White Star Capital Digital Asset Fund - newsletter #108
White Star Capital Digital Asset Fund - newsletter #108
Ethereum’s Shanghai Upgrade
Ethereum developers target the release of staked ETH for March 2023
Crypto’s top projects are continuing to grow and improve, despite wider market setbacks.
After the success of the Merge (which transitioned Ethereum’s consensus mechanism from Proof-of-Work to Proof-of-Stake in September), Ethereum’s developer team met on December 8th to discuss the next stage. Maintenance upgrades have been avoided in the Merge era to avoid added complexity to the already highly intricate technical event. The AllCoreDevs meeting therefore saw many improvements jockeying for consideration, but one upgrade in particular was prioritised by most: a hard fork, called ‘Shanghai’.
What is the Shanghai Upgrade?
The Shanghai upgrade includes two components, called Ethereum Improvement Proposal (EIP) 4895 and the EVM Object Format (EOF).
EIP 4895 allows those who have Beacon Chain staked ether (ETH) to withdraw funds and staking rewards. When Ethereum transitioned to proof-of-stake, Ethereum holders can ‘stake’ their ETH, meaning they deposit it with the network to generate new ETH. However, at this point, this ETH is locked. Shanghai will enable the withdrawal of staked Eth, of which there is currently over 15.5m (worth around $19bn), according to Dune Analytics.
EOF is a collection of EIPs that essentially upgrade the Ethereum Virtual Machine to make it more scalable. Notably, EIP 4844 enables proto-danksharding, which splits the network into ‘shards’ and rolls up huge amounts of data. As Buterin has explained, sharding is the future of Ethereum’s scalability, enabling mass adoption as costs decrease. This dramatically increases the number of transactions processed per second, increasing capacity and consequently lowering gas fees. This will also in term increase the speed and ease with which Layer 2 networks like Optimism and Arbitrum verify data.
When will the upgrade happen?
Last month, Ethereum developers launched the Shandong testnet to resolve any Shanghai bugs, and following the latest call developers aim for a new public testnet for this later in December.
Developers chose to prioritise EIP 4895, scheduling it for March 2023. Ideally, EOF would happen at the same time, but if it is too complicated to implement they will push it back to avoid delaying the ETH unlocking schedule, and give developers enough time to focus on each issue. This means that the two major hard forks will be split into two different terms instead of being put together.
🔦 White Star & Portfolio Spotlight
Lighthouse wants to make the metaverse less lonely
Montreal-based Lighthouse rolled out an open metaverse navigation engine that allows users to find places to visit in virtual worlds.
The first ALEX governance vote has concluded
This was a milestone towards the progressive decentralization of governance of ALEX.
🏦 Enterprises & Institutions
ConsenSys launches private beta of zkEVM testnet
The zkEVM testnet allows developers to deploy and test smart contracts, and migrate dapps from existing networks.
Magic Eden hires its first Chief Gaming Officer
Chris Akhavan joins Magic Eden from Forte, a blockchain-based gaming firm that raised $725 million in Series B funding in 2021.
Starbucks NFTs are now available to beta testers
Bringing a whole new meaning to javascript, Starbucks is expanding its coffee empire to web3 in earnest, as it rolls out its loyalty program in the U.S. to beta testers.
Apple Plans to Allow External iOS Apps in Potential Boon for Crypto, NFTs
The move could make it easier for developers to build apps around NFTs and broaden the ability to make crypto payments through iPhones and iPads.
⚖️ Government & Regulation
US lawmakers introduce bill aimed at reporting on crypto miners' potential environmental impact
Members of Congress said they were “sounding the alarm” on crypto mining in the United States, with a bill calling on the EPA to study and report on its energy consumption.
Spain’s central bank to experiment with wholesale CBDCs
Bank of Spain (BDE) has announced it will be experimenting with wholesale central bank digital currencies (CBDCs), which will be separate from the work the European Union (EU) is doing on the digital euro.
Hong Kong to subject crypto exchanges to the same laws governing TradFi
The new investor protection legislation will come into effect from June 1, 2023, starting a licensing regime for virtual exchanges on similar grounds as traditional financial institutions.
European Parliament terminates crypto-friendly Eva Kaili's term of office
The European Parliament voted to terminate crypto-friendly vice-president Eva Kaili's term of office by a double majority.
💰 Funding & Exits
Digital collectibles firm Forum3 raises $10 million in seed funding
Forum3 powers Starbucks's recently announced digital collectibles loyalty program, which rewards users with NFTs.
Pplpleasr’s Shibuya NFT Video Platform Raises $6.9M to Build the 'A24 of Web3'
Shibuya, which lets NFT owners interact with its original content, raised a seed round co-led by Andreessen Horowitz and Variant Fund.
DeFi derivatives protocol Perennial raises $12 million, launches mainnet
Perennial, a decentralized finance protocol for trading derivatives, has raised $12 million in a seed funding round.
Crypto Insurance Firm Evertas Bucks Bear Market With $14M Raise
The Series A round was led by Polychain Capital and also included SinoGlobal Capital, Morgan Creek and Balaji Srinivasan.
Nillion raises over $20 million to build new web3 infrastructure
Nillion is a deep technology infrastructure project. While blockchains decentralize finance, Nillion aims to decentralize everything else and the rest of data.
🚀 Project Launches & Updates
Gaming blockchain Oasys' SEGA and Ubisoft-validated mainnet goes live
Oasys completed the final phase of its mainnet, marking a significant milestone for the gaming-focused blockchain firm.
Bitcoin Lightning Network to be used in fiat transfers between EU and Africa
The new application, Send Globally, allows GBP or EUR to be instantly transferred into the local currencies of Nigeria, Kenya and Ghana.
ImmutableX gaming NFTs now available on Nifty Gateway
ImmutableX-powered NFTs from web3 games such as Gods Unchained, Guild of Guardians, Illuvium, Embersword and Planet Quest are now available on Gemini-owned NFT marketplace.
🔥 Other Bits We're Excited About
Reddit Users Have Minted More Than 5 Million NFT Avatars on Polygon
Reddit’s push into tokenized avatars has been a rare bright spot amid declining NFT sales and a wider crypto market in turmoil, and now the Polygon-based initiative has marked a new milestone with more than 5 million of the collectibles minted to date.
OpenSea Again Changes Course on NFT Royalties After More Creator Pushback
The firm has extended the deadline by which creators of new NFT projects will need to use its tool to have royalties fully enforced, along with other changes.