White Star Capital Digital Assets Fund - newsletter #124
Ethereum implements its Shanghai upgrade, enabling staked Eth withdrawals
Ethereum implements its Shanghai upgrade, enabling staked Eth withdrawals
Last Thursday, Ethereum implemented its highly-anticipated Shanghai upgrade, also referred to as the Shapella hard fork, which finally enables the withdrawal of staked (locked) ether coins. The event is a pivotal moment in improving the Ethereum network’s mechanics, and has galvanised interest in the second-largest crypto currency by market value.
The Beacon Chain (Ethereum’s consensus layer) is secured by proof-of-stake, meaning to maintain its integrity, and carry out transactions and smart contracts, it needed validators to stake Eth in the Beacon Chain contract in exchange for interest (a reward for securing the network during this development stage). The only catch was that validators could not unstake their Eth until a later, undetermined date.
The Shanghai upgrade’s Ethereum Improvement Proposal (EIP) 4895 allows those who have Beacon Chain staked ether (ETH) to be able to withdraw funds and staking rewards. In other words, validator stakes can become entirely liquid, and validators can freely remove their stake at will.
The Beacon depositor contract contained about 18 million Eth, accounting for roughly 15% of total circulating supply. It was therefore projected as a make-or-break event for the Ethereum blockchain, as enabling withdrawals could have posed a risk of mass selling. Over 1 million Eth has been withdrawn since the hard fork occurred on April 12th, however a significant number have restaked their Eth and staked Eth has since again surpassed the number of Eth being withdrawn.
Institutional interest has also been galvanised since the upgrade. Because institutions typically prefer regulated products such as CME futures that allow them to have exposure to digital assets without owning them, CME futures tied to BTC or ETH are widely considered a proxy for institutional activity. "The past few days have seen a strong inflow of institutional interest into ETH futures," Acheson, the author of the popular Crypto is Macro Now newsletter, said. "USD open interest is now at its highest since March 2022, and just before the weekend, ETH futures open interest on the CME jumped over 80% in USD terms," Acheson said. An increase in open interest alongside a price rise represents an influx of new money into the market and confirms the uptrend. Ether's price rose 8% in the days after the Shapella hard fork.
Enabling staked Eth withdrawals has been a landmark development for Ethereum on its path to achieving security, decentralisation, and scalability. It was an orderly and well-absorbed by the market, and, combined with Eth being deflationary post-Merge, has encouraged wider interest on Eth.
🔦 White Star & Portfolio Spotlight
Atlendis Labs announces user notifications via Wherever and Push Protocol integration
Atlendis can now send real-time wallet notifications via Wherever's infrastructure for any activity on users' positions.
Ledn's latest Proof of Reserve attestation
Ledn has completed its fifth Proof of Reserves attestation, allowing clients to verify their balances and ensuring transparency and trust.
Superfluid supports Celo developers with its Climate Collective Grant program
Superfluid is supporting developers using Superfluid on Celo via the @CeloOrg Climate Collective Grant Program, providing up to $20k in funding, technical assistance and guidance, and access to extensive web3 networks.
🏦 Enterprises & Institutions
Starbucks brews a new NFT collection on Polygon
Starbucks is releasing its second paid NFT collection on Polygon, named "The Starbucks First Store Collection." It portrays elements from the first Starbucks store that opened in 1971 in Seattle's Pike Place Market.
How does Apple card’s new savings account compare to crypto?
Apple Card's new high-yield deposit account offers an APY of 4.15%, while Coinbase and Bybit offer up to 6% on volatile crypto assets, and Crypto.com offers 4.5% on stablecoins with the need to stake the exchange's CRO token. DeFi has lower basic savings yields but offers global permissionless access and can be used as collateral for borrowing. Apple's offering has FDIC insurance and flexibility, while DeFi alternatives are uninsured by default.
Nike unveils first .Swoosh NFT digital sneaker drop
The “Our Force 1" collection will potentially consist of hundreds of thousands of virtual pairs of the brand’s iconic Air Force 1 sneaker.
Binance and Brazilian football federation launch free NFT aimed at wooing new customers
Binance and Brazil’s football federation launch an initiative to attract new customers through a referral system and promise of lower fees. Fans can acquire free NFTs for a chance to take advantage of lower trading fees on Binance and compete for prizes.
⚖️ Government & Regulation
Israel wants to see ‘Significant’ use of Stablecoins for payment before considering digital Shekel
Israel would consider issuing a CBDC if the US or EU does so, as other developed economies may also release CBDCs soon. Israel may re-evaluate digital currency if cash usage changes. The bank is investigating technological advancements that could validate a digital currency, inspired by the US FedNow initiative.
Crypto companies can now apply for licenses under UAE’s securities regulator
The UAE permits virtual assets only if accepted by its federal securities regulator. Companies can apply for licenses to provide crypto services, except those in financial free zones. Licenses from the securities regulator are necessary for virtual asset platforms, distributed ledger technologies, and stored value facilities.
