White Star Capital Digital Assets Fund - newsletter #128
Worldcoin releases crypto wallet, amidst reported $100m fundraise
Worldcoin releases crypto wallet, amidst reported $100m fundraise
Since the public release of ChatGPT last year, artificial intelligence and socio-economic concerns surrounding it have taken the world by storm. In the internet of AI-generated content, the distinction between man and machine in the online world will become increasingly blurred. The recent release of Photoshop’s AI-powered editing feature and the first wave of AI-generated ads give just a taster of what this new online world will look like. Taken to its extreme, advanced AI and deep fakes will mean we face a fresh wave of the online challenge: proof-of-personhood.
Sam Altman, the co-founder of Open AI (the company behind ChatGPT), thinks blockchains could provide the solution.
The Founding of Worldcoin
Worldcoin is a crypto project involving a device (called ‘the Orb) that provides verifiable proof of humanity using iris-scanning technology, and rewards verified users with tokens. It was founded by Sam Altman and Alex Blania in 2019.
The Orb works by scanning the iris and then converting the scan into a short numeric code, or a hash, which is unique to each individual, and serves as their ‘proof of humanity.’ This digital World ID can then be used pseudonymously in a wide variety of everyday applications without revealing the user identity. Worldcoin executives argue that by distinguishing between humans and bots, and providing a universal basic income through the Worldcoin cryptocurrency, they provide solutions to the two primary problems posed by artificial intelligence- indistinguishability of humans vs bots online, and job losses to AI.
Perhaps unsurprisingly, this uncanny innovation received criticism at the time of founding- notably the retina-scanning orb used to authenticate users felt dystopian to some. Others were concerned about the privacy risks posed by biometric scanning, although the company has worked hard to combat that impression by emphasising that they will not store iris scans.
The meteoric rise in AI usage over the past 9 months has also been crucial to improved public understanding of the original thesis behind Worldcoin.
‘Everything that has happened with AI in the last six months has made people understand the project a lot better,’ said Tiago Sada, the head of product at Tools for Humanity, the company behind Worldcoin.
Round Two
The company has kept a low profile relative to OpenAI, the ChatGPT creator which struck a multibillion-dollar deal with Microsoft earlier this year.
Now, according to recent coverage by the FT, three people with knowledge of the deal have revealed that Worldcoin is in advanced talks to raise $100m in fresh cash.
The group includes existing and new investors, said one of the FT’s sources. Previous investors in the company include Andreessen Horowitz, Khosla Ventures, Coinbase Ventures and Digital Currency Group.
Worldcoin, UBI and World App
Amidst fundraising rumours, it launched its crypto wallet, World App, last week. Built on the Ethereum sidechain Polygon, the new app is both a crypto wallet and a digital passport, granting retina-scanned humans access to apps and services gated to World ID holders.
For those who have yet to create a World ID, the World App will still function as a Metamask-like crypto wallet, enabling people to buy, sell and store wrapped Polygon-based versions of Bitcoin, Ethereum and DAI.
But for those who choose to create a World ID, they receive free Worldcoin tokens, and provides the vehicle for sending tokens to every verifiable person on earth, in line with the company’s secondary UBI-like plans. Through the unique iris-scanning protocol, Worldcoin can verify unique human identities, thereby preventing fraud in a UBI system.
Executives at Worldcoin believe that if AI and automation technology continues on its current trajectory, humans will be displaced at an unprecedented rate in various fields, and that UBI could ensure standards of living. The token is not yet available for public sale and has no market value.
Other Use cases
The grand vision of Worldcoin’s World ID protocol is to allow other app developers to leverage its network of biometrically-authenticated humans. Applications range from financial services dependent on identity (e.g. undercollateralized lending), to social media account authentication, to voting.
“Whether you're talking about voting on a poll on something really dumb on Twitter, or voting for something much more serious, there's a lot of really interesting voting applications there,” Sada said.
Although the perks (and concerns) of having a World ID remain mostly theoretical for now, if you squint, the possibilities are far-reaching.
🔦 White Star & Portfolio Spotlight
Ledn receives regulatory approval in the Cayman Islands
ALEX has introduced the world's first BRC-20 Initial DEX Offering (IDO) Launchpad, named B20LaunchPad. This platform aims to serve as a launchpad for BRC-20 projects and to foster connections with the ALEX community.
DFNS drives mass adoption through user-friendly blockchain solutions
While typically serving institutions and B2B markets, Dfns is gaining interest from B2C wallet providers like SavingBlocks. The founder aspires for mass adoption by creating a user-friendly system where blockchain private keys are undetectable to the users.
Lighthouse expands its portal with the addition of five new worlds
Lighthouse has expanded its digital horizons by incorporating five distinct web3 universes into its platform, with each universe dedicated to a specific realm, such as artistic expression, 3D modelling, immersive advertising, business-oriented virtual environments, and cooperative virtual spaces.
