July 29, 2023
Issue No. 64
Welcome to this week's AtherXplorer, covering the latest in gaming, blockchain, and everything in between.
This week’s top picks include:
- AI: Stability AI Releases SDXL 1.0 Model
- Blockchain: Vitalik Buterin Responds on Worldcoin
- Gaming: ESRB Proposes Facial Recognition to Verify Age
- Web3, Metaverse, and NFTs: Reddit Launches More Polygon NFTs, Including Cool Cats and Aku Dreams
- Legal Landscape: Prosecutors Drop Campaign Finance Charge Against Sam Bankman-Fried
Stability AI Releases SDXL 1.0 Model
Stability AI launched Stable Diffusion XL 1.0, a text-to-image model the company says is its most advanced to date. Available in open source on GitHub and Stability's apps, it offers more vibrant colors, accurate lighting, and higher image resolution compared to prior versions.
Joe Penna says Stable Diffusion XL 1.0 can yield 1-megapixel images in seconds in multiple aspect ratios. The model is customizable and easy to use with basic text prompts for complex designs. It also has improved text generation and legibility, including generating detailed image variations from input photos.
However, the open-source model raises concerns about toxic content generation due to the web data used to train it. Penna acknowledges abuse is possible and that the model has biases. Stability AI has taken steps to filter harmful training data and block problematic prompts.
The training set includes some artwork from artists protesting the use of their work. Stability AI claims fair use protection but some artists have filed lawsuits. Stability AI says it incorporates removal requests but has not removed all flagged artwork.
Penna says "We are constantly improving the safety functionality of Stable Diffusion."
Stability AI is releasing a fine-tuning beta for specialized image generation. It's also bringing Stable Diffusion XL 1.0 to Amazon Web Services. Stability AI CEO Emad Mostaque says the latest model "represents the next step in Stability AI's innovation heritage."
Amazon Web Services Introduces New Healthcare Services Enabled by Generative AI
Amazon unveiled AWS HealthScribe, an API to create transcripts, extract details and generate summaries from conversations between clinicians and patients. The transcripts can be converted into patient notes using machine learning models and analyzed for insights.
HealthScribe identifies speaker roles and categorizes transcript segments by clinical relevance. It also extracts structured medical terms.
The AI capabilities use Amazon's Bedrock platform that provides trained generative AI models from startups and Amazon. However, generative AI can exhibit biases and invent facts. Speech recognition algorithms also often contain biases, according to a recent study.
It's unclear if HealthScribe is consistent and can handle different accents. For now, it only creates notes for general medicine and orthopedics. Clinicians can review notes before finalizing records.
Amazon highlights HealthScribe's security, noting it doesn't retain data after processing or use inputs/outputs to train models. Healthcare providers control where transcripts and notes are stored. But HealthScribe is "HIPAA eligible," requiring a contract to ultimately reach compliance.
3M Health Information Systems, Babylon Health, and ScribeEMR are already using HealthScribe.
Alongside HealthScribe, Amazon announced AWS HealthImaging for storing, transforming, and analyzing medical imaging data at scale. HealthImaging provides dynamic pricing and "subsecond" image access. Amazon claims organizations can reduce medical imaging storage costs by up to 40%.
Microsoft Testing Bing Chat for Select Users on Chrome and Safari
Microsoft is expanding its Bing Chat AI chatbot to non-Microsoft browsers, confirming reports that it is appearing in Chrome and Safari. The expansion will make the ChatGPT-like chatbot available to more users as it was previously only available in Microsoft products.
Microsoft communications director Caitlin Roulston said Bing Chat is being flighted to "select users" in Safari and Chrome as part of testing on other browsers. Once testing is complete, more users will get access.
Those who gained early access to Windows received a pop-up offering Bing AI in Chrome. Otherwise, users can access Bing Chat from Bing.com via their preferred browser. The company declined to share details about the tests or when they began.
Bing Chat in Chrome supports only 5 messages per conversation instead of 30 in Edge and limits to 2,000 characters instead of 3,000.
In addition to Chrome and Safari support, Bing Chat is testing a dark theme.
