December 24, 2022
Issue No. 34
Welcome to this week's AtherXplorer, covering the latest in gaming, blockchain, and everything in between.
This week’s top picks include:
- Blockchain & Defi: Visa Proposes Automatic Payments Using StarkNet; Cypherock Startup Raises $1M to Skip Seed Phrases
- NFTs: Family-friendly NFTs Bring Youth into Web3; Amazon's New Series 'NFTMe' Explores NFT Culture…
- Web3 & Metaverse: Activision Blizzard’s President Joining Yuga Labs; Argentine Football League Scores Metaverse Partnership
- Gaming: Cookie Run Kingdom's Heavy Focus on Narrative; Former Diablo Immortal Devs Pick ImmutableX for Upcoming Web3 MMORPG
- Legal Landscape: Brazilian President Signs Crypto Bill into Law; US Election Agency Approves Use of NFTs…
Blockchain & DeFi Developments
Visa Proposes Automatic Payments Using Ethereum Layer 2 System StarkNet
Payments processor Visa (V) recently proposed a system known as “account abstraction” that uses smart contracts can be used to enable automated programmable payments on Ethereum, per a crypto thought leadership post.
This solution involves the creation of a smart contract that acts as an intermediary between a user account and a contract account, allowing for the creation of a self-custodial wallet that can make automatic recurring payments without requiring the active participation of the user.
Such a move would allow recurring payments to be conducted entirely over blockchain networks, which currently are devoid of such capability, Visa said. The company proposed deploying the system on the Ethereum layer 2 network — StarkNet.
Currently, there are two types of accounts on the Ethereum network: Externally Owned Accounts (EOA) controlled by a private key, and Contract Accounts (CA), which are essentially smart contracts.
EOAs can initiate transactions, but CAs cannot. However, by using Account Abstraction it is possible to create a smart contract that can initiate transactions on behalf of an EOA, enabling the creation of a self-custodial wallet that can make automatic recurring payments, Visa said.
Account Abstraction (AA) is a proposal that aims to combine user accounts and smart contracts into a single type of account on the Ethereum blockchain. This is possible by allowing for the creation of validity rules for individual transactions.
One use case for AA is the creation of "delegable accounts," which allow for the automation of payments through the use of smart contracts.
With a delegable account, a user can delegate the ability to initiate a payment to a pre-approved smart contract, known as an "auto payment contract,” Visa said.
Here’s how it could hypothetically work: When a user visits a merchant's website and agrees to allow for auto payments, the auto payment contract's address is added to the user's allow list.
The merchant could then trigger a payment by calling the charge function of the auto payment contract, causing the user's account to initiate a payment that will be valid due to its presence on the allow list.
As of Tuesday, Visa did not reveal any plans to use the system as part of its offered services.
Solana-Based Raydium Exchange Victim of 7-Figure Exploit
Solana-based decentralized exchange platform Raydium confirmed in a tweet that it had been the victim of an exploit.
At press time, around $2 million worth of different cryptocurrencies was sitting in the account of an attacker that managed to maliciously withdraw user funds from Raydium exchange pools.
“Initial understanding is owner authority was overtaken by attacker, but authority has been halted on AMM & farm programs for now,” Raydium wrote in its tweet, referring to automated market makers.
Raydium, which allows users to trade between different cryptocurrencies without the use of an intermediary, is one of the premier platforms in Solana’s beleaguered decentralized finance (DeFi) ecosystem. According to its own numbers, Raydium has around $45 million locked in trading pools and facilitated around $4 million in trades in the past 24 hours. It is unclear whether that $4 million includes the improper withdrawals from the attacker.
The Solana DeFi ecosystem was hit especially hard by the collapse of the FTX exchange due to its heavy ties to the Sam Bankman-Fried trading and investment empire.
Hardware Wallet Startup Cypherock Raises $1M to Skip Seed Phrases
When creating a self-custody crypto wallet, users are asked to write down and store a seed phrase that can be used to recover the wallet. But if this phrase is misplaced, users risk losing all of their crypto assets. Worse, your written seed phrase could be captured on camera for the world to see.
