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A Nouns DAO’s plan to donate 100 ETH ($123,000) to ZachXBT has unexpectedly been called off, after the on-chain proposal to do so was canceled.

The identity of the person responsible for doing so is still unknown. The wallet address responsible for canceling the already finalized proposal only has three transactions in its history.

Nouns DAO will have to repeat the process following this latest development. This incident does, however, raise the question of how someone was able to cancel a finalized DAO governance proposal.

The Block reported earlier today that the Nouns DAO community voted in favor of a proposal to reward on-chain sleuth ZachXBT with 100 ETH. ZachXBT is a pseudonymous Twitter personality whose work exposes fraudulent activities in the crypto space. The Nouns DAO donation was supposed to be a retroactive reward for ZachXBT’s efforts in exposing crypto scammers.

DAO member “Noun 40” filed the proposal. Noun 40 is the persona of Bitwise Asset Management Co-founder Hong Kim. The DAO voted on the proposal with 90% of participants in favor of the planned donation. All that was left was for the proposal to be executed and the funds sent to ZachXBT.

The issue stems from the fact that Kim delegated his tokens to House of Nouns, the DAO’s governance client, before the vote was executed. By so doing, Kim lost voting power and this enabled someone to cancel the proposal.

This cancellation of an already finalized vote is due to a quirk in the way the Nouns DAO governance works. It allows anyone to cancel a proposal if the address responsible for filing the proposal gives up its voting power. Nouns DAO has this quirk because it is a fork of the Compound DAO governance which uses this feature as an anti-spam measure.

What next?

Nouns DAO now has to repeat the process with another governance vote. “Assuming the vote passes as it did before — a near certainty — the funds will be delivered in about a week, once voting ends,” House of Nouns tweeted on Thursday.

The new vote will commence on Dec. 10, according to details on the DAO’s voting page. Kim also filed the proposal and acknowledged the mistake that led to it being canceled the first time around.

The DAO will transfer the funds from its $35 million treasury to an address labeled zachxbt.eth, if all goes as planned this time.

ZachXBT previously stated that the funds may remain unspent for a while or may be used to hire an intern.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The U.S. Securities and Exchange Commission wants companies to publicly disclose if they have exposure to crypto assets, including whether they do business with any crypto-related companies. 

The regulatory agency, which oversees disclosures for public companies in the U.S., said the guidance is due to, “Recent bankruptcies and financial distress among crypto asset market participants,” that occurred this year, most recently the high-profile implosion of FTX and its corporate family. “In meeting their disclosure obligations, companies should consider the need to address crypto asset market developments in their filings generally, including in their business descriptions, risk factors, and management’s discussion and analysis,” the agency guidance continues. 

Firms must disclose if they have direct or indirect relations with companies that have filed for bankruptcy, experienced excessive redemptions or withdrawals of crypto assets, maintain unaccounted crypto assets of customers and experienced corporate compliance failures.

In addition, companies must describe how the bankruptcies of certain firms affected their businesses and that the company must take safeguards to protect its customers’ crypto assets. 

The news comes after FTX’s collapse led to fears of financial contagion in crypto markets, as well as increased scrutiny of the SEC. The guidance will be posted to an SEC website, “and is intended to be illustrative of the types of comments we might send to public company issuers if/when applicable,” an agency spokesperson told The Block. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A campaign watchdog group is using Sam Bankman-Fried’s claim that he was a secret GOP megadonor to file a complaint with the Federal Election Commission. 

The nonprofit Citizens for Responsibility and Ethics in Washington filed an FEC complaint alleging Bankman-Fried violated federal laws by not disclosing millions he boasted of giving to GOP-affiliated “dark money” groups, and potentially distributing donations under the names of other people. 

The embattled former FTX CEO and major political donor told YouTuber Tiffany Fong last month that he used dark money groups to hide his contributions to Republicans, because he believed press coverage would be less favorable. 

Bankman-Fried gave roughly $37 million to Democrats and Democratic-leaning groups and said in the interview that he gave “the same amount to both parties” during the 2022 election cycle. But public records show the FTX co-founder, who has come under investigation by law enforcement the exchange’s collapse and been criticized by the company’s new leadership for lack of record-keeping, reporting $320,400 in donations to Republicans and Republican-aligned groups, according to CREW. 

