February 11, 2023
Issue No. 41
Welcome to this week's AtherXplorer, covering the latest in gaming, blockchain, and everything in between.
This week’s top picks include:
- Blockchain & Defi: Aave Launches Stablecoin on Testnet; Tron Launches $100M AI Dev Fund…
- Gaming: Limit Break Super Bowl Ad; Mino Games Raises $15M to Create Web3 Game
- Web3 & Metaverse: Microsoft Disbands Metaverse Project; Paris Hilton Metaverse Dating Show Launching on Sandbox
- NFTs: Open Edition NFTs Reenergizing Market; Moonpay and LooksRare Ink New NFT Partnership
- Legal Landscape: China Approves Blockchain Research Hub in Beijing; SEC Hits Kraken With $30 Million Fine
Blockchain & DeFi Developments
Ready, Gho: Aave Launches Native Stablecoin on Ethereum Testnet
GHO, a decentralized, over-collateralized stablecoin, is set to launch on Ethereum Goerli testnet by Aave, a decentralized lending and borrowing platform.
GHO, Aave's native stablecoin, is launching on the Ethereum Goerli testnet as a secure, capital-efficient payment layer. The protocol has been audited by Open Zeppelin, SigmaPrime, and ABDK and is currently under audit by Certora. It is also part of Aave's bug bounty program. GHO is managed by the Aave DAO, the governing body of Aave Protocol and GHO, with its codebase available on GitHub for developers. The launch of GHO marks an important milestone for the DeFi space and will provide a secure and reliable way for users to transfer value across DeFi and TradFi ecosystems.
The launch of GHO marks an important milestone for the DeFi space and will provide a secure and reliable way for users to transfer value across DeFi and TradFi ecosystems.
Tron Launches $100M AI Development Fund
Tron is leaning into the artificial intelligence revolution with the launch of a new $100 million AI development fund.
The fund will focus on four main areas: an AI service payment platform, an AI-infused oracle, AI-informed investment management services, and AI-generated content.
The integration of Tron’s DeFi infrastructure with AI promises to enable “self-learning, on-the-go, adaptable capabilities in all aspects of decentralized commerce,” including the creation and deployment of smart contracts, payment layer protocols, AI payment gateways, and currency settlement.
AI will also be used to improve user safety by accurately predicting the direction of various assets as well as the balance between user assets and liabilities.
The utility of NFTs will be increased as AI is employed to develop new use cases for digital assets, which Tron anticipates will spark widespread disruption across legacy industries.
While these four areas are the primary focus of Tron’s AI development fund, the platform is actively seeking applications for grant funding from developers with other innovative use cases.
Sushiswap Acquires Cosmos-Based Trading Platform Vortex Protocol
SushiSwap has acquired Vortex Protocol, a decentralized derivatives exchange built atop Sei Network, a blockchain using Cosmos’ tooling.
Vortex Protocol will come under the SushiSwap umbrella as another product and will take a new name. It will offer users 10x margin trading on a variety of assets and launch on mainnet in Q2 of 2023.
This move also means that SushiSwap will be one of the first Ethereum applications to make the move over to the Cosmos ecosystem.
The advantage of building on Cosmos is that it lets developers spin up blockchains specifically tailored to a project’s needs and adjust block processing on the chain, decrease finality to 300 milliseconds, and introduce a feature called parallelization that boasts up to 22,000 orders per second on its internal testnet. These features, and “a cross-chain thesis that we resonated with,” are all part of what made the latest acquisition so enticing.
Games & Blockchain Gaming
Squid Game is Coming to Sandbox VR Immersive Experience Locations
Sandbox VR, a location-based virtual reality experience, is collaborating with Netflix to create a fully immersive Squid Game virtual reality experience. Launching in late 2023, the experience will allow fans of the show to go from watching to living it in VR. The deal is a continuation of the love affair between games and Hollywood, and Sandbox VR hopes to create the future of entertainment by building highly immersive experiences using bleeding-edge virtual reality technology.
