Welcome to The Node. This is Daniel Kuhn, wishing you a merry Boxing Day. This week the newsletter will feature guest essays from CoinDesk’s Crypto 2023 series – where some of the sharpest minds in crypto have made their predictions about the months and years ahead. In today’s newsletter:
Crypto lender Nexo’s potential acquisition of rival Vauld was canceled some five months after the two signed an initial agreement to explore the transaction and less than a month before the Singapore-based target has to come up with a restructuring plan. “To provide a very brief summary, our discussions with Nexo have unfortunately not come to fruition,” a spokesperson for Vauld, which suspended withdrawals and filed for creditor protection related to over $400 million in assets in July, told CoinDesk.
What’s Mine?
Miners across the U.S. powered down over the weekend as a winter storm swept across North America. The Bitcoin mining hashrate, a measure of computing power on the blockchain, dropped about 100 exahash per second (EH/s), or 40%, to 156 EH/s, between Dec. 21 and Dec. 24. It returned to about 250 EH/s as of Dec. 25. Europe-based miner Denis Rusinovich said the drop is “Another confirmation that bitcoin’s geographical diversification is vital.” Meanwhile, a customer is accusing mining infrastructure provider Blockware Solutions of fraud in a lawsuit filed Dec. 17, related to the sale of 50 mining rigs for $525,000.
Secure It, B.
The Brazilian Securities and Exchange Commission on Friday approved the ability for investment funds to trade crypto. Only entities recognized by the country’s securities regulator or central bank can hold these assets, according to a regulatory framework signed into law by outgoing president Jair Bolsonaro on Thursday. Meanwhile, data shows over $30 billion worth of NFTs passing hands on Ethereum, representing nearly half the blockchain’s total NFT volume, is wash trading. Finally, crypto analysts raised concerns BNB token, Binance’s $40 billion exchange token, could be determined to be a security as Binance is investigated for market manipulation. This may explain why no unaffiliated U.S.-based exchanges have listed the token.
Don’t want to miss out on the Web3 revolution? Few platforms make it easier to join than Nexo.
For starters, you can buy BTC, ETH, and 50+ more coins instantly with a card. On the Nexo Exchange, you can swap 500+ pairs and get up to0.5% in crypto rewards on each transaction.
To top it all off, Nexo makes it easy to borrow funds against your crypto, starting at0% APR. Their pioneering Instant Crypto Credit Lines have stood the test of time thanks to fundamental principles such as overcollateralization and robust risk management.
Recently, there’s been increasing awareness and focus on how blockchains, distributed systems with decentralized buy in, support public goods. Public goods are the stuff we all rely on (like open-source software or privacy research) but are hard to maintain and fund.
Another term for this is “regenerative economics,” the idea that money can be used to incentivise communities to solve systemic issues. Even when open-source projects fail, the exercise can benefit the rest – if everyone is moving along the same axis towards social betterment.
Degens came to Web3 seeking financial upside. Regens are those who are working or building in regenerative cryptoeconomics. But the two often share much in common: like in the belief of markets and the power of individuals. Regens, however, often after having been burned by a bad trade, focus instead on Web3’s long-term potential not just short term trades.
With programmable money, we can program our values into our money. Crypto has it within itself to create systems equally as extractive and fragile as the existing financial system. When a degen trades, he’s playing a zero-sum game – the tokens leave his wallet and enter the counterparty’s wallet and visa-versa. But Web3 can also build more positive sum protocols that expand resource capacity over time.
To regain legitimacy, the Web3 ecosystem must find ways to rotate capital, attention and talent away from the projects that have the best Ponzi-nomics and towards the projects that are going to have the most durable positive impact. Some of these projects include the universal basic income pilot Proof of Humanity, the crowdfunding platform I built Gitcoin and the newest way of trading carbon credits (or any regenerative project) called Hypercerts.
Following the collapse of FTX, user trust in crypto exchanges’ transparency, security and liquidity have proven to be critical to the continued adoption of crypto. The 2022 World Cup is therefore a unique opportunity to showcase to over 4 billion potential viewers how crypto firms are prioritizing security and risk management, facilitating the adoption of crypto even during the crypto winter.
We’ve already seen a few Web3 and crypto players leverage FIFA as a chance to pave the way for the global adoption of Web3 technologies.Continue here.