Hardware wallet startup Cypherock believes it has the solution to this potentially fraught scenario and has raised seed funding to build it.
Cypherock exclusively told Decrypt this week that it has raised $1 million in a seed round with investments from ConsenSys Mesh, Infinite Capital, Gnosis and its co-founder Stefan George, Polygon co-founder Sandeep Nailwal, Mahin Gupta, OrangeDAO, and others.
Rohan Agarwal, co-founder and CEO of Cypherock, told Decrypt that the current approach to securing crypto wallets creates multiple opportunities for potential mishaps.
"You have to keep your wallet secure because they have been hacked before," he said.
"And you have to keep your seed phrase secure, as well. So you now have two single points of failure that you have to keep secure."
The company’s Cypherock X1 hardware wallet, which launched in October 2022, uses four encrypted near-field communication (NFC) cards to store users' private keys and what would be the seed phrase. Tapping any of the cards to the wallet approves a transaction, and Cypherock advises that users store each in a different geographic location.
"These cards use the same secure hardware used in the banking industry for making debit cards and credit cards," Agarwal told Decrypt. "So using the same secure hardware, but our own software that is written inside these cards, we take that security infrastructure and port it to Web3."
Family-friendly NFTs Bring the Next Generation of Youth into Web3
Nonfungible tokens (NFTs) continue to be a dominant force within the Web3 space for increasing innovation and adoption. As the space continues to push its way into mainstream adoption, Web3 will reach new demographics, including the youth.
Recently, big-name entertainment company Disney, which is highly catered toward children, has expanded to include crypto-savvy team members and created partnerships with the Polygon blockchain network.
Such developments hint at an impending entrance of large entertainment companies into the world of Web3. However, big questions arise if Web3 content is to be created for minors, such as how does an NFT become kid-friendly? How does true ownership work when minors are involved?
Cointelegraph spoke with Jeremy Fisher, an artist and the founder of Lucky Ducky — a family-friendly NFT collection — about how to create Web3 content for kids and bring them into the next generation of digital interactions.
While there have been cases of NFTs being used and even created by children, such as the 9-year-old girl who fell in love with cats and made a cat NFT collection, Fisher believes parents are still the ones who should be considering what projects to support while their kids are still young.
It is “just like supporting your favorite production studio in the early days,” he said.
“We think buying and trading should be handled by adults. Once the collection is created and funded, there are many products that can spin off from the concept.
Fisher said the Lucky Ducky NFT characters are all from a new family-friendly animation series also in the works. He said that for children, popular kid shows are excellent ways to introduce Web3 concepts and “shine a spotlight on the existing IP and NFTs."
However, as the Web3 space is still in its “Wild West” phase, Fisher said NFTs and many Web3 activities catered toward minors should still be heavily overseen by parents.
“It’s advisable for parents to be in control of anything kids are interacting with involving Web3.”
As the technology becomes more pervasive, he anticipates Web3 tools and features will be “running in the background of games and collectibles to facilitate trading,” with built-in protections and parental controls.
Nonetheless, because NFTs are great tools for general mass adoption and teaching newcomers about the space, the same applies to younger generations.
“NFTs are a really great tool to teach about investing like how a pretend stock trading game teaches how the stock market works.”
Amazon's New Series 'NFTMe' Explores NFT Culture and Disruption Worldwide
The capacity to digitally authenticate almost everything, and the possibility of monetizing in ways nobody could even imagine before. These are some of the ways that Amazon's new documentary series NFTMe introduces nonfungible tokens (NFTs).
The show features artists, collectors, and industry professionals across the world sharing their experiences with NFTs and how the merger between art and technology has positively affected their daily lives.
In six 30-minute episodes, NFTMe introduces 50 pioneers in the NFT space from four continents, including American singer Susaye Greene of The Supremes; Queen Diambi Kabatusuila of the Democratic Republic of the Congo; Refik Anadol, a digital artist for SpaceX and NASA; Peter Rafelson, a music producer for Madonna; and Cheryl Douglas of Portion, who launched NFT collections for the Black-Eyed Peas.
