In a significant development within the crypto world, the bankrupt digital asset exchange FTX has received approval from Judge John Dorsey to sell billions of dollars in cryptocurrency assets. This pivotal decision marks a crucial step forward for the collapsed exchange’s new management, as they work towards recovering funds and addressing the fallout from FTX’s unexpected bankruptcy in November. Let’s delve into the details of this court approval and its implications for FTX and the broader cryptocurrency community.
The Green Light for Asset Sale
Judge Dorsey’s approval, granted at the U.S. Bankruptcy Court for the District of Delaware, empowers FTX to sell approximately $3.4 billion worth of digital assets. These assets include popular cryptocurrencies such as Solana, Ethereum, and Bitcoin, among others. This move is part of FTX’s carefully crafted plan, initially outlined in August, aimed at offloading these assets to repay creditors and address the financial challenges arising from its bankruptcy.
Galaxy Digital Steps In
Under this plan, Mike Novogratz’s Galaxy Digital will assume the role of the investment manager responsible for overseeing the sale of these cryptocurrency assets. FTX has set a weekly selling limit of $100 million for tokens, which could potentially be increased to $200 million on an individual token basis, subject to court authorization. This flexibility allows FTX to adapt to market conditions while ensuring a responsible approach to asset sales.
Exceptions to the Weekly Limit
It’s worth noting that Judge Dorsey’s order includes exceptions to the $100 million weekly limit. Sales of Bitcoin, Ethereum, stablecoins, and the redemption of stablecoins will not count towards this limit. Additionally, transactions involving the bridging of tokens from non-native blockchains back to their native networks are excluded from the calculation of the limit. These exceptions provide FTX with some leeway in managing its assets efficiently.
A Path to Recovery
FTX’s sudden bankruptcy last November sent shockwaves through the cryptocurrency industry. Alleged criminal mismanagement resulted in billions of dollars in customer funds disappearing. The court-approved sale of assets, including $1.16 billion in Solana (SOL), $560 million in Bitcoin (BTC), $192 million in Ethereum (ETH), and $137 million in Aptos (APT), will play a pivotal role in addressing the financial gap that originally stood at $7 billion. Notably, these valuations are based on cryptocurrency prices as of August 31.
Progress Amid Legal Challenges
Despite the hurdles and legal challenges, FTX’s new management is making strides in recovering lost funds. To date, approximately $800 million in cash and public equity has already been recovered. Meanwhile, former CEO and co-founder Sam Bankman-Fried awaits a major criminal trial in October, facing a slew of charges, including wire fraud, securities fraud, conspiracy to commit bank fraud, and defrauding the Federal Election Commission.
Conclusion
The court’s approval for FTX to sell billions in Bitcoin, Ethereum, and Solana marks a significant turning point in the exchange’s journey towards recovery. With Galaxy Digital overseeing the asset sale and the flexibility to adjust selling limits, FTX is taking steps to fulfill its financial obligations to creditors and move past the challenges of its turbulent recent history. This development not only impacts the exchange but also resonates within the broader cryptocurrency ecosystem, highlighting the need for responsible management and oversight in the fast-evolving world of digital assets.
In order to satisfy the expectations of its expanding user base, Robinhood Wallet, the well-known multi-chain, self-custody, Web3 wallet, has added additional functionality. Due to customer requests, Robinhood Wallet now accepts Bitcoin (BTC) and Dogecoin (DOGE), enabling users to store, transmit, and receive these coins.
Select users now have access to more than 200 tokens for trading thanks to the platform’s implementation of on-app swaps on the Ethereum (ETH) network.
Robinhood Wallet Increases Support for Crypto
In order to provide customers more alternatives within the wallet, support for Bitcoin and Dogecoin has been added. Since its general release six months ago, Robinhood Wallet has experienced widespread popularity, drawing hundreds of users from more than 140 nations.
According to the study, users may now easily participate in decentralized finance (DeFi) without having to keep Ethereum in their wallets thanks to the recent launch of in-app Ethereum swaps on Robinhood Wallet. Instead, users’ existing tokens will instantly be removed from network costs, making the exchanging procedure easier and decreasing entrance barriers.
General Manager of Robinhood Crypto Johann Kerbrat emphasized the firm’s dedication to improving the DeFi experience and increasing support for several networks and coins. According to Kerbrat, Robinhood Wallet’s user-friendly interface and robust functionality are intended to make Web3 technology available to a larger audience.
The current version of Robinhood Wallet allows users can own, transmit, and receive cryptocurrency across different chains by supporting the Arbitrum (ARB), Bitcoin, Ethereum, Dogecoin, Optimism (OP), and Polygon (MATIC) networks.
Additionally, the wallet enables cryptocurrency trading on the Polygon and Ethereum networks, letting users connect to a variety of decentralized applications (dapps).
Robinhood Wallet guarantees that only users own and maintain the private keys to their cryptocurrencies by giving them total control over their assets.
Robinhood Connect and the Fiat Onramp?
The usefulness of the wallet is further improved by a Web3 browser since it allows for direct connection to decentralized programs.
Following the addition of Polygon, Arbitrum, and Optimism, and with intentions to spread access to more Layer 2 chains according on user demand, Robinhood Wallet intends to continue extending its network support, according to the statement published on August 30.
By adding learning rewards to its existing rewards program, the site now allows users to earn USDC for completing instructional sessions.
However, users must set up biometric authentication or a personalized PIN in order to use the app. Additionally, they are told to come up with a private recovery phrase that will give them access to their wallet and cryptocurrency assets.
Atomic swaps eliminate middlemen and centralized authority, further decentralizing bitcoin exchanges.
Atomic swaps remove the need for a middleman (like a centralized exchange) and allow peer-to-peer (P2P) transactions between users of different cryptocurrencies on two different blockchains. Users can exchange digital assets through atomic swaps in accordance with self-executing smart contracts.
Centralized exchanges (CEXs) offer a trading experience similar to that of traditional stocks and fiat trading by managing trading pairs and order books, supplying asset liquidity, ensuring fair market pricing, and bringing buyers and sellers together on a platform. Because they have access to user private keys, they exercise centralized control and are custodial.
