White Star Capital Digital Assets Fund - Newsletter #148
JPMorgan goes live with first blockchain-based collateral settlement
JPMorgan goes live with first blockchain-based collateral settlement
White Star Capital Digital Asset Fund - newsletter #148
BlackRock used JPMorgan's Ethereum-based Onyx blockchain and the bank's Tokenized Collateral Network (TCN) to convert shares in one of its money market funds into tokens. These tokens were then transferred to Barclays Plc as collateral for an over-the-counter (OTC) derivatives trade.
TCN is a private blockchain application on JPMorgan's Onyx Digital Assets platform. It has successfully facilitated the first collateral settlement for a live client OTC derivative transaction. The collateral between BlackRock and Barclays was posted in just one second, significantly faster than the typical timeframe of one or more days. Asset tokenization has infiltrated traditional finance, as companies seek to reduce costs and boost efficiency. Utilizing blockchain networks eliminates intermediaries, resulting in faster and cheaper transactions. Additionally, these networks provide an immutable and auditable record, reducing procedural risks and improving transparency.
BlackRock CEO Larry Fink last year called the tokenization of securities “the next generation for markets.” The trade facilitated by blockchain with BlackRock is fostering innovation in post-trade settlement. By tokenizing money market fund shares as collateral in clearing and margining transactions, the operational friction in meeting margin calls during periods of intense margin pressures in the market can be significantly reduced. This enables money-market funds to be mobilized and utilized more efficiently, unlocking new pools of liquidity for margining purposes.
JPMorgan had launched Onyx Digital Assets in 2020, and its first applications were for facilitating intraday repurchase transactions to offer short-term borrowing in fixed income via the exchange of cash for tokenized collateral. Onyx Digital Assets is now open for business for institutional clients. JP Morgan has started with tokenized Money Market Funds and plans to expand to other types of collateral, including equities and fixed income. They believe that ultra-fast collateral movement will bring significant value to the $25tn collateral industry.
🔦 White Star & Portfolio Spotlight
Eyeball Pool launches Phase 2 on Immutable zkEVM blockchain
Eyeball Pool has made the decision to launch Phase 2, including a player-vs-player mode, on the Immutable zkEVM blockchain instead of Immutable X. This decision was reached after extensive discussions with partners and investors, with the aim of maximizing the success of the Phase 2 launch in the challenging web3 market environment. The launch is scheduled for February 10, 2024, to coincide with the mainnet launch of Immutable zkEVM.
Cometh introduces Connect SDK, a Smart Wallet for Ethereum development
Cometh has announced its inaugural sponsorship at ETH Global's ETH Online event, a leading Web3 gathering that promotes Ethereum development through hackathons. This year, they are introducing their Connect SDK, a biometric smart wallet. The wallet is designed as an Account Abstraction-as-a-Service, allowing users to effortlessly create, use, and expand smart wallets using their fingerprint, while abstracting gas fees.
Safello partners with Quantum Leben and Hubins
Safello, in collaboration with Quantum Leben and Hubins, is offering a unique opportunity to invest in actual cryptocurrency assets while avoiding capital gains tax. This initiative allows individuals and businesses to protect their crypto holdings for future generations through a capital insurance mechanism.
Index Coop added Merit Circle to their Metaverse Index
Index Coop has included Merit Circle ($MC) in their Metaverse Index ($MVI). The Metaverse Index ($MVI) is a digital ecosystem that combines blockchain technology with gaming innovation to enhance immersive gaming experiences. It aims to track the shift of entertainment, social interaction, and business into virtual economies powered by NFTs and blockchain.
Alethea partners with AWS Startups
Alethea has formed a significant partnership with AWS Startups. This collaboration aims to contribute significantly to the democratization of AI ownership. Alethea has successfully utilized AWS resources, such as GPUs and compute power, to scale its infrastructure and accommodate up to 30 million visitors.
Atlendis introduces NFT positions with Revolving Credit Lines
Atlendis has announced the addition of NFT positions to their Revolving Credit Lines. This offering provides accurate calculations and adjustable interest rates that are based on the position's history. These positions are integrated following the ERC721 standard, which guarantees smooth integration with external smart contracts.
ParaSwap launches iOS Beta Program
ParaSwap has recently launched the iOS Beta Program, offering participants an exclusive opportunity to access a range of new features. These features include a redesigned User Interface (UI), swapping functionality, limit orders, portfolio management, and compatibility with iPad devices. Moreover, participants will get a preview of upcoming platform developments.
🏦 Enterprises & Institutions
JPMorgan goes live with first blockchain-based collateral settlement
JPMorgan recently conducted its first live blockchain-based collateral settlement transaction in collaboration with BlackRock and Barclays. The transaction involved tokenizing BlackRock's shares in a money market fund using JPMorgan's Ethereum-based Onyx blockchain and transferring them to Barclays as collateral for an over-the-counter derivatives trade. This milestone represents a significant advancement in the tokenization of traditional financial assets within the banking industry.
