January 21, 2023
Issue No. 38
Welcome to this week's AtherXplorer, covering the latest in gaming, blockchain, and everything in between.
This week’s top picks include:
- Blockchain & Defi: Bankrupt Genesis Reveals List of Creditors; Robinhood Rolls Out MetaMask Wallet Competitor…
- Gaming: Intella X Raises $12M for Web3 Gaming Platform; Tiny Colony’s Web3 Tower Defense Game on IMX
- Web3 & Metaverse: MetaJuice Sells Out Digital Collectibles In IMVU; Alethea AI Debuts Generative AI on Polygon
- NFTs: First National Geographic NFT Launch Meets Massive Backlash; L'Oréal's NYX Makeup Brand to Launch DAO & NFTs
- Legal Landscape: SEC Sues Eisenberg for Draining Mango Markets, Alleges MNGO a Security
Blockchain & DeFi Developments
Gemini, Hedge Funds, and a DeFi App: Bankrupt Genesis Reveals List of Creditors
Defunct crypto broker Genesis has revealed the largest creditors in its recent Chapter 11 bankruptcy filing, with crypto exchange Gemini taking the top spot, with a disputed debt of roughly $765.9 million.
The filing, made in the Southern District of New York revealed over $3.6 billion of debt to its largest creditors. Roughly half of the debtors were not named.
The second-largest named creditor is a Singapore-based entity called Mirana Corp, which has an outstanding debt of around $151.5 million.
Mirana Corp’s Seychelles-registered subsidiary Mirana Ventures has been actively investing in the industry, backing crypto gaming firm Animoca Brands, Ethereum scaling project Matter Labs, and a host of others.
The venture firm was also caught in the collapse of Three Arrows Capital (3AC), suing the now-bankrupt firm in December over an alleged $13 million debt.
The third-largest named creditor is Moonalpha Financial Services Limited, which trades under the name Babel Finance, and is based in Hong Kong.
The firm, which is owed just over $150 million, provides a litany of services such as crypto wealth management and crypto lending, marketed at high-net-worth individuals.
The fourth position is filled by hedge fund Coincident Capital, with Genesis owing the Cayman Islands-based firm around $112 million.
Donut, a mobile DeFi app that offered investors up to 6% on their savings, was revealed as the fifth largest named creditor with a debt of roughly $78 million.
Due to this Genesis exposure, Donut’s lending operations met a similar fate to Gemini Earn, shuttering withdrawals in November 2022.
What’s next for Genesis?
As well as being the firm's largest creditor, Gemini has been engaged in an ongoing public spat with Gemini's parent firm DCG.
Gemini terminated its Earn program on January 11, which offered users up to 8% on their idle cryptocurrencies, after first announcing delays to user withdrawals in November 2022.
Gemini attributed the issues affecting its Earn program to its exposure to Genesis, who was the primary lending partner for the program. Genesis first announced suspending withdrawals in November 2022, too.
DeFi Project 1inch Network Launches Hardware Wallet
Popular decentralized exchange (DEX) aggregator 1inch Network is expanding its ecosystem of products and projects with the launch of its own multi-coin hardware wallet.
Supported by a grant from the 1inch Foundation, the crypto wallet is in its final stages of development, with sales expected to start later this year.
Hardware wallets, also known as cold storage, come as physical devices and are considered the best option for securing cryptocurrencies as they keep users’ private keys in a secure offline environment, safe from potential online attacks and intrusions.
As a DEX aggregator that identifies the best trade for a specific pair, 1inch Network provides a place to swap tokens on the Ethereum (ERC-20), BNB Chain (BEP-20), Avalanche, Fantom, and Polygon networks, among others.
Similar to what the existing 1inch Wallet offers, the hardware crypto wallet will support the same set of coins, with more chains to be gradually added in the future, the team behind the project told Decrypt.
Though users can create new wallets using the Hierarchical Deterministic (HD) Wallet algorithm, which is in accordance with Bitcoin Improvement Proposal (BIP) 44, the wallet doesn't currently support Bitcoin. BIP-44 was a proposal co-authored by Marek Palatinus and Pavol Rusnak, the creators of the Trezor hardware wallet, that was originally designed to safely hold the world’s largest cryptocurrency.
“In fact, we call it the first DeFi hardware wallet, that’s why I believe BTC is outside the scope, however, WBTC will be supported,” Alexey Devyatkin, founder of the 1inch hardware wallet told Decrypt, referring to the Ethereum-compatible version of Bitcoin called Wrapped Bitcoin (WBTC).
