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November 25, 2023
Issue No. 80
CURATOR:
Welcome to this week's AtherXplorer, covering the latest in gaming, blockchain, and everything in between.
This week’s top picks include:
Artificial Intelligence
OpenAI CEO Sam Altman Briefly Fired, Nearly Joins Microsoft, Then Gets Reinstated
The past week was a rollercoaster in OpenAI, with drama beginning the Friday before Thanksgiving, as the OpenAI board had removed CEO Sam Altman. This news led to the majority of OpenAI's employees threatening to quit unless Altman was reappointed, objecting to his firing and board chair Greg Brockman's demotion.
Shortly after, Altman and Brockman were hired by Microsoft to lead an AI research lab, welcomed by Microsoft CEO Satya Nadella. Ilya Sutskever, OpenAI's chief scientist and board director, had pushed for Altman's removal but later regretted this decision. Sutskever feared OpenAI was commercializing too quickly at the expense of safety but didn't cite specific incidents involving Altman.
The board announced Altman's firing Friday without warning, then hired Twitch co-founder Emmett Shear as interim CEO rather than meet Altman's demands. Dozens of staffers quit when Sutskever said Altman wouldn't return. Nadella confirmed Altman will lead Microsoft's new AI entity as CEO, with Brockman and other OpenAI staffers.
After such a crazy week, Altman was ultimately reinstated as CEO.
Microsoft Releases Orca 2 LLM, Previews Co-Pilot Testing for Windows 10
Microsoft has released Orca 2, a pair of smaller AI language models that match or outperform much larger models on complex reasoning tasks. The 7 billion and 13 billion parameter models build on Microsoft's previous Orca research showing smaller models can be trained to imitate the reasoning capabilities of larger models.
Orca 2 was trained on tailored datasets to employ different reasoning strategies depending on the task. This allows the smaller models to break problems into steps rather than try to answer complex questions directly like huge models. When tested across 15 reasoning benchmarks, Orca 2 matched or exceeded 5-10x larger models like Meta's LLama and Anthropic's Wizard in average scores.
In other news, Microsoft previewed its AI-powered Copilot feature for Windows 10, after previously limiting it to Windows 11. Windows 10 testers can now try Copilot, which brings an AI chatbot for queries and text generation. The rollout comes as Microsoft invests more in Windows 10, though it still plans to end support in 2025.
Copilot for Windows 10 works similarly to the Windows 11 version. The gradual expansion aims to leverage Windows 10's continued popularity despite lagging Windows 11 adoption. With the Copilot preview and potential additional AI features, Microsoft caters to Windows 10's huge user base while pushing the adoption of its newest OS.
Anthropic Announces Claude 2 Updates
OpenAI rival Anthropic has announced updates to its Claude chatbot, including doubling the number of tokens it can process to 200,000. This allows Claude to interpret longer texts equivalent to over 500 pages. The update is exclusive to Anthropic's Pro plan and exceeds GPT-4's 32,000 token limit. Anthropic says this "industry first" enables Claude to comprehend entire codebases or literary works.
The company also claims Claude will now hallucinate or lie 50% less frequently. New beta tool integration allows connecting Claude to third-party APIs so it can search the web, use a calculator, or leverage other contextual APIs through natural language requests.
Anthropic, founded by former OpenAI engineers, aims to make Claude more useful while avoiding the commercialization controversies facing OpenAI. The Claude 2.1 update brings it closer to ChatGPT capabilities.
Other new features include a test window to try prompts, custom persistent instructions so users can customize Claude's responses and personality, and an updated developer console.
The chatbot improvements come as OpenAI faces leadership turmoil, with its board abruptly firing and then rehiring CEO Sam Altman in the span of days. Many employees threatened to quit over Altman's removal. The drama highlighted clashes over OpenAI's direction as it rapidly commercializes while acquiring massive Microsoft funding.
In Other AI News…
Gaming
Epic Games Reveals Fortnite's Next Live Event, ‘The Big Bang’
Epic Games has revealed details about Fortnite's next major live event, The Big Bang, occurring on December 2nd. The event marks the end of Fortnite Chapter 4, Season OG, and the start of a new beginning for the game.