“All my Republican donations were dark. The reason was not the regulatory reason. It’s because reporters freak the fuck out if you donate to a Republican because they’re all super liberal. And I didn’t want to have that fight,” Bankman-Fried said in the interview.

Bankman-Fried’s comments about intentionally concealing political donations could be evidence he violated the Federal Election Campaign Act, according to the watchdog group, since donations above $200 to influence election outcomes must be disclosed by the donor, and the correct person who funded the donation must be named. Millions of dollars-worth of political donations made by other FTX executives, some to Republicans, have also come under scrutiny since the corporate empire’s rapid collapse. 

“Mr. Bankman-Fried’s frankness amounts to an admission that he, and other unknown persons, violated federal laws designed to ensure Americans have transparency into those funding elections,” the group said in its complaint. “Federal laws against straw contributions, however, prohibit such schemes where the original contributor intends their funds to influence elections and routes the money through intermediaries to the recipient who then fails to disclose the original source.”

The complaint names Bankman-Fried and the “other unknown persons,” he donated to. It’s unclear how much money Bankman-Fried actually gave to dark money groups, or which organizations received donations. The organizations do not report donations, and a Bankman-Fried spokesperson did not share the size and scope of his Republican political giving. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Gnosis Chain, a privacy-focused blockchain, has activated its own version of The Merge, and transactions on the network are now being processed under a proof-of-stake consensus in a process similar to what happened on Ethereum on Sept. 15.

The Gnosis Chain underwent an upgrade that saw the network merge its previous execution layer with the Gnosis Beacon Chain launched last year. This process happened at the agreed-upon total terminal difficulty (TTD) on the Gnosis legacy chain at 01:47 PM EST on Thursday, and Gnosis paid homage to Ethereum by including Ethereum’s TTD in its own Merge TTD.

Gnosis Chain now becomes the second network after Ethereum to transition to PoS from a different consensus architecture. The team says The Merge now makes the chain the third-most decentralized network in the crypto space after Bitcoin and Ethereum. Gnosis Chain’s validator count has subsequently increased from 20 to 100,000.

Gnosis Co-founder Martin Köppelmann told The Block that The Merge is only the first step in a flurry of developmental changes for the network. Following The Merge, the team will work on making its bridges trustless, Köppelmann said, referring to the tools that allow users to send crypto tokens from one network to another.

EIP-4844

“The Merge will allow us to upgrade the security of our bridges enormously. Currently — it is more or less like many other chains — controlled by a multisig,” Köppelmann said. “In the future thanks to zK-proof of consensus we will be able to have the bridges secured by the full validator set.”

Köppelmann also said that The Merge will lay the groundwork to enable EIP-4844 on the Gnosis Chain. EIP-4844 introduces “blob-carrying transactions” into the Ethereum ecosystem. This upgrade is billed to introduce significant cost reductions for on-chain activity on Ethereum.

EIP-4844 is also the first Ethereum upgrade that will not be compatible with EVM networks that have not undergone a Merge event, as recently pointed out by Ethereum Developer Péter Szilágyi. This is because the upgrade does not support networks without a beacon chain. Gnosis Chain will be the only other EVM chain apart from Ethereum that will be compatible with this upgrade, Köppelmann pointed out.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• Rapid Insights provide a deeper analysis of the current crypto landscape in a timely fashion.
• Uniswap launched an NFT aggregator last week that has been integrated into its platform.
• Success has been fairly modest thus far, despite an ongoing gas rebate promotion.
• As of this writing, Uniswap occupies 1.4% of the total aggregator-driven NFT trading volume.

This research piece is available exclusively to
members of The Block Research.
You can continue reading
this Research content on The Block Research.

Quick Take

• December 6, 2022 Signature Bank gave remarks regarding their crypto strategy and FTX at Goldman Sach’s Conference 
• Signature reducing digital asset exposure by as much as ~$10bn, though long-term conviction remains steady
• Signature currently trades at $117.38 in intra-day trading, reflecting (1.25%) 1-day and (63.11) YTD 
• This piece will focus on Signature’s digital asset business as part of The Block Research’s ongoing market overview and commentary series

This research piece is available exclusively to
members of The Block Research.
You can continue reading
this Research content on The Block Research.

Virtual world platform Decentraland now allows land owners to rent out their property. 

The new system lets owners of Decentraland land NFTs, called LAND parcels, to find tenants in what the company says is a secure, trustless process. Virtual land owners can establish the cost of renting per day and the desired duration of the lease, and the tenant pays the owner through MANA, Decentraland’s main cryptocurrency.