Bing Chat has been integrated into other Microsoft products since launching earlier this year, including the Bing app, Edge browser, Skype, and an enterprise version with privacy and security controls. Microsoft also noted Visual Search, where the chatbot responds to uploaded images, is rolling out.
In Other AI News…
Blockchain and DeFi
Vitalik Buterin Responds on Worldcoin
Buterin wrote an article responding to the recently launched Worldcoin human identity verification system. Worldcoin and similar solutions aim to verify people as artificial intelligence advances. They believe this will help distinguish humans from machines and provide a universal basic income to combat bots endangering human utility.
Vitalik’s argument is that this proof of personhood is valuable for solving anti-spam and anti-concentration problems. If Worldcoin continues decentralizing as promised, it will avoid dependence on central authorities while revealing minimal information. Buterin says "If proof of personhood is not solved, decentralized governance becomes much easier to capture by very wealthy actors."
Buterin addressed four main concerns with these solutions: privacy, accessibility, centralization within Worldcoin Foundation, and security. On June 27, Worldcoin had a brief scare that it quickly clarified after thousands of transactions caused speculation of an attack.
Steve Dakh commented on Buterin's post, saying systems like Worldcoin could work with EAS, his network's attestation service. He called for community accountability through audits. Though he does not envy those designing these systems, he says a world without proof of personhood is likely dominated by centralized identity solutions.
Italy’s Central Bank Taps Polygon, Fireblocks DeFi Project to Help Institutions Dabble With Tokenized Assets
The Bank of Italy's innovation hub selected a project involving Polygon Labs and Fireblocks to help Italian financial institutions experiment with decentralized finance and tokenized assets. The Milano Hub will support this Institutional DeFi for Security Token ecosystem for six months.
The platform aims to help traditional financial firms safely experiment with security tokens and execute transactions using DeFi. This comes as central banks explore blockchain technology and tokenization trends.
Tokenization may reshape how value is transferred and stored across industries, making transactions faster and cheaper, according to Bank of America.
Cetif Advisory, a consultancy spinoff of the Università Cattolica del Sacro Cuore of Milan, will lead the platform's development. It will coordinate with Polygon Labs, Fireblocks, Reply, Linklaters, and DVRS.
The project will involve Italian banks, asset managers, and major firms like Intesa Sanpaolo, with over $1 trillion in assets. Imanuel Baharier of Cetif Advisory said, "It is vitally important to create conditions for DeFi to become a safe and open operating environment for supervised entities."
Hong Kong and Saudi Arabia Collaborate on Tokens and Payments
Hong Kong is expanding its financial collaboration with Saudi Arabia, targeting tokenization and payments infrastructure agreements.
The Saudi Central Bank (SAMA) and the Hong Kong Monetary Authority (HKMA) held a bilateral meeting on July 26th to strengthen integration between the two countries. They discussed financial infrastructure development, market connectivity, and sustainable development. The central banks also signed an MoU to promote financial innovation discussions.
Hong Kong and Saudi authorities shared expertise in areas like tokenization, payment infrastructure, and supervision technologies. HKMA chief Eddie Yue said, "there is a lot of room for cooperation between the Kingdom of Saudi Arabia and Hong Kong." SAMA governor Ayman Alsayari noted the MoU will promote the continued development of their relationship.
The announcement doesn't specify if developments will involve cryptocurrencies like Bitcoin, though HKMA recently allowed retail crypto trading. Saudi Arabia hasn't been vocal on crypto plans in recent years, only warning that Bitcoin is "not recognized" there in 2019.
In Other Blockchain & DeFi News…
ESRB Proposes Facial Recognition to Verify Age
The ESRB has proposed facial recognition technology to the FTC to verify ages for buying mature games. The ESRB says it will help ensure only legal adults buy those games.
Called Privacy-Protective Facial Age Estimation, the proposal was made with Yoti and SuperAwesome. It says facial verification would be useful for guardians without ID to verify purchases.
Currently, users just enter a birthdate to bypass age verification for digital games. The ESRB says facial recognition offers an easy alternative without sharing extensive data.
To verify age, a user would take a photo at the time of purchase. Rejected photos would be immediately deleted after age estimation by Yoti.