High trade volumes make CEXs popular, but they go against the decentralized nature of cryptocurrencies and blockchain. Decentralized exchanges (DEXs) aim to represent a noncustodial infrastructure in this context. Greater interoperability across different blockchain networks is made possible by atomic swaps. They allow for the trading of many decentralized blockchain cryptocurrencies, promoting the real decentralized finance (DeFi) ethos.
By using a CEX like Coinbase or Binance and the processes below, one may swap Ether (ETH) on the Ethereum network and Bitcoin (BTC) on the Bitcoin network:
Opening a user account on a centralized exchange that accepts the ETH/BTC trading pair. According to the CEX’s regulation, this can call for an application procedure and a KYC requirement.
ETH transfer to the central exchange.
Converting ETH to BTC may require paying transaction fees and occasionally waiting a lengthy time.
Transferring the purchased Bitcoin to a Bitcoin wallet, which can come with extra costs.
The final step is to wait patiently for the exchange to be processed for the money to finally arrive.
This typical CEX trade offers a number of processes, prohibitive prices, and several potential issues. Furthermore, CEXs may provide unforeseen security vulnerabilities relating to asset custody. The exchange keeps custody of the private keys and stores user monies in custodial wallets at CEXs. The user’s cryptocurrency may be vulnerable to risks in the event of a security breach, hack, or regulatory withdrawal freeze.
DeFi and DEXs enable atomic swaps, which eliminate the need for middlemen in trading, expedite the procedure, and drastically lower several possible security risk points for cryptocurrency users, in order to address these issues.
How are atomic swaps used?
Atomic swaps safeguard the exchange of digital assets using hashlock cryptographic methods and smart contracts.
There is just one possible outcome for processes that are described as “atomic”: they either end successfully or don’t start at all. For cryptocurrency trading, there are just two possible outcomes: either the deal is done successfully or nothing happens.
Simply said, an atomic swap establishes a process where both parties to a bitcoin transfer must meet all prerequisites before the deal can be closed. Smart contracts, which are self-executing programs created to enforce the criteria necessary for a transaction to be successful, are used to do this.
Atomic swaps enable safe and trustless cryptocurrency transfers by using hashed time lock contracts (HTLCs), a type of smart contract. HTCLs essentially “lock” a transaction and require both parties to confirm the data before the exchange can take place.
Atomic swap smart contracts need to include these two things:
Hashlock
With the help of the hashlock method, the contract may be secured using a special cryptographic key that can only be created by the person who deposited the bitcoin. This key, which is a special piece of data, makes sure that the exchange only goes through when both sides agree to it.
Timelock
The timelock technique functions as a swap deadline. It guarantees that the transaction will be finished in a specific length of time, and if it is not, it will reimburse the depositor’s money. with essence, Timelock aids with transaction security. The transaction cannot be completed unless both parties agree to the exchange within the allotted time frame, in which case the cryptocurrency will be returned to its respective owners.
The advantages and disadvantage of atomic swap
Atomic swaps increase the interoperability of blockchains, lessen risks, and provide traders more freedom for less money.
Benefits of atomic swaps include:
Fully decentralized nature
Trades have the benefit of decentralization with atomic swaps. Peer-to-peer trading offers financial independence from CEX platforms or a centralized liquidity pool as well as control over one’s own money.
Enhanced security
A higher degree of security is offered to traders by the hashlock and timelock methods in the self-executing smart contracts utilized by atomic swaps. In the case of delays or disputes, traders may be sure that their bitcoin will be refunded.
Interoperability and altcoin trade flexibility
Atomic swaps allow users on various blockchains to exchange data. Many CEXs restrict traders from trading a wide variety of altcoins. This issue is resolved by atomic swaps, which enable the exchange of almost all types of alternative currencies.
Technology-wise, atomic swaps can be challenging, and slower adoption rates are a direct effect of longer blockchain wait times.
The following are some downsides of atomic swap:
Complexities with trade swap
Atomic swaps need the exchange of hashed cryptographs, data, and information. For traders who are new, this may be intimidating.
Lack of fiat-crypto on-ramp
It might be difficult for traders to liquidate to fiat because atomic swap DEXs do not provide fiat-to-crypto and crypto-to-fiat trades.
Few platforms now enable atomic swaps. To use atomic swaps, one might also need to have a certain level of programming expertise and haveh understanding. But in the future, it’s conceivable that bitcoin wallets will include this technology into their programs.
Is it possible to trace atomic swaps?
User anonymity is protected through atomic swaps so that identities are not revealed.
Atomic swaps do not need KYC, unlike CEXs. Since atomic swaps are intended to be trustless and private, neither the transaction details nor the identity of the participants should be made publicly known.
The underlying blockchains for atomic swaps, like Bitcoin and Litecoin, are public ledgers where transactions are recorded and available to all, therefore it is crucial to keep that in mind. The individual transactions involved in the swap may still be traced on their separate blockchains even if the atomic swap transaction itself may be difficult to distinguish from other transactions on the blockchain.
Participants can employ other strategies like currency mixing or privacy-focused cryptocurrencies to further increase privacy. In order to make it more difficult to track down the cash, coin mixing involves merging many transactions to obfuscate the transaction history. Cryptocurrencies with a privacy focus, such as Monero (XMR) or Zcash (ZEC), provide built-in privacy features that may be combined with atomic swaps to increase anonymity.
Atomic swap vs. bridge
Atomic swaps make P2P trading possible, and cross-chain bridges connect blockchains so that assets may be transferred via tokenized representations.
Cross-chain bridges and atomic swaps both improve the interoperability of blockchains and are used to transfer cryptocurrency between multiple blockchains, although they operate in distinct ways. Bridges that span different blockchain networks are known as cross-chain bridges. They serve as brokers who make it easier for assets to move between various networks.
Cross-chain bridges demand that a token be burned or locked before it is made available on another blockchain. An equivalent quantity in a liquidity pool on the target chain is made accessible together with the creation of a wrapped token. Then, these wrapped tokens may be traded, transferred, or exchanged for the original assets on the source network.
Cross-chain bridges are seen as a cutting-edge, approachable solution to exchange coins on different blockchains and are growing in popularity due to their simplicity of use and appealing user interface.