The first episode explores the NFT community and the journey of different people through digital culture, with leading influencers breaking down NFTs and blockchain technology, and the Congo's Queen Diambi describing how her tribes have a Web3 mindset. The second episode digs into how Refik Anadol is creating art with NASA and how Eminem's request from 20 years ago led to an NFT journey.
The following episodes explore how brands are connecting with NFTs to explore new audiences and generations, the social impact of digital transformation, tokenization in the music industry, metaverse disruption, and NFTs' role in recognizing and giving voice to artists. Among the highlights is CrossTower co-founder Kristin Boggiano breaking down regulation's role in keeping the NFT market on track in episode five.
Behind the documentary series are the film producer Tech Talk Media and award-winning director Jonny Caplan. The production started in 2019 and had to be adapted due to COVID-19 restrictions, "which included sending in A.I. robots equipped with LiDar sensors, enabling the director to remote move, direct, and communicate," Tech Talk said in the official announcement, adding that:
"NFTMe intends to be the MTV of NFTs, providing the default go-to for information on NFTs in a clear, understandable, and effective way, enabling viewers to absorb the plethora of terminology, diversity, and opportunity in the Web3 realm, whilst experiencing the culture, the mood, the style, and the energy."
NFTMe is streaming on Amazon Prime, initially in the United States and the United Kingdom. The series will roll out worldwide to more broadcasters in 2023, according to Tech Talk.
Trump NFTs Tanking as Hype Dies, Floor Price Down 70%
Donald Trump’s first official NFT collection was the talk of the crypto world late last week, captivating Twitter and late-night TV in the process. But after prices and trading volume surged over the weekend, both metrics have fallen sharply as the hype around the disgraced former U.S. president’s project is apparently fading.
Trump’s digital trading cards, which are minted on Ethereum scaling network Polygon, peaked on Saturday, December 17 with over $3.5 million worth of trading volume, per data from CryptoSlam. Sales prices rose even higher on Sunday, with the NFTsselling for an average of just over $680 apiece, although total volume fell to nearly $1.95 million for the day.
On Monday, however, day-over-day trading dropped 57% to about $836,000 worth of ETH, with the average sale price falling to about $466. Today, the cheapest available Trump NFT up for sale on leading marketplace OpenSea is listed at just 0.21 ETH, or about $255.
Trump launched his digital trading card NFTs last Thursday, with 44,000 of the NFTs selling for $99 apiece in the primary sale. Buyers were incentivized by the possibility of winning a meet-and-greet or dinner with the former president, amid other potential perks. Another 1,000 NFTs were kept back by the project’s creators, for a total supply of 45,000.
Despite widespread mockery and criticism of the project—even from some of Trump’s own supporters—the project sold out within 24 hours and fueled secondary market demand. Since then, the project has racked up over $8.7 million worth of secondary trades.
Momentum peaked over the weekend, with the floor price—or cheapest listed NFT—hitting 0.84 ETH (about $990) on Saturday. Prices rose and fell in a volatile market ahead of the NFTs being skewered on NBC’s late-night comedy show, Saturday Night Live. Just three days later, the floor price has fallen 74% when measured in USD.
Web3 & Metaverse
Activision Blizzard’s President Joining BAYC’s Yuga Labs Company to Build Metaverse
Activision Blizzard president and COO, Daniel Alegre, is departing the publisher to join NFT company Yuga Labs.
The news was buried in an SEC filing, where the Call of Duty publisher explained Alegre "plans to leave for another opportunity upon completion of the current term of his employment agreement," which expires on March 31, 2023. As detailed in a separate press release, Alegre will then join Yuga Labs as CEO.
Yuga Labs said Alegre's appointment will help it realize its "ambitious vision for blockchain gaming, metaverse development, and community-building."
The web3 company is best known for launching the Bored Ape Yacht Club collection of NFTs in 2021, and earlier this year raised $450 million in seed funding at a valuation of $4 billion.
In a press release that's heavy on spiel and light on details, the company said it's now working on creating a "gamified metaverse inspired by MMORPGs" called Otherside, which was revealed in March 2022 and will be powered by Yuga's own cryptocurrency, ApeCoin.
Yuga believes Alegre's experience working in video games and tech will allow it to scale up that project.