Facial recognition carries risks like software failure, bias against people of color, and allowing easy access to phones. The ESRB acknowledged potential risks but argued benefits outweigh them.
The ESRB later clarified that the technology is not for verifying children but for confirming people over 25. It said facial scans would comply with U.S. law and images would never be stored, used for AI training, marketing, or shared.
New Starfield Animated Shorts Show Glimpses of Bethesda’s New Universe
Bethesda Game Studios released three animated shorts as part of a new Starfield anthology series called Starfield: The Settled Systems.
The shorts give glimpses of three of the game's cities: New Atlantis, Akila City, and Neon. "Follow a delivery pilot in New Atlantis seeking the exciting life of the elite; a stranded orphan looking for a way out of Akila City; and two street rats struggling to survive in the underbelly of Neon," Bethesda wrote.
The shorts are less than three minutes each, gorgeous in motion, and offer an intriguing taste of the Starfield universe. I'd recommend watching them if you're excited about the game.
Starfield is scheduled for release on September 6 on Xbox and PC. You can play it a few days early if you preorder the Premium or Constellation Editions. For more on the game, see the 45-minute deep dive Microsoft and Bethesda shared in June.
CD PROJEKT RED Lays off 100 Employees
CD Projekt RED CEO Adam Kiciński announced that the company will lay off around 100 people, or 9% of its workforce. He said the layoffs are needed for the company to grow and develop quality games efficiently.
Kiciński said the company is working on new projects like The Witcher Polaris, Cyberpunk Orion, and a new franchise called Hadar. As part of transforming the development process, the company is now reshaping its teams to be more agile and effective.
After assessing the teams, Kiciński said the company is currently overstaffed with talented people who will not have opportunities for the next year based on project needs. The layoffs will occur between now and Q1 2024. Employees will get ample time to process the change and a comprehensive severance package.
Kiciński addressed affected employees, saying "Although our paths will diverge professionally, I believe the relationships we have built can remain strong." He thanked them for being "an invaluable part of our journey" and wished them success in their next chapter.
Twisted Metal Debuts on Peacock on July 27 as the Latest Game-to-Streaming Adaptation
Sony Pictures Television is releasing a TV series based on the Twisted Metal video game franchise. The 10-episode series will premiere on Peacock on July 27.
The show is based on the 1995 game where players compete in a demolition derby in a post-apocalyptic world. It was known for its irreverent humor amid battles to the death.
Twisted Metal started as a PlayStation exclusive in 1995 and had 9 game releases through 2012. Sony initially tried making a movie in 2012 but canceled it. A TV series makes more sense now given the success of other video game adaptations.
The series stars Anthony Mackie as the lead John Doe. Will Arnett voices Sweet Tooth and Joe Seanoa plays him. Stephanie Beatriz, Thomas Haden Church, and Neve Campbell also star.
Sony describes it as a high-octane action comedy about a man (Mackie) given a chance at a better life if he delivers a mysterious package across a post-apocalyptic wasteland, facing armed cops (Church and Campbell) and a clown (Seanoa) driving an ice cream truck.
The show is developed by Deadpool writers Rhett Reese and Paul Wernick with Marc Forman as executive producer. They seem perfect to find humor in the apocalypse like the original creators.
Producers wanted to do an action comedy in an apocalyptic setting, adding the car combat of Twisted Metal. While The Last of Us covers the serious side of the apocalypse, Twisted Metal aims for binge-able action-comedy.
Mortal Kombat 1 Adds Omni-Man, Peacemaker, and Homelander to Roster
Homelander, Peacemaker, and Omni-Man from The Boys, Peacemaker, and Invincible are coming to Mortal Kombat as downloadable fighters. The characters will join returning Mortal Kombat natives like Quan Chi, Ermac, and Takeda in the Kombat Pack DLC.
J.K. Simmons will voice Omni-Man for Mortal Kombat but it's unclear if Antony Starr and John Cena will reprise their roles for Homelander and Peacemaker.