Sandbox VR's motion-tracking technology captures the movements of a player's entire body and combines it with a high-quality haptic system to provide players with unprecedented realism and immersion. Guests act as their own game controllers; they simply step into the virtual world and participate in the action unfolding around them.
Sandbox VR currently boasts six proprietary experiences based on both exclusive licensing of Hollywood properties and their own intellectual property. All experiences are developed by an in-house gaming studio and are specifically designed for groups to play as social experiences. Teams of up to six friends freely roam and explore virtual worlds together, while relying on each other to succeed.
In the Sandbox VR experience, players are transported to iconic Squid Game locations, where they become contestants in a variety of challenges inspired by the Netflix series and compete against each other to be the last one standing. After each session, players will receive personalized highlight videos capturing their in-game reactions and recapping how their story unfolded.
Sandbox VR is now operating in over 30 global locations and expanding rapidly. With a dozen locations launched in the last twelve months, every 5,000 square feet with at least four decks, Sandbox VR is the fastest-growing location-based VR startup in the world. Investors include Andreessen Horowitz, Alibaba Entrepreneurs Fund, Gobi Partners, and Craft, as well as Justin Timberlake, Katy Perry, Kevin Durant, and Will Smith.
Limit Break Super Bowl Ad Will Give Away Thousands of NFTs to Gamers
Limit Break, a cutting-edge blockchain gaming startup headed by Machine Zone founders Gabe Leydon and Halbert Nakagawa, is pioneering a revolutionary “free-to-own” NFT model. During Super Bowl LVII, the company will give away thousands of free NFTs in its DigiDaigaku Dragon series. To get their free NFTs, viewers will need to scan a QR code embedded in the ad during its broadcast.
The free-to-own model is a stark contrast to the previous generation of NFT projects, which often charge thousands of dollars for digital collectibles instead of giving them away. Limit Break’s NFTs can be used to enhance the player experience in Web3 games, such as their collaborators “Castaways” and “Ether Orcs”.
Mobile gaming is a huge industry - far larger than television, movies, and music combined. The vast majority of the industry is based on the free-to-play model, which was pioneered by Leydon and Nakagawa at Machine Zone. Through this model, users purchase add-on game enhancements or earn them by playing.
Since its founding in 2021, Limit Break has raised $200 million and plans to spend $6.5 million on the Super Bowl ad. The company has already been giving away free NFT assets since last year, and with this coming Super Bowl giveaway, they hope to grow a massive global audience.
With the free-to-own NFT model, gamers will receive NFTs for free and eventually use them in a game or sell them to others. This could be the start of a new era of gaming.
Mino Games Raises $15M to Create Dimensionals Web3 Game
Mino Games, the character-driven gaming company, has raised $15 million in a round led by Standard Crypto for its Dimensionals collectible character game with Web3 features. It has also brought on gaming industry veterans Bing Gordon and Don Mattrick as advisers. The round saw participation from Boost VC, Collab Currency, Earl Grey Capital, and Konvoy Ventures, as well as previous investors Sybo Games and Andreessen Horowitz, bringing the total raised to date to $25 million.
Mino Games CEO Sasha MacKinnon stated that the company will be using the funds to double down on its mission of making Dimensionals into the next household name in gaming. He highlighted the free-to-own NFT model as a way to give gamers NFTs for free which they could then use in a game or sell to others.
The company previously scored big hits with its Mino Monsters series of free-to-play games and titles such as Cat Game and Dog Game. It will be transitioning into Web3 games with the new Dimensionals franchise, leveraging Web3 to build a direct relationship between developer and community, and bypassing the big platforms and their fees.
The team at Mino Games is made up of seasoned talent from major gaming companies, including Electronic Arts, Zynga, and others. The company is actively hiring for multiple positions and plans to expand the team by 50% by year-end.
The Dimensionals title is far more ambitious than anything the company has done to date. It will get help in doing so from its advisers, as well as from its existing investments and partnerships with games like Castaways and Ether Orcs. It also plans to use its Super Bowl LVII ad to give away thousands of free NFTs in its DigiDaigaku Dragon series.
