July 15, 2023
Issue No. 62
Welcome to this week's AtherXplorer, covering the latest in gaming, blockchain, and everything in between.
This week’s top picks include:
- AI: Big Stability AI Releases: SDXL 1.0 on Discord and Sketch-to-Image Tool
- Blockchain: Polygon Proposes Token Switch From MATIC to POL
- Gaming: Google Play Embraces NFT Games
- Web3, Metaverse, and NFTs: Free Slurpee NFTs Served Up by 7-Eleven
- Legal Landscape: Ripple's Win: Judge Rules XRP is Not a Security
Big Stability AI Releases: SDXL 1.0 on Discord and Sketch-to-Image Tool
Stability AI announced the release of the SDXL 1.0 release candidate via the SDXL bot, a Discord bot run on the Stability AI Discord server, allowing community feedback, before the model is fully released later.
Stability AI recently launched Stable Doodle, a sketch-to-image tool that converts simple drawings into dynamic images. Stable Doodle allows professionals and novices alike to generate high-quality images in seconds from basic sketches, speeding up the design process for industries like education, creative design, fashion, and arts.
Stable Doodle combines Stability AI's Stable Diffusion XL image generation model with Tencent ARC's T2I-Adapter technology. The T2I-Adapter provides guidance to the SDXL model by understanding sketch outlines and using prompts combined with outlines to generate images. This offers control over the AI generation process.
Google Drops Two Big AI Announcements: A Better Bard and New NotebookLM Service
Google recently announced two major AI products. The first is an update to Bard, Google's large language model. The updates give Bard expanded language support, accessing 40 languages and most global regions. Bard can now also speak 40 languages which could help with pronunciation learning. Users can choose from five modes that change Bard's responses. Bard also gained four productivity features including pinning conversations, exporting code, sharing responses, and using images in prompts with Google Lens integration.
The second product is NotebookLM, an AI-powered note-taking service. NotebookLM aims to improve on traditional note-taking by automatically analyzing and summarizing notes while also answering questions about them. Google's solution is a "virtual research assistant" that is personalized based on a user's selected documents. NotebookLM then presents a guide and answers questions about any aspect. For example, a medical student could upload an article and ask NotebookLM to create a glossary of key terms, or an author could upload research notes and ask NotebookLM to summarize interactions between two people. Content creators could also generate video scripts based on their ideas.
However, NotebookLM is currently only available in the U.S. on a waitlist. The mass updating of Bard and the launch of NotebookLM show Google's continued commitment to generative AI technologies following the announcement of these technologies at its annual I/O conference in May 2023.
Anthropic Unveils Claude 2
AI safety startup Anthropic has released Claude 2, an updated version of its AI model Claude. Claude 2 can generate longer responses of up to 4,000 tokens compared to 512 tokens previously. Anthropic claims Claude 2 improves performance on tasks like coding while generating less harmful responses and addressing safety concerns.
Anthropic sales lead Sandy Banerjee said Claude 2 is easier to converse with, provides longer explanations, and is less likely to produce harmful outputs. She encouraged users to treat Claude 2 like an eager colleague and provide context for tasks. According to Banerjee, Claude 2's longer context window is enabling new use cases for enterprise customers using the Claude API, like summarizing long conversations.
Anthropic is working with several partners using Claude 2 including Slack, Notion, Midjourney, Zoom, Robin AI, and Sourcegraph for tasks like content moderation, customer service, and contract improvement. Banerjee highlighted Anthropic's measured approach to deployment and continuous improvement as factors in its success.
Founded by former OpenAI researchers, Anthropic has raised $1.5 billion with a mission to build reliable and transparent AI products. The company focuses on AI safety research and has published several relevant papers. Anthropic's red teaming dataset is widely used, underscoring its commitment to responsible AI practices to help customers.
The launch of Claude 2 signifies a milestone for Anthropic as it challenges major players like OpenAI. While the demand for AI is growing, ensuring its safety and reliability remains challenging. Anthropic aims to address these challenges by combining research and product development to create helpful AI systems.
