I'm running out of titles to describe continuing crypto fallout + All the Web3 news you missed this week
We haven’t seen the last of the crypto fallout. This week, Genesis faces “hundreds of millions” in losses from 3AC exposure and its being reported that FTX is close to buying BlockFi for just $25m. My guess is that there’s still more residual aftershocks to be felt in the coming weeks.
Here’s the Web3 news from the past week
Rhys Lindmark, CEO of the “nonprofit startup studio” Roote, is bullish about the possibility that a new wave of crypto billionaires will change philanthropy for the better. In an interview with CoinDesk, Lindmark said that he expects to see a rise of “impact DAOs” that will shift public goods financing away from the government and toward a bottom-up model.
Solend, a DeFi lender on the Solana network, was on the verge of a meltdown last week, when a whale account facing an impending liquidation couldn’t be reached. After many attempts to contact them — and an emergency governance proposal to temporarily take over the account and liquidate its assets off-chain — Binance got through to the whale, which averted the crisis by reducing its position in Solend.
A British Virgin Islands court has ordered the beleaguered crypto firm Three Arrows Capital, an investor in Solana and Terra, to liquidate. Teneo Restructuring will be overseeing the insolvency.
The downturn in the crypto market is forcing some crypto miners to liquidate coins and equipment in order to pay off their debts, which, for the industry at large, reportedly fall in the range of $2 billion to $4 billion. (Miners who use the newest and most cost-efficient machinery are in a better position to meet their loan obligations, however.)
Along with an abundance of celebrity sightings and performances — Snoop Dogg, Amy Schumer, Eminem, Pharrell Williams (announced as the new chief brand officer of the Doodles NFT project) — the NFT.NYC conference had several big takeaways. Among them: Interoperability is the aim for many metaverse projects, interest in play-to-earn games is still alive and kicking, and crypto participants are seeing a case for NFT lending during a bear market.
Facing volatility in the crypto market, NFT makers are weighing the decision to increase mint prices in order to maintain their fiat value — or to stick with their original mint price as a show of loyalty to collectors. One solution to this problem is a movement toward setting mints in fiat, with Mastercard and Stripe planning to integrate their services with NFT marketplaces.
NFT sales are expected to land below $1 million for June — the first month that’s happened since June 2021. OpenSea sales volume has plummeted by 75% since May, and floor prices of even the hottest collections have dropped in the last month, with Bored Apes down 33%.
Despite the collectivist ideals often attached to DAOs, a Chainalysis study of 10 major DAOs shows that “on average, less than 1% of all holders have 90% of the voting power.” Here’s an illustrative example of that imbalance, from DAO Solend: A proposal was passed with 1.1 million “yes” votes and 30,000 “no” votes, with 1 million of those “yeses” coming from one user. (After an outcry, the vote was overturned.)
Are 'decentralized autonomous organizations' the business structures of the future? (World Economic Forum)
DAOs are “the natural economic entity of web3,” but there remain significant hurdles when it comes to adoption, including a lack of explicit liability protection and clear rules around taxation. Per the World Economic Forum: “The need to build a regulatory framework around this technology is urgent.”
HTC has released a “metaverse-focused smartphone,” and according to Android Police editor Manuel Vonau, the results are deeply underwhelming. “Once we strip away all the buzzwords, nothing special remains,” Vonau writes.
Axie Infinity, which was hit by a $625 million heist in March, has reopened its Ronin Bridge, where users make deposits and withdrawals, after spending several months upgrading its security. Developer Sky Mavis detailed those measures in a Substack post, noting that it has undergone three audits and has a new circuit-breaker system that halts unusually large withdrawals. At this point, all users affected by the March exploit have gotten their money back.
In case you missed it - this was the most opened article from last week’s news roundup
Box CEO Aaron Levie on where web3 doesn’t make sense (TechCrunch)
Aaron Levie appeared on TechCrunch’s crypto podcast to discuss Web3, about which he has been more vocally critical than other tech execs. While Levie finds the space “compelling” from a philosophical standpoint, he doesn’t foresee DAOs replacing traditional corporate structures and believes crypto enthusiasts may be “over-estimating the consumer demand for ‘ownership.’”
Hi, I’m Andrew Chang - I created the Web3 Roundup to share what I’m learning in this space. I’ve spent my career at the forefront of the technology industry in areas such as crypto/blockchain (Former COO @ Paxos, co-founding partner of Liberty City Ventures), video and adtech. I learn by meeting with founders, investors and other thought leaders and approach Web3 with the same enthusiasm – and skepticism – I had about crypto/blockchain technologies 10 years ago.