By employing the free-to-own NFT model, Mino Games is hoping to create a new era of gaming and grow a massive global audience. The company's goal is to provide gamers with unprecedented realism and immersion, as well as personalized highlight videos capturing their in-game reactions and recapping how their story unfolded.
Web3 & Metaverse
Microsoft Disbands Industrial Metaverse Project: Report
Microsoft has reportedly disbanded its Industrial Metaverse Core team, just four months after it was formed. The team, consisting of 100 members, has been laid off as part of Microsoft's broader plan to lay off 10,000 employees. The team was formed to work with clients in industries such as health care, retail financial services, and energy, to build software interfaces that could be used to drive metaverse-related projects.
The metaverse is a virtual world that can be used for work, play, socializing, and events. Major companies have been showing enthusiasm for the metaverse, though it is still in its early stages of development. Microsoft remains committed to the industrial metaverse and has stated that customers will not see any change in how they are supported.
The purpose of the Industrial Metaverse Core team was to help clients build applications that used the metaverse for various purposes. Microsoft's decision to disband the team suggests that the company is focusing on shorter-term projects that are more likely to generate meaningful revenue.
The metaverse is still in its early stages of development, and while major companies are showing enthusiasm for it, there is still a long way to go before it can become a reality. It remains to be seen how Microsoft's decision to disband the Industrial Metaverse Core team will affect the development of the metaverse.
Paris Hilton Metaverse Dating Show Parisland to Launch on Sandbox
Paris Hilton is bringing her love of the metaverse to the masses with the launch of her new dating experience, Parisland, inside The Sandbox game. Parisland is set to launch on February 13th and will offer players a gamified experience as they virtually meet five other players, complete quests, and ultimately choose a partner.
The landscape of Parisland is designed to foster authentic relationships between players. From shopping for outfits to selecting wedding rings, players can explore the virtual world while trying to find love. The mission of Parisland is to “help people find love” and is developed in conjunction with Hilton’s 11:11 Media.
The Sandbox is built on Polygon and has seen many celebrities like Snoop Dogg and deadmau5 buy up virtual land in the metaverse. The platform operates using its native ERC-20 token SAND, which is down 85% in the past year but has seen a rebound of 42% in the past month.
Though Web3 dating in Parisland might be an appealing alternative to swiping on Tinder for some, it’s not without its risks. Reports from the New York Times, CNN, and the MIT Technology Review warned of the widespread harassment that occurs and can occur in metaverses. Representatives for The Sandbox have not yet commented on how they handle such issues.
Prior to Parisland, Hilton collaborated with Roblox to create Paris World, a virtual space for her Halloween event Cryptoween. She also released a Cryptoween experience in The Sandbox.
Parisland may be the perfect opportunity for players to find love in the metaverse, but they must remember to stay safe while doing so.
Nokia Uses The Metaverse to Connect Remote Breweries and Train Aircraft Technicians
Nokia has been exploring ways to use the metaverse to assist workers in remote locations.
Nokia has partnered with an Australian university to deliver a 5G-connected microbrewery using metaverse technology. This allows researchers from opposite ends of the globe to virtually brew beer, change the process, temperature, timings, volumes, and recipes, and feed this back into the digital twin.
In South Australia, Nokia has also been using the metaverse to help Cessna aircraft technicians at remote airports. Nokia global chief strategy and technology officer Nishant Batra believes the metaverse will have the biggest immediate impact on industries rather than the consumer market, as ports and aerospace companies use digital twins to track containers and simulate aircraft.
Meanwhile, Joyce believes the consumer metaverse won't take off until 2030, due to the lack of mass-produced, comfortable augmented reality wearables. Blockchain is seen as a potential necessity for applications involving payments or the transfer of assets, but not for all applications, as Joyce believes it isn't an essential underpinning technology for the metaverse.