Once the rental period expires, the virtual landlord must manually decide whether to claim their property or put it up for rent again. Decentraland said a potential use case for the system would be a virtual DJ, who could rent a space as a nightclub for performances.

The Decentraland Foundation, which oversees the platform, will store the owner and tenant data off-chain as well as on the Ethereum blockchain. 

Rentable land, of the virtual kind, has been possible since June through ERC-4907, the Ethereum standard that allows rentable NFTs. Unlike Decentraland’s rental system, this token standard allows land to automatically revert back to the owner once the rental period expires. While the token standard can be applied to items beyond just virtual spaces, the firm behind the standard’s creation, Double Protocol, told The Block that it envisions metaverse land rentals as one the key markets for rentable NFTs. 

The average cost of Decentraland parcels is around $2,380, making it one of the more valuable land plot compared to The Sandbox, NFT Worlds and other web3 virtual worlds, according to The Block’s Data Dashboard.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Ethereum developers are targeting March 2023 for the next hard fork, called “Shanghai,” that will make it possible to withdraw ether staked with network validators.

In a meeting today, core developers set the tentative timeline for when they expect the Shanghai upgrade to be completed. Also called “Ethereum Improvement Proposal (EIP) 4895,” Shanghai is a planned upgrade that will open validator staking withdrawals, a feature presently missing on the network.

It is not currently possible for users to withdraw staked funds from the Ethereum blockchain. Shanghai would fix that and provide greater flexibility and convenience to those who staked ether on the network before The Merge, the last upgrade when Ethereum transitioned to proof-of-stake consensus.

There’s no guarantee that the proposed timeline can be met due to potential technical difficulties or other unforeseen issues.

Beyond Shanghai

“Withdrawals will be enabled with Shanghai currently planned in March on the mainnet, if everything goes as planned,” Pooja Ranjan, a project manager at Ethereum Cat Herders who was present at the meeting, told The Block.

Developers also discussed a second hard fork, planned for after Shanghai, sometime in the third quarter of 2023 that will introduce “proto-danksharding,” or EIP 4844, an upgrade which would further improve the network’s capacity to handle more transactions.

EIP 4844 will introduce a new kind of transaction format to Ethereum called “shard blob transactions” that will allow for off-chain data to be stored and accessed by Ethereum nodes temporarily to address scaling needs of blockchain apps. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The Solana-based NFT platform Magic Eden has hired its first Chief Gaming Officer. 

Chris Akhavan joins Magic Eden from Forte, a blockchain-based gaming firm that raised $725 million in Series B funding in 2021. Akhavan served as the firm’s Chief Business Officer, in addition to working as the Chief Revenue Officer at the mobile gaming firm Glu Mobile — which was acquired by the video game development firm Electronic Arts in 2021 for $2.1 billion. 

At Magic Eden, Akhavan will drive growth of the platform’s gaming partnerships and support game development, creator and collector experiences.

“I think you’re gonna see a lot coming soon from us that that really hits on that core concept of adding value to the collector’s experience and gamer’s experience, and giving people a reason to eventually come to Magic Eden every single day — not just thinking of it as a transactional place, but as a hub for discovering great web3 content,” Akhavan said in an interview with The Block.

Magic Eden added support for the Polygon Network on Nov. 22, 2022, a move that allows the platform to get in on the burgeoning gaming niche emerging on the blockchain, The Block previously reported. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto prices were trading higher on Thursday, while stocks bucked the week’s downtrend with Coinbase leading the charge.

Bitcoin rose 0.3% over the past 24 hours, trading at $16,901 at 10 a.m. EST, according to TradingView data. Ether was up 1.4% to $1,248.

BTCUSD chart by TradingView

Binance’s BNB added 1.3%, Ripple’s XRP tacked on 1.6%, and Polygon’s MATIC gained 1.3%. Elsewhere, dogecoin was up 0.8%, and Polkadot’s DOT dropped 0.3%. 

The U.S. Dollar Index fell below 105 in trading at 10:30 a.m. EST. Bitcoin typically strengthens when the U.S. dollar weakens.

DXY chart by TradingView

Crypto stocks, structured products

U.S. stock indices traded higher, with the S&P 500 rising 0.7% and the Nasdaq 100 jumping 0.9% by 10:30 a.m. EST. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.