BitGo: Crypto Water Cooler — Feb 7
GM. It’s Wednesday, February 7.
News Update : BitGo Expands into Private Securities with Acquisition of Brassica
Newsmakers
Airdrops: Effective Marketing Tactic, Lightning Rod for Criticism, or Both?
Airdrops, a marketing strategy whereby creators give free tokens to encourage usage and adoption, are making a comeback. According to Decrypt, the top fifty airdrops of 2023 gave away over $4.5B of crypto. Ethereum layer-2 Arbitrum at almost $2B; NFT marketplace Blur (~$820MM); and modular blockchain Celestia (~$730MM) were among the biggest.
The new year has also started with a bang. Jupiter, the largest decentralized exchange on Solana, last week dropped nearly $700M worth of its new JUP token to nearly one million wallets. Ethereum’s AltLayer airdropped $100MM to users late last month. And, a Bitcoin developer announced Runestone, an airdrop to people who used Bitcoin Ordinals during its first year.
Of course, everyone loves freebies, but airdrop tokenomics are not without controversy, as Jupiter illustrates. In many airdrops, VCs and seed investors got large pre-sales of tokens at lower prices — only to “dump” them at the top of the hype cycle. Additionally, team members sometimes award large numbers of tokens to themselves. While Jupiter was praised for eschewing presales and VC funding, the team did allocate half of the JUP supply to themselves, triggering criticism.
Critics also noted that some terms of the drop essentially made it a funding round not disclosed as such; others accused Jupiter of using it to drive “fake demand.” Anticipation for JUP did stoke increased usage of the exchange. Heading into the airdrop, Jupiter’s $1.2B in 24-hour trading volume made headlines.
Whether that activity can be sustained is an open question. Airdrop “farming,” the targeting of airdropped tokens as a principal part of a trading strategy has become a cottage industry. Farmers ramp up transactions on the network doing the airdrop. For example, a seventeen-year-old made made $1MM from the Jupiter airdrop by “actively using all of Jupiter’s tools. It’s about being smart with your moves on the platform”, he said. That included swapping tokens, placing limit orders, dollar-cost-averaging into positions, and bridging to other blockchains, making him an airdropper’s dream customer — but possibly a rare one. Read more: CoinDesk
Read more →CoinDesk
Thailand’s Updates Its Dual Approach to Crypto Regulation
Thailand’s approach to crypto is an interesting mix. Crypto payments are banned due to money laundering concerns while crypto trading has been regulated since 2018. Now, a January 2024 update to the country’s crypto framework has kept the payment ban in place while both loosening and tightening elements of trading regulation.
The update adds to the May 2018 “Emergency Decree on Digital Asset Businesses” issued by the Securities and Exchange Commission (SEC) of Thailand. That decree required digital asset firms to be licensed to operate and gave the SEC oversight of issuers of initial coin offerings (ICO), brokerage firms, fund managers, and crypto advisors.
Six years on, Thailand ranks tenth in the world for crypto adoption, according to a 2023 Chainalysis report , with continued growth projected by Statista ($) . The updated framework is intended to foster continued growth while protecting investors and traders.
To that end, there are three key changes. In the loosening column, the 300,000-baht (about $8,400) limit for retail investment in tokens backed by real estate or infrastructure has been removed. But tighter regulations now apply to custody and expansion. Firms must use dedicated custodial wallet management entities; these must be publicly listed company subsidiaries with a proven record of secure storage of securities. And, digital asset companies wishing to expand must first gain SEC approval.
In other regulatory matters, the SEC is taking a wait and see approach to spot bitcoin ETFs. CBDC exploration by the Bank of Thailand and a consortium of commercial banks is continuing. “Project Inathon ” began in 2019, and two phases of wholesale experimentation have already taken place, including one with the Hong Kong Monetary Authority that focused on cross-border payments.
Then there are value-added taxes on crypto trades, which are overseen by the SEC. Currently set at seven percent, they briefly were at fifteen percent and, under certain circumstances, exempted . But because of concerns over income tax loopholes, effective on January 1, 2024, all residents must pay personal income tax on foreign revenues, including revenue earned from crypto trading.
Read more →SEC.or.th
Exploring the Expanding Blockchain and Web3 Use Case Landscape
While Web3 adoption didn’t reach a tipping point in 2023, companies are finding ways to use the technology to increase efficiency, boost engagement, and build loyalty. According to a new report from NFT Tech, in 2022 and Q1 2023, 315 brands launched a total of 526 Web3 projects with 40 percent of these projects now lasting more than a year. Real-world applications exploded in 2023 with use cases in industries ranging from finance to logistics to, yes, bubble tea.
Financial services giant Franklin Templeton launched Franklin OnChain U.S. Government Money Fund on Polygon, the blockchain that’s home to some of the biggest Web3 projects. This is the first U.S. registered mutual fund to process transactions and record share ownership on a public blockchain. Benefits include better security, faster transaction speed, and lower costs.