1inch wallet introduces 'multi-seed' functionality What separates the 1inch offering from other hardware wallets on the market is that it supports multiple seed phrases—a sequence of random words that stores the data required to access or recover crypto assets stored in the wallet.
According to 1inch, this solves the problem of one device supporting only one unique seed phrase. Compromising this one seed phrase would also compromise all the existing wallets (no matter BTC, ETH, or any other), hence the need for multiple seed phrases.
The wallet’s users can also take advantage of transparent transaction signing, as opposed to blind signing offered by some other devices. Blind signing lets users confirm a smart contract interaction they don’t have full transparency over, and as such is considered as high risk, especially in the often complex world of decentralized finance (DeFi).
Additionally, to prevent hacks and theft, the wallet executes full transaction parsing and offline call data analysis, immediately warning the user if a transaction has been compromised.
“In case of an attacker asking you to show wallets, you can enter a pin code for only one wallet with no money. They will never know how many other wallets you have,” Devyatkin told Decrypt.
When it comes to design aspects, the 1inch hardware wallet is roughly the size of a bank card, weighing just 70 grams and 4 millimeters thin. The device is fully air-gapped, as it has no buttons, and does not require any wired connection, while all data is exchanged using QR codes or with NFC.
As for the price tag, it's estimated somewhere between $179 to $199.
Robinhood Rolls Out Its MetaMask Wallet Competitor to 1 Million Users
Robinhood is finally entering the software wallet game.
The company today launched the Robinhood Wallet, a smartphone app that allows users to swap and transfer crypto, and view owned NFTs and crypto. It’s currently being slowly rolled out to over 1 million waitlisted users via an access code, according to Robinhood. It was previously released in beta to just 10,000 waitlisted customers in September.
The Robinhood Wallet uses Polygon, an Ethereum sidechain, to offer swaps without network fees. It also added support for Ethereum today.
If you’re confused about what’s going on with Robinhood “wallets,” we don’t blame you. Robinhood initially referred to a new transfer feature on its original trading app as a “Crypto Wallet” product. That feature launched in beta in January 2022, and it finally allowed Robinhood users to transfer crypto to and from the platform.
That wasn’t really a “wallet”—it’s no different than how users are able to transfer crypto to and from Coinbase, Kraken, Binance, or any other crypto trading app. The Robinhood Wallet that is being rolled out today, however, is more like MetaMask, Phantom, or the Coinbase Wallet (not to be confused with the Coinbase trading app).
“The Robinhood Wallet is a completely different product housed in a separate, standalone app that allows users to have total control over their crypto and provides access to more advanced features, like connecting to decentralized apps and NFT marketplaces,” Robinhood’s General Manager Johann Kerbrat told Decrypt.
Games & Blockchain Gaming
Neowiz's Intella X Raises $12M for Web3 Gaming Platform
Intella X, a Web3 gaming platform developed by South Korea’s gaming giant Neowiz, has raised $12 million in funding.
Intella X is planning to launch its platform on Polygon, a leading Ethereum Layer-2 scaling platform.
The funding round included more than 20 investors from various sectors and includes notable partners such as Polygon, Animoca Brands, Magic Eden, Planetarium, Big Brain Holdings, Crit Ventures, JoyCity, Pearl Abyss, XL Games, WEMIX, and Global Coin Research.
As the next-generation Web3 gaming platform, Intella X’s mission is to bridge the gap between Web2 and Web3 through unique platform protocols, services, and games.
What Intella X hopes will set itself apart from its competitors is that the platform perpetually rewards the contributors of its ecosystem (i.e game developers and users) through its native platform token, the Intella X token, through its own unique “proof of contribution” protocol.
The platform also redistributes shares of its revenue back to the contributors through its unique decentralized revenue distribution protocol to further exercise the fundamental values of Web3.
In combination with its service protocols and wide genres of games in its 2023 lineup, the platform offers additional features in an effort to remove high-entry barriers and improve user experience in Web3. From streamlined wallet creation to the implementation of meta-transactions, Intella X has set its mission on providing high-quality games and a user-friendly environment to accelerate mass adoption.
Intella X is set to launch on Polygon in the first quarter of 2023 along with its proprietary Web3 wallet, DEX(Decentralized Exchange), NFT marketplace, launchpad, and games.