🏦 Enterprises & Institutions
AI to be ‘Revolutionary’ for Exchanges
Crypto.com has introduced Amy, an AI companion, to enhance user experience in the crypto industry. By incorporating AI into trading products and exchanges, Crypto.com aims to improve accessibility and believes it will be a game-changer for the industry.
Revolut could see License application denied, but Crypto offerings unaffected
Revolut is facing rejection of its banking license application by the Bank of England due to concerns over its internal IT systems and balance sheet. While the denial will primarily affect its mortgage and loan services, its crypto offerings are expected to remain unaffected.
Coinbase launches subscription service overseas, focuses on staking
Cryptocurrency exchange Coinbase has introduced its subscription service, Coinbase One, offering reduced trading fees, 24/7 customer support, and lower staking commissions. This move is part of Coinbase's global expansion strategy, focusing on markets in the US, UK, Germany, and Ireland.
Ledger Crypto Wallet under fire over Seed Phrase recovery service
Hardware wallet provider Ledger's latest update allows users to back up their seed phrases by linking them to their passports or identity cards, raising concerns about potential security risks and reliance on third-party companies. While Ledger assures the safety of encrypted fragments and user approval requirements, critics warn of exposing sensitive information and the possibility of new forms of attack.
⚖️ Government & Regulation
Coinbase hits back at SEC with new court filing in ongoing lawsuit
Coinbase has countered the SEC in their lawsuit, maintaining that their request for a response on new digital asset regulation is still warranted. Coinbase argues that the SEC's actions and statements indicate a predetermined denial of their request, accusing the regulator of ignoring industry petitions and asserting that additional rulemaking is unnecessary.
Hong Kong expected to lift Crypto Retail Trading ban next month
Hong Kong is rebuilding its fintech hub status by permitting retail investors to trade cryptocurrencies once again. The Securities and Futures Commission has completed its consultation on digital asset platform rules, implementing measures such as token vetting and investor training to protect retail investors and attract crypto startups back to Hong Kong.
EU Banks could access Stablecoins more easily under Leaked Plans
The European Commission is proposing to ease regulations on commercial banks' holdings of stablecoins and tokenized assets, countering the European Parliament's push to discourage crypto holdings. The leaked document suggests lowering risk weights for certain stablecoins and aligning treatment of tokenized assets with their underlying instruments, while emphasizing the need for proper risk management by banks.
U.S. is 'Losing' the Bitcoin movement
Cathie Wood, founder of ARK Invest, believes that the U.S. is losing the bitcoin movement due to its regulatory system, pointing to the expansion of crypto exchange Coinbase in other countries as an example. Wood also mentioned that recent crises in the banking and crypto exchange sectors have highlighted the importance of decentralized and auditable systems, with the collapse of FTX serving as proof of bitcoin's concept.
IRS deploys Attachés as countries acknowledge global need for Crypto Crime Regulation
The Internal Revenue Service (IRS) has intensified its efforts to combat cybercrime and oversee cryptocurrency-related financial crimes by deploying attachés to different countries, including Germany, Colombia, Australia, and Singapore. These agents will focus on building relationships, investigating tax and financial crimes involving cryptocurrency, peer-to-peer payments, and mixing services, as part of the IRS's global-scale approach to combatting cybercrime.
💰 Funding & Exits
Bitcoin services startup River Financial secures $35 million from Peter Thiel, others
Bitcoin startup River Financial raised $35M in a Series B round led by Kingsway Capital, with participation from investors including Peter Thiel, Cygni, Goldcrest, and Valor Equity Partners. River provides a range of Bitcoin-related services and plans to use the funding to expand its consumer offering, enhance its Bitcoin banking solutions, and invest in mining and Lightning infrastructure.
Cormint secures $30M in Series A funding and 400 BTC in Bitcoin debt to expand its West Texas Bitcoin mining operations
Cormint Data Systems, a Bitcoin miner committed to low-cost and renewable operations, has raised $30M in Series A equity funding, led by President Jamie McAvity and Nav Sooch, Chairman of Silicon Laboratories. This funding, combined with BTC-denominated promissory notes, will fuel Cormint's expansion in West Texas, aiming to reach 2.4 EH of self-mining capacity by 2024 and establish itself as a leading, cost-efficient Bitcoin miner in North America.
Azteco raises $6M Seed Funding to promote financial inclusion with Bitcoin vouchers
Bitcoin voucher provider Azteco has raised $6 million in seed funding led by Jack Dorsey and other investors. The funding will support Azteco's mission to provide financial inclusion and stability by enabling the easy saving, spending, and sending of small amounts of bitcoin, particularly for the billions of people facing untrustworthy economic conditions.
Jia, a blockchain-based lender of small businesses in emerging markets, raises $4.3 million seed
Blockchain fintech Jia has raised $4.3 million in seed funding led by TCG Crypto, with participation from investors including BlockTower and Hashed Emergent. Jia will use the funds to expand its operations in Kenya and the Philippines and explore new markets, offering affordable loans to micro and small businesses in emerging markets using decentralized finance and token rewards.
