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1. DAOs treated as LLCs

The Facts:

  • On July 1, a new law in Wyoming concerning decentralized autonomous organizations (DAOs) went into force.
  • The law classifies DAOs as a form of limited liability companies (LLCs).
  • DAOs can be algorithmically managed or member managed.

Why it’s important:

  • DAOs are a typical way to manage decentralized protocols. They are used, for example, in many DeFi protocols such as Uniswap, Aave or Compound.
  • The legislation provides regulatory clarity for the treatment of DAOs within traditional laws, and might lead to a stronger presence of DAOs in the analog world.

 

2. Twitter and WWW NFTs

The Facts:

  • Twitter is engaging in the NFT space and handing out 140 NFTs.
  • The NFTs are available on on Rarible, an NFT marketplace, with the cheapest being already priced at 3.3 ETH (ca. $7’000).
  • This week, an NFT of the original World Wide Web code was also sold for $5.4 million.

Why it’s important:

  • NFTs continue to attract interest from mainstream media and investors. A large company like Twitter entering the space speaks to the longevity of the concept of NFTs.
  • Current applications mostly focus on art and digital property. There exist, however, other applications of NFTs – for example, Uniswap is using NFTs to represent liquidity provider positions in their v3.
S01E18_TwitterNFT
Source: Twitter

 

3. Binance faces regulatory scrutiny

The Facts:

  • The UK’s Financial Conduct Authority (FCA) published a consumer warning on June 26 saying that Binance Markets Limited and Binance Group are not authorized to “undertake regulated activity” in the UK.
  • It later clarified that this does not equal a full ban of Binance’s activities.
  • Binance also had to close down its service to customers from Ontario.

Why it’s important:

  • As the crypto industry and overall market capitalization of the space grows, it faces increased regulatory scrutiny and interest in potential risks to financial stability.
  • In the longer term, a dialogue with regulators is crucial and will open up the space to more participants, especially from the institutional side.
  • Number of the Week
    $111 billion
    total stablecoin market capitalization

 

4. Compound launches Treasury

The Facts:

  • Compound launched a new platform called “Treasury” targeting institutional investors, with traditional onboarding procedures.
  • The platform offers a 4% p.a. yield on USD.
  • It uses the Compound protocol in the background to generate yield, coming from regular USDC lending rates as well as the COMP liquidity mining program.

Why it’s important:

  • Compound’s new platform represents an easy interface to DeFi, which is needed to expand the scope of DeFi and might push assets locked in DeFi to new highs.
  • Other DeFi protocols, such as Aave, are also looking to attract institutions with new products. These might come with some restrictions on the otherwise permissionless nature of DeFi.
  • What has been holding up real world assets for years is the basic question of legal recourse – how do you legally enforce a claim by a decentralized organization (DAO)?
    Rune Christensen

 

5. BIS encourages CBDCs

The Facts:

  • The Bank for International Settlement (BIS) published a report on central bank digital currencies (CBDCs).
  • The report mentions benefits to settlement process, liquidity, and innovative competition.
  • It also outlines potential cross-border possibilities using internationally coordinated “multi”-CBDCs.

Why it’s important:

  • Many central banks are working on CBDCs, and the BIS’s guidance might further boost research and experiments in the sector.
  • Longer term, private stablecoins and CBDCs might also coexist, giving the consumer choice over which means of payment to use.

 

In other news

  • CoinMarketCap integrates Uniswap (via The Block)
  • Ark Invest files for Bitcoin ETF (via CNBC)
  • TP ICAP launches crypto trading (via The Block)
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