Established in 1997, Neowiz is one of the leading game companies in Korea. The company has published a wide variety of PC and mobile games since 2003 and has also co-developed and launched wildly successful titles such as FIFA online, Brave Nine, DJMax Respect, Skul: The Hero Slayer, Cats & Soup, and the upcoming Lies of P.
Tiny Colony Debuts as Web3 Tower Defense Game on ImmutableX
Tiny Colony is launching soon on the ImmutableX blockchain platform today as a game that combines base building, tower defense, and sim management as you build a colony with pixelated ants.
The title will launch its alpha launch soon and the Tiny Game studio is also raising a round of funding before
Since 2018, film producer Arshia Navabi has been immersing himself in the world of Tiny Colony, writing the lore and backstory for the game as he pivoted from film into games. He started the company formally in 2021 and raised money through various coin and non-fungible token (NFT) sales.
And he assembled a team of industry veterans from Electronic Arts, Capcom, and Sony PlayStation to build the first management sim, base building, and tower defense hybrid game on Web3. The Vancouver, Canada-based company built the title on ImmutableX, the Layer 2 blockchain scaling solution on Ethereum from the Web3 gaming company Immutable
“I had been working in the Vancouver film industry for about seven years prior to entering the blockchain space. I consider myself a storyteller and a system builder. As I was working in the film industry, I was also working on Tiny Colony as a mobile game initially,” he said. “And then the opportunity came to launch Tiny Colony as a blockchain game. So we decided to move in that direction.”
The company held an “initial DEX offering” in January 2022, raising about $3 million to build the game. It also minted and sold 18,000 NFTs on Fractal.
Tiny Colony was first developed on the Solana blockchain, but the company migrated the title to ImmutableX to leverage the platform’s scaling features while retaining a focus on Ethereum’s security and decentralization.
The game uses a pixelated art style. The goal is to run an efficient ant colony. It’s a 2D game where you create an ant farm and start gathering resources. You have to maximize resources, grow your population, and make sure your ants are happy. Every now and then, other colonies will attack your colony and you have to defend your base using catapults, ballista, traps, and oil pits.
Prior to the move, Tiny Colony was a top-selling collection on the digital marketplace Fractal, with over 18,000 NFT assets sold and $3 million raised.
The Immutable partnership will allow the Tiny Colony team to resume game development and capitalize on specialized technical support and product life cycle consultation.
By adopting ImmutableX technology, Tiny Colony will be able to offer numerous new features and capabilities, including faster and more responsive performance; improved security; enhanced accessibility for new Web3 gamers with the inclusion of a built-in crypto wallet; the option to pay for in-game assets with fiat currency, and more.
“We’re thrilled to welcome Tiny Colony to the rapidly growing ImmutableX family and provide the team with our full suite of tools and solutions to make the game as accessible, engaging, and performant as possible,” said Andrew Sorokovsky, vice president of global business development at Immutable, in a statement. “The team’s goal of building a fun and engaging Web3 game that provides a variety of entertainment options and freedom of asset ownership perfectly aligns with Immutable’s own mission to power the next generation of games.”
Web3 RPG Guild of Guardians Releases Esports Team Summons
Web3 RPG, Guild of Guardians has partnered with eight top esports teams and today, fans can buy and earn in-game summons featuring team branding.
The partnership with these teams — Cloud9, Fnatic, NAVI, Ninjas in Pyjamas, NRG, SK Gaming, T1, and Team Liquid — and publisher Immutable Games Studio was first announced in September 2022. Notably, NRG first partnered with Guild of Guardians back in 2021.
Each partnered team will have two NFT summons featuring their IP. One is purchasable and the other is exclusively earned through gameplay. Guild of Guardians players can buy esports summons from February 8-15, but only 16,000 in total are available.
These esports teams and Guild of Guardians emphasize the long-term vision of the partnership. This drop and team IP integration is the first step. Soon, Immutable plans to add leaderboards to foster in-game competition. Eventually, GOG esports NFT holders will also gain access to unique in-game and out-of-game rewards. This includes in-game synergies, easier access to other esports-themed items like pets, exclusive real-world merch, and VIP access to events.
While there is some friction between the esports and Web3 communities, Bo Kryne, VP of product at Team Liquid believes in the long-term vision of Guild of Guardians. “The ecosystem health of IMX creates the conditions for a long and meaningful partnership for us — something that Liquid is very keen on as we only believe in projects that offer lasting value for their users … ultimately what we are endorsing and promoting to our audience is a game title that puts gameplay and quality of the product first. Team Liquid is not interested in participating in speculative crypto projects that impersonate video games.”