In Other AI News…
- Elon Musk’s new xAI company launches to ‘understand the true nature of the universe’
- How McDonald’s is serving up generative AI innovation
- KPMG to invest $2 billion in AI in expanded partnership with Microsoft
- Meta reveals new AI image generation model CM3leon
- OpenAI and Associated Press (AP) announce partnership to train AI on news articles
- Quora’s Poe chatbot introduces better context window and document upload support
Blockchain and DeFi Developments
Polygon Proposes Token Switch From MATIC to POL for More Utility
The Polygon network proposed a token upgrade that would replace its current MATIC token with a new POL token. The POL token would function as a single token for all Polygon-based networks, including the main Polygon blockchain, Polygon zkEVM, and various application-specific Polygon supernets.
The proposal lifted the price of MATIC temporarily. If approved, network validators could use a single POL token to support the operation of multiple Polygon chains.
The upgrade from MATIC to POL would technically be simple, requiring token holders to send their MATIC to an upgrade smart contract that would automatically return an equivalent amount of POL. Token holders would have ample time to upgrade, proposed as four years or more.
Each Polygon chain's community will ultimately decide which token to use for gas fees, with some possibly choosing POL. Holders would use POL to vote on governance proposals for decentralized applications built on Polygon, and all rewards would be distributed in POL.
The proposal creates a single token to function across Polygon's various blockchain networks, simplifying the ecosystem.
Multichain Stops Operations, Opens up About Events that Led to its Halt
Cross-chain protocol Multichain has announced it is stopping operations due to a lack of funds. The announcement follows a report that withdrawals appear to be an insider "rug pull".
On July 14, Multichain's Twitter account said it was halting operations due to a "lack of operational funds." The team explained that their CEO, known as Zhaojun, had been detained by Chinese police and they had no contact with him since. The global team learned that Zhaojun's computers, phones, wallets, and passwords were seized by authorities. The team said all funds and access to servers were with Zhaojun and the police.
According to the team, Zhaojun's sister later transferred some funds to addresses under her control, but she was then taken into custody by police and stopped responding. As a result, the team announced it was halting operations.
The troubles for Multichain started in May when routing was suspended for an upgrade that took longer than expected. In response, Binance halted deposit and withdrawal support for some Multichain bridged tokens due to uncertainties. To make matters worse, large outflows from the Multichain Bridge platform sparked fears of an exploit. On July 6, observers concluded the protocol was hacked as over $100 million worth of assets were withdrawn from its Fantom bridge.
You Can Now Store Your Bitcoin Private Key as Colors
Bitcoin developer Entero Positivo created an open-source tool called BIP39Colors that converts a BIP39 mnemonic phrase into a series of colors and vice versa.
BIP39 is a standard for generating seed phrases - lists of 12 or 24 words that contain the information to create and access a Bitcoin wallet. Seed phrases were meant to make it easier for users to recover crypto if they lose their wallets.
Most users back up their seed phrase by writing the 12 words on paper. But Positivo notes this is obvious to potential hackers or thieves. By contrast, colors are ubiquitous and can be hidden in plain sight. A color palette titled "My new home wall colors" would be less suspicious than a list of 12 words.
The tool expresses colors as six-digit hex color codes representing red, green, and blue combinations. These colors can be stored in HTML, CSS files, or PNG palettes.
Unlike seed phrases, the order of colors does not matter - all that is needed is for all colors to be present. Positivo claims this flexibility could make it harder for governments to seize Bitcoin. Users can store different colors across various locations and later decode them into their seed phrase with just a calculator.
Positivo created BIP39Colors as an alternative Bitcoin backup storage method that is less obvious and potentially more secure than a written list of seed words.
Gaming Updates and Insights
Google Play Embraces NFT Games
Developers in the crypto space often prioritize security over user experience, resulting in a cumbersome and complex Web3 interface. This has been a persistent challenge in the industry, with the characteristics of blockchain making it difficult to create user-friendly applications similar to Web2. One key issue with Bitcoin applications is that actions on the blockchain are irreversible, lacking an "undo button," which can lead to costly mistakes. The analogy of driving a manual gearbox car versus an automatic car is used to highlight the fundamental differences in user experience between Web2 and Web3.
In a recent update, Google Play Store announced that it will allow nonfungible token (NFT) games on its platform. The decision aims to enable video game publishers to offer blockchain-based digital content within apps and games. Previously, Google Play had removed the game Bitcoin Blast and prohibited cryptocurrency mining apps. The new policy clarifies that NFTs obtained outside of the App Store should not provide players with any exclusive advantages within a game, indicating an effort to prevent deceptive practices.
