Weekly_Wrap_Article_Image

1. Visa to settle USDC stablecoin on the Ethereum blockchain

The Facts:

  • USDC, a stablecoin pegged to and backed by the U.S. Dollar, will be used by Visa for digital currency settlement on the Ethereum blockchain. Visa will initially work with Crypto.com to enable the new service.
  • The first federally chartered digital asset bank, Anchorage, will act as Visa’s settlement agent for USDC. Crypto.com will send USDC to Visa’s Ethereum address at Anchorage.
  • The USDC settlement capability will be expanded to other partners in the year ahead after further testing with clients, partners, and regulators.

 

Why it’s important:

  • The new USDC settlement capability means that partners can now settle transactions directly on the Ethereum blockchain. This means they no longer need to settle in fiat currency. This may enable a significant reduction in cost and complexity while boosting the usage of stablecoins.
  • This new development follows Visa’s new network strategy designed to integrate Visa’s existing payment network with public blockchains. Visa’s CEO, Al Kelly, has also recently confirmed the importance of cryptocurrencies for the Visa network, and Visa’s future plans to settle payments in CBDCs.
  • Visa now becomes the first major payment network to use a stablecoin as settlement currency. It should be noted however, that MasterCard has been a member of the Ethereum Enterprise Alliance for several years. It will be interesting to see how they respond to the Visa developments.

2. Singapore sovereign wealth fund and New Zealand retirement fund invests in Bitcoin

The Facts:

  • Robert Gutmann, CEO of NYDIG, recently revealed in an interview with Raoul Pal of Global Macro Investor that a number of sovereign wealth funds have approached NYDIG, seeking information about making Bitcoin purchases.
  • In the same interview, Pal stated that Temasek Holdings, a sovereign wealth fund, owned by the government of Singapore with portfolio of SGD 306 billion (USD 227 billion), has been purchasing Bitcoin from miners since 2018.
  • James Grigor, Chief Investment Officer at New Zealand’s Funds Management stated that the KiwiSaver Growth Strategy fund has allocated approximately 5% of its assets to Bitcoin, with the first purchase starting in October last year.

 

Why it’s important:

  • The revelation that Bitcoin purchases by a Singapore sovereign wealth fund and a New Zealand retirement savings scheme have been underway for some time, may be an indication that others are following or already have made investments.
  • The eight recent Bitcoin ETF filings in the U.S., and the success of the Canadian ETFs, also suggest interest in Bitcoin and cryptocurrencies from financial institutions is still growing.
  • Michael Sonnenshein, CEO of Grayscale, has also noted that pension funds and endowments in the U.S. are actively investing in Grayscale crypto trusts. James Grigor expects that within five years, Bitcoin is likely to play a greater part in KiwiSaver schemes, reiterating the current narrative that Bitcoin can be thought of as a store of value, similar to gold.
  • It is exciting to see disruptive technology like #NFTs transform our relationship to content and empower content creators like never before.
    joe-lubin-square
    Joseph Lubin
    CEO Consensys

3. Polkadot initiates parachain slot auctions on Rococo testnet

The Facts:

  • The Polkadot parachain testnet, Rococo, launched in August 2020, has commenced parachain slot auctions. Acala Network recently won the first slot auction, followed by Plasm Network and Kilt Protocol. More auction winners have been announced, and others will follow soon.
  • Rococo is designed to enable projects to test their own chains, fix bugs, test interaction with other chains while the core functionality for Polkadot’s inter-shard communication protocols is finalized.
  • Current expectations suggest that Polkadot mainnet will support approximately 100 parachain slots, to be deployed slowly over time. Each parachain is an individual layer-1 blockchain, running in parallel and connected to the Polkadot Relay Chain.