In-game skins have become a hot topic for esports monetization as it is a low-friction option to diversify their revenue. Some publishers offer in-game esports skins, but selling skins in newer titles like Guild of Guardians could become more popular.
Web3 & Metaverse
Metahood Raises $3M to Build the Zillow of the Metaverse
The hype around the Metaverse peaked early in January 2021, but if the future internet is to become a place where people own digital property and establish businesses, then they will need a property sales platform better suited to more than just speculative flipping. In other words, a Zillow or Redfin for the burgeoning metaverse.
This is what Metahood is aiming to build, and it has just raised $3 million in a seed round led by crypto VC firm 1confirmation, with participation from Volt Capital, Flamingo DAO, and Neon DAO.
The startup also received funding from notable angel investors in the space, including The Sandbox co-founder Sébastien Borget, SuperRare co-founder John Crain, Sorare Growth Lead Brian O'Hagan, and VC and blogger/podcast host Packy McCormick.
Metahood’s platform is designed to deliver more context for metaverse land buyers than a general-purpose NFT marketplace. It uses a map-driven interface to show available land plots in relation to those around it, providing a sense of the wider neighborhood or district while pointing out landmarks and highlighting sales trends, nearby land owners, and more.
“We really want to provide as much information and context as possible when you buy land,” founder Gwendall Esnault told Decrypt.
At this point, the reality of the metaverse still falls well short of the ambitious vision of builders both within and outside of Web3. Decentraland is bland and sparsely populated, The Sandbox has only launched limited beta test experiences, Otherside appears to be far from release, and Meta’s Horizon Worlds is a far cry from its eventual, robust metaverse vision.
Would-be metaverse inhabitants may not need to weigh real-world considerations like school quality or walkability scores, but if you’re going to spend real money on the digital property as an investment, or with plans to build out an experience, then you’ll want to know where you’re buying into. That’s a void Metahood aims to fill, one a broader marketplace like OpenSea doesn’t.
MetaJuice Hits A Million Web3 Wallets And Sells Out Digital Collectibles In IMVU
MetaJuice, a division of IMVU owner Together Labs, said that its partners have deployed more than a million Web3 wallets for digital collectibles in the past two years.
MetaJuice aims to unlock blockchain-driven markets that allow everyone to create, earn, own and shape the future of the metaverse, the universe of virtual worlds that are all interconnected, like in novels such as Snow Crash and Ready Player One.
John Burris, president of MetaJuice and chief strategy officer of Together Labs, said in an interview with GamesBeat that MetaJuice’s trends for selling digital collectibles with non-fungible tokens (NFTs) have grown fast in the past year, outpacing the weak U.S. retail market for physical goods.
“We’re really sharing the continued success of our move of from a Web2 platform to a Web3 platform,” said Burris. “Regardless of the state of the traditional gaming market, or the Web3 market, we’re just continuing to move forward on our business plan.”
That means more than a million users have purchased, held, earned, or are currently holding VCoin on the MetaJuice platform, he said.
“So far, we’re getting good results,” Burris said.
The popularity of these NFT-based digital collectible goods has propelled the number of Web 3 wallets on IMVU past a million in less than two years. Millennials and Gen Z (18-35-year-olds) are driving this trend, with virtual fashion, beauty, and streetwear items priced at between $3 to $100 selling out in the tens of thousands in an average of 7.5 minutes per release.
“It’s really the loyal creators, and the real loyal users and the global user base who are the ones that are really engaging here early on,” Burris said.
Metajuice launched the platform last fall. In the first month, MetaJuice reached the top 10 in global NFT collectible transactions on DappRadar, which tracks all blockchain transactions. About 20% to 30% of the NFTs are resold. IMVU has about four million monthly active users.
“We want to make NFTs affordable to the masses and have true utility so owners can use, wear, trade, and gain social currency to improve their daily digital lives,” said Burris. “Sales of digital goods in games and metaverses have grown steadily and NFTs will further propel their popularity through scarcity, uniqueness, and proof of ownership.”
The MetaJuice team initially launched VCoin, a globally transferable digital currency, and announced VCore, an ERC-20 token designed to enable users to participate in shaping the future of the metaverse. VCore is available outside the U.S.