Atomic swaps, often referred to as cross-chain atomic swaps, were first postulated in 2013 but just recently become a reality.
A developer named Sergio Demián Lerner created the first iteration of a trustless exchange protocol in July 2012. However, Tier Nolan, who is commonly regarded as the inventor of atomic swaps because to his in-depth explanation of the atomic swap process, presented a complete working paper in 2013.
When Charlie Lee, the creator of Litecoin, announced the momentous event of the completion of the first successful atomic exchange, the idea became real for the first time in 2017. He successfully carried out an LTC/BTC cross-chain atomic swap, trading Litecoin (LTC) for Bitcoin (BTC).
Since this significant day, many DEXs and swaps have been utilizing this technology to develop fresh approaches to trade cryptocurrencies. The Lightning Network, Liquality, AtomicDEX, and other well-known DEXs and networks facilitate trading atomic swaps.
The chief executive of the spot cryptocurrency exchange EDX Markets, Jamil Nazarali, said that the venue’s distinct quotations for retail and institutional investors will set it apart since they allow for tighter pricing and better execution.
Nazarali, who earlier served as Citadel Securities’ global head of business development, told Markets Media that his years of expertise in traditional finance and introducing fresh ideas are quite useful.
The first items that will be traded on EDX are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. EDX Markets announced the opening of its digital asset exchange and the conclusion of a financing round with additional equity partners in June of this year.
According to Nazarali, one advantage for EDX is that it will offer distinct quotations for retail and institutional investors, as well as increase transparency by offering the complete depth of book.
Due to the engagement of several market makers, “our retail-only will benefit participants by providing tighter prices,” he noted.
DV Crypto, GTS, GSR Markets LTD, and HRT Technology, together with Miami International Holdings and other market makers, recently finalized a fresh investment round with the firm. They join the initial investors, which also include well-known financial institutions including Virtu Financial, Charles Schwab, Citadel Securities, Fidelity Digital Assets, Paradigm, and Sequoia Capital.
The blockchain will be used to net and settle trades, doing away with the need for pricey bilateral settlement and allowing for increased speed and efficiency. Assets will be held in a network of independent digital custodians, just like conventional finance.
To run a spot cryptocurrency exchange, EDX does not require regulatory clearance; however, the company also has intentions to open a clearinghouse, which will require such approval. Trades matched on EDX Markets will be settled by EDX Clearing, allowing players to profit from increased pricing competition and less settlement risk. According to Nazarali, the use of a single settlement method by EDX Clearing will increase competitiveness and boost operational efficiency.
Technology will be provided to EDXM by MEMX, which runs a US equity exchange and plans to start a US options exchange. Nazarali clarified that Citadel Securities had invested in MEMX and that he also served as the organization’s board of directors. And he said, “I knew the quality of the technology and team at MEMX, which was important to us.”
In a statement, MEMX CEO Jonathan Kellner said: “This marks a new chapter for MEMX as we bring our scalable market technology to other asset classes and market operators.”
According to Nazarali, there has been a significant response to the announcement from June, which reflects latent demand for safe and legal trade of digital assets through reliable intermediaries. EDX Markets is presently concentrating on onboarding institutions, and Nazarali stated that he would like EDX to be recognized in 12 months as a reliable middleman in the cryptocurrency markets for the execution of client flow.
“The roadmap for expansion includes trading more tokens, launching derivatives, and international expansion,” claimed Nazarali.
ETFs for Bitcoin
The debut of EDX coincides with traditional asset managers filing for spot bitcoin ETFs, which the US Securities and Exchange Commission earlier rejected clearance for, despite the SEC having authorized ETFs on listed bitcoin futures.
Since the BlackRock bitcoin ETF filing in June, the price of bitcoin has changed significantly.
Although a spot bitcoin ETF has never been available in the US, Greg Cipolaro, global head of research at bitcoin company NYDIG, stated in a report that significant investment has already been made in existing structures like the Grayscale Bitcoin Trust (GBTC), futures-based ETFs in the US, spot-based ETFs outside of the US, and private funds.
According to Cipolaro’s study, these products account for $28.8 billion in assets under management, $27.6 billion of which are invested in spot products.
However, Cipolaro went on to say that a spot ETF could have advantages such as better liquidity, lower tracking error and costs, familiarity with purchase and sale methods through securities brokers, simplicity of position reporting, risk measurement, and tax reporting, as well as the reputation of BlackRock and the iShares franchise.
Since the initial registration statement for a spot bitcoin ETF was filed more than ten years ago, investors are once more thrilled about the likelihood that one of the current applications would be accepted, according to Cipolaro. We advise participants to assess their choices according to the likelihood that they will ultimately be approved because a slot ETF is still not assured. The future’s path is probably anything from simple, if the procedure for previous bitcoin ETFs is any indication.
Five applications for bitcoin ETFs from BlackRock, Fidelity, Invesco Galaxy, VanEck, and WisdomTree were published in the Federal Register on July 19, 2023, establishing a deadline for the SEC to examine the proposals.
To list and trade shares of the iShares Bitcoin Trust, for instance, Nasdaq submitted a proposal.
“After issuing the Bitcoin Futures Approvals,” the filing continued, “which conclude that the CME Bitcoin Futures market is a regulated market of significant size as it relates to Bitcoin Futures, the only consistent outcome would be approving Spot Bitcoin ETPs on the basis that the Bitcoin Futures market is also a regulated market of significant size as relates to the bitcoin spot market.”
Additionally, Nasdaq is recommending that additional actions be taken to strengthen its capacity to gather data that would be beneficial in identifying, looking into, and preventing fraud and market manipulation in the Commodity-Based Trust Shares. The exchange and Coinbase, a publicly traded cryptocurrency exchange, agreed to the parameters of a surveillance-sharing agreement on June 8, 2023.
It’s anticipated that the deal would be a bilateral surveillance-sharing pact between Nasdaq and Coinbase, which aims to enhance the Exchange’s market monitoring program.