Season OG brought back Fortnite's original Chapter 1 map and weekly nostalgic content drops. But it concludes on December 2nd at 11PM PT / 2PM ET when The Big Bang event commences.
Epic says players can join The Big Bang 30 minutes prior to start time through the Battle Royale mode selection screen. Parties of up to 4 players are supported. The event will be available across platforms including PlayStation, Xbox, Switch, and PC. Cloud gaming services like Xbox Cloud Gaming and Nvidia GeForce Now provide additional ways to participate on mobile devices and computers.
To prepare, Epic Games experiences will be disabled starting at 12pm ET on December 2nd, while player-created modes can remain on until the Chapter 4 season transition begins at 11:30PM ET. Epic encourages players to group up with friends beforehand and get their cosmetics ready.
The Big Bang represents a major shift for Fortnite, though details remain scarce. Epic promises the event will mark a new beginning as Chapter 4 concludes. Live events have often dramatically reshaped Fortnite's world and gameplay.
The announcement comes on the heels of Epic admitting it missed the mark with a recent cosmetic item restriction update that proved unpopular. But The Big Bang generates excitement and speculation about how Fortnite will evolve next.
With Season OG offering a nostalgic throwback, The Big Bang event turns attention firmly to Fortnite's future. Players can jump in on December 2nd to experience the start of this new era firsthand.
AviaGames Sued for Using Bots to Win Against Players in an Apparent Case of “The House Always Wins”
Mobile gaming platform AviaGames is facing a class action lawsuit alleging the use of bots in games advertised as human vs human skill competitions with cash prizes. The lawsuit stems from separate litigation between AviaGames and rival Skillz.
Skillz accused AviaGames of infringing its patents and game designs. During that case, Skillz claimed it found evidence AviaGames used unbeatable bots as opponents instead of real players, constituting illegal gambling.
The new class action lawsuit builds on Skillz's allegations. It accuses AviaGames and its founders of fraud and racketeering through the "deceptive practice" of disguising bots as human players. This transforms skill-based games into uncontrolled gambling.
The lawsuit cites internal AviaGames documents apparently showing bots "guarantee the winning rate in favor of AviaGames against its customers." Players compete in various mobile card and puzzle games to win cash prizes or tickets redeemable for money.
AviaGames promotes these as contests of skill rather than chance. However, the lawsuit contends the use of bots makes the outcomes manipulated games of chance, violating gambling regulations.
Along with the company and founders, the suit names AviaGames investors as defendants. AviaGames has not commented on the allegations. The litigation highlights potential risks firms face in using AI bots in skill-based gaming.
Separately, a judge granted Skillz access to normally privileged AviaGames attorney communications under a "crime-fraud exception." Skillz can use these for evidence of potential fraud.
CD Projekt Red Reveals Cyberpunk 2077 Ultimate Edition
CD Projekt Red is releasing a Cyberpunk 2077: Ultimate Edition on December 5th. This bundle includes the base game plus the Phantom Liberty expansion in one package. It will be available digitally and physically for PlayStation 5, Xbox Series X/S, and PC.
Phantom Liberty launched as a standalone expansion in September, marking the first and only major story add-on for Cyberpunk 2077. The expansion earned praise for enhancing the gameplay and mechanics.
The Ultimate Edition provides an easy way for new players to get the complete Cyberpunk 2077 experience. It also gives existing owners a physical option if they want both the base game and expansion disc.
Ubisoft Teams Up With Animoca Brands on Web3 Metaverse Mocaverse
Animoca Brands, an investor in blockchain gaming, is partnering with Ubisoft's Strategic Innovation Lab to support Ubisoft's Web3 initiatives on Animoca's metaverse project Mocaverse.
Mocaverse will collaborate with and amplify Ubisoft's Web3 efforts, including the tactical RPG Champions Tactics Grimoria Chronicles where players battle with mythical champions.
Mocaverse aims to build an interoperable metaverse experience layer across Animoca's 400+ portfolio companies and partners, focusing on Web3 identity, social features, and growth in culture/entertainment.