"We are thrilled to have [Daniel] join the team to help with our vision of a truly interoperable metaverse. Daniel has held one of the highest level roles at one of the largest gaming companies in the world," said Yuga Labs co-founder Wylie Aronow.
"He brings valuable experience across entertainment, e-commerce, and global strategic partnerships—all of which are critical aspects of an immersive web3 world built by creators and for creators."
Alegre, meanwhile, said he believes Yuga's pipeline of products and partnerships represents a "massive opportunity to define the metaverse in a way that empowers creators and provides users with true ownership of their identity and digital assets."
He departs Activision Blizzard with the company in the middle of a protracted merger with Microsoft, which is attempting to purchase the U.S. publisher for $68.7 billion.
Argentine Football League Scores Metaverse Partnership After World Cup Triumph
Argentina’s World Cup triumph in Qatar is already bearing fruit for its national football association through a new metaverse partnership.
The country’s professional football league will make the first foray into Upland’s metaverse through an official licensing agreement between the Argentine Football Association (AFA) and the Silicon Valley-based firm.
The deal will see the AFA take the Liga Profesional de Fútbol (LPF) into Upland’s metaverse platform, powering fan engagement between Argentine football fans, teams, and players.
Gamified opportunities are touted to include a variety of Argentine football digital collectibles, including teams, clubs, players, tickets, highlights from games, historical moments, and other exclusive offers.
The partnership also represents a first for Upland as it offers exclusive ownership of highlight videos of moments from LPF matches. The sale of a variety of nonfungible tokens (NFT) is set to provide the Argentine top-flight league with a new source of income as users buy, sell and trade licensed digital assets.
Upland will also afford users the ability to start virtual businesses to resell LPF digital collectibles in user-owned and operated shops located on virtual properties. The metaverse platform is mapping out a digital version of the world intended to offer digital land ownership, asset creation, and a virtual economy.
The agreement with the Argentine Football Association comes on the back of Upland’s partnerships with Portuguese topflight outfit FC Porto as well as FIFA itself. The latter agreement saw Upland offer licensed digital collectibles for the 2022 World Cup in Qatar, which included highlights from the recently completed tournament.
The world of sports, cryptocurrencies, and blockchain has become increasingly entwined in recent years. Formula 1 filed trademarks for NFT and cryptocurrency-powered goods and services in August 2022, while the likes of McLaren and Red Bull Racing explored their own Web3 and NFT offerings this season.
The Sandbox Sells $1.66M of Virtual Land for its Metaverse
The Sandbox has sold more than $1.66 million worth of virtual land across the map of its metaverse in the past few weeks.
That’s not a bad accomplishment, considering we’re in the middle of a crypto winter. The company just finished sales of its LAND, where would-be developers purchase plots of virtual space in its metaverse where they can develop games and other attractions.
These plots of LAND exist alongside branded experiences, which suggests that consumers believe in the concept of beachfront virtual property, or the notion that the LAND is worth more if it’s next to something cool. LAND in The Sandbox is transparently represented on public blockchains by Non-fungible Tokens (NFTs), which can uniquely identify digital ownership.
The Sandbox operates on the model of selling valuable real estate where developers can be located near high-value developments, like in the real world. Only the developers (or players) in this case buy The Sandbox’s currency, $SAND, with real money. Then they get NFTs that verify their ownership, and then they go and develop it on the expectation they can make the land more valuable.
This kind of LAND sale has made $SAND reach a market capitalization of $641 million. That’s lower than during the crypto boom, and yet it’s so valuable that critics have said it’s a crazy price for a company that, like its rival Decentraland, doesn’t have many users and has been dubbed an “empty metaverse.” DappRadar says The Sandbox has about 530 daily active wallets — meaning there aren’t many transactions yet.
But The Sandbox continues to be successful in selling LAND. Starting on November 22, The Sandbox put 1,900 virtual parcels up for sale and now it has completed the sales in two chunks of the virtual lands. The Sandbox sells the parcels for a fixed price, and it has artificially limited the number of plots of LAND it will sell to protect user investments. It has also completed two more collections of LAND and sold them out.
