Twitter 2.0
Elon Musk has made his vision of a "Twitter 2.0" clear, aiming to create an all-in-one app with direct messaging, video, verification, and payment capabilities. The Tesla and Twitter CEO has now taken the idea further and is working with the US Treasury Department to apply for regulatory licenses that could enable the platform to offer fiat and cryptocurrency payments. If the project is successful, it will likely revolutionize how we use Twitter and other social networks.
Polygon (Matic)
Polygon is revolutionizing the Ethereum blockchain by providing a high-speed, low-cost alternative for processing transactions. Polygon can handle up to 65,000 transactions per second with its proof-of-stake blockchain, making it a game-changer for the industry. And it's no surprise that Polygon has quickly risen to become the 10th largest cryptocurrency, with major brands like Starbucks, Reddit, Nike, Disney, and Meta all choosing to integrate with Polygon.
Reddit has created a collection of nearly 8.5 million unique avatars on Polygon, while Starbucks has launched a new loyalty program built around NFTs. Nike is also set to enter the fashion metaverse with their upcoming project on Polygon.
The arrival of Fractal, a web 3 gaming platform co-founded by Justin Kan of Twitch, has further solidified Polygon's position as the destination for all things decentralized. Fractal brings its web 3 gaming suite and features to Polygon, including a marketplace for NFTs and a launchpad for new projects and tournaments. And with the Fractal SDK, developers now have the tools to create in-game marketplaces like never before.
BTC Balance on Exchanges
In the world of cryptocurrency, the trend of holding assets directly has been on the rise. In 2020, the all-time high of Bitcoin held on exchanges was a staggering 3.2 million coins. However, as of February 9th, 2023, this number has decreased to 2.2 million, with over 1 million coins being removed from exchanges in the last 35 months. This shift can be attributed to the collapse of centralized exchanges and a growing distrust of third-party entities.
This trend is a positive indication for the future of Bitcoin as a long-term investment. As the amount of coins held on exchanges decreases, it reduces short-term sell pressure and showcases a growing confidence in the stability and security of this digital asset.
What’s Happening in the Space?
In my previous newsletter, I correctly anticipated that the Super Bowl this year would not feature any cryptocurrency advertisements. Last year, the event was dubbed the "Crypto Bowl," as four leading exchanges, eToro, Coinbase, Crypto.com, and FTX, aired commercials during the broadcast. However, this year, Fox Sports has confirmed that there will be "zero representation" of crypto firms in the highly-anticipated showdown between the Chiefs and the Eagles.
The CEO of Coinbase expressed his concerns regarding the SEC's potential ban on crypto staking for retail investors via a tweet on Wednesday. The SEC Chairman's previous remarks had indicated that cryptocurrencies that enable staking could fall under the category of securities according to the Howey test, despite the CFTC's statement of Ether as a commodity. Staking on Ethereum, for instance, offers returns of around 6%. This announcement comes at a critical time, with Ethereum recently transitioning to proof-of-stake in September 2022 and the next upgrade, the Shanghai fork, scheduled for March, which will enable Ethereum holders to retrieve their staked tokens. Decentralization exchanges like Uniswap could also make it challenging to regulate staking in the event of a ban.
Recently Binance temporarily suspended USD deposits and withdrawals on February 6th. Their team closely monitors the situation and works to resolve it as soon as possible. Currently, less than 0.01% of Binance’s monthly active users were impacted by this suspension. These users have been directly notified of any inconvenience this may have caused. Binance let its customers know “all other methods of buying and selling cryptocurrency on Binance remain unaffected, including bank transfers using other supported fiat currencies.”
Uniswap v3 on BNB Chain
The recent proposal to deploy Uniswap v3 on the Binance Chain has sparked a debate over decentralized finance (DeFi) governance. With venture capital firm Andreessen Horowitz (a16z) voting against the proposal using its 15 million UNI holdings, it has raised questions as to whether decentralized autonomous organizations (DAO) should act in favor of self-interest or optimize solely for the protocol. The voting period is scheduled to end on February 10th, and the outcome is yet to be determined.
The disagreement stems from which cross-chain bridge to use for deployment; the Wormhole bridge or LayerZero. In 2022, the Wormhole protocol suffered one of the largest exploits resulting in the loss of 120,000 Wrapped Ether (wETH) tokens worth around $321 million. It's worth noting that LayerZero Labs is a part of a16z venture's portfolio, and back in March, the protocol raised $135 million led by Sequoia and a16z.
The outcome of the vote and the debate it has provoked is sure to be closely watched, as it will set a precedent for how DAOs handle governance decisions in the future.
Not Financial Advice
Please note that all opinions in my newsletter are strictly my own and should not be considered financial advice. It is important to conduct your own research and make your own investment decisions. Always consult a qualified financial advisor before making any investment decisions.