“The current people building and launching dapps are the ones who are gaining the asymmetrical information advantages.
We will likely see this advantage widen over years and cycles of launch, fail, learn & repeat. Folks that keep building, keep learning. Go long on these people.” - Peter 'pet3rpan' (@pet3rpan_)
“Before everyone starts freaking out whether crypto winter is over, remember the ‘rule of 10 best days’ (rule #6)
- ex-10 best days, #bitcoin down 25% per year. All the gains come in 10 days. Are u that good at trading?
PS: we believe $BTC is weak in trendless macro.” - Thomas Lee (@fundstrat)
“The trigger for the 2018 crypto crash was the SEC prickling the bubble. ICOs did not wither because investors got smart and realized ICOs were money grabs. Money simply stopped flowing. With this fine the SEC is signaling "entrepreneurs" have green light to start another party.” - Alex Krüger (@krugermacro)
“Hypothesis: BTC is the most widely held asset among technologists, more than any tech stock.
Reason: people at Tencent likely don’t have FB stock, and Google employees probably aren’t big holders of Spotify.
But at every tech company there are likely some Bitcoiners.” - Balaji S. Srinivasan (@balajis)
“Bakkt's first 7 trading days have been quite underwhelming. Total volume has so far been $6.5 million. Even though it's not very comparable, BitMEX does that kind of volume in less than 4 minutes. CME BTC futures in about 80 minutes. Long way to go” - Larry Cermak (@lawmaster)
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