UK could see live crypto regulation within 12 months
The UK plans to introduce crypto regulations, while the US adopts an enforcement-heavy approach. The UK Treasury aims to require crypto firms registered with the Financial Conduct Authority to apply for authorisation under the new regime.
NY authorities to collect more fees from crypto companies
The New York Department of Financial Services (DFS) issued new regulation for BitLicense holders that will change how supervision costs are assessed.
Lack of crypto compliance is SEC's fault, say Republican lawmakers
The letter accuses the agency boss of cramming the digital assets industry into an improper regulatory framework.
Stablecoins offer ‘efficiency and functionality’ in payments, says Bank of England
“The question is not whether but how we should develop the machinery for tokenized transactions to settle in central bank money,” says Bank of England’s John Cunliffe
💰 Funding & Exits
EOS Network lands $60M investment and partnership from DWF Labs
DWF Labs invests over $60 million in a partnership with the EOS Network Foundation, providing a $45 million EOS token purchase agreement and a $15 million pledge for EOS-based projects to expedite growth and adoption.
Trading-focused blockchain Sei raises $30M, bringing valuation up to $800M
Sei, a layer-1 blockchain focused on trading, raised $30M to secure strategic partnerships ahead of mainnet launch. Unlike general-purpose Layer-1 blockchains, Sei prioritizes the crypto trading network through its chain.
Information protocol RSS3 raises $10M via token sale to DWF Labs
RSS3 introduces RSS3 AIOP, an AI training environment that bridges blockchain technology and AI for web3 information. This latest investment follows the protocol's aim to connect search engines and social media to blockchain.
Fractal raises $6 million to reshape market structure after FTX
Fractal offers a transparent platform for crypto traders with a focus on clear settlement and clearing in digital assets, avoiding the leveraged deal-making that caused the downfall of firms like Three Arrows Capital and FTX.
INTMAX raises $5M seed round to build a stateless zkRollup
zkRollups are the next big thing, and INTMAX is creating an extremely scalable zkRollup as a vital component of new Ethereum-based infrastructure.
Former DOJ special agent raises $4.3 million to fight crypto crime
CAT Labs, a start-up fighting crypto-enabled crime, raised $4.3M in its pre-seed round to develop digital asset recovery and cybersecurity tools for governments.
Helio raises $3.3 million to power Web3 payments for merchants
Helio secures funding to bring Web3 payments to the masses and aims to create a user-friendly "Stripe" for blockchain-native payments.
Natix raises $3.5 million to build Natix Network: a blockchain-based worldwide crowdsourced camera network
Natix Network raises funds to launch first mobile app, Drive&, expand team and further develop their decentralized camera network. The blockchain-based network creates real-time maps of cities using a crowdsourced camera network.
🚀 Project Launches & Updates
FTX reboot plan attracts interest from VC firm Tribe Capital
FTX's plan to restart operations has drawn a $250M fundraise bid from Tribe Capital, who is considering a $100M commitment. FTT exchange token has risen by 17% in response. The FTX creditor's committee is evaluating options for rebooting or selling the exchange.
Ethereum surges following Shanghai Upgrade
Ethereum surges following successful Shanghai upgrade allowing stakers to withdraw holdings for the first time since December 2020. Validators who exit the network are taking their staked Ethereum and rewards with them.
LI.FI and InsurAce pitch protection for moving Crypto between Blockchains
LI.FI partners with InsurAce to provide bridge insurance for users transferring cryptoassets across blockchains. The tool covers risks of hacks, malfunctions, and exploits that can result in loss of funds.
MarginFi's AI chatbot plugs into your crypto wallet
MarginFi, a decentralized finance lender, has launched an experimental chatbot called Omni, which can also interact with users' wallets. The chatbot can perform simple Web3 tasks for marginFi, and its crypto functionality is Solana-specific.
🔥 Other Bits We're Excited About
Jeremy Cowart to create 10,000 photo NFTs in 20 Minutes—in front of an audience
Award-winning photographer Jeremy Cowart will produce the NFTs live in Nashville, in partnership with OpenSea and Transient Labs.
Machankura lets Africans use Bitcoin with basic mobile phones
Bitcoin maximalist Kgothatso Ngako has brought global digital financial services to Kenya, South Africa and other countries where at least half of the population doesn’t have smartphones and reliable internet service.
Smurf happens: beloved blue characters enter Web3
The small, blue beings that originated as a comic and became internationally known as cartoon and movie stars are entering the NFT arena.
Lido deposits surpass $12 billion as Ethereum's Shapella boosts liquid staking
Lido’s total value locked (TVL) surpassed 6 million ether (ETH), equivalent to around $12 billion, per DeFiLlama
Beam aims to become the new blockchain gaming hub on Avalanche
Merit Circle DAO is pushing Beam, a new gaming-focused subnet on Avalanche