Studio NetherRealm is known for including characters from outside Mortal Kombat, making it ideal for crossovers. Cameos from Warner Bros. properties, which owns NetherRealm, make sense. Past Mortal Kombat games have included violent characters like the Terminator, Freddy Krueger, and Spawn so these new characters will fit in. Homelander is also appearing as an operator in Call of Duty and Warzone.
The regular Mortal Kombat roster is expanding with the return of fighters like Li Mei, Tanya, and Baraka. Goro and Darrius will have cameo fights.
Mortal Kombat is known for over-the-top gore and fatalities. The addition of a "certified true-blue murder king" like Omni-Man will likely make the fatalities even more gruesome.
Web3, Metaverse, and NFTs
Reddit Launches More Polygon NFTs, Including Cool Cats and Aku Dreams
Reddit has launched another series of Collectible Avatars called "Retro Reimagined." The collection features artistic takes on Reddit's Snoo alien mascot from dozens of artists. It also includes NFTs based on the Cool Cats and Aku projects.
The avatars are limited edition and priced from $2.49 to $199.99. Many have already sold out.
For this drop, Reddit has imposed limits for the first day to restrict newly created accounts from buying large quantities. It has also implemented a CAPTCHA verification system to deter bots.
Reddit first launched Collectible Avatars last summer on Polygon to enable cheaper and faster transactions.
In addition to premium avatars that cost money, Reddit has given away millions of free avatars. These freebies make up the majority of Reddit's nearly 18.2 million Polygon NFTs minted to date, held in 14.25 million wallets.
$33.6 million worth of the avatars has traded on secondary markets, though demand was limited to an initial hype period last fall. The project is seen as showing how brands can onboard users to NFTs via free giveaways.
Star Atlas Lays off 122 Employees and Extends Development Timeline
Star Atlas is undergoing a restructuring that includes laying off 122 people, cutting its team down to 45 total. CEO Michael Wagner confirmed the layoffs were necessary to preserve the long-term goals amid market conditions and the need for uninterrupted development.
Star Atlas has accomplished major milestones but also encountered challenges like the reversal of consumer sentiment in 2022, losing approximately $15 million in the FTX collapse, and an inability to close financing deals.
Going forward, Star Atlas will prioritize the browser game SAGE and a crew companion mobile app to generate revenue. Existing products will continue but with extended timelines. The Unreal Engine product will still launch tests but with a delayed timeline.
Wagner said they had to scale down the team to a sustainable rate focused on activating the in-game economy.
Despite losing funds from FTX, Wagner is optimistic about building games on Solana. However, Solana faces issues with many projects departing or expanding beyond the chain.
Wagner reiterated the company is pushing ahead and retaining its vision. Scaling down was expected since Star Atlas always needed to generate revenue.
When launched in 2021, Wagner noted they had no funds, just a vision. "Even with hundreds of millions of dollars, that was never enough to get us to completion. I don't think people should be surprised that we're scaling down when the reality was that we always needed to generate revenue," he said.
Roblox Expands With VR and Ad Network, Launches New Fashion Collection
Roblox is expanding into new areas like VR and advertising. The platform now has a beta version available on Meta's Quest VR headsets, allowing users to explore Roblox experiences in virtual reality.
However, the beta has some issues like an inability to buy Robux and distorted graphics that Roblox is working to fix. The VR app is available on Quest 2 and Quest Pro and will come to Quest 3 as well.
Roblox also recently launched its advertising network called the Roblox Partner Program. The "immersive ads" on the platform include static images that simply convey information or transport users into a separate experience created by the advertiser. This is similar to other gaming ad networks.
On the fashion front, House of Blueberry partnered with Paramount to create a Clueless-inspired Roblox collection of 15 digital wearable pieces based on outfits from the 1995 film. The items are available in an immersive popup store within House of Blueberry's Roblox experience.
Ashley Hopkins of House of Blueberry said "As a big Clueless fan myself, it’s been so fun to lead the design process for this partnership." House of Blueberry is a metaverse fashion brand with over 20 million digital assets sold across platforms.
Aurory Expands to Arbitrum, Beginning their Cross-Platform Journey
Aurory is expanding to the Arbitrum blockchain, the first step in becoming a cross-platform project.
The company says expanding to multiple blockchains will give it access to more communities and users, driving adoption. Their vision is for players to easily access Aurory with minimal friction.
