Intelliekon

• Meta Platforms ended its support for NFTs, which could affect Web3 creators.
• Artificial Intelligence (AI) continues to be used in Web3 and we explored the intellectual property (IP) rights of AI-created works.
• Yuga Labs‘ new CEO will make his first public appearance since assuming the position.

Meta Platforms Ends Supports for NFTs

Meta Platforms, which owns Facebook and Instagram, recently announced that it would be winding down its NFT program after testing it out for several months. This news is a setback for Web3 creators who use social media to promote their art and interact with their community – signaling that Meta may not have figured out how to best engage with Web3 yet.

AI’s Impact On Web3

Artificial intelligence (AI) is increasingly being used in the web 3 space, so we took a look at the rules around intellectual property (IP) rights of works created with AI help. We also spoke to some NFT artists about their opinions on utilizing AI in their work.

Yuga Labs New CEO Debut

Yuga Labs will host a public event this week where attendees can hear from Yuga Labs‘ new CEO in his first public appearance since assuming the position. The event will provide insights into what Yuga Labs is planning next and how they are responding to this latest news from Meta Platforms.

The Airdrop Newsletter

The Airdrop newsletter discussed this week’s biggest stories across web 3 including metaverse, NFTs, DAOs and emerging technologies like VR/AR. It provides readers with up-to-date news on all things related to web 3 technology and offers advice on how to stay informed about these topics.

Rosie Perper

Rosie Perper is Deputy Managing Editor for the Web3 news section, focusing on metaverse, NFTs, DAOs and emerging technologies such as VR/AR. She has previously worked across breaking news, global finance, tech culture and business; she holds small amounts of BTC and ETH as well as several NFTs. Follow @rosieperper on Twitter for further updates!

• This article evaluates whether Bitcoin can be used as a store of value (SoV).
• On-chain metrics such as realized capitalization and holding trends demonstrate that there is belief in bitcoin as an SoV.
• Despite its price volatility, BTC exhibits qualities of sound money including durability, portability, scarcity, uniformity, and divisibility.

Evaluating Bitcoin as a Store of Value

Two On-Chain Metrics Show Belief In Bitcoin As an SoV

Two on-chain metrics – realized capitalization and holding trends – demonstrate belief in bitcoin as a store of value (SoV). Realized capitalization takes into account the cost basis for each coin held by investors, rather than just its current market price. This provides insight into how invested individuals view the asset as a long-term investment. Holding trends also show that more people are buying and holding onto their coins for longer periods of time instead of flipping them quickly for profits or losses.

Price Volatility is Expected During Price Discovery Phase

For an asset during its speculative, price discovery phase – like bitcoin is now – volatility should be expected. New technologies often capture the attention of traders and speculators alike, resulting in wild fluctuations while participants try to determine true value. It’s important to recognize these drawdowns alongside its upward trajectory; BTC has gone from trading below 1 cent to reaching nearly $70K in 2021 before settling around $20K today.

BTC Possesses Qualities of Sound Money

Despite this volatility, bitcoin does possess qualities associated with sound money including durability, portability, scarcity, uniformity, and divisibility. These features have made it increasingly attractive to those looking for potential protection against inflationary pressures seen elsewhere in the markets.

Acceptance is the Final Uncertain Factor

The final uncertain factor when it comes to evaluating BTC’s use case as an SoV is acceptance: will enough people buy into it and use it? After 14 years since its inception we’re still exploring this question but signs point towards increasing adoption across multiple industries worldwide which could enable greater liquidity over time.

Conclusion

Bitcoin’s journey so far has been volatile but promising; it continues to exhibit qualities associated with sound money while growing acceptance could facilitate increased liquidity over time allowing us to further evaluate its use case as a store of value.

• Bitcoin fell Thursday due to multiple catalysts that caused selling pressure.
• Tokens of major blockchains such as solana (SOL) and matic (MATIC) dropped 6% while Uniswap’s UNI and Avalanche’s AVAX fell 4%.
• AI-focused tokens The Graph (GRT) and SingularityAI (AGIX) fell 8%, while gaming-focused ImmutableX (IMX) dropped over 12%.

Crypto Markets See Slide Amid Bitcoin Weakness

Bitcoin dumped Thursday on the back of multiple catalysts that contributed to selling pressure, which in turn pushed alternative currencies lower. Tokens of some of the largest blockchains like Solana (SOL), Matic (MATIC), Uniswap’s UNI, and Avalanche’s AVAX all saw drops ranging from 4 – 6%. Meanwhile, Artificial Intelligence-focused tokens The Graph (GRT) and SingularityAI (AGIX) were down 8%, with gaming-focused ImmutableX (IMX) dropping over 12%.