Rihanna Producer Sells Royalties to "B*tch Better Have My Money" as NFTs
NFTs are becoming a popular way to redistribute royalties from music creations. Jamil “Deputy” Pierre, producer of Rihanna’s 2015 track “Bitch Better Have My Money,” sold 0.99% of his streaming royalty rights to the song as 300 Ethereum NFTs. This sale generated $63,000 and each token signified 0.0033% ownership of the copyright, granting holders the percentage of streaming rights from the master recording.
The NFTs sold quickly and granted holders the right to lifetime ownership of the portion of the copyright, as well as receiving a percentage of the streaming royalties earned no less than twice a year. It is estimated that holders will receive 6.5% returns per year, equating to $13.65 a year.
The sale of music rights as NFTs isn't a new concept. Justin “3LAU” Blau’s Web3 music platform Royal raised $16 million in 2021 and has since paid out over $132,000 in royalties to their NFT collectors. The success of this drop has spurred other music creators to explore the possibilities of selling their music as NFTs.
It is still unclear what percentage of the royalties Deputy has retained after the sale, as the signed NFT Ownership Agreement doesn't detail the total holdings. However, it is clear that selling music rights as NFTs is becoming increasingly popular, with promising returns for collectors.
Open Edition NFTs Reenergizing Market
The NFT market is experiencing a revival, with a sharp uptick in trading volume and total NFTs sold. Open edition mints, in which artwork is sold for small sums, are helping to fuel the hype. An open edition drop means there’s no cap on how many pieces of identical artwork can be purchased. The new meta sees open edition NFTs sold for under $10, much lower than the hundreds of dollars they used to sell for.
The buzziest NFT drop of 2023 thus far is Checks by artist Jack Butcher of Visualize Value. The project held an open edition mint on Zora, selling just over 16,000 editions for about $8 each. Since then, the Checks NFTs have skyrocketed in value amid details of a gamified trading model. They now start at 2.45 ETH (about $4,085)—a nearly 51,000% increase in one month. Checks has now generated over $26 million worth of secondary trading to date.
This success has sparked a wave of derivative projects that remix the theme. Artist Sean Bonner even created a flipped version of the artwork and sold it as an open edition. Bonner praised Butcher for encouraging and even amplifying derivative projects. It’s a stark contrast to aggressive legal tactics that certain NFT creators have taken in the past.
Open edition mints have helped to reenergize the NFT market, showing how the right cultural references at the right moment can be celebrated. These low-cost mints are much easier to buy into, letting holders trade multiple copies to unlock a potentially more valuable NFT or unlock other teased future benefits.
Onchain Monkey Bitcoin NFT Metagood Ordinals Inscription
OnChain Monkey, a collection of 10,000 Ethereum NFT profile pictures (PFPs), used Ordinals to "inscribe" all of its existing artwork on Bitcoin. This has caused prices of the Ethereum NFTs to nearly triple, with trading volume increasing by 12,200% over the past 24 hours. Metagood, the startup behind OnChain Monkey, put all 10,000 NFTs onto Bitcoin via the Ordinals protocol using a single transaction, just as it did for the original Ethereum collection back in 2021.
The move has fueled enthusiasm among users, who are eager to access the Bitcoin version of their NFTs. Metagood plans to build a bridge between Ethereum and Bitcoin to let NFT holders switch between the two versions. The startup is also working to fund programs that benefit communities, such as coral restoration and aid to Ukraine.
OnChain Monkey and Bitcoin Punks are both inscribing their NFTs via Ordinals, but with different approaches. Bitcoin Punks opted to put each Punk as a separate inscription, while OnChain Monkey committed its entire collection to Ordinals via a single transaction. This has made OnChain Monkey the first to successfully put all of its NFTs onto Bitcoin.
Moonpay and LooksRare Ink New NFT Partnership
MoonPay, a Web3 payments firm, is joining forces with NFT marketplace LooksRare to provide customers with an easy way to purchase cryptocurrency and NFTs. By offering MoonPay's "NFT Checkout" feature, collectors can now buy NFTs with a debit or credit card without first acquiring cryptocurrency. It will also enable MoonPay users to purchase LOOKS, the marketplace's native token.
