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1. Bitcoin mining discussed

The Facts:

  • In a panel next week organized by the Sichuan energy regulatory office, the impact of stopping local Bitcoin mining will be discussed. Bitcoin miners help to absorb excess hydropower.
  • Meanwhile, Inner Mongolia has outlined eight measures to restrict crypto mining and businesses that support it.
  • Iran has temporarily banned Bitcoin mining due to multiple power blackouts in cities.

Why it’s important:

  • Bitcoin mining and its environmental impact has been a hot topic over the past week. China is one of the largest Bitcoin mining hubs, so its actions and regulations regarding the topic are closely watched.
  • China has recently reiterated their stance on the topic; however, it remains to be seen how much follow-through there is.

 

2. Arbitrum launches

The Facts:

  • Arbitrum is opening its mainnet to developers on May 28.
  • It is a second layer scaling solution using optimistic rollups and requires only few code changes from current Ethereum mainnet smart contracts.
  • Typical transactions on Arbitrum use 2-3k gas.

Why it’s important:

  • In recent times, the cost of transactions on the Ethereum mainnet has risen, which has certainly hindered full DeFi adoption. Layer 2 solutions, such as Arbitrum or Optimism, might alleviate this issue.
  • Many DeFi protocols are looking into using such layer 2 solutions to improve the user experience and transaction costs – recently, the Uniswap community conducted a vote to deploy v3 smart contracts to Arbitrum.
S01E15_Uniswap_Arbitrum
Source: Twitter

 

3. Crypto companies raise capital

The Facts:

  • FTX is raising up to $1 billion at a $20 billion valuation.
  • The spot and derivatives exchange currently holds about 10% of the total open interest in the BTC futures markets.
  • Crypto venture capital firm 1confirmation raised $125 million for its third fund, focusing on early-stage crypto projects.

Why it’s important:

  • Crypto infrastructure continues to improve, both on the centralized as well as decentralized fronts. Fresh capital seems to look for investment in the “shovels during the gold rush”.
  • Providing funding for early-stage projects will help to secure the future and pace of developments of the crypto space.
  • Number of the Week
    1 Year
    since the launch of liquidity mining on Compound

 

4. CBDC plans advance

The Facts:

  • The Federal Reserve has announced its plans to release a discussion paper on digital payments and CBDCs.
  • It also noted that a CBDC rollout would require the Fed to have additional legal rights.
  • The central bank of Indonesia has also made its future steps into the digital payments space public.

Why it’s important:

  • The development of CBDCs continue to advance around the world – the majority of central banks are now at least very closely evaluating the topic or have already made plans for pilot projects.
  • China is likely the closest to launching its digital yuan. Other central banks are starting to catch up, but for most, a widespread launch still seems to be years out.
  • In absolute and relative terms, the dollar is used for illicit purposes far more than Bitcoin.
    Nic Carter

 

5. Demand for GPUs might reduce

The Facts:

  • GPU manufacturer Nvidia sees demand for graphics cards potentially dwindle once Ethereum switches to proof-of-stake. Ethereum’s current proof-of-work mining algorithm uses graphics cards.
  • Nvidia reported an 84% YoY increase in revenue to $5.7 billion – during the same time, the total Ethereum hash rate has increased by about 3.5x.
  • Meanwhile, there is currently a graphics cards shortage in the market, likely due to high demand from cryptocurrency miners.

Why it’s important:

  • Ethereum’s switch to proof-of-stake (currently anticipated end of this year/early next year) will bring some relief to the graphics cards markets – cryptocurrency miners have driven up the cost of the hardware, since Ethereum mining is highly profitable due to the rise in price and activity on the chain.
  • While it is hard to gain insight into the exact supply chain mechanisms of Bitcoin’s ASIC-driven mining, publicly traded companies selling GPUs can offer some insight into the mining hardware markets of Ethereum.

 

In other news

  • Apple hires payments specialist with crypto experience (via CoinTelegraph)
  • Carl Icahn looks to get involved in crypto with $1.5 billion (via CoinDesk)
  • PayPal is working on crypto withdrawal capabilities (via The Block)
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