Catalysts Behind Selloff

The selloff was caused by a number factors. Crypto-friendly Silvergate Bank announced it would be „voluntarily liquidating“ its assets and winding down operations of its holding company Silvergate Capital Corp. Additionally, U.S. banking giant JPMorgan ended its banking relationship with Gemini exchange. As a result, over $100 million in liquidations occurred within the last 24 hours according to Coingape analytics tool Coing.

Toncoin Sees Rise Despite Downturn

Despite the downturn in crypto markets, Toncoin bucked the trend with a 6% rise over the past 24 hours without any clear catalysts behind it. Shiba Inu also rose 2.2%, potentially due to the upcoming beta launch of Shibarium – its native blockchain.

CoinDesk Market Index Slides 1.2%

The CoinDesk Market Index (CMI), which measures the market capitalization-weighted performance of crypto markets, saw a 1.2% decline overall as prices dropped across most major coins including BTC (-8%), ETH (-9%), BNB (-4%), XRP (-5%), and APT (-4%).

Conclusion

­ ­ ­ ­ ­ ­ ­ ­ Overall, market sentiment appears bearish as weak bitcoin prices have led to token losses across multiple blockchains despite several standout performances from Toncoin and Shiba Inu among others

• JPMorgan and Canaccord Genuity have both downgraded their ratings for Silvergate Bank due to doubts about its solvency.
• The bank has delayed the filing of its annual report, and JPMorgan has also withdrawn its price target on the stock.
• Silvergate’s tangible book value was cut by more than half after it realized a loss of $886 million from selling underwater securities.

Silvergate Bank Downgraded By JPMorgan, Canaccord

JPMorgan and Canaccord Genuity have both downgraded their ratings for Silvergate Bank due to doubts about its solvency. JPMorgan cut its rating on the stock to „underweight“ from „neutral“ and withdrew its price target. Canaccord Genuity changed its rating to „hold“ from „buy,“ reducing their price target for the stock to $9 from $25.

Delay in Annual Report Filing

The crypto bank announced it would delay the filing of its annual report on Wednesday, sending its stock price plunging. The filing stated that the company is currently analyzing certain regulatory and other inquiries and investigations that are pending with respect to the Company, adding an additional two weeks before completion of the 10-K report for 2022.

Significant Losses From Selling Underwater Securities

In the recent quarter Silvergate realized a $886 million loss from selling underwater securities, resulting in the bank’s tangible book value being cut by more than half to $12.93 a share. This reflects that the company is facing continued liquidity challenges according to analysts at JPMorgan led by Steven Alexopoulos.

Impact On Share Price

Silvergate’s shares fell 47% to $7.18 in premarket trading following this news, which highlights how important liquidity is when assessing companies‘ ability to remain solvent going forward.

Conclusion

These downgrades show that investors are increasingly concerned about Silvergate’s ability to remain solvent going forward as it continues evaluating certain regulatory and other inquiries into its practices along with ongoing losses from selling underwater securities impacting liquidity levels significantly.

• The IMF’s Executive Board stated that cryptocurrency should not be granted legal tender status in order to safeguard monetary sovereignty and stability.
• The Board acknowledged that strict bans may not be ideal, but targeted restrictions could apply to limit crypto risks.
• The IMF has previously expressed concern that crypto could be used to evade capital controls imposed by governments.

IMF’s Stance on Cryptocurrency

The International Monetary Fund’s (IMF) Executive Board recently announced that cryptocurrency should, in general, not be granted legal tender status in order to safeguard monetary sovereignty and stability. They noted that outright bans may not be the first-best option, but targeted restrictions could apply to limit crypto risks.

Risks of Cryptocurrency

The IMF warned of the potential risks associated with cryptocurrency such as a threat to monetary policy, tax collection, financial stability and consumer protection. Additionally, the organization has previously expressed concern that crypto assets can be used to evade capital controls imposed by governments.

Regulations Should Not Stifle Innovation

Despite these potential risks, the board encouraged countries to clarify tax treatment and align with global standards while also noting that regulations should not stifle innovation or prevent governments from benefiting from the underlying technology of digital currencies.

El Salvador’s Attempt at Making BTC Legal Tender

The IMF has discouraged countries such as El Salvador who sought to make bitcoin (BTC) the official currency due its potential dangers related to monetary policies and capital control evasion.

Conclusion

In conclusion, cryptocurrency is seen as a risk by many especially when considering its legal tender status; however, regulations should strive for balance between protecting citizens from scams and allowing for innovation without hindering growth opportunities for governments through digital technology advancements.