US Senators Cynthia Lummis and Kirsten Gillibrand reintroduced the Responsible Financial Innovation Act in response to the market crash and bankruptcies experienced in 2022. The bill aims to establish regulations and safeguards to prevent similar events, specifically referencing the FTX incident. By defining the roles of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission, the legislation seeks to regulate digital assets and protect consumers. After being put on hold for approximately a year, the reintroduction of this bill underscores the importance of oversight and consumer protection in the crypto industry.
FTC Loses Bid to Extend Freeze on Microsoft-Activision Merger
The U.S. 9th Circuit Court of Appeals denied two requests to extend a temporary restraining order blocking Microsoft's attempted acquisition of Activision Blizzard.
Microsoft's $69 billion bid to combine with Activision, the maker of Call of Duty, has faced antitrust scrutiny.
The Federal Trade Commission sued to block the deal and made its initial case last month. A district court judge denied the FTC's request for a preliminary injunction on Tuesday.
The judge also denied the FTC's request to extend the temporary restraining order pending appeal. The 9th Circuit then denied the FTC's request to block the deal pending appeal.
The court did not provide an explanation for its denial. It also denied a similar request from a separate "gamers" lawsuit seeking to block the deal.
The FTC is still appealing but there is little to stop Microsoft from closing the Activision deal as soon as Saturday.
UK regulators that previously blocked the deal said they were extending consideration of it until August in anticipation of new proposals from Microsoft.
Blade: The Exciting New Addition to Honkai: Star Rail
Honkai: Star Rail has released a trailer for their upcoming five-star character, Blade, a popular Wind user previously introduced as an NPC. The game continues to expand its playable roster, regularly introducing new five-star and four-star units. The ongoing banner, Phase 2, has introduced two new characters: the five-star Luocha and the four-star Yugong, both utilizing the Imaginary combat type. With the banner ending on July 18, the game has started teasing the characters that will replace them.
Blade, highly anticipated by the community since version 1.0, is featured in a new trailer called "Death Approaches." Players are intrigued by the character's mysterious background and hope the upcoming storyline will provide more insights into his lore. Expected to be a top-tier main DPS character, Blade's play style offers flexibility, fitting well into various team compositions.
As a high-risk, high-reward character following the path of Destruction, Blade requires a solid support team despite his flexibility. His kit revolves around dealing substantial damage while having a powerful self-heal for sustainability. Blade's skill allows him to enter the Hellscape state, consuming a portion of his max. HP for damage buffs. During Hellscape, his Basic Attacks consume additional HP, dealing single-target damage based on his Attack and max. HP stat, with reduced damage to adjacent enemies. His Ultimate, Death Sentence, sets Blade's health to 50% of his max. HP and deals Wind damage to a single enemy.
Fans suggest that new or inexperienced players should avoid pulling for Blade due to the complexity of managing his HP and utility. Instead, they recommend waiting for the second part of Honkai: Star Rail version 1.2 and considering another five-star character, Kafka.
Naraka: Bladepoint Launches On PlayStation 5, Now Officially Free-To-Play
Naraka: Bladepoint is now free-to-play on PlayStation 5 as well as other platforms. The game is fully cross-platform.
The update also includes new content like 12v12 gang wars, new weapons, and a new hero named Tessa - a fox demon who can charm enemies and steal their souls.
There are special in-game events and rewards to celebrate the game's second anniversary along with exclusive items for PlayStation 5 players.
The game is also collaborating with Dwelling in the Fuchun Mountains, based on a famous Chinese painting.
Gameplay Tweaks Ahead: Diablo 4 Responds to Billion Damage Builds
Since its launch, Diablo 4 players have been crafting impressive builds, pushing the limits of the game's mechanics. One notable achievement includes a Druid build that dealt damage in the billions, thanks to a combination of damage-buffing Legendary Aspects, the Druid's Shred skill, and Critical Strike enhancements. However, these overpowered builds have caught the attention of Blizzard.
Following the viral footage of these feats, Blizzard has acknowledged the issue and expressed their intention to address the high damage output. The studio recognizes that such extreme power levels were unintentional and plans to make balance adjustments to improve the gameplay experience.
Blizzard stated that the behavior of allowing billion-damage builds is unintentional and will be changed in the near future to restore balance. While the specific timeline for the balance changes was not provided, players may still have a limited opportunity to experiment with these powerful builds before the adjustments are implemented.