The Spot BTC SSA, which would grant the Exchange additional access to information regarding spot Bitcoin trades on Coinbase when the Exchange determines it is necessary as part of its surveillance program for the Commodity-Based Trust Shares, is anticipated to have the characteristics of a surveillance-sharing agreement between two members of the ISG. To monitor the trading of Commodity-Based Trust Shares, the Exchange will use market data for orders and transactions that it anticipates receiving from Coinbase.
If the exchange decides that further information on spot bitcoin trading activity is required to identify and look into any manipulation in the trading of the Commodity-Based Trust Shares, it may also seek more information from Coinbase.
Grimace digital collectibles—soulbound tokens and mementos that may be created for free but cannot be traded or transferred—have been introduced by McDonald’s Singapore in collaboration with crypto infrastructure firm Bandwagon Labs and local non-fungible token (NFT) artist ‘The Hidden Walls’.
McDonald’s Singapore announced the conclusion of a promotion for early access minting spots in posts on Instagram and Facebook. “Introducing the Grimace Digital Collectible – a collection of 2,000 unique Grimaces minted via the McDonald’s app! He’s cool, cute, and totally purple,” the company said.
According to Bandwagon, the collection will be free and accessible starting on August 31 solely through the McDonald’s Singapore app.
Users must click “mint now” after connecting their Digital Collectibles wallet through the cryptocurrency wallet MetaMask or web3auth. The NFTs will be issued on Polygon, according to Decrypt, which quoted a McDonald’s official.
According to NFTevening, these NFT profile photographs (PFPs) are soulbound tokens.
These NFTs are open to everybody, but they cannot be sold or transferred on the secondary markets. Additionally, only one redemption is permitted per account.
The restaurant chain is “excited to bring Grimace closer to our fans through these unique digital collectibles,” according to Drina Chee, senior director of marketing and digital customer experience at McDonald’s Singapore. Grimace has evolved from a popular character “from nostalgic memories to love for all generations.”
Grimace in TikTok
Grimace, a cuddly, muppet-like mascot unveiled in 1972, is a well-known figure in the McDonald’s world.
On TikTok, a recent trend known as the “Grimace Shake” saw users pretend to experience awful deaths after consuming the berry-flavored milkshake, frequently incorporating the paranormal and/or demonic. Imagine ‘The Conjuring’ mixing with ‘The Blair Witch Project’ mixing with ‘Bird Box’, while some of these movies also fall into the criminal category.
It is reasonable to argue that this meme, although misrepresenting the character, functioned as free advertising for the birthday-celebrating mascot.
According to Marketing-Interactive, which quoted McDonald’s, the NFT effort “aims to serve as a testament to McDonald’s Singapore’s dedication to staying at the forefront of innovation.”
To celebrate the 40th anniversary of Chicken McNuggets, McDonald’s Hong Kong created McNuggets Land in July in partnership with the Ethereum metaverse game The Sandbox.
With the hashtag “McDoNFT,” McDonald’s France unveiled digital artwork in 2021 that included some of their most well-liked menu items.
A few months later, the company launched an NFT line in China to commemorate its 31st anniversary, while in the US, McDonald’s developed NFTs to recognize the 40th anniversary of the McRib.
Artificial intelligence (AI) is the term used to describe software-coded heuristics that simulate human intellect. These days, this code may be found everywhere from consumer apps to embedded firmware to cloud-based business systems.
Through extensive use of applications of the Generative Pre-Training Transformer, AI entered the mainstream in 2022. The most widely used application is ChatGPT from OpenAI, which has become associated with AI in the eyes of most users due to its huge appeal. However, it only reflects a small percentage of the current applications for AI technology.
Ability to reason and take actions that have the highest likelihood of reaching a certain objective is the ideal quality of artificial intelligence. Machine learning (ML), a subtype of artificial intelligence, is the idea that computer systems can automatically learn from and adapt to new data without human assistance. Deep learning algorithms allow for this autonomous learning by ingesting vast quantities of unstructured data, including text, photos, and video.
Understanding Artificial Intelligence
The first thing that comes to most people’s minds when they hear the word artificial intelligence is often robots. That’s because high-profile movies and books frequently include human-like computers that bring havoc on Earth. But the opposite is actually true.
Artificial intelligence is founded on the idea that human intellect can be described in a way that makes it simple for a computer to duplicate it and carry out activities of any complexity. Artificial intelligence aims to emulate cognitive processes in humans. When it comes to concretely defining processes like learning, reasoning, and perception, researchers and developers in the area are making unexpectedly quick progress. Some people think that soon inventors could be able to create systems that are better than what humans are now capable of learning or understanding. Others, however, continue to hold this view since all cognitive processes involve value judgements that are influenced by human experience.
Types of Artificial Intelligence
Weak and powerful artificial intelligence fall into two main types. Weak artificial intelligence is represented by a system that is built to do a single task. Video games like the chess example from above and personal assistants like Apple’s Siri and Amazon’s Alexa are examples of weak AI systems. The assistant responds to your query by providing an answer.
Systems with strong artificial intelligence can do tasks that are thought to be human-like. These have a tendency to be more intricate and difficult systems. They are trained to deal with circumstances when problem-solving may be necessary without human intervention. These sorts of technology are used in applications like self-driving automobiles and operating rooms in medical facilities.
What Are the Four Types of AI?
One of four types of artificial intelligence can be distinguished:
Reactive AI
Employs algorithms to provide the best possible results from a collection of inputs. AIs that play chess, for instance, are reactive systems that maximize the winning strategy. Reactive AI is frequently somewhat rigid and unable to grow or adjust to new circumstances. As a result, given the same inputs, it will create the same output.
Limited memory AI
May update itself in response to fresh observations or data or adapt to prior experience. The word “limited updating” refers to the fact that updates are typically few and far between. For instance, autonomous cars have the ability to “read the road” and adjust to unusual circumstances, even “learning” from prior mistakes.
Theory-of-mind AI
Are completely adaptable and has a wide range of learning and memory capabilities. These AI kinds include sophisticated chatbots that might pass the Turing Test and deceive a person into thinking it was a real person. These AI are remarkable and cutting-edge, but they are not self-aware.
Self-aware AI
as the name implies, become conscious of their own existence. Some professionals think that an AI will never develop consciousness or “life,” keeping this idea in the realm of science fiction.