Oliver Jeffcott, MoonPay's Senior Business Development Manager, expressed the company's ambition to increase access and usability for the Web3 community. This partnership serves as a move towards that goal. After raising $555 million in November 2021, MoonPay has been working on strategies to ease crypto payments and help more people join the Web3 space. In June, the company partnered with Mastercard to allow users to buy NFTs directly with their credit cards.
The new NFT Checkout feature will enable customers to purchase crypto without first buying crypto, and they can also get their hands on the marketplace's native token. This development may provide a boost to the NFT market, as it makes it easier for people to join the space. MoonPay and LooksRare's collaboration will hopefully bring a more efficient and secure way for customers to purchase NFTs and crypto.
BitKeep NFT Market Soars to Top 2 on Polygon
BitKeep NFT Market has made a huge splash in the NFT world, soaring to the number two spot on Polygon's top nonfungible token (NFT) marketplaces. As of February 2023, the platform had seen a 21.21% increase in unique active wallets, with an impressive $161,000 of total incoming value within the past seven days. It is also the best-rated mobile NFT marketplace application on Google Play, with 320,000 NFTs listed for sale, more than 51,000 monthly active users, and a remarkable $31.6 million in total trading volume since its launch in March 2022.
BitKeep NFT Market has partnered up with major blockchains like Ethereum, Polygon, BNB Chain, and Arbitrum, allowing users to purchase NFTs on the platform with tokens from any of the partnered blockchains. It also offers a bulk transfer function for users to easily transfer multiple NFTs at once, and there is support for bulk listing and purchasing in the future. There is even a “mint” section, featuring potential blue-chip freemint and whitelist projects, that are hand-selected by the BitKeep team. BitKeep is also pushing for growth in the NFT space, supporting initial NFT offerings of popular NFT projects.
NFT Market Share Battle Ramps Up Between OpenSea and Blur
2023 has seen an increase in competition between NFT marketplaces as they fight for creators and collectors. OpenSea has been the leader since its launch in December 2017, and last week had over 34,000 ETH in trading volume worth $56 million. Blur has been gaining traction since its debut in October, reaching the number two spot by volume. It offers zero trading fees and “floor sweeping,” and last week had over 9,200 ETH worth $15.2 million in trading volume.
OpenSea’s top five NFT projects by volume include Sewer Pass, Memes by 6529, Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), and Checks – VV Edition. Blur’s top five include MAYC, Azuki, BoredApeKennelClub, BAYC, and Otherdeed for Otherside, all high-volume collections. Blur has a higher medium market cap for its top five NFT collections, suggesting professional NFT traders use it more often than OpenSea.
Comparing the number of sales and wallets on the two marketplaces, it’s clear OpenSea dominates. Blur’s number of sales for the week ending on Feb. 6 was only 9% of OpenSea’s total, and the number of wallets interacting with OpenSea is 11 times greater than those plugged into Blur. This indicates that OpenSea dominates with retail traders and volume, while big-budget whales looking to flip more expensive pieces are taking their business to Blur.
Blur is launching its BLUR governance token on Feb. 14. OpenSea declined to comment, while Blur did not return a request to comment. With Blur’s no-fee marketplace, airdropping of BLUR tokens, and launch of its governance token, the competition between OpenSea and Blur is sure to heat up as they fight for market share.
National Policies & Legal Updates
Dubai Clarifies Rules for Crypto Companies
The government of Dubai has released its 2023 rulebook for regulating cryptocurrency which is to be enforced by its Virtual Assets Regulatory Authority (VARA). The stated goal of the Dubai government is to become a financial technology center and the rulebook is intended to attract crypto businesses, protect digital asset dealers and investors, and curb illegal practices, all in service of promoting Dubai as a regional and international hub for virtual assets.
Helal Saeed Almarri, Director General of Dubai’s Department of Economy & Tourism and Chairman of VARA’s Executive Board, said that the mission is to establish the Emirate as the capital of the future economy anchored by metaverse, AI, Web3.0 and blockchain.