Interestingly, another player managed to surpass the billion-damage mark with an even more staggering achievement—an undecillion (a number with 36 zeroes) in damage. This demonstrates the significant challenge Blizzard developers face in balancing the game and making appropriate adjustments for characters with such extraordinary power.
Swiftly addressing and fixing these overpowered builds is crucial to maintain the integrity and enjoyment of Diablo 4's gameplay. By ensuring a more balanced experience, players can continue to explore and create diverse builds without disrupting the intended gameplay dynamics.
Backlash as Skyrim Modding Community Faces AI Voice Cloning and Explicit Content
The Skyrim modding scene, renowned for extending the longevity of Bethesda's game, is now engulfed in controversy due to the use of AI-generated voice clips based on real Skyrim voice actors. Some mods feature pornographic AI voice performances, leading to significant backlash from the voice actor community. The issue was initially reported by GamesRadar, which highlighted Nexus Mods as the host for these explicit Skyrim mods. Nexus Mods stated that AI-generated mod content is allowed unless a credible complaint is received from affected creators or rights holders.
A Twitter user named @Robbie92_ drew attention to the practice of AI voice cloning in the Skyrim modding community, tagging the voice actors impacted by these mods. The affected voice actors expressed shock and dismay upon discovering that their voices were used in pornographic AI content without their consent. Robbie compiled a Google Doc with around 100 links to NSFW mods on Nexus Mods, many of which have since been hidden or flagged for potential permission issues.
The AI voice cloning tool responsible for generating the voice performances, ElevenLabs, had specific terms of service that users violated by creating NSFW Skyrim mods without obtaining proper permissions. The unauthorized use of real voice actors' lines in mods can have severe consequences for their career security and mental well-being. Voice actors, such as Abbey Veffer and Kyle McCarley, who have worked on The Elder Scrolls Online, condemned the use of deep fakes and explicit mods, likening it to revenge porn and stressing the need for protection against AI abuse.
Voice actors emphasized that the creators of these mods often fail to recognize the harm caused and the implications for the actors' employment opportunities and public image. They debunked misconceptions about actors' wages and job stability, highlighting the vulnerability and lack of legal protection in the industry. The unchecked use of AI technology in this manner has far-reaching consequences, potentially damaging both the financial and emotional well-being of voice actors.
Web3, Metaverse, and NFTs
Free Slurpee NFTs Served Up by 7-Eleven
To celebrate "Slurpee Day" on July 11, 7-Eleven launched free Slurpee NFTs on the Polygon blockchain.
The collectible game featured a virtual Slurpee cup with four flavors - Cherry, Blue Raspberry, Pina Colada, and Summertime Citrus. Collectors could choose any or all flavors and create their dream Slurpee.
After selecting their flavors, collectors could choose to "claim" their "Slurpee Vibe Digital Collectible". To claim, they provided their name, email, and phone number. An emailed code could then be used to claim the Slurpee NFT, and a new wallet on Polygon would be created to hold the Slurpee token.
While some considered NFTs a "dirty word", 7-Eleven's collectibles were referred to as "digital collectibles". The terms of service mentioned non-fungible tokens.
Unlike traditional NFTs where the holder owns the digital asset, 7-Eleven's collectibles were merely licensed to collectors. They could not be sold or transferred according to the terms of service.
Cool Cats to Release Three New Games Inspired by NFT Collection
Cool Cats Group, the company behind the Cool Cats NFT collection, is partnering with three gaming publishers to create new games featuring Cool Cats characters. The partnerships aim to develop the Cool Cats brand.
The games in development with nWay, iCandy, and Sync Studios are slated for release between late 2023 and early 2024.
The partnerships mark Cool Cats' ongoing expansion into the mainstream. Cool Cats recently received an investment from Animoca Brands and formed an alliance with Futureverse.
Cool Cats CEO Stephen Teglas said gaming builds an emotional connection with characters through gameplay, and the new games are critical to developing Cool Cats into a globally known brand.
The nWay partnership begins with a competitive multiplayer arcade game. nWay is known for fast-paced multiplayer titles.
The iCandy collaboration will produce a 2D endless runner game set to launch in September 2023. iCandy ranks among the leading game developers in Australia and Southeast Asia.
The Sync Studios partnership will launch a match-3 mobile game. Sync Studios is renowned for developing IP games for companies like Hasbro and Warner Brothers.