Airstack raises over $7M for AI-Backed Web3 developer platform
Web3 developer platform Airstack raises $7M in pre-seed funding led by Superscrypt, enabling developers to access cross-chain data using natural language requests. Airstack plans to onboard more developers, identify value, and establish a pricing model based on emerging business use cases.
ZK qtartup Lagrange Labs raises $4M to build secure DeFi interoperability
Zero-knowledge (ZK) startup Lagrange Labs raises $4M in pre-seed funding led by 1kx to develop secure interoperability for decentralized finance (DeFi) across multiple blockchains. Lagrange aims to enable developers to build decentralized apps (dApps) operating on different chains simultaneously, reducing security risks and unlocking new multi-chain DeFi possibilities.
Syntropy raises $4 Million to unlock the Web3 potential
Syntropy raises $4M in investment round led by Alpha Transform Group, Alphemy Capital, Denali Digital, Saxon Ventures, and FirstBlock Capital, fueling their vision to make Web3 mainstream and develop a groundbreaking product. The funding enables accelerated growth, innovation, and solidifies their position as a go-to solution for developers and users in the decentralized digital age.
PYOR raises $4 Million to accelerate global institutional participation in Digital Assets
PYOR (Power Your Own Research) raised $4 million in seed funding led by Castle Island Ventures, with participation from Hash3, Antler, Future Perfect Venture, and other investors. It aims to strengthen its position as a digital asset platform by expanding infrastructure, products, and institutional engagement in the crypto industry, providing high-quality data for decision-making.
LabDAO raises $3.6M to decentralize drug discovery
LabDAO, a decentralized autonomous organization for open-source drug discovery, raised $3.6 million in a funding round led by Inflection.xyz and Village Global. They launched the PLEX software platform, simplifying scientific computations and enabling data ownership verification through NFTs, advancing decentralized science (DeSci) in crypto.
Openfort raises $3M for wallet-as-a-service infrastructure for Web3 gaming
Openfort, a Web3 gaming wallet-as-a-service platform, raised $3 million in seed funding led by Gumi Cryptos Capital and Maven 11. It aims to enhance Web3 gaming by providing customizable wallet solutions and improving user experiences, addressing the limitations of generic wallet options.
🚀 Project Launches & Updates
Web3 Infrastructure company Upstream launches ‘Learn and Earn’ DAO Course
Upstream is launching My First DAO, a 24-week online class teaching students how to build decentralized autonomous organizations (DAOs). Participants will receive NFT rewards, including the opportunity to obtain rare generative art NFTs, as they learn about tokenomics, governance structures, and compliance concepts.
Deutsche Digital Assets launches Physically backed Multi-Asset Crypto ETP on German Exchange
Deutsche Digital Assets has launched the DDA Crypto Select 10 ETP, a physically-backed crypto exchange-traded product, tracking MarketVector's market cap-weighted crypto index. The ETP includes Bitcoin (61.99%), Ethereum (26.48%), Binance Coin (5.84%), and Cardano (1.5%), with quarterly rebalancing and a total expense ratio of 1.69%.
Sam Altman's Worldcoin unveils hardware that will scan your Eyeballs for Crypto
Worldcoin is a global cryptocurrency project that distributes tokens for free to individuals worldwide. Users must undergo an eyeball scanning process using "the Orb" hardware device to authenticate their identity. With support from prominent investors, Worldcoin aims to accelerate cryptocurrency adoption and unlock social and economic opportunities for billions of people.
Ripple rolls out CBDC Platform for Governments, Financial Institutions
Ripple has launched its CBDC Platform, enabling central banks and financial institutions to create and manage their own digital currencies. The platform, built on Ripple's Private Ledger, offers a comprehensive solution for CBDC issuance and lifecycle management.
🔥 Other Bits We're Excited About
This startup wants to use your GameBoy as a Cold Wallet
Game Wallet, a GameBoy cartridge, is being developed by Keyp to function as a crypto cold wallet. To create a secure seed phrase, users must complete in-game quests, which adds an element of nostalgia and randomness, while also addressing the weaknesses present in conventional cold wallets.
Celebrating Bitcoin Pizza Day: The time a Bitcoin user bought 2 Pizzas for 10,000 BTC
On May 22, 2010, Laszlo Hanyecz bought two pizzas for 10,000 bitcoins, marking the first commercial transaction with bitcoin. Although the bitcoins would be worth a fortune today, this event was crucial in demonstrating bitcoin's potential as a medium of exchange and laying the foundation for its widespread use.
Sotheby’s Auctions off 3AC’s NFT Collection for $2.5M
Several NFTs from failed hedge fund Three Arrows Capital were auctioned at Sotheby's, with "Fidenza #725" selling for over $1 million, far exceeding its previous offer on OpenSea. The liquidation proceedings resulted in around seven NFTs selling for a total of approximately $2.5 million.