Artificial intelligence has drawn criticism from both the scientific community and the general public since its inception. One recurring thought is that machines will advance to the point that humans won’t be able to keep up with them, and they’ll take off on their own, reinventing themselves exponentially.
Another is that technology has the potential to be weaponized and can invade people’s privacy. Other debates center on the morality of artificial intelligence and whether robots and other intelligent machines should be accorded the same rights as people.
AI is utilized in healthcare settings to support diagnoses. AI is excellent at spotting minute irregularities in scans and can more accurately make diagnosis based on a patient’s symptoms and vital signs. AI is also used to categorize patients, keep track of and preserve medical information, and manage insurance claims. Future technological advancements are expected to include collaborative clinical judgment, virtual nurses or physicians, and AI-assisted robotic surgery.
Especially after Facebook announced its makeover as Meta, the word “metaverse” has been bandied about quite a bit in recent years. A social technology startup called Meta claims to want “to bring the metaverse to life.” Numerous people in the metaverse expressed interest in this.
The phrase and idea aren’t really novel. The concept of the metaverse and manifestations of it have really been around for a while. Neal Stephenson invented the phrase “metaverse” in his 1992 book Snow Crash, in which the protagonists employ computer avatars to explore a virtual world or engage in social interaction in order to flee their dystopian reality.
David Gelernter introduced the concept of the “digital twin,” or a virtual equivalent of anything that exists in reality, in his book Mirror Worlds in 1991. Dr. Michael Grieves, who is also credited with creating the idea of the digital twin program, brought the digital twin idea to manufacturing for the first time in 2002. NASA ran simulations of spacecraft in 2010 using digital twin technology.
The metaverse appears to be upon us, but what is it and what effects can it have on our day-to-day lives?
Here are some instances that help to clarify the metaverse so that you may learn more about it, how it functions, and where it could be going.
What exactly is a metaverse?
It might be challenging to define the metaverse precisely.
The metaverse is a loosely defined virtual environment where users have access to digital avatars that allow them to “live” there. People can communicate with pals, purchase and exchange digital goods, travel virtually to digital destinations (which may be entirely imagined or may have real-world analogues), and more in the metaverse.
Similar to the OASIS from Ready Player One, the metaverse offers a world where only one’s imagination is constrained.
The metaverse is a virtual environment that exists in addition to or serves as an extension of our physical reality, to put it a little more technically. It is comprised of interoperable technologies like virtual reality and augmented reality, and it is powered by a working digital economy that can use cryptocurrencies or digital currencies—yes, digital currencies are distinct from crypto—to purchase goods and services.
Furthermore, there isn’t a single, distinct metaverse. There are several variations of the metaverse. For instance, if you are playing Fortnite, you may enter a metaverse. If you’re using Facebook Horizon, you can also access a distinct metaverse. The metaverse is intended to be interoperable, so you will ultimately be able to access your assets that you have gathered on one platform and use them on another.
Examples of the Metaverse that Can Help Explain
The idea of the metaverse and the potential benefits it offers are just astounding. Here are some instances from the actual world that provide us a peek of the metaverse and its future to better describe this parallel reality.
The Metaverse in Pop Culture
Ready Player One
Almost invariably, Ready Player One is used as an example when discussing the metaverse. There is a valid explanation, though. The 2011 science fiction book by Ernest Cline provides a vivid description of the future appearance and operation of the metaverse.
In the 2045 novel, people turn to the OASIS, a massively multiplayer online simulation game (MMOSG) with its own virtual world (and currency), where they can interact with other players, visit different locations, play games, and even shop, as an escape from a world torn apart by war, poverty, and climate change.
In the OASIS, everything is possible since everyone has the freedom to be anyone they want to be and “reality” is only constrained by people’s imaginations.
If that’s a lot to process, watch the 2018 Steven Spielberg film adaptation, which offers a decent look of the metaverse from the novel.
In the real world, Facebook is making great progress toward building Facebook Horizon, its own version of the OASIS. Through either the Oculus Rift or the Oculus Quest 2 headgear, users may enter this virtual world. Users may explore, play, create, and engage with other gamers in this vast digital environment.
Fortnite Concerts
What initially began as a game has soon evolved into something deeper and capable of providing a wider range of experiences.
Players in Fortnite may design their own worlds and go on quests. They can engage in cross-play with other Fortnite gamers. Players may access the game via its cross-platform functionality on devices such the Xbox, PC, Playstation, and mobile phones.
Fortnite has developed into more than just a game, allowing players to hang together and go to in-game concerts. Ariana Grande, Marshmello, and Travis Scott were a few of the featured musicians. Fortnite’s creator, Epic Games, ups the ante by launching the Soundwave Series, which includes tunes from musicians all around the world. Players may enjoy immersive in-game experiences with The Series.
Social networks and games in the metaverse
Second Life
Even though it’s not really a game, Second Life is an online environment where users may create virtual characters to explore the environment, communicate with other users, and even exchange products and services using the Linden Dollar, the in-world money.
In Second Life, users may interact with other users and the digital world itself in a shared virtual realm, similar to an earlier iteration of the metaverse. Users may learn about the opportunities the metaverse offers thanks to this technology, which has been present since the late 2000s.
The Sandbox
Users may play in and create virtual worlds in the Sandbox, a virtual metaverse. They may also control and profit from their in-game experiences thanks to it. With non-fungible tokens, or NFTs, you may purchase and sell lands and other assets in The Sandbox metaverse.
In essence, NFTs are digital tokens that are created on the blockchain. As a result, they become one-of-a-kind, irreducible, and non-interchangeable, giving you genuine digital ownership of your in-game assets.
This demonstrates how widely used digital currencies are in the metaverse. In a digital future, there will be no boundaries to how we perceive, utilize, or define money.
Illuvium
According to its description, Illuvium is an open-world role-playing game that is built on the Ethereum Blockchain. Players can keep Illuvials, which resemble deities, on Shards by hunting and capturing them in this location. Players in Illuvium essentially acquire NFTs, which stand in for each Illuvial. Additionally, you’ll have the chance to amass in-game goods that you may sell on outside NFT marketplaces.