House of Blueberry Raises $6M for Digital Fashion in the Metaverse
House of Blueberry has raised $6 million in seed funding for its digital fashion business in the metaverse and interactive entertainment.
Makers Fund led the round, with continued participation from Everblue Management. House of Blueberry will use the money to expand partnerships with new games and online worlds to reach a broader audience.
Founded in 2012 by Mishi McDuff, House of Blueberry has sold over 20 million digital assets across platforms such as Roblox, The Sims, and Second Life under its own brand. On a mission to unlock the next level of self-expression for players, creators, and digital denizens, House of Blueberry said it has created a respected brand in an emerging space with enormous opportunity.
The company paved its way in the digital fashion world by partnering with brands like Natori and Boy Meets Girl to debut their first virtual collections; Jonathan Simkhai to launch the first Metaverse Fashion Week; and Broadway’s Dear Evan Hansen to create digital versions of the show’s iconic blue polo.
“Our ultimate vision is to become the largest digital fashion house in the world,” said McDuff, in a statement. “While it’s still early days, we are proud of the foundation we have already built and we’re thrilled about partnering with interactive entertainment experts at Makers Fund and about having more firepower to continue building authentically for and with our community, to power creative, aesthetic and aspirational self-expression on any digital platform where it matters.”
This latest round of funding will accelerate growth to new communities by expanding from a primarily female design aesthetic into male and androgynous design, as well as accessories, makeup, and environmental assets. House of Blueberry will also extend onto new games and online platforms where user-generated content and self-expression matter.
“Over 62 million [items of] clothes and accessories were created by players on Roblox alone in 2022,” said Lia Zhang, an investor at Makers Fund, in a statement. “The numbers have been rapidly increasing every year and we’re starting to see more games and platforms understand the importance of user-generated content.”
Zhang added, “We believe that as many of the top games and virtual worlds have become social networks, it’s more important than ever to offer customizability for our characters as they represent our digital identities. We share Blueberry’s vision that digital fashion and custom design are at the heart of online self-expression, and are excited to support Mishi and her team as they explore new aesthetics and expand into additional platforms and communities.”
Alethea AI Debuts Generative AI on Polygon Blockchain
Alethea AI has teamed up with blockchain company Polygon to bring the power of generative AI to AI character non-fungible tokens (NFTs).
The deal will enable millions of Artificially Intelligent collectibles to be easily minted on Polygon, a Layer 2 scaling solution for Ethereum.
Alethea AI and Polygon are creating an AI Collectibles campaign, which allows anyone to rapidly create, train and trade AI characters as NFTs on Polygon. Alethea AI received development funds from Polygon to undertake the AI characters project.
“Since we last talked, the thing that is different now is the character’s body is generated from the prompt from the user,” said Arif Khan, CEO of Alethea AI, in an interview with GamesBeat“. The personality is also generated from the prompt. So it’s like a full-character creator, just from the prompt. Previously, the users were creating the personality, giving it a name, giving it habits, this, and that. So now, the user enters police officer and it generates everything.”
The AI Characters are generated using Alethea AI’s recently launched Generative AI System CharacterGPT, a multimodal text-to-character system that goes beyond traditional text-to-image engines like Open AI’s Dall-E 2 or Stability AI’s Stable Diffusion model. Alethea AI has been working on AI tech for nearly four years.
CharacterGPT enables users to generate fully interactive and intelligent AI characters with a single-line prompt in natural language. Users can generate free AI characters on the recently launched AI Protocol’s dApp mycharacter.ai and then mint them as NFTs on Polygon. It generates both the visuals and the “personality.”
To demonstrate this, a one-of-one AI Collectible of Sandeep Nailwal, the cofounder of Polygon, is now live on the dApp mycharacter.ai, as a tokenized Digital Twin. Sandeep’s AI Collectible is modeled on his writings, public statements, and interviews.
It can educate millions of users concurrently on the benefits of utilizing Polygon’s blockchain ecosystem and share anecdotal wisdom on Nailwal’s entrepreneurial journey. As more users interact with Nailwal’s Digital Twin, the underlying AI becomes progressively more intelligent over time, Khan said.
Nailwal said in a statement, “Generative AI is advancing at a rapid rate and has the potential to profoundly impact our lives in the coming years. I have seen firsthand how Alethea AI has developed this technology over the last few years and through their CharacterGPT AI engine, users will be able to create interactive characters in a matter of seconds. We are excited to continue supporting Alethea as it builds on Polygon and to bring the power and potential of generative AI to our thriving ecosystem.”