This kind of LAND sale has helped The Sandbox expand. It is owned by Animoca Brands and has more than 400 people. It expects to hire 50 or 60 more. This is happening in an environment where FTX has gone bankrupt, with criminal investigations of its founder Sam Bankman-Fried that have cast guilt by association on the entire crypto industry, in the view of some people.
“We are still very excited about being able to feel like the metaverse and making The Sandbox into a Web3 platform,” said CEO Arthur Madrid, in an interview with GamesBeat.
“I think people trust The Sandbox as a safe place to create and get into NFTs.”
Games & Blockchain Gaming
Cookie Run Kingdom's Heavy Focus on Narrative
When it comes to video games, how important is the Narrative? Needless to say, some of the best-selling titles like God of War, Witcher 3, Skyrim, and Red Dead Redemption place a massive emphasis on Narrative, crucial to delivering an immersive and unforgettable experience to the player.
Mobile Games, however, are generally built for players to have a quick and casual experience. Some of the best mobile games like Clash of Clans, Call of Duty Mobile, Subway Surfers, and RAID: Shadow Legends have almost non-existent or completely forgettable stories. So the question is, can only AAA titles played on PC or Console deliver a compelling tale? One mobile game that has consistently invested in Narratives is Cookie Run Kingdom. Cookie Run Kingdom features a main storyline that spans 14 different areas. Each of these areas even has its own unique environmental storytelling elements and different background soundtracks to reflect the essence of the story being told! For example, Area 13 is where the player will meet the "Ancient Dark Cacao" cookie (a fierce & dedicated warrior). As the player steps into the Area, the sound gets more fierce and the environment exudes a darker and scarier vibe!
These Narrative elements that you enjoy in both the story and other events are further enhanced when you actually acquire these cookies via gacha. All of the cookies have clearly distinguishable and unique personalities. Their dialogue scripts, and voice lines in every segment of the game (in battle or in idle) and as cookies are even roaming around the kingdom ensure that these personalities are portrayed in absolute clarity.
Cookie Run is so convicted of delivering their Narrative that they released a Game Mode just to deliver the story. The Cookie Odyssey game mode lets the player enter and watch just cutscene after cutscene for rewards with no gameplay involved.
The latest Cookie Run Christmas update focuses a lot on introducing new characters like the newest Sherbet cookie through his own story journey. We see him interacting with other cookies in the game like the Frost Queen and the Sea Fairy and get a taste of the kind of character he really is!
This much focus on Narratives might not work for every mobile game. Cookie Run Kingdom is able to meld the story elements with the art design and the gameplay elements seamlessly and doubles down on the lore to deliver something more immersive to the players. When players decide to roll on gacha for a cookie, it may not be solely due to its power in PVE or PVP game modes...its probably because they love the story and personality behind the cookie!
Game Developers Expect to Work on Web3 Games in the Future: Survey
As blockchain gaming gains broader adoption, three out of four game developers expect to work on Web3 game projects in the future, according to a recent survey.
Blockchain entertainment firm Coda Labs commissioned a survey targeting game developers to have a peek into their thoughts on Web3. The researchers found that a majority of the respondents believe Web3 gaming is on its way to their firms, with 75% expecting to work on Web3 projects in the future.
Apart from this, more than half of the survey participants believe Web3 will revolutionize the gaming industry. Forty percent anticipate that implementing Web3 will bring more new users, while 36% believe that Web3 integration will enable games to retain users better.
Sekip Can Gökalp, founder and CEO of Coda Labs, commented on the survey results, noting that while the potential of Web3 games is being debated, the upside for developers is obvious. He explained:
“This survey shows that a majority of developers have already dipped their toes into Web3 game development, driven by benefits such as additional funding, new revenue streams, and player retention.”
In addition to getting new users and retaining them, a number of developers also recognize that Web3 brings new revenue streams. Forty-seven percent of the survey participants highlighted that one of the main benefits of Web3 is nonfungible token (NFT) sales, while 43% believe in crypto tokens as a source of additional revenue.
However, not everyone is convinced that Web3 is here to stay. The survey results also show that 32% of participants think Web3 games are just a fad and will not be around for long.