Amazon and Immutable want to make it easier to launch crypto games
Immutable is teaming up with Amazon Web Services (AWS) via the ISV Accelerate Program to streamline infrastructure solutions for the crypto gaming sector. This partnership seeks to simplify game developers' ability to launch and scale their blockchain games, particularly those using Immutable's Ethereum-compatible blockchain, Immutable X, who can now access AWS Activate for support, up to $100,000 in AWS credits, and additional resources, per Immutable's press release.
OpenAI's GPT-4 introduces GPT-Vision
OpenAI's GPT-4 introduces GPT-Vision (GPT-V), a multimodal AI that understands and works with images, decodes redacted government documents, reads doctors' handwriting, offers medical analysis, plans home workouts, provides interior design suggestions, aids with homework, and analyzes stock or crypto charts. This marks the evolution of multimodal large language models, with competitors like Google's Gemini and NexT-GPT on the horizon, poised to reshape industries and daily interactions.
Sandbox Group partners with XDB Chain for Web3 expansion
Sandbox Group has announced a partnership with XDB Chain, an open-source blockchain, to develop an exclusive branded cryptocurrency. This cryptocurrency will serve as a medium of exchange within Sandbox Group's digital products and services. The objective is to facilitate the education sector's transition to Web3 by providing secure, decentralized, and transparent transactions, rewards, and incentives.
Circle collaborates with Coins.ph to improve cross-border money transfers in the Philippines
Circle, the issuer of the US dollar-pegged stablecoin USDC, has partnered with Coins.ph, a cryptocurrency exchange and digital wallet provider based in the Philippines. The goal of this partnership is to promote the use of USDC for faster and more cost-effective cross-border money transfers. By offering educational campaigns and community engagement initiatives, this collaboration aims to enhance the remittance landscape in the Philippines, which receives a significant amount of global remittances. This will be particularly beneficial for the 44% of the adult population in the Philippines who do not have access to traditional banking services.
⚖️ Government & Regulation
Zimbabwe turns gold-backed digital token into payment method
Zimbabwe has recently introduced Zimbabwe Gold (ZiG), a digital token backed by gold, as an official payment method. The Reserve Bank of Zimbabwe initiated this project to incentivize local investors to transition from holding United States dollars to national assets. Each digital token is backed by a specific amount of physical gold stored in the bank's reserves.
Brazilian securities regulator plans sandbox for tokenization in 2024
Brazil's securities regulator, the Comissão de Valores Mobiliários (CVM), plans to launch a second regulatory sandbox in 2024, emphasizing tokenization use cases after successfully tokenizing approximately $36 million in assets. Superintendent Daniel Maeda revealed the CVM's openness to innovations, particularly in areas like agribusiness and environmental, social, and governance (ESG), while closely monitoring Brazil's crypto market and international regulatory practices.
Stablecoins are ‘a better product’ than local currencies in emerging economies, Carrica says
Martin Carrica, co-founder of Mountain Protocol, points out that in Argentina, stablecoins have become the favored means of accessing dollars due to rampant inflation and currency stability concerns. He emphasizes that stablecoins offer a superior alternative to traditional currencies in emerging economies, streamlining access and custody while mitigating common issues in these regions.
Cyprus enhances cryptocurrency regulations to meet international standards
Cyprus is planning to tighten its cryptocurrency regulations to comply with international standards set by the Financial Action Task Force (FATF) and MONEYVAL. The proposed amendments state that all cryptocurrency service providers must register with the Cyprus Securities and Exchange Commission (CySEC). However, there are concerns about these changes, particularly regarding service providers with licenses from other European countries registering with CySEC.
Central Bank of Nigeria addresses concerns over eNaira's impact on financial stability
The Central Bank of Nigeria (CBN) issued a statement to dismiss claims that its eNaira central bank digital currency (CBDC) poses a threat to the country's financial stability. This response came in reaction to media reports, including one in the Nigerian newspaper Punch, that raised concerns based on the CBN's report highlighting the gradual adoption of eNaira and its potential impact on liquidity in commercial banks. The CBN emphasized its commitment to improving the eNaira's user experience and encouraging financial inclusion, while also underscoring its expertise in CBDCs as evident in its report.
💰 Funding & Exits
Crypto prime broker Membrane Labs raises $20M from Brevan Howard, Point72 and Jane Street
Membrane Labs has raised $20 million in a Series A funding round, with participation from major investors like Brevan Howard Digital and Point72 Ventures. Notable contributors also include Jane Street, Flow Traders, Two Sigma Ventures, Electric Capital, Jump Crypto, GSR Markets, Belvedere Trading, and Framework Ventures. The funding will be used to strengthen the cryptocurrency market's trading infrastructure and improve transparency and risk management in the wake of recent industry challenges.