Nailwal’s tokenized AI Collectible comes with an on-chain and verified proof of ownership, represented as a Gold Checkmark on the dApp’s Interface, that is meant to showcase that his AI-generated likeness and intelligence were generated with his permission.
First National Geographic NFT Launch Meets Massive Backlash, Technical Issues
National Geographic has launched its first NFTs on Polygon and posted a detailed explainer of the technology on social media—prompting outright rage from hundreds of fans of the 135-year-old nature-centric magazine responding with rage.
NatGeo’s Instagram, Twitter, and Facebook account posted an image of a Bored Ape Yacht Club (BAYC) NFT Monday with a caption detailing the rise of NFTs, which are unique blockchain tokens that signify ownership.
The social media posts were designed to prepare the magazine’s mainstream audience for its own NFT drop on Polygon, which dropped Tuesday and features work from 16 different photographers including Justin Aversano, Reuben Wu, Cath Simard, and John Knopf.
The response to NatGeo merely mentioning NFTs on its social media accounts was met with an overwhelming number of negative comments, calling NFTs a “bubble” that “already popped,” “bullshit,” “an extinct species,” and even “another way to launder.”
Many urged NatGeo to “delete this.”
Others asserted that NFTs were an outright “scam,” effectively throwing the whole technology itself under the bus—even though people, not the technology, create NFT phishing scams and “rug pulls.”
Even the manager of acclaimed photographer Ansel Adams’ account chimed into the conversation, replying to NatGeo’s Instagram post about NFTs with a simple “Nope.”
This kind of NFT backlash, sans nuance, is far from new. Netflix saw fallout last year when it created free NFTs as a part of its promotions for the latest season of “Stranger Things.” And the video game industry has seen continued, consistent backlash from gaming publications and gamers themselves who despise the technology.
It seems that the general public’s perception of NFTs hasn’t changed. The Ethereum Merge, which was executed in September 2022, didn’t do much to appease those convinced that NFTs were bad for the environment, either, despite the fact that the Ethereum Merge reduced ETH’s energy consumption by 99.998%, per Ethereum Foundation data.
NatGeo has a massive following, with 256 million on Instagram, 49 million on Facebook, and well over 28.6 million on Twitter. Despite all the hate, though, its Instagram post about NFTs still received over 100,000 likes.
Despite the flurry of rage, it is notable that NatGeo has chosen to launch NFTs at a time when NFT trading volume is a sliver of what it once was. According to a Dune Analytics dashboard, Polygon saw just $15.39 million in total NFT volume traded on OpenSea last month, a dramatic 80.5% decrease from its all-time high of roughly $79.45 million a year ago.
L'Oréal's NYX Makeup Brand to Launch DAO, Ethereum NFTs to “Redefine Beauty”
NYX Professional Makeup is launching an online beauty “incubator” in the form of a DAO called GORJS, as well as 1,000 Ethereum NFTs called the “FKWME Pass,” the L'Oréal-owned brand announced Thursday.
GORJS, pronounced “gorgeous,” aims to set a precedent for “what beauty will be in the metaverse, and lead the cultural conversation as it relates to the values of diversity, inclusivity, and accessibility,” according to the DAO’s litepaper, or technical explanation.
The DAO was first announced last June, but it’s finally launching in the near future with the same vision intact. The FKWME NFT passes will be released to the public on February 1, with a price of 0.19 ETH—about $290 each at present.
In a statement, NYX Global Brand President Yann Joffredo said GORJS was created to shine a light on “3D creators” and give them “a path to success within the Web3 ecosystem.”
Joffredo sees digital “makeup” designs as being radically different from what's possible with physical cosmetics because creators can go above and beyond with surreal elements that defy the laws of physics.
“From extraterrestrial glass skin to morphing elemental lashes, makeup and digital fantasy are entwined in an aspirational, accessible way,” Joffredo told Decrypt via email. “In one instance, eyelashes might be stacked in a multi-tier beauty application norm; in Web3, they could dramatically flare into lifelike flames that dare the viewer to dream.”
NYX’s DAO, then, is a move beyond physical cosmetics sold at drug stores—an exploration of what makeup means in the digital age of avatars and pseudonymity.
“We believe that a new generation of Web3 creators will help redefine beauty,” Joffredo told Decrypt.