• TrueFi’s TRU token surged over 200% after Binance’s TUSD mint sparked speculation.
• The speculation appears to be misplaced as the issuers of TrueUSD and TRU were separated in 2020.
• TrueFi is in the process of transferring its IP and assets to the TrueFi Foundation, a legal entity.

TrueFi’s TRU Token Rallies Over 200% After Binance’s TUSD Mint Sparks Speculation

The rally appears to come from traders mistakenly connecting TRU with TUSD, a stablecoin that had been issued by TrueFi in the past but now no longer is.

Separation of Issuers

TrustToken sold TUSD in 2020 to a firm called Techteryx, according to an announcement by TrustToken Chief Executive Rafael Cosman at the time. TrustToken also separated from the TrueFi protocol and was renamed Archblock last year, as TrueFi embarked on a road to decentralize the platform.

TRU Price Movement

TRU surged as high as 14.6 cents from 4.4 cents on Binance before later paring some of the gains. The token was trading at around 11 cents at press time.

BUSD Drama

Earlier this week, Paxos said it would halt minting BUSD on the orders of U.S regulators, sparking speculation that other stablecoins such as TUSD may be given more airtime on exchanges like Binance going forward due to their better compliance infrastructure.

Conclusion

It remains unclear why speculators have linked this event with TRU token despite their separate issuers; however, it appears they are mistaken connections based on similar namesakes between TUSD and TRU tokens without much substance behind them.

• The SEC has reached an agreement with Kraken to shut down their crypto staking service for US customers and pay $30 million to settle Securities and Exchange Commission (SEC) charges.
• Kraken’s staking service offered a 20% APY, promising to send customers staking rewards twice per week.
• This settlement comes after Coinbase CEO Brian Armstrong’s speech emphasizing the importance of self-regulation and working with government regulators in the space.

Kraken Agrees to Shutter US Crypto-Staking Operations

The U.S. Securities and Exchange Commission (SEC) has announced that cryptocurrency exchange Kraken will „immediately“ end its crypto staking-as-a-service platform for U.S. customers and pay $30 million to settle charges related to offering unregistered securities.

Details of the SEC Settlement

The SEC voted on the settlement during a closed-door commissioner meeting on Thursday afternoon, confirming that Kraken would shut down its staking services for U.S. customers as part of the resolution. This includes a crypto lending product offering up to 24% yield which is also expected to be shut down under the settlement agreement.

Background Information

This settlement follows Coinbase CEO Brian Armstrong’s speech earlier this week emphasizing the importance of self-regulation and working with government regulators in the space rather than fighting against them like many other exchanges have done in recent years. It also comes after reports that Kraken was close to reaching a settlement with the SEC over offering unregistered securities on Wednesday evening prior to Thursday’s announcement by the agency.

Implications of Settlement

The news underscores how seriously authorities are taking potential violations within cryptocurrency markets, particularly when it comes to offering unregistered securities or operating without proper oversight or licensing requirements from financial regulators such as the SEC in America or FINMA in Switzerland. It also highlights how exchanges can still remain competitive while being compliant with existing regulations by engaging proactively with government agencies rather than working against them which could lead to further penalties or sanctions if found guilty of any wrongdoing or violation under applicable laws or regulations governing digital assets markets worldwide.

Conclusion

Overall, this latest settlement between Kraken and the SEC serves as an important reminder for exchanges around the world: compliance matters! Taking proactive steps towards regulatory compliance may seem daunting at first, but it ultimately pays off in terms of customer trust and overall market innovation since companies can operate without fear of running afoul of any laws or regulations associated with digital asset transactions globally

• Coinbase (COIN) shares jumped more than 20% after the latest Fed rate hike decision and dismissal of a class-action lawsuit.
• Crypto-related stocks are rallying, with MicroStrategy (MSTR) up 10% and Silvergate Capital (SI) soaring 30%.
• Barclays said Coinbase volumes rose 56% in January from the previous month, near levels seen before FTX’s collapse.

Coinbase Shares Surge

Coinbase (COIN) shares soared more than 20% on Thursday after the Federal Reserve’s latest interest rate hike decision, as well as the dismissal of a proposed class-action lawsuit by customers who claimed that it sold them unregistered securities. The U.S.-based crypto exchange has seen its stock price rise more than 100% since the start of 2021 as the crypto industry recovers from the FTX exchange’s collapse.

Crypto-Related Stocks Rally

The surge in Coinbase stock was part of a larger rally among crypto-related stocks, with other companies such as MicroStrategy (MSTR), which sometimes acts as a bitcoin proxy due to its large holdings, rising about 10%, and crypto bank Silvergate Capital (SI) skyrocketing 30%.