While many of the developers who participated in the survey believe that NFTs and crypto tokens can be new sources of revenue, another recent survey showed that gamers are more interested in earning Bitcoin while playing games.
Former Diablo Immortal Devs Pick ImmutableX for Upcoming Web3 MMORPG
Metaverse Game Studios, developers behind popular video games such as Far Cry and Diablo Immortal, are making use of blockchain technology to build a new Web3 MMORPG.
Independent gaming developer Metaverse Game Studios, which boasts a host of developers that have worked on various AAA titles, has announced a partnership with Web3 development platform ImmutableX to continue building Angelic.
The upcoming title is powered by Unreal Engine 5 and is touted as a dark science fiction-themed narrative strategy RPG featuring turn-based combat. A story-driven single-player campaign and a free-to-play multiplayer metaverse suggest a broad offering for gamers that are looking for an AAA-level Web3 gaming experience.
ImmutableX’s full-stack gaming platform will power Ethereum-based nonfungible tokens (NFTs) digital collectibles in the game that can be owned by players. The developers also tout Angelic as “chain agnostic,” meaning digital assets will be hosted off-chain while being interoperable with other blockchain networks.
While catering to both Web2 and Web3 audiences, Angelic promises to deliver a “collaborate-to-earn” offering that will facilitate user ownership of in-game assets and participation in the game’s future development. Metaverse Game Studios and ImmutableX also aim to reward Angelic community members for contributions to the game’s world.
Metaverse Games Studios director of operations Anastasia Volgemut credited ImmutableX as a key component of its Web3 functionality :
“By leveraging ImmutableX, our users can tap into the benefits of fast, secure, and gas-free minting and an uninterrupted, quality gaming experience.”
Angelic will roll out alpha testing with select community members and partners in January, with a public launch in February. Players will then be able to trade previously acquired in-game NFTs from the early access version in the PvP section of the game.
Metaverse Game Studios closed a $10 million seed fundraising round in March that was led by Animoca Brands, Pantera Capital, and Everyrealm.
NFT Marketplace OpenSea Confirms Ban on Cuban Artists
Citing U.S. sanctions on Cuba, OpenSea, the world’s largest marketplace for non-fungible tokens (NFT), said today that it's banning digital artists from all countries sanctioned by the United States.
The ban came to light last week after NFTcuba.ART, a project that helps Cuban artists succeed in the NFT industry, tweeted that OpenSea had disabled its profile on the marketplace. Not only "Cubans on the island, but those who have other nationalities have to endure censorship in web3 company,” wrote NFTcuba.ART. The project asserts that the sanctions are being applied unfairly to Cuban artists who are living outside the island nation.
A message on the collective’s website warned that the project was banned from OpenSea, saying this is “likely just because it has the name Cuba in it and or they are fearful of sanctions.”
The New York-based company, however, said it's simply complying with U.S. sanctions law.
“Our Terms of Service explicitly prohibit sanctioned individuals, individuals in sanctioned jurisdictions, or services from using OpenSea. We continue to holistically evaluate what other measures need to be taken to serve our community and comply with applicable law," an OpenSea spokesperson told Decrypt.
OpenSea also explained that "sanctions against Cuba are effectuated by multiple legal authorities. They take form in executive orders, federal statutes, and regulations in the Code of Federal Regulations (CFR). The sanctions are complicated and target certain activities, including economic activity, in Cuba. In light of these restrictions, OpenSea does not allow the use of its services from Cuba."
New NFT Private Auction Scam Threatens OpenSea Users
As nonfungible tokens (NFTs) became more popular, bad actors who constantly try to exploit users within the space have become more active. Now, a new hack involving a feature on the NFT marketplace OpenSea threatens NFT holders through phishing sites.
In an announcement, anti-theft project Harpie warned NFT users of a new hack involving gasless sales on the OpenSea platform. According to Harpie, hackers were able to steal millions in digital assets by exploiting the feature.
When users want to conduct gasless sales within the OpenSea platform, they are required to approve a signature request with an unreadable message. With this feature, users are also able to allowed to create private auctions with unreadable signatures.