This Web3 push also appears to be a move away from NYX’s traditional diet of beauty influencer content, which typically consists of smartphone footage of creators applying makeup shared to Web2 social media platforms like TikTok, Twitter, and YouTube.
Dungeons & Dragons Wants Nothing to Do With Web3 or NFTs
Following considerable backlash from the Dungeons & Dragons (D&D) community this week, publisher Wizards of the Coast today said that it will scrap some planned license changes that impact fan-made content and projects. But an updated license is still coming, and it appears that derivative Web3 content such as NFTs will indeed be prohibited under the new rules.
Wizards of the Coast first shared plans last year to update the long-standing Dungeons & Dragons Open Game License (OGL), which allowed fans and other companies to create and sell derivative works inspired by the tabletop role-playing smash. One of the stated targets in the upgrade was D&D-inspired NFT collectibles and projects.
“The OGL needs an update to ensure that it keeps doing what it was intended to do—allow the D&D community’s independent creators to build and play and grow the game we all love—without allowing things like third-parties to mint D&D NFTs and large businesses to exploit our intellectual property,” the company wrote in December.
Purported leaked details of the broader OGL shift were published by io9 last week, pointing to alleged changes ahead that would charge creators royalty fees for derivative works, as well as prohibit things like paywalls for gating content for paying subscribers.
The tabletop icon has seen an explosion of popular fan-made, Dungeons & Dragons-inspired content in recent years, including the “Critical Role” web series and “The Adventure Zone” podcast and graphic novels. Many content creators revolted against the reported changes, saying that it would hobble their fan-supported businesses and projects.
The OGL update was rumored to launch today, but instead, Wizards of the Coast announced that it will cut controversial elements of what it said were “early drafts” of the license change. Updates are still coming, but the publisher says that the new license will not include any kind of royalty structure, and should not impact the business models of most derivative projects.
“It’s clear from the reaction that we rolled a 1,” the post reads, with the publisher claiming that it intended to solicit community feedback before rolling out the final updated license. Now with that vocal feedback in hand, Wizards said it will take some more time to address players’ concerns.
“First, we won’t be able to release the new OGL today, because we need to make sure we get it right, but it is coming,” the post reads. “Second, you’re going to hear people say that they won, and we lost because making your voices heard forced us to change our plans. Those people will only be half right. They won—and so did we.”
Wizards wrote that setting clear limits around Web3 technology is one of the core tenets in reshaping the OGL, and the post doesn’t suggest that the publisher plans to back down on blocking NFT projects and Web3 games that attempt to trade on the Dungeons & Dragons IP.
Binance Tightens Rules on NFT Listings
According to a Jan. 19 announcement, cryptocurrency exchange Binance has tightened its rules for nonfungible token listings. Starting Feb. 2, 2023, Binance will delist all NFTs listed before Oct. 2, 2022 and with an average daily trading volume lower than $1,000 between Nov. 1, 2022, and Jan. 31, 2023. In addition, after Jan. 21, 2023, NFT artists can only mint up to five digital collectibles per day.
Binance NFT requires sellers to complete Know Your Customer (KYC) verification and have at least two followers before listing on its platform. In addition to the revised rules, Binance said it would forthwith “periodically review” NFT listings that do not “meet its standards” and recommend them for delisting.
“Users can report NFTs or collections that may be in violation of Binance NFT minting rules and terms of service. Our due diligence team will actively review reports of fraud or rule violations and take the appropriate actions.”
All digital collectibles not meeting the two requirements will be automatically delisted by Feb. 02, 2023. The delisted assets will still appear in users’ wallets afterward. Binance has come under intense scrutiny by regulators since last year over allegations of lax KYC measures and its role in processing illicit funds, which the exchange has denied.
Amid the Bitzlato money laundering allegations that surfaced on Jan. 18, the United States Financial Crimes Enforcement Network claimed that Binance was among the “top three receiving counterparties” to Bitzlato. As previously reported, Binance was among exchanges that continued to serve non-sanctioned Russians following new sanctions from the European Union.
Rarible Adds Marketplace Builder for Polygon-Based NFT Collections
Nonfungible token (NFT) marketplace Rarible has announced the launch of a marketplace builder that lets artists and projects customize a marketplace for their NFT collections based on Polygon.
In an announcement sent to Cointelegraph, Rarible highlighted that the new tool will allow various customization options, such as royalty fee adjustments, and will not require any coding. The marketplace builder aims to let creators show their “unique brand identity,” which the Rarible team claims to be impossible to do in traditional NFT marketplaces.