 

Why it’s important:

  • The launch of the Polkadot parachain auction slots on Rococo signal that the Polkadot roadmap is moving forward. Projects will go through full testing on Rococo prior to deployment on Kusama and eventually Polkadot mainnet.
  • The growth of the number of new projects participating in the slot auctions may provide an indication of the value of Polkadot’s cross-chain composability for new applications and services. Parachains can also connect to external networks, such as Bitcoin and Ethereum.
  • The recently announced Polkadot DAO Alliance will support development of decentralised governance as well as establishing a multi-million U.S. dollar development fund for early stage projects. The alliance is designed to promote activity and developer commitment to the Polkadot ecosystem. The range of promotional initiatives to incentivize developers and start-ups is notable, and it will be interesting to monitor the adoption and success going forward.
  • Number of the Week
    Screenshot 2021-04-01 091401
    More than USD 1.5 billion
    The amount Bitcoin miners have earned in revenue for March, via The Block

4. Dharma upgrades its integration of DeFi with banking services

The Facts:

  • Dharma is a non-custodial Ethereum smart contract wallet. It enables easy access to DeFi protocols for lending, borrowing, providing liquidity, and staking, directly from a mobile app. Dharma integrates with traditional bank accounts via a fiat-to-crypto conversion service.
  • In a recent brand overhaul, Dharma HQ upgraded its bank-to-DeFi services, increasing deposit limits to USD 25k per week. Dharma also confirmed that they will be moving to Ethereum L2 in a few months, which will cut current network fees by up to 100x.
  • Dharma currently supports Uniswap, Compound Finance, Aave, and Yearn Finance. DharmaOS, an open SDK, can connect any Ethereum protocol to the Dharma fiat on and off ramp system. This will enable developers to add new protocols as needed.

 

Why it’s important:

  • Dharma is highlighting its unique selling proposition (USP) as “dollars to DeFi in a tap”. Dharma also claims to have more capabilities than any other fiat to crypto exchange, and better fiat support than any other Ethereum wallet.
  • The ability to transfer up to USD 25k a week from traditional bank accounts into DeFi protocols will provide users with significant new opportunities to generate yield on otherwise dormant cash savings. The two-way crypto-fiat bridge, allowing withdrawals to bank accounts 24/7, will also improve user experience.
  • Dharma L2 integration will solve scalability and fee issues. For DeFi to hit mainstream, the UI and UX should match existing FinTech applications running on mobile. The new Dharma capabilities of low fees, seamless DeFi integration with bank accounts, and the opportunity to earn high DeFi yields, may be an important development towards greater mainstream adoption.

5. Ether Cards register record sales figures

The Facts:

  • Ether Cards is an integrated NFT ecosystem, consisting of: the Ether Card platform which enables the creation of customizable NFT tokens; and Ether Card membership cards that entitle holders to privileges, such as VIP access, free NFT drops and discounts.
  • The Ether Card main sale commenced on March 18. Over 5,000 ETH worth of founder series cards were sold within 24 hours. Ether Cards now has the single-day revenue launch record for NFT collectible platforms, beating NBA Top Shot, Hashmasks and EulerBeats.
  • The Ether Card platform uses Chainlink’s Verifiable Randomness Function (VRF), which enables cryptographically proven randomness. This ensures that Ether Card NFTs are endowed with traits that are fairly distributed and cannot be manipulated.

 

Why it’s important:

  • Interest in NFTs is growing rapidly. However, two possible limitations may hinder utility going forward. First, rarity is the key value for NFTs, however many NFTs are not provably rare or randomly distributed. Chainlink’s VRF on the Ether Card platform enables these capabilities.
  • Second, most NFTs are static. They are not able to inherit or draw on data from the real world or change over time. Through the oracle system, Ether Cards enable dynamic NFTs that can evolve and upgrade in response to real world events.
  • Applications may include: updating stats on NFT sport cards, minting new milestone cards and adding new value to in-game items. Dynamic NFTs that use oracle networks may also enable real world services such as: fraud-proof digital passports, land deeds, and a range of other auto-updating real world assets.

In Other News

  • Optimism delays mainnet launch until July (via Optimism)
  • PayPal now allows crypto spending at millions of merchants (via The Block)
  • Dragonfly Capital launches new USD 225 million fund to invest in DeFi, NFT and more projects (via The Block)