Because of this, phishing websites have been using this feature to ask their victims to sign one of these unreadable messages. According to Harpie, the signatures often pose as a step required to log in and access the website.
However, the login messages are actually signature requests to conduct a private sale of the victim’s NFTs to the scammer for 0 Ether. If signed, it will send the NFTs to the hacker’s wallet address.
Apart from this scam, blockchain security company CertiK has also recently issued a warning to the crypto community over what they describe as “ice phishing.” Through this exploit, scammers trick Web3 users into signing permissions that allow the attackers to spend their tokens. CertiK noted that the scam is a significant threat and is unique to the Web3 world.
Back on Dec. 17, an analyst brought up how a scammer used the gas-less Seaport signature feature to allegedly steal 14 Bored Ape NFTs. After performing thorough social engineering, the hacker directed the victim to a fake NFT platform before asking the holder to sign a contract. This was followed by the victim’s wallet being drained.
National Policies & Legal Updates
Brazilian President Signs Crypto Bill into Law
Jair Bolsonaro, the president of Brazil set to leave office on Dec. 31, has signed a bill aimed at legalizing the use of crypto as a payment method within the country.
In a Dec. 22 publication of the official journal of the federal government of Brazil, Bolsonaro’s office said the president had signed bill 14.478 into law following approval from the country’s Chamber of Deputies. The legislative body sent the bill to the president’s desk on Nov. 29 as the final step in recognizing crypto payments.
According to the text of the bill, Brazil’s residents will not be able to use cryptocurrencies like Bitcoin as legal tender in the country, as is the case in El Salvador. However, the newly passed law includes many digital currencies under the definition of legal payment methods in Brazil. It also establishes a licensing regime for virtual asset service providers and sets penalties for fraud using digital assets.
Bolsonaro’s announcement did not suggest which federal agency could be in charge of supervising crypto payments. However, like the United States, digital assets considered securities fall under the regulatory umbrella of Brazil’s Securities and Exchange Commission. The law also included provisions likely made in response to the collapse of FTX, requiring exchanges to distinguish between user and company assets.
The crypto law will take effect in 180 days — likely in June 2023. Bolsonaro is slated to leave office in a matter of days, after which Luiz Inácio Lula da Silva, or simply “Lula,” will assume the presidency on Jan. 1. Lula served as the president of Brazil from 2003 to 2010 and has previously made statements in favor of crypto and blockchain adoption.
US Election Agency Approves Use of NFTs as Campaign Fundraising Incentive
The United States Federal Election Commission (FEC) has issued an advisory opinion stating DataVault Holdings may use nonfungible tokens for fundraising efforts.
In a Dec. 15 notice, the FEC said it was “permissible” for DataVault holdings to send nonfungible tokens, or NFTs, to political campaign contributors without violating rules on corporate contributions. According to the election agency, DataVault will receive “reasonable compensation” for each NFT issued to contributors, as well as track all tokens issued for its own records.
“The Commission concludes that DataVault’s proposals to provide political committees with NFTs on the same terms that it regularly offers its non-political clients would be a permissible extension of credit by DataVault in the ordinary course of business,” said FEC Chair Allen Dickerson. “Under the Act and Commission regulations, an incorporated commercial vendor may extend credit to political committees under terms substantially similar to those the vendor offers non-political debtors. DataVault is a ‘commercial vendor’ because its usual and normal business involves the provision of the same services that it proposes to provide to political committees.”
Speaking to Cointelegraph, DataVault CEO Nathaniel Bradley said:
“We are very pleased by the unanimous approval by the FEC of our patented DataVault platform for use by political campaigns here in the US. In a broader view, we believe, Blockchain technology represents the future for elections that seek to be trusted and transparent in their outcomes in the future.”
NFTs have sometimes been connected to political campaigns globally. In South Korea, the campaign behind Democratic Party candidate Lee Jae-myung said in January it would issue NFTs showing images of the politician and his campaign pledges to those who made donations.
Subscribe to our newsletter today and be the first to receive Sipher news, AtherXplorer weekly issues, and new AtherXperiment posts. Sign up now and get ahead of the game!