Explaining why the platform chose the Polygon network for the tool, the Rarible team highlighted that the blockchain had gained significant popularity in the NFT market. Alexei Falin, the co-founder and CEO of Rarible, explained that the Polygon NFT market has recently gained “tremendous traction.”
The team also believes that buying and selling NFTs will be on community marketplaces in the future. Falin said:
“We see community marketplaces as the future of NFT buying and selling and we believe every project should have its own marketplace. The self-serve tool is vital for making this happen.”
Apart from Polygon-based NFT projects, Rarible also has a marketplace builder for Ethereum ERC-721 and ERC-1155 collections.
On Jan. 11, an NFT index released a tool that grades the trading performances of NFT collectors’ wallets. The index analyzes wallets by their realized and unrealized gains and other factors.
While NFT projects are adding new tools or services, others are doing whatever they can to navigate the crypto winter. NFT marketplace SuperRare, recently announced that it laid off 30% of its workforce. The firm’s CEO, John Crain, said they over-hired when the market conditions were better, saying they “grew in tandem with the market.” However, the NFT marketplace executive also noted that this was unsustainable.
National Policies & Legal Updates
SEC Sues Eisenberg for Draining Mango Markets, Alleges MNGO a Security
The U.S. Securities and Exchange Commission on Friday charged decentralized finance (DeFi) trader Avraham Eisenberg over his draining of $116 million from Solana-based decentralized exchange Mango Markets. But this action could have a wider effect. The SEC’s charges rest on the agency’s assertion that MNGO, Mango Markets’ governance token, is considered a security, much like its arguments in previous actions that have put the crypto industry on its guard. Eisenberg, 27, already faced criminal commodities fraud charges for his admitted role in orchestrating the “highly profitable trading strategy” against Mango Markets in October. Apart from his actions, the SEC complaint detailed the Howey Test standards the agency used to call MNGO a security, much as the agency has done in previous enforcement actions – most notably the former Coinbase (COIN) manager's insider-trading case where the SEC declared nine tokens as unregistered securities without directly accusing the token issuers or Coinbase of anything. In that case, the Mango action doesn't go after Mango Markets, the exchange. A Mango co-founder didn't immediately respond to a request for comment. The SEC's backdoor listings of which tokens it considers securities have sent shudders through the law firms that represent crypto clients. In this case, the agency said that despite MNGO’s labeling as a “governance token,” it “was purchased and sold as a crypto asset security.” Its holders had expectations of profit and “entered into a common enterprise” – two of the factors the SEC looks for in identifying investment contracts that fall under securities laws. And holders of MNGO can use their tokens to vote in decisions governing Mango Markets’ operations, the agency said. SEC Chairman Gary Gensler and his enforcement officials have recently been amplifying their warnings that the regulator is losing patience with unregistered securities and the unregistered exchanges where they trade. The Commodity Futures Trading Commission already hit Eisenberg last week with accusations he’d manipulated the market.
New Hampshire Gov Releases Report on Blockchain Following Executive Order
The governor of New Hampshire has released the report of a commission he formed by executive order last year to recommend legislation around digital assets and blockchain.
In a Jan. 19 announcement, Chris Sununu said the Commission on Cryptocurrencies and Digital Assets had reported that the legal and regulatory status of cryptocurrencies and digital assets was “highly uncertain,” stymying development and leading to less protection for investors and consumers.
The group recommended New Hampshire establish a state legal regime aimed at drawing in blockchain firms and individuals. Specifically, it recommended establishing legal status for decentralized autonomous organizations, or DAOs; putting funds into the state’s court system for resolving disputes involving blockchain issues; and encouraging the government’s banking department to provide “clear, public and proactive guidance” on how financial institutions may handle digital assets.
According to the report, sent to the governor on Dec. 22, the commission considered the human factor in its recommendations, alluding to the collapse of FTX and the arrest of its former CEO Sam Bankman-Fried — i.e. “criminal fraud resulting in the loss of billions of dollars of customer assets”.
“New Hampshire should take strong pro-active and public steps to build a better legal infrastructure for the sound development of Blockchain technologies and its applications,” the report said.
The report concluded with the following:
“The Commission expects that Blockchain technologies will continue to evolve and develop and become more integrated into our society and economy [...] this next phase of development should be accomplished not only through innovations in computer software protocols but also should be accompanied by improvements in the legal infrastructure that necessarily operates in parallel with these activities.”
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