Aurory isn't leaving the Solana blockchain. The Arbitrum integration simply opens up a new way for users to interact with the platform from their native chain. Aurory plans to integrate with more blockchains in the future.
Using Aurory's SyncSpace infrastructure, all on-chain assets like $AURY, Nefties, eggs, and skins can be transferred between Solana and Arbitrum. Users can freely move assets between the chains.
SyncSpace will be the new entry point for all users. This means Nefties need to be in SyncSpace to play, $AURY needs to be in SyncSpace for the marketplace, and eggs need to be in SyncSpace to hatch Nefties.
For now, Aurorians can only go on Expeditions from Solana. However, users can buy $AURY on Arbitrum by depositing USDC into SyncSpace or soon through Arbitrum DEX pools.
Aurory assets in inventory will show a SyncSpace, Solana, or Arbitrum logo to indicate where the asset resides.
CyberKongz to Mint Genkai NFTs on Ronin, Migrate Game to 'Axie' Chain
CyberKongz, a collection of pixelated ape NFTs, is planning to migrate its NFT minting game from Polygon to Ronin, the blockchain created by Axie Infinity developer Sky Mavis.
CyberKongz is also launching a new anime-inspired NFT collection called Genkai this week on both Ronin and the Ethereum mainnet. A representative said there is no concrete timeline yet for the Polygon to Ronin migration.
The Genkai collection will have 20,000 total NFTs, with 16,000 minting on Ethereum mainnet at 0.25 ETH each and 4,000 minting on Ronin. Ethereum holders will later have the option to migrate their Genkai NFTs to Ronin.
Sky Mavis director Kathleen Osgood said the company works closely with gaming partners it brings onto Ronin. A CyberKongz council member said there has always been a community connection between Axie fans and CyberKongz holders.
As part of the collaboration, Axie Infinity will reward all Mystic Axie NFT holders with a free Genkai NFT.
CyberKongz plans to create an animated series and comics but didn't share details, saying "a lot can change." Council member Henry said, "When we say too much in the beginning, people either tend to lose interest or they start to judge you by that."
Delabs Games Raises $4.7 Million to Build on Polygon
Blockchain gaming company Delabs Games announced it raised $4.7 million in a seed funding round led by Hashed Ventures. Spartan Labs, Polygon Labs, Planetarium, and Merit Circle also participated.
The funds will be used to develop Delabs' blockchain games including Rumble Racing Star, a Mario Kart-like game; Space Frontier, a space survival game; and Meta Bolts, a post-apocalyptic survival game. All games are being built on the Polygon blockchain.
Delabs Games CEO Joonmo Kwon said the investment "acknowledges that Web3 technology is poised to revolutionize gaming by empowering players with true digital ownership."
Delabs Games is the gaming arm of South Korean game developer 4:33 Creative Lab with over 13 years of experience and 250 million downloads. The company has released mobile games like Boxing Star, Battle Boom, and Eroica.
Rumble Racing Star is set to release later this year while Space Frontier and Meta Bolts do not yet have release targets. Delabs previously released an Adventure Pass NFT on Ethereum that grants holders access to Rumble Racing Star and exclusive in-game items across its games.
Note that Delabs Games is a separate company from DeLabs, the startup behind NFT projects DeGods and y00ts. Despite being separate, Rumble Racing Star features a y00ts character along with drivers from Bored Ape Yacht Club, Goblin-town, and other projects.
Legal Landscape, Policies, and Regulation
Prosecutors Drop Campaign Finance Charge Against Sam Bankman-Fried
Federal prosecutors pursuing criminal charges against FTX founder Sam Bankman-Fried said they are dropping a campaign finance violation charge against him.
Prosecutors said the Bahamas government, which extradited Bankman-Fried to the U.S., did not intend to extradite him on that charge. Dropping the charge is a victory for Bankman-Fried's legal team, which argued the U.S. mishandled the extradition.
Prosecutors had previously dropped 5 other charges added after Bankman-Fried's extradition. He now faces 7 charges, including securities and wire fraud. Prosecutors argue he defrauded FTX customers and lenders of billions, which he used for campaign donations, charities, and real estate.