Augmented Reality (AR)
A recent technological advancement called augmented reality (AR) overlays digital augmentations on top of real-world objects. For instance, utilizing augmented reality (AR), you may see a dragon perched on your neighbor’s car while you’re still in the actual world.
AR is employed in navigation systems in addition to gaming applications. Users may explore the actual world more using Google’s AR and VR thanks to these technologies.
Users will have a more immersive experience thanks to this real-world application, which will enable them to get the most out of their smart gadgets. You can explore a place more effectively, for instance, if you utilize Google Maps’ Live View feature since directions are superimposed over your Google Street View photographs.
Google Search is one more place where AR may be used. You may do this to put 3D items in your own environment and get a better sense of their scale.
In the actual world, augmented reality is also used for:
Being used to show plays in football games
Giving you a sense of how a piece of furniture may seem in your room
by superimposing images of past civilizations over ruins, historical landmarks will be given new life.
The world of education is also embracing augmented reality technologies. An AR creation tool for educators and kids in the classroom is called The Metaverse Studio. Apps, games, and other activities that help improve project-based learning can be developed using it.
Metaverse Real Estate
We cannot discuss the metaverse without addressing its uses in real estate. People purchase and sell real estate on online marketplaces, just as in the real world. They are trading, nevertheless, using cryptocurrencies.
Technologists predict that the metaverse will eventually have its own fully functional economy, even though real estate in the metaverse is presently viewed as being “highly speculative”. Due to the popularity of virtual real estate, digital assets are already trading for millions of dollars. While a piece of virtual property in The Sandbox brought a hefty price of $4.3 million, a piece of virtual real estate in Decentraland went for 618,000 mana, or $2.4 million in cryptocurrency.
Many businesses have taken the risk of developing their own digital worlds and, along with them, their own digital properties as a result of the metaverse’s growing popularity. One such business is the Metaverse Group, which runs the user-owned virtual world Decentraland. Users are free to explore lands owned by other users, create artwork and challenges, take part in contests for rewards, and engage in events to exchange digital goods using mana, Decentraland’s own coinage. This virtual world is similar to past versions of virtual worlds in this regard.
SuperWorld, a virtual environment where you may purchase, sell, and amass parcels of virtual land, is another outstanding example of real estate in the metaverse. There are now 64.8 billion distinct virtual land plots available, including Mount Rushmore (0.1 ETH), the Taj Mahal (50 EHT), and the Eiffel Tower (100 ETH).
In addition to owning distinctive digital assets, users who buy a piece of virtual real estate also become platform stakeholders and are eligible to partake in the proceeds from user activity carried out on the property.
The metaverse is gradually becoming a reality. From video games and movies to navigational tools used in the real world, technology has found its way into many facets of our everyday lives. Although the metaverse itself can be difficult to describe and is still in its infancy, we can claim for the time being that it is definitely full of potential. What more will the metaverse have in store for us moving forward is the topic at hand.
In a remarkable turn of events, the pre-sale of an Ethereum (ETH) -based smartphone has exceeded all expectations, with the first 50 units flying off the virtual shelves within a mere 24 hours. This astonishing success story sheds light on the growing interest in blockchain technology and its integration into everyday devices.
The Ethereum Smartphone: Blending Innovation and Functionality
Dubbed the “Ethereum Phone,” this groundbreaking device is built on the foundation of the Google Pixel 7a, harnessing the power of a unique open-source operating system known as ethOS. Notably, “ethOS” not only stands for the Ethereum operating system but also carries the Greek meaning of “character.”
What sets these smartphones apart from their counterparts in the Web3 ecosystem is the inclusion of an Ethereum light client. This feature empowers the ethOS operating system to independently validate blocks, effectively transforming the device into a “light node” on the Ethereum network.
Empowering Users with Cutting-Edge Features
The Ethereum smartphone boasts a suite of built-in tools, simplifying payments, and facilitating seamless communication through message sending and receiving capabilities. Furthermore, the device seamlessly integrates Ethereum Name Services (ENS), streamlining payment processes for users. Beyond that, it extends support for Ethereum Virtual Machines (EVM) and Layer 2 scaling networks, opening up new horizons for blockchain applications.
Unlocking Access Through NFT Ownership
However, the path to owning one of these Ethereum smartphones was no ordinary transaction. Prospective buyers had to secure an ethOS non-fungible token (NFT) to qualify for their purchase. The process involved either burning or destroying the NFT, effectively reserving their coveted phone.
This unique approach has led to a surge in ethOS NFT prices on platforms like OpenSea, where some are fetching as much as three Ethereum (ETH), translating to nearly $5,000. This price disparity, considering the regular Google Pixel 7a’s $499 price tag in the US, underscores the immense demand and willingness of enthusiasts to embrace this cutting-edge technology.
Competitive Landscape: Ethereum vs. Solana
While Ethereum smartphones have soared to success, a different story unfolds in the world of Solana (SOL) smartphones. The initial reception of Solana’s crypto phone has been less enthusiastic, with just over 2,000 units sold since its launch, as reported by Flipside records.
In an attempt to reignite interest and boost sales, Solana Labs recently reduced the price of its crypto phone from $1,000 to $599. This strategic move followed the announcement of Ethereum’s impending smartphone premiere, scheduled for the fall of 2023.
In conclusion, the Ethereum smartphone’s pre-sale triumph underscores the growing appetite for blockchain integration in everyday technology. It also highlights the community’s willingness to embrace innovative concepts, even if it means acquiring these devices through unconventional means such as NFT ownership. As the world eagerly awaits the official launch of the Ethereum smartphone, the stage is set for further developments and competition in the mobile Web3 space.
Venture capital (VC) is a sort of private equity and funding provided by investors to start-up enterprises and small businesses with the potential for long-term growth. The majority of venture capital is often provided by wealthy individuals, investment banks, and other financial organizations. The source of venture capital need not necessarily be monetary. In actuality, it frequently manifests as managerial or technical knowledge. Small businesses with outstanding growth potential or those that develop fast and seem set to keep growing frequently receive VC funding.