Dubai has taken steps into the blockchain space since 2019, including the Dubai Department of Economic Development moving its services to a blockchain-based registry on the Dubai Pulse blockchain platform. Several blockchain companies have applied for and gained licenses to operate inside the Emirate, including Binance and the fallen cryptocurrency exchange FTX.
Any entity wishing to do business using cryptocurrency must seek authorization and receive a license from the regulatory authority before offering their services. The rulebook clarifies that the new regulations regarding money laundering include the financing of terrorism and other unlawful organizations and prohibits insider dealing (trading), unlawful disclosure, and market manipulation.
The rulebook includes some exemptions, including a professional exemption for “duly registered” practicing lawyers, accountants, or “other professionally licensed business consultants that carry out any [virtual asset] activity in a manner that is wholly incidental to their professional practice.” Professionals looking to keep these exemptions must remain appropriately authorized by a competent professional body to operate in the Emirate and maintain professional indemnity insurance applicable to their profession.
Violating these rules, VARA warns, could result in fines, civil penalties, and “other enforcement actions” against the responsible individuals. With this move, Dubai has taken a major step in its goal of becoming a financial technology center and boosting its competitive edge both locally and internationally.
China Approves Launch of Blockchain Research Hub in Beijing
China’s Ministry of Science and Technology has approved the construction of its National Blockchain Technology Innovation Centre. The research hub will focus on researching the technology for industrial applications, as well as how it could be applied in the national economy. The center will be led by the Microchip Research Institute and the Edge Computing Research Institute and will collaborate with domestic universities, research institutes, and businesses.
Despite the ban on cryptocurrency trading in September 2021, some of the largest Chinese firms are still making significant progress in terms of building out blockchain-based products. For example, Alibaba, one of the world's largest tech firms, announced a collaboration with Avalanche blockchain to power node-as-a-service initiatives in December 2022.
The Chinese government has also shown interest in Non-Fungible Tokens (NFTs). In December 2022, the country announced the launch of the “China Digital Asset Trading Platform.” This state-backed digital collectible marketplace is expected to run on a native blockchain.
Overall, the government of China is continuing to invest in blockchain technology and related applications. The National Blockchain Technology Innovation Centre will play a key role in researching and developing the technology in order to further enhance the power of blockchain and its applications in the national economy.
SEC Hits Kraken With $30 Million Fine, Orders Crypto Exchange to Halt Staking in US
The U.S. Securities and Exchange Commission (SEC) has fined San Francisco-based cryptocurrency exchange Kraken $30 million for violating securities laws. The SEC alleges that Kraken failed to register the offer and sale of their crypto-asset staking-as-a-service program. The company agreed to halt its staking service for U.S. clients but will still offer staking services for non-U.S. clients through a separate Kraken subsidiary.
Staking is the process of “locking-up” cryptocurrency to keep a blockchain’s network running. Those who hold proof-of-stake assets—such as Ethereum (ETH)—pledge it to the network by sending it to a specific blockchain address and can receive rewards for doing so. Kraken’s staking service allows users to earn up to 24% yearly with some tokens.
Kraken is the fourth largest crypto exchange by daily volume and allows customers to buy and sell cryptocurrencies. According to SEC Chair Gary Gensler, “Today’s action should make clear to the marketplace that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection.”
The SEC’s crackdown on the crypto world has intensified in recent months, hitting exchanges such as Genesis and Gemini with charges for offering unregistered securities. The agency is looking to crack down on all the coins and tokens it believes are unregistered securities.
The increased pressure follows the collapse of digital asset exchange FTX last year after it was allegedly mismanaged. The company’s co-founder Sam Bankman-Fried is now facing eight criminal charges and has pleaded not guilty.
Kraken has also faced other regulatory troubles. Last November, it agreed to pay the U.S. Treasury Department’s Office of Foreign Assets Control $362,158.70 for apparent violations of sanctions against Iran.
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