Building Blocks #27

Your route to web3 alpha in the MENA region. Whether you’re a seasoned HODLer or just getting into crypto - we’ve got something for everyone to keep you ahead of the curve. By the community, for the community - Building Blocks.

Free merchandise Giveaways every single week ?? - read till the end to participate!

Birds Eye View (vs Last 7 Days)

?? Overall Crypto Market Cap: $2.31 Trillion (+0.4%)

?? BTC Dominance: 57.31% (-0.17 PPT)

?? Price Snapshot:

?? Bitcoin: $67036 (+0.11%)

?? Ethereum: $2611 (+0.07%)

?? BNB: $589 (-0.57%)

?? Solana: $165 (+7.5%)

UAE to introduce legal framework for DAOs

RAK DAO, a free economic zone in the UAE focused on digital assets, plans to launch a legal framework for decentralized autonomous organizations (DAOs).

Law firm NeosLegal and RAK DAO announced the new system will be introduced at the DAO Legal Clinic on Oct. 25.

NeosLegal partner Irina Heaver announced he framework will explain how DAOs can stay legally compliant, which she said will greatly impact decentralized governance and the broader Web3 ecosystem in the UAE.

RAK DAO said the new framework will cover legal and governance rules for DAOs, including setting up a legal structure.

The announcement said the legal structure will spell out tax duties and perks. It will also allow ownership of onchain & offchain assets and shield DAO founders, members/contributors from personal liability.

The free zone added that the framework will let DAOs make legally binding deals and set rules for solving internal and external conflicts.

Heaver said that DAOs can register in the UAE under the new system without being in the country. DAOs can be "set up remotely,"

The UAE crypto lawyer added that these groups will be able to open bank accounts. "This remote access makes it easier for global players to join the UAE's growing virtual assets sector,"

The lawyer said launching the legal framework would boost the UAE's role as a global center for blockchain and digital asset innovation, drawing in entrepreneurs and developers.

DAO legal wrappers can also be set up in Switzerland. While Switzerland has no specific rules for DAOs, it also allows DAOs to be formed there through a legal wrapper.

Still, the lawyer mentioned that setting up a DAO legal wrapper in the UAE would be cheaper. Heaver said that in Switzerland, a DAO setup might cost up to $46,000, while in the UAE it would start at $3,000.

"This low cost lets even the smallest DAOs protect themselves and work within a legal framework," Heaver added.

UAE stablecoin issuer gets nod from central bank

The UAE Central Bank (CBUAE) has given initial approval to AED Stablecoin under its new rules for payment tokens, the company announced.

This early license for AED Stablecoin puts it ahead in the race to issue the first regulated dirham-linked stablecoin in the UAE.

This news eases worries about possible limits on crypto payments, which came up after the CBUAE's new rules that ban crypto for payments unless it's licensed dirham-linked tokens.

If fully approved, AED Stablecoin's AE Coin could be used to trade crypto on exchanges and other platforms, and let shops accept it for goods and services.

The central bank's rules also ban algorithmic stablecoins and privacy tokens, favoring fully cash-backed assets.

Issuers must back their stablecoins with cash in a separate account in dirhams at a UAE bank.

They can also keep at least 50% of assets as cash, with the rest in UAE government bonds and CBUAE bills lasting up to six months on average.

AED Stablecoin will likely compete with Tether and Circle, which are the world's largest stablecoins by market value.

Tether recently said it's working with local firms Phoenix Group and Green Acorn Investments to launch its own dirham-linked stablecoin.

Meanwhile, the UAE's crypto-friendly rules are attracting big players. OKX recently started a trading platform in the UAE after getting a full license, including derivatives trading for qualified big investors.

Also, crypto exchange M2 has opened a new system that lets residents directly change dirhams into Bitcoin and Ether.

Which other countries do you think can benefit from UAE's future-fit crypto regulations? Let us know in the comments below!

European investors pour record $105B into US Bitcoin ETFs

European investors have poured a record amount of money into spot Bitcoin exchange-traded funds (ETFs) in the United States.

Europeans have put over $105 billion into spot Bitcoin ETFs so far this year, setting a new high.

Eric Balchunas, a senior ETF analyst at Bloomberg, shared the record European ETF flows in an Oct. 21 X post: "Flows into US-focused ETFs by locals in Europe is now at a record $105b YTD. And why not? $SPY is up 24% vs 10% for Europe. Asia also funneling record flows."

Rising ETF inflows could push Bitcoin to a new high from its current sideways movement. Inflows into US Bitcoin ETFs made up about 75% of the new money that helped Bitcoin go over $50,000 in Feb. 2024.

Despite the record European inflows, Bitstamp data shows that Bitcoin hasn't been able to get back above $70,000, a level it last hit on July 29.

This week, European inflows weren't the only record for Bitcoin and Bitcoin-based ETFs.

Today, on Oct. 21, Bitcoin's hash rate — the total computing power protecting the network — hit an all-time high, showing the network's growing security and higher BTC mining costs.

Balchunas said on Oct. 17 that US Bitcoin ETFs passed $20 billion in total net flows, or the "hardest metric to grow" for ETFs. It took Gold-based ETFs over five years to reach this same point.

Even with these ETF milestones, Bitcoin's price has been stuck under $69,500 since July 29.

Bitfinex analysts said this is because ETF inflows take time to affect the spot BTC price.

The analysts said that the order book heavy on sell orders suggests crypto traders are using ETF flows as a way to exit their trades: "Usually, this means that large ETF inflows have a muted impact for a few days and then the market reverses lower once the aggression from spot market buyers fades."

The Bitcoin ETFs have recorded six consecutive days of net positive inflows, Farside Investors data shows:

On Oct. 14, the US Bitcoin ETFs bought a cumulative $555 million worth of Bitcoin, resulting in a 5% daily increase in Bitcoin price, from $62,450 to a daily high of $66,479.

Which coins do you think will have ETFs launched soon in the US? Let us know in the comments below!

Crypto market matured ‘dramatically’ in 2024: Coinbase

The cryptocurrency market has experienced a remarkable transformation in 2024, showcasing a level of maturity that is "dramatic," as billions of dollars have been funneled into spot crypto exchange-traded funds (ETFs). Additionally, there has been a notable spike in transaction volume across various blockchain networks. This information comes from a detailed report released on October 15 by Coinbase and Glassnode, two prominent entities in the crypto space.

According to the report, authored by David Duong, who serves as Coinbase's head of institutional research, along with the analytical team at Glassnode, "From the runaway success of spot ETFs to the spike in on-chain activity to the upswing in trading volumes, it's clear that markets have grown deeper, more liquid, more sophisticated, and more accessible." This statement highlights the significant changes that have taken place in the market, indicating a shift towards a more robust and user-friendly environment for investors.

Moreover, the report emphasizes that the accelerating adoption of stablecoins, coupled with a surge in Ethereum layer-2 scaling solutions, "reflect the maturation of the market and the broadening of the crypto economy." This suggests that the market is not only growing but also evolving to meet the diverse needs of its participants. The rise of stablecoins, which are designed to maintain a stable value, has provided a sense of security for investors, while layer-2 solutions have enhanced the efficiency of transactions on the Ethereum network.

In 2024, the cryptocurrency market has shown a decrease in volatility as more investors have shifted their focus towards higher-quality assets. The report indicates that Bitcoin's three-month spot price volatility now stands at less than 60%, a significant drop from its peak of nearly 130% in 2021. This reduction in volatility is a positive sign for the market, as it suggests a growing confidence among investors and a more stable investment environment.

Data from Glassnode reveals that stablecoins and Bitcoin (BTC) have come to dominate a larger share of the total market capitalization of cryptocurrencies during the third quarter of 2024. Spot BTC ETFs, which were officially listed in the United States in January, attracted approximately $5 billion into the digital currency during this same quarter, according to information from Bloomberg and Coinbase. This influx of capital into Bitcoin ETFs underscores the increasing interest in Bitcoin as a viable investment option.

In the third quarter, the total market capitalization of stablecoins reached an all-time high of around $160 billion. This surge is attributed to the fact that market participants continue to utilize stablecoins for a variety of new and existing use cases. The growing acceptance of stablecoins indicates a shift in how investors are approaching the cryptocurrency market, as they seek more stable and reliable options for their investments.

On the other hand, Ether (ETH) ETFs have faced challenges, experiencing net outflows as investors opted to cash out of the Grayscale Ethereum Trust (ETHE). This trust, which initially launched under a different fund structure in 2017, transitioned to an ETF format in 2024. While the spot price performance of ETH has not kept pace with that of BTC, the report notes that "looking beyond price reveals a rapidly growing Ethereum ecosystem, led by the strength of new and innovative layer-2s." This suggests that despite the price lag, the underlying technology and infrastructure of Ethereum are advancing significantly.

In 2024, there has been a sharp increase in daily active Ethereum addresses, with transactions rising five-fold compared to the beginning of 2023. The report attributes this growth to the proliferation of layer-2 scaling networks, such as Coinbase's Base, which have made transactions faster and more efficient. Concurrently, ETH has regained a substantial market share of fees among fee-earning layer-1 (L1) blockchains, rebounding from a low of 9% in late August to an impressive 40% by late September. This recovery indicates a renewed interest in Ethereum and its capabilities.

In summary, the cryptocurrency market in 2024 has shown significant signs of maturity and growth. With the rise of spot ETFs, stablecoins, and innovative layer-2 solutions, the market is becoming more sophisticated and accessible to a wider range of investors. As volatility decreases and adoption increases, the future of cryptocurrency looks promising, paving the way for further developments in this dynamic and evolving space.

Avalanche Foundation introduces Visa crypto spending card

The Avalanche Foundation, the group behind the Avalanche crypto platform, has rolled out a new Visa crypto card.

On Oct. 21, Avalanche shared on X about launching the Avalanche Card, a Visa card that lets users pay with crypto.

The post said this new Visa card by Avalanche will work with Circle's USD Coin stablecoin, Wrapped AVAX (wAVAX), BENQI Liquid Staked AVAX (sAVAX) and other coins.

Users can get the Avalanche Card as a physical card or a digital one, allowing them to use their crypto "at any place that takes Visa," the foundation said.

The Avalanche Card website states that the card links to a "wallet you control and a unique address for each asset." It also notes that user activity is "not shared with credit bureaus."

The site explains that while the Avalanche Foundation introduced the card, Rain Liquidity, a fintech service provider, offers it.

The card info also points out that the Avalanche Card and Rain Liquidity are not banks and lack FDIC insurance, adding:

The Avalanche Card site says it will first be available to people living in Latin America and the Caribbean.

"People who live in or are from Cuba, Venezuela, Nicaragua, Russia, North Korea, Syria, Iran, and the Crimea, Luhansk and Donetsk areas can't sign up no matter where they live," the site states.

The card details also say there's no fee for using the Avalanche Card, but users should check the full list of card and service fees in the terms.

As Cointelegraph reported, the crypto world has seen crypto payment cards before. Some cards let users spend cryptos like Bitcoin straight from wallets they control. One example is Tangem's Visa card, which the company says allows sending crypto right from the self-custody wallet.

Aurum Equity Partners launches tokenized fund worth $1B

Investment firm Aurum Equity Partners has unveiled plans for a $1 billion tokenized fund that will mix equity and debt assets in a single package.

The company announced on Oct. 22 that this new tokenized fund will target building data centers across the United States, United Arab Emirates, Saudi Arabia, India, and Europe.

To power the fund, Aurum will use Zoniqx's asset tokenization tools and the Dynamic Compliant Interoperable Security Token (DyCIST) protocol. It will also tap into the XRP Ledger (XRPL) blockchain to explore real-world asset tokenization (RWA) opportunities. These technologies will help turn the firm's assets into digital tokens.

By using tokens, the fund can open doors for more investors, including smaller players who usually can't access big infrastructure deals.

David Schwartz, Ripple's tech chief and XRPL co-creator, noted: "Turning private equity into tokens is a new way to use RWA. It helps solve problems like lack of liquidity and limited access in these markets."

Aurum typically puts money into key infrastructure, aiming for steady growth in real estate, startups, and cloud tech. Crunchbase reports the firm has been part of over 125 deals worth $2 billion in India and the US.

The tokenization field has been growing fast lately. Experts think it could get 50 times bigger by 2030, as more traditional assets like real estate, bonds, and physical goods move onto blockchains.

By 2030, the RWA token market could be worth between $4 trillion and $30 trillion. This shows more people want easier and better ways to invest.

Zoniqx's founder and CEO Prasanth Kalangi said: "We built our tech to keep up with what the finance world needs. We're excited to show how it can work for private equity."