Through the partnership, Mocaverse will integrate Champions Tactics into its Web3 Frequent Player Program as a key activation. The program allows holders of Moca ID to earn points through participation, redeemable for exclusive digital/real-world rewards from Mocaverse, Animoca, and partners.
Animoca co-founder Yat Siu said the company is dedicated to onboarding users to Web3 through gaming, culture, and entertainment. Animoca is excited to partner with Ubisoft to drive awareness and user onboarding by utilizing the Mocaverse incentives.
Ubisoft's Nicolas Pouard said Ubisoft has been following Animoca and is pleased to support Mocaverse's consumer-facing approach by joining from the first season.
The collaboration aligns Ubisoft's push into Web3 gaming with Animoca's expertise in blockchain gaming investments and metaverse development. Mocaverse provides Ubisoft with a platform to engage players through rewards and interconnect its titles into a shared metaverse environment.
The partnership highlights growing traction at major gaming companies in leveraging Web3, metaverse, and blockchain technologies to explore new experiences.
New Updates Surrounding Niantic’s Sexual Bias Lawsuit
A California judge ruled that a class action gender bias lawsuit against Pokémon Go developer Niantic can proceed, blocking Niantic's attempt to move the case to arbitration. Two female former employees accuse Niantic of fostering a hostile work environment and pay discrimination against women.
The judge found the allegations were protected under a 2021 law against forced arbitration in harassment cases. The plaintiffs' attorney called it a major victory enabling the suit to move forward in court rather than private arbitration that tends to favor employers.
The lawsuit alleges Niantic denied equal pay to women, devalued their work, and created a "boys club" culture. It was filed by one anonymous employee, then amended with a second plaintiff claiming sexism impeded her career growth.
Niantic sought to dismiss the class action this week and compel arbitration instead. But with arbitration now blocked, the plaintiffs plan to proceed in court.
In response to the lawsuit, Niantic said it is committed to a fair workplace and does not believe the allegations have merit. It takes the claims seriously but says they don't reflect how the company operates.
The ruling represents a significant development, allowing the plaintiffs to pursue the gender bias claims in court rather than being forced into confidential arbitration. With arbitration denied, the plaintiffs now have a path to seek possible class-action status on behalf of other affected employees.
The lawsuit spotlights issues of discrimination and hostile workplace cultures in the gaming industry. While Niantic disputes the claims, the judge's decision advances the plaintiffs' efforts to hold the company publicly accountable through the courts. The case will test the strength of the allegations as litigation proceeds.
Sony Sued for $7.9B Over UK PlayStation Store Pricing
Sony is being sued in the UK for £6.3 billion ($7.9 billion) over allegations of overcharging customers on the PlayStation Store. Consumer rights advocate Alex Neill is leading the class action lawsuit, claiming Sony has abused its market dominance to inflate digital game and content prices.
The lawsuit contends Sony's requirement that games and DLC be exclusive to its storefront allows it to charge a 30% commission to developers/publishers, costs that are passed on to consumers. Neill argues this results in customers unknowingly paying higher than intended prices on the PlayStation Store.
This follows a similar 2021 US lawsuit that was dismissed in mid-2022. However, UK gamers filed a new suit shortly after, which was just allowed to proceed by the Competition Appeal Tribunal. However, the Tribunal suggested claimants who made purchases after the suit was filed in 2022 should be removed from the class.
Neill called the ruling the first step in getting consumers their money back. His arguments detail how Sony's policies force publishers to raise prices and stop retailers from selling digital codes.
Sony attempted to have the case thrown out but failed. It earns billions from digital sales, including reportedly $1 billion annually just from Call of Duty. This revenue potential adds motivation for Sony to fight the lawsuit.
The litigation raises concerns about console makers leveraging closed digital platforms to charge higher commissions and prices. While the outcome is uncertain, the suit spotlights allegations of anti-consumer practices as digital sales expand.
For now, the UK class action continues forward in seeking billions in damages from Sony related to perceived PlayStation Store overcharging. The ruling keeps alive legal threats to Sony's very lucrative digital ecosystem.
