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1. EIP-1559 to be included in London hard fork scheduled for July

The Facts:

  • Following extensive research, discussion and debate, Ethereum core developers agreed to include Ethereum improvement proposal 1559 (EIP-1559) in the upcoming London hard fork, two years after it was originally proposed by Eric Connor.
  • The key objective is to solve the core UX problem that Ethereum users face: What is the minimum transaction fee that needs to paid to ensure a transaction gets included in a block?
  • EIP-1559 is designed to solve this problem. A formal mechanism, BASEFEE, establishes a “standard market rate” for transactions. BASEFEE automatically adjusts in a predictable way, using an algorithm that calculates transaction fees relative to the congestion of the network. The ETH paid for the BASEFEE by each transaction is then burned.

 

Why it’s important:

  • Sending a transaction without overpaying for gas and implementing predictable gas costs means that UX is expected to substantially improve.
  • Ether needs to be paid for transaction fees rather than other currencies such as stablecoins. This prevents economic abstraction and cements the economic value of ETH within the Ethereum ecosystem. Additionally, a deflationary effect on the supply of Ether will result if fee burning exceeds Ether issuance.
  • EIP-1559 had widespread support throughout the Ethereum community. However, some, but not all, miners registered their objections. Miner revenue was over $1.37 billion in February, with 52.8% coming from fees alone.
Ethereum_Miner_Revenue
Source: The Block

 

2. NFT volumes are growing fast as the digital collectible market expands

The Facts:

  • Christies conducted an online auction for Beeple’s “5000 days”. The final bid price was $69.3 million. Recently, another Beeple work was sold for $6.6 million.
  • Jack Dorsey, Twitter CEO, is auctioning his first ever Tweet on Twitter on NFT platform Valuables. The current bid is $2.5 million. The proceeds will go to charity.
  • Total NFT market data shows $202 million in volume, and 136,330 NFT sales in the past month. The all-time volume is $413 million.

 

Why it’s important:

  • The auction price achieved by “5000 days” is the highest price ever achieved by an NFT. This places Beeple’s NFT piece in the league of the most expensive art from living artists.
  • NFTs provide trustworthy information about uniqueness, history, and origin of digital art forms. The Christies auctions suggest many serious collectors now accept NFTs as a valid art form, and the extraordinary price achieved by Beeple will likely further boost artists’ attention and interest in the NFT space.
  • In February, NFT volume was almost 50% of all-time NFT volume. The recent prices achieved by NFTs however, have caused some to warn that the NFT price speculation may be signs of a classic bubble, similar to the ICO boom in 2017.
  • NFTs turn everything into a market. Our digital future is going to get wild.
    Research scientist at MIT
    Lex Fridman

 

3. Digital asset surveys from Goldman Sachs and JPMorgan reveal mixed results

The Facts:

  • Goldman Sachs recently conducted a digital asset client survey with 280 clients including: banks, hedge funds, asset managers, macro funds, corporates, insurance, and pension funds. Results revealed that 40% had exposure to cryptocurrencies, and that 60% expected that their digital asset holdings would increase in the next 1 to 2 years. 20% expect that Bitcoin will trade above $100,000 within the next 12 months.
  • JPMorgan surveyed 3,400 investors at 1,500 institutions at their recent Macro Quantitative Conference. 78% said it is unlikely that their firm will invest in or offer trading services for crypto. 58% believed crypto is here to stay, 21% called is a temporary fad, but 7% believed cryptocurrencies will become one of the most important assets.

 

Why it’s important:

  • The Goldman Sachs survey was relatively small and appears to have selected respondents who either intended or were already invested in cryptocurrencies. Respondents from the larger JPMorgan poll, from the broader macro investor community, while being open to cryptocurrencies, are still skeptical of its relevance to them.
  • JPMorgan has also advised private wealth clients that Bitcoin may represent a good portfolio diversifier if sized correctly.
  • Goldman Sachs recently reopened their crypto trading desk in the U.S, and Matthew McDermott, Global Head of Digital Assets at Goldman Sachs, stated that corporate treasurers increasingly view Bitcoin as a balance sheet investment to hedge negative interest rates, and to protect against asset devaluation.

 

4. Institutional interest growing in Bitcoin and beyond

The Facts:

  • Soros Fund Management and other leading Wall-street institutions, have participated in a $200 million capital round with NYDIG for “bitcoin-related strategic initiatives”.
  • Norwegian energy giant, Aker Solutions, launched Seetee, a new operation focused on Bitcoin mining using wind, solar and hydro power. All Seetee’s liquid investable assets will be held in Bitcoin.
  • Hong Kong based Meitu, Inc. added 379.1 BTC and 15,000 ETH to their corporate treasury. Goldman Sachs, ICAP, JPMorgan and UBS have recently purchased shares in a Swiss ETP providing Polkadot (DOT) exposure.

 

Why it’s important:

  • NYDIG’s intention to invest in Bitcoin infrastructure, products and services, with backing of major Wall-street players, demonstrates growing interest in Bitcoin from insurance, banking, and investment management institutions.
  • Aker’s strategic investment in Bitcoin infrastructure further highlights how non-crypto native institutions want to engage in the crypto industry rather than only invest in Bitcoin the asset class.
  • Meitu’s purchase of ETH for its corporate treasury may be the first example of a crypto treasury investment beyond Bitcoin. Meitu also intends to engage in the Ethereum ecosystem rather than just invest in ETH.
  • USD 1.37 billion, with 52.8% from fees
    The_Block
    Number of the Week
    Miner revenue on Ethereum in February, via The Block

 

5. Amazon launches Ethereum infrastructure service

The Facts:

  • Amazon Managed Blockchain Services originally signalled their intention to integrate with Ethereum, focusing on enterprise needs in 2018.
  • Now, a fully managed Ethereum service will allow any AWS customer to build scalable and highly available services and applications including: DeFi applications, smart contract monitoring tools and fraud detection software.
  • AWS customers will be able to provision, launch and manage Ethereum nodes and connect to both Ethereum test networks, Rinkeby and Ropsten, as well as Ethereum mainnet.

 

Why it’s important:

  • The service will launch in the US, Asia Pacific and Europe. It seems that Amazon is signalling that there is a growing worldwide developer demand for tooling and services utilizing the Ethereum blockchain.
  • It is notable that Amazon refers to DeFi services and applications and their recent growth. They specifically state that they will be supporting DeFi developers in managing and operating their Ethereum infrastructure.
  • Together with Amazon’s recent announcement that they are preparing to launch a digital currency in Mexico, it will be interesting to see how their expanding interest in the digital payments and DeFi develops in the future.

In Other News

  • Ethereum devs confirm Berlin hard fork date (via Decrypt)
  • Optimism Dai bridge with fast withdrawals announced (via MakerDAO)
  • PayPal acquires crypto security firm Curv for nearly $200 million (via Decrypt)