VC offers funding to start-ups and small businesses that investors think have excellent development potential. Private equity (PE) is the most common type of financing, although it can also take the shape of knowledge, such as technical or management experience.
Large ownership stakes in a firm are typically created as part of VC investments and then sold to a select group of investors through independent limited partnerships. These connections are made by venture capital companies and might include a group of numerous comparable businesses.
However, one significant distinction between venture capital and other private equity transactions is that, while PE typically funds larger, more established businesses looking for an equity infusion or a chance for company founders to transfer some of their ownership stakes, venture capital tends to focus on emerging businesses seeking substantial funds for the first time.
Despite the risk, the possibility of above-average profits frequently draws venture capitalists. VC is gradually becoming a well-liked and crucial source of funding for new businesses or initiatives with brief operational histories (under two years), especially if they do not have access to capital markets, bank loans, or other debt instruments.
The biggest drawback is that investors often receive shares in the business and consequently a voice in corporate decisions.
Benefits and Drawbacks of Venture Capital
New enterprises without access to stock markets or adequate cash flow to incur loans might receive investment from venture capital. Due to the fact that both parties earn stock in promising enterprises and businesses receive the funding they require to bootstrap their operations, this arrangement may be advantageous to both parties.
The benefits of a VC investment are not the only ones. VCs frequently offer mentorship services to assist young businesses establish themselves as well as networking services to help them acquire talent and consultants in addition to investment funds. A solid VC backing may be used to leverage more investments.
However, a company that takes VC funding may forfeit creative control over its future course. VC investors are likely to seek a sizeable portion of the company’s stock and may start putting pressure on the management of the business. Many VCs may put pressure on the firm for an early exit since they are simply looking for a short, high-return payment.
Benefits
Gives startup enterprises the money they need to fund their own operations.
Companies can obtain VC capital without having assets or cash flow.
Mentoring and networking programs sponsored by venture capital aid startups in attracting talent and achieving growth.
Drawbacks
Demand a sizable portion of the company’s equity
As investors seek quick profits, businesses risk losing creative control.
VCs could put pressure on businesses to sell their investments early rather than focus on long-term growth.
Types of Venture Capital
The growth stage of the firm receiving the investment may be used to broadly divide venture capital. Generally speaking, the risk for investors increases with a company’s youth.
the following stages of VC investment:
Pre-Seed
The founders are attempting to put a concept into a detailed business strategy at this early stage of a company’s growth. They could sign up for a business accelerator to get coaching and early investment.
Seed Funding
A new company is now trying to introduce its first product. The business will require VC funding to support all of its activities because there are currently no income sources.
Early-Stage Funding
Before a company can become self-supporting, it will require more cash to increase manufacturing and sales once a product has been established. The company will thereafter require one or more investment rounds, which are often identified progressively with Series A, Series B, etc.
The Process of Venture Capital
Any company seeking venture money should start by submitting a business plan to either a venture capital firm or an angel investor. If the company or investor is interested in the idea, they must subsequently do due diligence, which entails a careful examination of the company’s operational history, management, and business plan.
This background investigation is crucial since venture capital tends to invest higher cash amounts in fewer businesses. Many people in the venture capital industry have prior investment expertise, frequently as equities research analysts, while others have an MBA. Professionals in venture capital (VC) also frequently focus on a single sector. For instance, a venture capitalist with expertise in the healthcare sector may have previously worked as a healthcare industry analyst.
Following the completion of due diligence, the business or the investor will promise to invest money in return for shares in the company. The capital may be donated all at once, although rounds of funding are more common. The corporation or investor then actively participates in the financed company, providing advice and observing its development prior to disbursing new cash.
After some time has passed, usually four to six years after the initial investment, the investor leaves the business by starting a merger, acquisition, or initial public offering (IPO).
The foundation of a capitalist economy is based on innovation and entrepreneurship. However, starting a new firm is sometimes a very dangerous and expensive enterprise. To share the risk of failure, external funding is frequently sought for. Investors in fledgling enterprises can purchase shares and voting rights for pennies on the prospective dollar in exchange for taking on this risk through investing. Therefore, venture money enables firms to take flight and entrepreneurs to realize their goal.
An essential phase of a new company’s lifetime is represented by venture capital. A business requires enough start-up funds to recruit staff, rent space, and start developing a product before it can start making money. VCs give this money in return for a portion of the stock in the startup firm.
It is advised that you conduct a cryptocurrency analysis before investing in it in order to limit the risk of your investment. Such an examination necessitates a close examination of the cryptocurrency’s primary characteristics. Investors can, however, invest not just in cryptocurrency coins, but also in tokens. These tokens are also valuable. Tokenomics is when you undertake an analysis to determine whether or not you should invest in a token.
Tokenomics combines the words “token” with “economics,” and it refers to the study of why a token has worth and why it has achieved the price that it has. Tokenomics presents an answer to the economizing difficulties of tokens and their usefulness in blockchain technology by looking at numerous aspects that shape the world of cryptocurrency.
What is a Token?
Tokens are multipurpose financial units that may be exchanged for other goods or used to pay for a football game. They are also present in cryptocurrencies, such as Ethereum, which was the first blockchain platform to provide decentralized services other than transactions. These decentralized services, known as ERC-20 tokens, require tokens in the same way that transactions require money to be completed. With the development of Ethereum, the notion of tokens in cryptocurrencies grew.
Tokens are categorized into two types: Layer 1 and Layer 2. Layer 1 tokens are native to a blockchain and can fuel all services within it, like Ether (ETH) on the Ethereum network and BNB in the Binance chain. Layer 2 tokens are used for decentralized applications within a network, like OMG tokens for OmiseGO on the Ethereum network. There are also security and utility tokens based on their usage.
Security tokens are investment contracts that demand a financial investment, profitability, and common business, and are generated by the computing work of others. They pass the Howey Test, so becoming security tokens. Siafunds (SF) on the Sia network is one example. Utility tokens provide network funding and are often allocated through initial coin offers (ICOs) to support project development. Basic Attention Token (BAT), for example, was first issued through an ICO and is currently used in decentralized advertising on the Ethereum network’s Brave browser. Tokens can be fungible or non-fungible, with fungible tokens having the same value and replicating, allowing ETH to be replaced with another token.