In Other Gaming News…
Web3, Metaverse, and NFTs
Binance and CZ Plead Guilty to Violating Anti-Money Laundering Requirements, CZ Steps Down as CEO
Crypto exchange Binance and its founder Changpeng "CZ" Zhao have agreed to pay nearly $3 billion to settle a lawsuit from the U.S. Commodity Futures Trading Commission (CFTC). This includes a record $1.35 billion penalty, the largest fine ever imposed by the CFTC.
The settlement resolves allegations that Binance unlawfully offered unregistered crypto derivatives products to U.S. investors. The CFTC accused Binance of knowing the activity violated U.S. law but evading regulations for profit.
As part of the deal, former Binance chief compliance officer Samuel Lim will pay $1.5 million and is banned from operating illegal crypto derivatives platforms. Going after compliance officers is a new move for the CFTC.
CFTC Chair Rostin Behnam said Binance undermined financial market foundations and turned a "blind eye" to illicit activity for profits. Commissioner Caroline Pham noted it's the first time the CFTC charged an individual compliance officer, sending a "strong message" about lacking oversight.
The swift settlement reinforces the CFTC’s strength in digital asset cases, said Behnam. However, the Securities and Exchange Commission's separate lawsuit against Binance remains unresolved.
Overall, the CFTC deal secures record penalties from Binance and Zhao. Along with related Department of Justice and Treasury Department settlements totaling over $4 billion, it demonstrates U.S. regulators' crackdown on non-compliance in the crypto sector.
New Ethereum L2 ‘Blast’ Goes Live with Over $400M in TVL Only 4 Days After Launch
Ethereum layer 2 network Blast has attracted over $443 million in total value locked just days after launch. The rapid inflow demonstrates the strong demand for layer 2 protocols to improve Ethereum's scalability bottlenecks.
A unique feature driving adoption is Blast allows bridged ether to earn yields alongside BLAST governance tokens. Blast natively participates in Ethereum staking, passing back staking yields to users automatically. Bridged ether can earn up to 4% APY via auto-staking on Lido.
However, the mainnet doesn't launch until February, so funds cannot be withdrawn yet during this test phase. Access requires an invite code from an existing user. BLAST tokens are claimable starting in May.
Blast is led by NFT figure @PacmanBlur and backed by investors like Paradigm. It extends the Blur NFT ecosystem by enabling advanced products and yields on idle assets.
The project's design and traction have garnered praise but also skepticism. Some compare Blast's referral-based reward points to a pyramid scheme. Others question the need for another layer 2 amidst a crowded DeFi landscape.
Yet the yields continue attracting assets despite the mainnet being months away. The majority of funds bridged have been auto-staked on Lido, making Blast a top Ethereum staker already.
SEC Targets Kraken Again — This Time Alleging They’re an Unregistered Exchange That Mixes User Funds
The SEC has filed a lawsuit against crypto exchange Kraken, accusing it of operating as an unregistered exchange, broker, dealer, and clearing agency. The SEC alleges Kraken illegally traded tokens it deems securities and improperly commingled up to $33 billion in customer funds with corporate assets.
The SEC seeks to permanently ban Kraken from operating as an unregulated exchange. It also wants fines, disgorgement of profits, and injunctive relief. Kraken strongly disputes the claims and vowed to defend its position in court.
In particular, Kraken rejects its lists or trades securities. The company criticized the SEC's "regulation by enforcement" approach as detrimental to consumers and innovation. Kraken settled previous SEC charges over staking services earlier this year.
The SEC highlighted the alleged commingling of up to $33 billion in customer crypto and $5 billion in customer cash with Kraken corporate assets as a key risk. Kraken denied any customer funds are missing, claiming the SEC mischaracterized Kraken's spending earned fees.
The new lawsuit escalates the ongoing battle between crypto exchanges and the SEC over securities registration requirements. Kraken, Coinbase, and Binance argue the SEC lacks legal grounds to demand registration for crypto asset trading.