In logistics, Shell, IT consulting firm Wipro, and Polygon PoS launched Falcon, a platform that securely manages equipment data by tying physical objects to Polygon’s immutable ledger. They expect a 20 percent improvement in efficiency.
Bubble tea company Boba Guys saw success with its Passport loyalty program where customers can accumulate points that unlock Mystery Boxes containing free drinks, discounts, gift cards — even free vacations. Success metrics include 31 percent of orders in month one coming from the Passport program with loyalty members visiting 1,400 percent more often and spending 1,023 percent more monthly.
Looking ahead to 2024, data from Web3 development platform Alchemy points to an increasing developer desire to build Web3 products, including an increase in the numbers of hackathon participants and students enrolled in their courses, and engagement with Ethereum SDK (software development kit), which has consistently gone up for the past five years.
Read more →AlexaBlockchain.com
News In Brief
Regulation and Security
领英推荐
Business of Crypto
DeFi and Web3
Midweek Market Pulse
Total Market Cap: $1.65T — 7 day change as of Tuesday 2/6/24 12 PM EST: -1.8%
*quotes in red being actively updated at time of download
The total crypto market cap fell 1.8% to $1.65T, drifting lower in a relatively quiet week. Bitcoin (BTC, -0.9%) and Ethereum (ETH, -1.3%) declined slightly.
On Tuesday morning, an outage brought the Solana (SOL, -8.9%) network to a halt for five hours, undermining the praise the network received last week for handling a surge of usage related to the Jupiter airdrop. It was an untimely reminder of several outages in 2022 and one in February 2023, which lasted for nearly twenty hours.
Elsewhere, Chainlink (LINK, +19.6%) hit a two-year high on speculation about a whale or institution accumulating $42MM worth of LINK based on forty-seven new wallets withdrawing over 2.2MM LINK tokens from Binance over a two-day period. As an oracle, Chainlink’s value proposition to provide TradFi institutions with data and computing and cross-chain capabilities could be well-suited to this era of increasing institutional adoption.
Bittensor (TAO, +13.5%), a new decentralized machine learning protocol, is charging higher as it gains recognition in the open-source AI community as the crypto market becomes more interested in ways that crypto dovetails with artificial intelligence.
In an older market segment, privacy coin Monero (XMR, -29.9%) hit a five-month low on news that Binance will delist it. Binance is also delisting several other privacy-focused tokens, citing various factors including “evidence of unethical or fraudulent conduct or negligence.”
The Last Word
Oracle
Noun
: A computerized system that connects off chain data to blockchains, and blockchains to one another
/ Oracles promise to solve many of the interoperability challenges preventing large scale blockchain adoption.
About BitGo
BitGo provides the most secure and scalable solutions for the digital asset economy, offering regulated custody, borrowing and lending, and core infrastructure to investors and builders alike.
Founded in 2013 — the early days of crypto — BitGo pioneered the multi-signature wallet and later built TSS to improve upon other companies’ MPC offerings. Between multi-sig and TSS, BitGo offers the safest technology on the market and safeguards over 600 tokens across a wide variety of blockchains.
Over the years, BitGo has expanded from offering wallets into providing a full-suite solution that lets clients hold assets safely and then put them to work.
BitGo launched BitGo Trust Company in 2018, providing fully regulated, qualified cold storage to complement BitGo Inc’s original hot wallet solution. In 2020, BitGo launched BitGo Prime, which allows its clients to trade, borrow, and lend. Moreover, BitGo also provides access to DeFi, staking, NFT wallets, and beyond, and serves as the world’s sole custodian for WBTC, or wrapped Bitcoin.
Today, BitGo is the leader in digital asset security, custody, and liquidity, providing the operational backbone for more than 1500 institutional clients in over 50 countries — a list that includes many regulated entities and the world’s top cryptocurrency exchanges and platforms. BitGo also processes approximately 20% of all global Bitcoin transactions by value.
For more information, please visit www.bitgo.com .
?2024 BitGo Inc. (collectively with its affiliates and subsidiaries, “BitGo”). All rights reserved. BitGo Trust Company, Inc., BitGo Inc., and BitGo Prime LLC are separately operated, wholly-owned subsidiaries of BitGo Holdings, Inc., a Delaware corporation headquartered in Palo Alto, CA. No legal, tax, investment, or other advice is provided by any BitGo entity. Please consult your legal/tax/investment professional for questions about your specific circumstances. Digital asset holdings involve a high degree of risk, and can fluctuate greatly on any given day. Accordingly, your digital asset holdings may be subject to large swings in value and may even become worthless. The information provided herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. BitGo is not directing this information to any person in any jurisdiction where the publication or availability of the information is prohibited, by reason of that person’s citizenship, residence or otherwise.
Great insights in this week's Crypto Water Cooler! ?? As Steve Jobs once said, "Innovation distinguishes between a leader and a follower." With Thailand's SEC evolving its stance on regulation, it shows how pivotal innovation and adaptability are in the crypto world. ???? Keep leading with such informative content!