The Weekly Wrap – Parachain Auctions, Coinbase NFTs, U.S. mining dominance, U.S. debt ceiling

Oct 15, 2021 - 4 min read

1. Polkadot Parachain Auction Dates approved via Governance Vote

The Facts:

  • The first of the much anticipated Parachain Auctions is set to take place on November 11th.
  • The auctions are divided in two badges with the first five auctions taking place every week and going live on December 15th and the second badge of six auctions taking place every two weeks with go live on March 9th, 2022.
  • Compared to the Kusama Parachain Auctions, the leasing period will be significantly higher with 96 weeks compared to 48 weeks.

Why it’s important:

  • The test on Kusama was a success with KSM 2.4m committed by 49’000 uniquely active addresses, indicating a smooth Auction process for Polkadot.
  • Almost exactly five years after publishing the whitepaper, Polkadot has unlocked the final core technical element to unlock its parachain functionality.
2. Coinbase announces NFT Platform

The Facts:

  • The exchange announced Coinbase NFT with the intention of enabling customers to mint, trade and exhibit their collectibles.
  • Coinbase NFT provides a platform where communities can grow with social engagement being a key element.
  • Initially the platform will support Ethereum based ERC-721 and ERC-1155 tokens, with the ambition to soon add multichain support.

Why it’s important:

  • Since the direct listing in April and after cancelling its lend program due to SEC intervention, Coinbase has been under pressure to deliver a new product.
  • With Binance (June) and FTX (October) announcing similar entries into the market and a growing competitive landscape, missing out on trends is costly. Coinbase NFT could spark new engagement on the customer side and be an additional revenue stream to counter the -24% drop of the NASDAQ listed company.

It’s too early to talk about it today

3. U.S. House pulls a quick fix to avoid imminent default

The Facts:

  • The U.S. House of Representatives avoids crisis before next week’s deadline as it passes a $480 billion debt limit increase.
  • The new deadline to hit the debt ceiling is set for December 3rd, anticipating another battle between parties.
  • Temporarily the government’s borrowing limit amounts to $28.9 trillion.

Why it’s important:

  • Increasing the debt limit does not authorize new spending. It is used to pay for expenses that have already been authorized by the government.
  • If the government can’t borrow to cover the expenses, it would have to suspend some pension payments, delay interest payments, and cut the pay of soldiers and federal workers, which would constitute the first default in its history.

Number of the week

The amount of burned ETH as result of the new fee regime, EIP-1559.

4. US dethrones China as leading Bitcoin miner

The Facts:

  • Since China imposed a ban on Bitcoin Mining in May 2021, its share of global hash rate went down from 44% to allegedly 0%.
  • As a consequence, the US benefits by increasing its share to 35.4% (August).
  • The US has established itself as mining hub, with companies like Cipher Mining, Riot Blockchain, Marathon Digital and others purchasing large orders of mining rigs.

Why it’s important:

  • Chinese mining companies are investing large sums to build data center in the US, demonstrating their mobility and independency.
  • It remains to be seen if having jurisdiction over a domestic mining industry is of geopolitical relevance or not. In any case China just gave it up.
5. SEC Tweet sparks hopes for Bitcoin Futures ETF

The Facts:

  • The SEC is expected to either approve, reject or delay different proposals for future ETFs rather than ETFs with Bitcoin as underlying in the coming 2 weeks.
  • SEC Chairman Gary Gensler publicly mentioned his support in August.
  • The Tweet of the official SEC Investor Ed account sparks hopes among industry natives.

Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits.

Check out our Investor Bulletin to learn more:

— SEC Investor Ed (@SEC_Investor_Ed) October 14, 2021

Why it’s important:

  • A potential Bitcoin future ETF offers investors the possibility to create exposure without directly owning the underlying itself. As a bankable product, accessibility would be drastically increased.
  • SEC approval would mark a new era of regulatory adoption and would solidify the strong position the U.S. is taking on in the industry.

In other news

  • Bitfury is planning an IPO at a $2 billion valuation. (via The Telegraph)
  • Stripe to build new crypto team after 3-year absence. (via TechCrunch)
  • Binance launches $1 billion fund to push adoption of blockchain industry. (via Binance)

Bitcoin Suisse