For now, the litigation threatens to hamper Kraken's US exchange business. The SEC aims to penalize Kraken and compel compliance with securities laws. Kraken maintains it operates legally without SEC registration.
GAM3S.GG Reveals Web3 GAM3 Awards Nominees
GAM3S.gg and Magic Eden have revealed the shortlist for the 2023 GAM3 Awards, which honor excellence in Web3 gaming with a $2M prize pool.
After 214 game nominations, judges selected 40 finalists across categories like Game of the Year. The top nominees include My Pet Hooligan, Wildcard, Big Time, Deadrop, and Parallel. Public voting on the finalists runs November 22 - December 1 on GAM3S.GG.
The ceremony on December 14 will bring together traditional and blockchain gaming leaders as judges and guests. GAM3 touts it as the "Oscars" of Web3 gaming.
This year sees increased diversity, with 9 blockchain networks and a notable debut by Arbitrum with 4 nominees. Polygon, Ethereum, Immutable X, Arbitrum, and Avalanche lead represented networks.
Industry voices highlight 2023 as a milestone for increasingly polished Web3 games despite economic challenges. Standouts like Big Time, Wildcard, and Parallel showcase the sector's ingenuity per GAM3.
The community has an influential 10% vote across some categories, including the People's Choice Award. This amplifies gamers' role in the prestigious event. Over $100k in community rewards are offered.
Judges praised the number and diversity of nominees, signaling Web3 gaming's dynamic growth. Public voting now commences ahead of the ceremony where winners will be unveiled across categories.
Pyth Network Distributes Over $77M Worth of PYTH via Token Airdrop
The Pyth Network oracle platform has commenced its long-awaited PYTH token airdrop, distributing over $77 million worth of tokens to eligible crypto wallets. The airdrop aims to reward early Pyth users and gain attention amid competition with the leading oracle project Chainlink.
Pyth provides real-time data feeds to blockchains, focused on financial use cases requiring speed. It claims faster refresh rates than Chainlink, sourcing data directly from institutions rather than decentralized node operators.
The airdropped PYTH token serves for voting in Pyth's governance system. Holders can weigh in on the protocol's evolution and publish data feeds. The token quickly reached a market cap of over $750 million but has since settled around $450 million.
Pyth is currently the 4th largest oracle project with $1.5 billion in value secured, though far behind leader Chainlink's $14.7 billion. While Pyth touts greater speed, Chainlink highlights recent latency improvements and its decentralized, multi-source data aggregation model.
Critics argue Pyth's direct institution data sourcing risks centralization, versus Chainlink's node network. But Pyth claims game theory and cryptography maintain accuracy. Both have tradeoffs in decentralization, security, and real-world viability.
The airdrop's goal is to attract users and liquidity for PYTH trading. Airdrops are commonly used by new tokens seeking attention and distribution. Pyth also benefits as more DeFi developers integrate and rely on its oracles.
KyberSwap’s Elastic Pool Gets Exploited, Team Offers 10% Bounty Reward
Decentralized exchange KyberSwap has offered a 10% bounty, or $4.6 million, to the hacker who stole $46 million from the protocol on November 22nd. KyberSwap requested the return of 90% of funds by November 25th to receive the bounty reward.
The hacker drained around $20 million in wETH, $7 million in wstETH, and $4 million in ARB tokens from KyberSwap Elastic. The loot was moved across multiple chains including Ethereum, Arbitrum, Polygon, and Optimism.
After the hack, the attacker left an on-chain message stating they were open to negotiations after resting. KyberSwap responded the next day with a 10% bounty offer for returning 90% of the funds.
KyberSwap acknowledged the hacker's skills but urged them to return most funds so users could move on. If the hacker does not comply by the deadline, they risk staying "on the run" according to KyberSwap.
Analysis suggests the attacker relied on a complex smart contract exploit to repeatedly drain funds across KyberSwap pools on multiple networks. In total, the hacker made off with $46 million in crypto.
The incident highlights the ongoing risks associated with DeFi protocols while showcasing KyberSwap's response to try and recover user funds through negotiation. The outcome of the attempted bounty agreement remains uncertain.
In Other Web3 & Metaverse News…
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