Non-fungible tokens (NFTs) on the other hand, do not have the same value because each NFT is unique. NFTs are often tokenized assets like as photographs, artworks, antiques, and real estate, among others. Because NFTs are one-of-a-kind, they cannot be duplicated. This can raise their worth over that of fungible tokens.
Coins vs. Tokens
So, in the realm of cryptocurrencies, what are the similarities and differences between coins and tokens?
Similarities
Decentralized
Coins and tokens are both decentralized under blockchain technology. This means that employing tokens or coins in cryptocurrencies eliminates the need for third parties or central bodies to regulate these services.
Value
Tokens and coins both have potential worth. Coins and tokens may have different pricing variables, but they may both be bought or sold for the necessary amount.
Differences
Independence
With an independent blockchain, coins may be utilized. The benefit that coins have comes from their operability.
Change in value
The price of a coin is influenced by several outside influences. The fluctuation in the value of the cryptocurrency on which a token is based, however, has a significant impact on how much a token’s value changes.
Purpose
As their name implies, coins are made to serve as a symbol of worth in money. On the other hand, tokens might be produced with the intention of powering additional blockchain services.
What Exactly Is Tokenomics?
Tokenomics is the study of tokens, including how they function, what purpose(s) they serve, and what considerations should be considered before investing in cryptocurrencies. This is how it got its name.
Tokenomics, in general, refers to everything that can impact the value of a token, including the token itself.
Which Tokenomics Factors Should You Consider Before Investing?
There are several elements that might influence the price of a token or cryptocurrency. However, some of these characteristics are critical to consider if you wish to invest.
Total Supply and Market Cap
When evaluating a cryptocurrency, it is critical to consider the total quantity of coins. Typically, cryptocurrencies with a restricted total supply may increase in value in the future. This occurs because scarcity generates a market shortage. In order to achieve equilibrium, a price rise is required.
On the other hand, if supply is unrestricted, future prices may not rise as much as they would if supply was constrained.
The supply of a cryptocurrency is highly correlated with its market capitalisation. The market cap is calculated by multiplying the entire circulating supply by the current price of one token. The completely diluted market cap is a fictitious estimate of a cryptocurrency’s market capitalisation if its whole supply is in circulation.
Even if one cryptocurrency has a greater supply than another, this does not always imply that the market supply is larger. The same may be said of bitcoin prices. A higher price does not always imply that a cryptocurrency’s market cap is greater than that of others.
Before you invest, you should think about the market cap. A smaller market valuation may indicate that the cryptocurrency has more room to expand. This is true for small-cap cryptocurrencies (those having a market valuation of less than $1 billion). Large-cap cryptocurrencies (market caps more than $10 billion) may be a safer bet, but their growth potential is often lower.
Allocation and Distribution
Prior to the introduction of a cryptocurrency, tokens can be allocated via fair launch or premining.
A fair launch is the systematic distribution of a cryptocurrency once it has been issued. Tokens are distributed through mining, and the quantity of mining is often determined by the processing capacity of the blockchain’s nodes.
The allotment of a cryptocurrency prior to its introduction, on the other hand, is known as premining. This is accomplished through an ICO, which secures funds for the cryptocurrency’s development.
These two theories have a significant influence on token distribution.
When a cryptocurrency is released fairly, the distribution is more concentrated on nodes with better computing powers, so they can mine more tokens. It is said to be “fair” since those who spend more in mining are paid more than those who invest less.
If a cryptocurrency is premined, the tokens offered during an ICO are often sold to institutional investors and the coin’s development team, rather than regular investors. As a result, when institutional investors possess a bigger percentage of the entire supply, token distribution is unbalanced. As a result, by selling the tokens all at once, such investors can substantially influence the price of a cryptocurrency.
Vesting and Inflation
When a cryptocurrency is premined, its operators have the option of locking up the available supply and releasing tokens gradually over time. This gives small-scale investors peace of mind that institutional investors won’t suddenly acquire all of their tokens and disrupt the market’s equilibrium. Token distribution should be done in a rational manner, which means that little quantities should be distributed over time.
After a large number of tokens are released all at once, there is a shift in the value of the existing tokens known as inflation. There would be a surplus if there were a large quantity of tokens. Additionally, anytime there is a surplus, prices drop. Contrarily, deflation is the reverse of inflation, which occurs when there is a risk that the amount of tokens in circulation may decrease, leading to an increase in their price.
Staking and Utility
Staking is the process of locking tokens for a predetermined amount of time (depending on the cryptocurrency) in exchange for a network reward or passive revenue. The drawback of staking is that tokens staked during a period cannot be transferred until the end of that time. The supply will be more constrained during the staking phase if more tokens are staked. The price of a coin may be impacted by this. Some cryptocurrencies don’t require any staking at all or have staking requirements that are far lower. Due to the easiness with which individuals may buy or sell tokens, significant price spikes or decreases may not take place.
The use of the tokens is referred to as utility. To put it simply, a token’s usefulness is what encourages individuals to purchase additional tokens, which raises the price of a cryptocurrency.
Everything involving a token in cryptocurrency is referred to as tokenomics. Before making a cryptocurrency investment, it is important to thoroughly consider each Tokenomics component.
Although it is still a young subject of research, tokenomics has the potential to grow into one of the most important economic subfields.
Tokenomics FAQs
What exchange should I list on: DEX or CEX?
– Both have advantages and disadvantages, and a separate article would be necessary to cover them all. To determine what is ideal for your specific situation, speak with your tokenomics adviser, but as a general guideline, consider “What are the users of my projects most likely to be comfortable with?”
Do I need a market maker?
– It is advised to have one if you are listed on a CEX. There are other choices if you are on a DEX, such as a public Liquidity Provider program.
Also keep in mind that different Market Makers may not all be appropriate for your situation due to their varied attitudes and tactics for delivering liquidity.
How do you calculate a token’s worth?
– We do not currently have a very strong framework for analyzing cryptocurrencies because they have only been around for a relatively little time. As a good substitute for value, there are a number of experimental ones as well as a number that are leftovers from conventional financial modeling. These contain:
