Welcome to this inaugural edition of our Chain Reaction newsletter for the week beginning 22nd November 2021. This weekly newsletter will take a look at what's recently happened in the news and information from around the world of blockchain, cryptocurrency and decentralised finance projects so stay tuned for more.
What you can expect in this newsletter
In the News
Videos of the week
Charts and Data
Around the world of social media
In the news
CoinTelegraph - 1.2M users flock to NFT Pirate Bay for artwork archive – Per the article “An Australian software developer has created an online repository of nonfungible tokens (NFT) called the “The NFT Bay.” The repository includes JPEG versions of the NFTS, not the blockchain-secured token itself.” In what looks like the old “The Pirate Bay” website made famous for downloading (torrenting) movies, this art project and it’s author (Geoffrey Huntley) highlight how many JPEGs on NFT exchanges are not necessarily hosted on the blockchain. Caveat Emptor.
BetaShares – Off the Chain - Crypto market cap hits $3T – In this update from BetaShares we see the total cryptocurrency market getting to over $3 trillion across more than 10,000 coins. They show that Microsoft took 33 years to get to $1 trillion whilst it took less than 13 for cryptocurrencies. In terms of their CRYP ETF, they highlighted how it has reached more than $100 in AUM in just the first 4 days of it trading (many ETFs take months or years to get there).
They also focus on data (which we like) with the On-chain metrics analysis (with data from GlassNode) and this week they highlight the growth in number of active addresses as well as number of transactions. The data shows that these metrics are recovering but not at the same levels seen in May but with prices higher, the type of demand appears different.
Check out previous issues of Off the Chain.
AFR – Chanticleer - CBA’s bet on Winklevoss twins shows its crypto caution – more details on CBA’s bet on Gemini (the trusted elder focused on blockchain security and owned by the Winklevoss twins) along with more details on the crypto system that will enable CommSec investors to trade 10 different cryptocurrencies. As suggested by the Chanticleer, the bet on security whilst forging ahead with a new (volatile) asset for customers looks like a bet each way.
AFR - RBA warns of ‘faddish’ crypto crash – In this article from James Eyers we look at warnings from the RBA’s Tony Richardson on the potential for cryptocurrency markets to crash. Obsessive hype and the need for regulation were also highlighted along with other potential negatives (such as the high energy costs, potential for financial crime and more). Whilst there is a want to be able to regulate these assets the key challenge remains how to regulate something that is by its very nature, decentralized. There is talk in this article of CDBC’s (central bank digital currencies) and whether these prove to help or hinder growth of cryptocurrency remains to be seen.
One thing we highlight from the article is the focus on the proof of work type model that is used to critique the energy use nature of many cryptocurrencies, but newer models are coming out to market that look at proof of stake as well as proof of authority will likely see these energy costs decrease and thus remove the energy consumption excuse as a negative argument.
7news - Crypto goes real world for home buyers – Being priced out of homes where deposits are likely to be more than $100k means many people in the younger generation are looking for alternative ways and whether its bitcoin being added as a payment method for property platform First-Place, salaries being paid in cryptocurrencies or seeing increased demand for banks to manage digital assets, the world is very much looking forward to a digital future.
FX Empire - US SEC rejects the VanEck Spot Bitcoin ETF - In this article we see that the SEC rejected the attempt by VanEck to create a spot bitcoin ETF for US investors. The main concern has been around the potential for market manipulation in these markets whilst in Canada a number of bitcoin and ethereum based ETFs are already out in the open market.
CoinDesk - VanEck to Launch Bitcoin Futures ETF ‘XBTF’ Next Week After SEC Rejects Spot Offering - Whilst rejected from a spot bitcoin ETF, VanEck is launching their version of a bitcoin futures ETF. Ticker symbol will be XBTF and it will trade on the CBOE.
CoinTelegraph - White paper introducing Jack Dorsey's decentralized Bitcoin exchange published on Friday – The white paper from Jack Dorsey (CEO of Square and Twtitter) just came out for Square’s decentralized bitcoin exchange called tbDEX. It will be different to other exchanges as it will not be a trustless model. Per the article it says that this is a “message protocol designed to facilitate trust relationships without relying on a federation to control access.”
Videos of the week
Ausbiz - Bitcoin’s ‘Big Bang’ moment has arrived – 18th November 2021 – per the show notes “You mightn't know it given the spluttering price action this week, but bitcoin has just undergone a major upgrade to dramatically improve privacy and scalability. BTC Markets' Caroline Bowler says the taproot upgrade fixes requirements for smart contracts and enhanced privacy on complex transactions, so you can read basic details on the blockchain but not the full story.”
Coinsider - Top 10 DeFi 2.0 Projects With the MOST Potential! – 13th November 2021 – In this video Coinsider goes through the top 10 DeFi 2.0 projects that he’s been tracking including Alchemix, Tokemak, Rari Capital, Gelato and more. If you’re interested in staying on top of what’s happening in the world of next generation DeFi then this is the video for you.
Whiteboard Crypto - What is OlympusDAO? - OHM Explained with Animations – 19th November 2021 – In this video, Whiteboard Crypto goes through the complicated nature of OlympusDAO and how its OHM tokens work and their bonding and staking techniques as well as the “3, 3” meme and how the Prisoners Dilemma thought experiment (relating to Game Theory) plays a role here.
Charts and Data
This week we highlight that as of their October 2021 figures, Australia ranks 3rd amongst overall cryptocurrency ownership according to Finder.
In this chart from GlassNode, we look at the 30-day average of total blocks mined on bitcoin versus the price of the cryptocurrency. Going all the way back to 2009 we can see that the trend of block size and price has generally trend with one another, despite volatile sections along the way.
Top 10 cryptocurrencies as at 19th November 10:57pm. The 7 day price action has not been kind to investors.
Around the world of social media
In this week’s highlight we look at ConstitutionDAO and their attempt to get the U.S. Constitution sold as an NFT via Sotheby’s (who’ve never worked with the DAO community before). They had a record level of crowdfunding but ultimately failed. Check out the comments section as many think they’ll be back and we certainly are intrigued by the possibilities of what this could represent.
In this week’s education piece we look at where to trade cryptocurrencies if you are interested. Thankfully, the folks at Finder have put together a list of the various exchanges including some metrics about each exchange. Check it out here: https://www.finder.com.au/cryptocurrency