Gutter Cat Gang Twitter Hacked, At Least $750K Worth of NFTs Swiped
The official Twitter accounts of the Gutter Cat Gang NFT collection and its co-founder were hacked, resulting in the loss of at least $750,000 worth of NFTs. Some estimate as much as $900,000 in NFTs were stolen.
Here’s the official announcement from the CGC account:
In Other Web3 News…
- You Can Buy 'The Flash' as an NFT Just Weeks After Hitting Theaters
- Get Protocol Raises $4.5 Million to Take on Ticketmaster With NFT Tickets
- Hip-Hop Collab Teams PUMA, Roc Nation, and Legitimate for Sneaker Release
- ZTX will launch a 3D virtual world on the Arbitrum blockchain
- Futureverse launches AI League smart soccer game on iOS
Legal Landscape, Policies, and Regulation
SEC vs. Ripple (XRP) Case: Judge Rules XRP is Not a Security
A U.S. judge has ruled that Ripple's XRP token is not a security, putting an end to a years-long legal dispute.
The SEC had previously sued Ripple CEO Brad Garlinghouse and Christian Larson over XRP's security status. The court's decision could be a landmark moment for cryptocurrencies.
U.S. Judge Analisa Torres partially denied the SEC's motion, ruling against the agency's claims that XRP is a security. However, the judge found that Ripple's institutional XRP sales constituted securities offerings.
The decision is a major win for Ripple, with the sale of XRP not considered an investment contract.
In response, Ripple CEO Brad Garlinghouse said the two-year legal fight has led to a decision that is "for all crypto innovation in the U.S.".
The SEC has taken an enforcement-first approach to regulating digital assets, so this decision could impact many other tokens. The crypto industry has been anxiously awaiting a verdict in the closely watched case.
Celsius Network fined $4.7B by FTC, Ex-CEO Arrested
The U.S. Federal Trade Commission fined bankrupt crypto lender Celsius Network $4.7 billion for falsely advertising its platform as safe while misappropriating consumers' funds.
While the fine was issued, it will be suspended to allow Celsius to return the remaining assets to consumers through bankruptcy proceedings. Celsius and its affiliates were permanently banned from offering crypto products and services.
The FTC alleged Celsius co-founders Alex Mashinsky, Shlomi Leon and Hanoch Goldstein lied to customers while misappropriating over $4 billion in assets. The co-founders did not agree to a settlement and faced federal court action.
The FTC accused Celsius of making $1.2 billion in unsecured loans, falsely claiming a $750 million insurance policy, and lacking the means to track assets and liabilities.
While lying to customers to prevent withdrawals, the FTC said the co-founders withdrew significant crypto sums from Celsius before bankruptcy, leaving customers without access to their funds.
The SEC, CFTC, and DOJ also filed lawsuits and criminal charges against Celsius and Mashinsky. Celsius filed for bankruptcy in July.
Mashinsky, Celsius's founder and former CEO, was arrested and charged with defrauding customers and lying about the company's business model. Prosecutors said Mashinsky misled customers into believing Celsius was safe when it was high risk.
Celsius took in tens of billions of dollars in deposits by promising high-interest rates. Though Mashinsky claimed Celsius operated differently from banks, the SEC said Celsius made millions in uncollateralized loans and discussed its token as if it were a publicly traded stock.
Australia Receives First Spot Bitcoin ETF Application
Australian crypto investment firm Monochrome Asset Management announced that its partner, Vasco Trustees, filed an application with the Australian Securities Exchange to offer a spot Bitcoin ETF.
The Monochrome Bitcoin ETF will give investors direct exposure to Bitcoin. The filing marked the first for a spot Bitcoin ETF under Australia's new crypto laws.
Per regulatory guidance, there should be institutional support and acceptance of the crypto asset for an investment vehicle to be approved. Reputable service providers should also support ETPs that invest in crypto assets and there should be mature spot and futures markets for trading related derivatives.
Currently, only two AFS license holders have retail crypto licenses, including Vasco.
Monochrome CEO Jeff Yew believes a Bitcoin ETF on the ASX will show traditional investors the "unregulated Wild West is coming to an end." The fund will provide a "familiar, structured and protected environment" for investments, he said.
Yew explained what sets their fund apart is it can hold Bitcoin directly, authorized under Australia's "crypto-asset" licensing category.
Yew expressed confidence an optimistic outcome will be reached.
Europe is also working to launch its first spot Bitcoin fund this month after a 12-month delay.
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