Prosecutors plan a second trial on the 5 dropped charges, including bribing a foreign government. They said litigation over the extradition delayed that trial.
Experts say prosecutors still have strong evidence against Bankman-Fried, and dropping the campaign finance charge may simplify the fraud case for a jury. If convicted, he faces decades in prison.
The authorities have said Bankman-Fried and others used $90 million in customer funds for campaign contributions to over 300 candidates. Prosecutors have asked recipients to return the donations.
Grayscale: “SEC Should Approve All Spot Bitcoin ETF Applications”
Grayscale urged the SEC to approve all proposed spot Bitcoin ETFs at the same time in a comment letter. Grayscale said the SEC should not "pick winners and losers" but make a fair decision on all applications.
Grayscale argues the SEC can approve spot Bitcoin ETFs based on its approval of Bitcoin futures ETFs since the two fund types are "inextricably linked." The surveillance of Bitcoin futures markets should protect against fraud in the spot Bitcoin market.
While Grayscale supports any effort that enables crypto access and oversight, it does not think new surveillance-sharing agreements between ETF providers and spot markets are "the silver bullet" for approval.
As a disclosure-based regulator, the SEC should provide consistent guidance to issuers, not picking winners. Grayscale says all spot Bitcoin ETF applications should be approved simultaneously for fairness.
Grayscale's own Bitcoin trust, with nearly 1 million investors, would also benefit from an ETF conversion. Returning billions in value to investors. There is "simply no reason" to keep GBTC investors from a spot Bitcoin ETF, Grayscale said.
However, the SEC previously denied Grayscale's application to convert GBTC to a spot Bitcoin ETF. In response, Grayscale sued the SEC, arguing it was acting arbitrarily toward similar investment vehicles.
Hugging Face, GitHub, and Others Unite to Defend Open Source in EU AI Legislation
A coalition of open-source AI organizations is calling on EU policymakers to protect open-source AI innovation as they finalize the EU AI Act, the world's first comprehensive AI law.
In a policy paper, the coalition provides recommendations for ensuring the AI Act works for open source. They argue "overbroad obligations" that favor closed and proprietary AI threaten the open AI ecosystem.
Open-source AI innovation is at stake, according to Yacine Jernite of Hugging Face. While the paper is detailed, the main point is regulation should not hinder open-source AI innovation. Openness enables responsible governance.
The EU AI Act focuses on the risk levels of AI applications, with higher-risk systems facing more regulation. But policymakers are now also looking upstream at development to mitigate risks.
This poses challenges for open source as requirements may not make sense for hobbyists, nonprofits, and students. Policymakers have focused on well-resourced actors, ignoring open source.
The coalition is optimistic clarifying information will help as the law is finalized. The EU has historically set global tech regulation trends, so the AI Act will likely influence global policy. The coalition hopes open-source developers will have input into emerging AI policy discussions.
Putin Signs Digital Ruble Bill Into Law, Priming Russian CBDC for Launch
Russian President Putin has signed a bill granting legal tender status to a digital ruble. The bill tasks the Russian central bank with serving as the platform operator for the central bank digital currency (CBDC).
Despite Putin's approval, Russian officials say the digital ruble won't be widely used for years. Deputy central bank chair Olga Skorobogatova said most citizens won't get access to digital wallets until at least 2025.
Unlike cryptocurrencies, a CBDC is centralized and tied to a national fiat currency. The ruble is among the world's weakest currencies due to rising inflation accelerated by Western sanctions over Russia's Ukraine invasion.
The ruble trades around 90-100 per dollar or euro, and inflation prompted the central bank to raise interest rates to 8.5%.
The digital ruble concept has long been discussed but urgency grew after sanctions cut Russia off from financial markets. Parliament fast-tracked the bill which allows central bank testing from August 1.
The bill says Russians can make payments and transfers from digital wallets hosted by the central bank or partner banks. But the CBDC can only be used for payments, not loans or deposits.
While the CBDC won't be mandatory, central bank governor Elvira Nabiullina hopes it will be more convenient and cheaper, giving Russians a "new opportunity."
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