Coinbase Volume Rises

Barclays noted in a report that Coinbase volumes rose 56% in January from the previous month, now nearing levels seen before FTX’s collapse but still below average for 2022. This suggests that investors may be regaining confidence in cryptocurrencies and driving up demand for exchanges like Coinbase.

Fed Chair Comments on Inflation

The Fed’s rate hike decision was accompanied by comments from Powell noting progress in fighting inflationary pressures. This news bodes well for all types of investments including cryptos and stocks related to them such as those mentioned above.

Crypto Industry Recovering

Overall, this news indicates that the crypto industry is recovering from recent losses and gaining back investor confidence due to improved fundamentals and macroeconomic conditions like lower inflation rates. It also shows that companies like Coinbase are benefiting financially due to increased trading volume on their platforms.

• Brevan Howard has hired Kevin Hu, a Dragonfly Capital veteran, as its Digital Portfolio Manager.
• Hu will be based in Brevan Howard’s Abu Dhabi office and will report to BH Digital CEO Gautam Sharma.
• Brevan Howard created its Brevan Howard Digital division in September 2021 to give institutional investors access to blockchain-related investment opportunities.

Brevan Howard, one of the world’s largest traditional finance giants, has recently announced the hiring of Kevin Hu, a Dragonfly Capital veteran, as its Digital Portfolio Manager. The hire marks a major move for the firm as it looks to expand its digital assets arm and offer institutional investors access to blockchain-related investment opportunities.

Hu will be based in Brevan Howard’s newly opened office in Abu Dhabi and will report to BH Digital CEO Gautam Sharma. Prior to joining Brevan Howard, Hu spent three years as an associate at BlackRock with the Alternative Investment Group and two years as a general partner and head of liquid strategy at Dragonfly Capital.

The addition of Hu is part of a wave of senior hires for the firm’s digital assets arm. Last September, Brevan Howard Digital was created to target the growing demand for blockchain and cryptocurrency related investments. The firm has since raised at least $1 billion for a record-breaking crypto hedge fund, which has been largely successful despite the volatility of the crypto market. According to Bloomberg, the fund had only lost 5% of its value despite the market conditions.

With the addition of Hu, Brevan Howard is furthering its commitment to providing institutional investors with access to blockchain-related investment opportunities. As the industry continues to grow, Brevan Howard is well-positioned to capitalize on the potential opportunities the blockchain space has to offer.

• Aave, a DeFi protocol, eliminated the bad debt of 2.7 million CRV tokens from a botched November trade by Mango Markets exploiter Avi Eisenberg.
• The move came after Aave’s community approved the procurement of the necessary CRV tokens using the ParaSwap decentralized exchange aggregator in a governance vote concluded on Tuesday.
• The action also took place prior to the activation of a major tech upgrade called Aave v3.

Aave, one of the leading decentralized finance (DeFi) protocols, recently cleared bad debt of 2.7 million curve dao tokens (CRV) from a botched November trade by Mango Markets exploiter Avi Eisenberg. The maneuver comes ahead of the activation of a major tech upgrade of the protocol called Aave v3.

The debt was cleared after Aave’s community approved the procurement of the necessary CRV tokens using the ParaSwap decentralized exchange aggregator in a governance vote concluded on Tuesday. The protocol is governed by a decentralized autonomous organization (DAO) and AAVE token holders vote on proposals.

The debt elimination was a result of an incident in November when Avraham Eisenberg roiled Aave with a trading strategy that involved borrowing tens of millions of CRV tokens from the platform. After a sudden price spike due to a short squeeze, his position got liquidated, leaving Aave with bad debt in CRV that amounted to $1.6 million at the time.

An analysis by DeFi data platform EigenPhi showed that the liquidator of the bad debt pocketed some $150,000 in fees. After the incident, Aave’s community voted to take action and eliminate the debt by acquiring CRV tokens.

The decision to clear the debt was made in order to ensure the smooth functioning of the Aave protocol and its services. By eliminating the debt, Aave will be able to secure enough liquidity to cover its obligations.

The move also serves as an example of the power of decentralized governance in DeFi protocols. Aave’s community was able to take swift action and come to a resolution that was in the best interests of the protocol and its users.

The debt elimination is also timely. It comes ahead of the activation of Aave v3, a major tech upgrade that will bring a host of new features to the protocol. With the bad debt cleared, Aave will be able to focus on the upcoming upgrade and continue to provide users with the best possible experience.

In the end, Aave’s debt elimination is a testament to the power of decentralized governance in DeFi protocols. It also serves as an example of the ways in which DeFi protocols are able to respond quickly and effectively to unexpected events. With the bad debt cleared, Aave is now in a position to move forward and take advantage of the upcoming Aave v3 upgrade.