Untangled Finance raises $13.5M to tokenize institutional-grade private credit
Untangled Finance has secured $13.5 million in equity funding, with Fasanara Capital leading the investment round. The company aims to tokenize institutional-grade private credit, such as invoices and SME loans, by transferring these assets onto the blockchain using structured credit pools. This process will allow the issuance of collateralized debt notes for investors.
Cicada Partners secures $9.7M to enhance DeFi lending transparency
Cicada Partners, a non-custodial credit risk management firm, has raised $9.7 million in funding led by Choppa Capital, with participation from Bitscale, Bodhi Ventures, Shiliang Tang, and others. These funds will enable Cicada to launch multiple non-custodial lending pools and conduct R&D for blockchain-based lending solutions, fostering transparency and accountability in institutional lending within the DeFi sector.
Phaver raises $7M to help make onboarding to web3 social platforms easier
Phaver, a startup aiming to streamline onboarding for web3 social platforms, has raised $7 million in seed funding. The company's technology integrates with decentralized social protocols, enabling users to easily manage and monetize their social profiles and data across platforms, potentially boosting the adoption of web3 social applications among its current user base of 250,000.
REPUBLIK secures $6M Seed round for its Web3 social media app
REPUBLIK, a Web3 social media platform, has secured $6 million in a seed round, valuing the company at $75 million. The funds, backed by investors like 6th Man Ventures, Arcane Ventures, and OKX Ventures, will expedite the development of REPUBLIK's platform and Web3 creator tools, which have already drawn over 500,000 beta users across web apps, iOS, and Android platforms.
Crypto-powered, fantasy horse racing startup raises $5M
Fantasy horse racing startup Game of Silks, which connects NFTs to real thoroughbreds, has secured $5 million in funding. These NFTs enable owners to earn rewards based on the actual performance of the corresponding horses, bringing the company's total funding to over $10 million as it collaborates with organizations such as the New York Racing Association, Belmont Race Track, The Jockey Club, and FOX Sports' Americas Best Racing.
🚀 Project Launches & Updates
CoinMarketCap launches ChatGPT plugin
CoinMarketCap has launched a ChatGPT plugin that enables users to ask cryptocurrency-related questions to an AI chatbot powered by a large language model. The plugin provides real-time data from CoinMarketCap, offering information on listings, gainers, and losers, as well as blockchain statistics, making it a valuable tool for cryptocurrency enthusiasts.
Wormhole Foundation, Borderless Capital, and Outlier Ventures launch Web3 accelerator program
Wormhole Foundation, in collaboration with Borderless Capital and Outlier Ventures, is launching the Wormhole Base Camp Accelerator Program. This 12-week virtual accelerator aims to support early-stage Web3 founders developing applications and products utilizing Wormhole's cross-chain messaging. The program offers participating teams a $200,000 USD investment from Borderless Capital, mentorship from industry experts, and workshops, with applications open until December 2023 and the program commencing in January 2024.
Chinese government-owned newspaper to launch NFT platform
China Daily, a government-owned newspaper, plans to launch its own NFT platform and metaverse. They are offering a contract worth 2.813 million Chinese yuan ($390,000) for designing the platform. The goal is to promote Chinese civilization using technologies such as the metaverse, VR, AR, and NFTs. It's worth noting, however, that China has banned cryptocurrency transactions since 2021.
IoTeX launches confidential computing hardware stack
IoTeX, in collaboration with ARM Research, has introduced confidential computing to its DePIN stack, enabling developers to work with encrypted data securely. This hardware-backed technology, distinct from zero-knowledge proofs, allows computations to extract information from encrypted data without exposing the data itself, enhancing privacy and security. IoTeX's indoor security camera, Ucam, serves as an initial proof of concept for this advancement.
🔥 Other Bits We're Excited About
Zero-knowledge proofs show potential from voting to finance
Zero-knowledge proofs (ZK-proofs) offer solutions for privacy and truth in various fields beyond cryptocurrency and blockchain. They could enhance privacy in digital voting, safeguard CBDCs, combat fake news, and revolutionize financial auditing. However, challenges like bridging real-world information, computational complexity, and user experience need addressing for widespread adoption.
The Blockchain-based solution poised to improve our financial lives
Blockchain-based digital wallets have the potential to revolutionize financial infrastructure by simplifying and unifying the management of diverse financial accounts and assets. They offer enhanced security through cryptographic protection and enable streamlined transactions. This innovation addresses the challenges posed by the current fragmented financial system, paving the way for a future where digital wallets play a central role in individuals' and institutions' financial lives.
Ether could hit $8K by end of 2026: Standard Chartered
Standard Chartered forecasts that ether (ETH) could reach $8,000 by the close of 2026, driven by the growing adoption of Ethereum in gaming and tokenization. This shift is expected to demonstrate Ethereum's advantages over traditional systems, with significant progress anticipated by 2025-26, and a short-term target of $4,000 by the end of next year, partly due to the bitcoin (BTC) halving in April 2024.