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Miami Mayor Francis Suarez said that he’s still taking his paycheck in bitcoin despite the ongoing market volatility.

“I just bought some yesterday,” he said at a press briefing after speaking at a conference. 

Suarez, who leads the U.S. Conference of Mayors, first said just over a year ago that he’d become the first American politician to take his official salary in bitcoin, announcing the plan just days before the all-time high of $68,789. While the digital currency has declined about 76% since Suarez first announced the measure, he’s noted that his mayoral salary is not his only source of income as he also has jobs as a lawyer and with private equity.

Suarez, a Republican, has been one of the most vocal proponents of positioning Miami as a new center of tech, finance, and crypto, and he frequently refers to the city as the “capital of capital.” That enthusiasm has been criticized by some who have bemoaned rising housing prices and others who point to the volatility of digital asset price.

He struck an optimistic tone at a conference on Tuesday, telling a crowd that it was time to capture the moment and innovate in the wake of the high-profile collapse of the FTX crypto exchange.

“Web3 and crypto is here to stay,” he said to widespread applause at the MiamiWeb3 summit co-hosted by CTH Group and the City of Miami. “Sometimes we just have to breathe, right? We have to remember that this technology is new. Not every iteration is going to succeed. Not every company is going to succeed.”

Call for ‘proactive’ regulation

Suarez called for proactive regulation that could protect people from fraudulent schemes but not hurt the development of the nascent industry.

“If the leaders who now emerge from this winter come together and help lawmakers find the right regulatory benchmarks to make sure that this technology helps people, raises democratizing investment and wealth creation opportunities, and doesn’t hurt people and rob them of their hard-earned savings,” Suarez said, calling for a collaborative approach for regulation. “There’s a lot of learning that needs to happen.”

The collapse of FTX has loomed large over the city, with many wondering how much of an impact it could have on the efforts to become a global leader in the sector. Miami-Dade County authorities were quick to say they would terminate the business relationship with FTX and remove the company’s name from the iconic downtown arena that’s home to the NBA’s Miami Heat.

Suarez said that the city had zero exposure to FTX and that its economy was sufficiently diversified to weather any downturn that might occur in a single industry.

Momentum remains

The momentum doesn’t seem to have slowed, at least judging from the number of events being held in the city. Not even a week after FTX filed for bankruptcy protection, hundreds of developers, VC funders and CEOs descended across the city at two separate conferences on. Nov. 17. And this week has been even busier, with multiple events hosted around the Art Basel art fair. 

Julian Holguin, CEO of Doodles, an NFT company, said during a fireside chat with the mayor that his company was opening an office in the city, affirming Suarez’s positioning of the city as the new major fintech hub. 

“My message is that it’s still early. It’s the second inning. Fintech is here to stay.” Suarez said. “Will they have ups and downs? Of course.”

© 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.

Starlight, a Brevan Howard-backed web3 payments startup, has launched corporate cards that aim to simplify expense payments for crypto businesses. 

The cards allow both fiat and crypto payments that can be tracked via a treasury dashboard on the platform; those payments then are loaded through a crypto wallet available through Starlight, or a checking account. Funds held in the fiat account are FDIC insured, according to the startup. Cards have adjustable limits for currencies such as bitcoin, USDC, ether or fiat. 

“These cards mean that if you’re a DAO or a crypto business, you can spend with crypto in the real world,” said founder and CEO Grey Nguyen in an interview. “That could be on your Amazon Web Services purchases or your travel tickets.” 

The goal to build corporate cards for crypto companies aligns Starlight with a number of other venture-backed businesses launched in recent years, which look to ease payments for crypto businesses. In April this year, Rain raised $6 million from Lightspeed Ventures to launch corporate credit cards for DAOs. Starlight raised $5 million in seed funding in the same month — a round which was co-led by Abstract Ventures and A* Capital with participation from Brevan Howard. The Sequoia-backed Multis also launched corporate cards for crypto treasuries earlier this month.  

Currently, many fledging crypto startups either use a personal wallet to fund crypto-related expenses or rely on exchanges to house treasuries, said Nguyen. It can take months to complete sign ups, and leave crypto startups vulnerable to potential withdrawal stoppages, as in the case of FTX. 

The FTX fallout 

Amid crypto exchange chaos, other providers have been pulling back from serving crypto companies.

Per an email sent on Nov. 18, expenses firm Ramp temporarily suspended spending on its cards for crypto companies, citing “unprecedented events in cryptocurrency, blockchain, NFT and DeFi ecosystem.” The companies were asked to provide balance and income sheets and a list of any accounts that they held with exchanges from the last twelve months. 

Among those affected was DeFi API startup Conduit, which raised a $17 million round in January. NFT startup Tokenproof and the Karn Saroya-founded Re Protocol also had their ability to spend via Ramp curtailed, per the Ramp support Twitter page. 

Over direct message last week, both Tokenproof founder Alfonso Olvera and Conduit’s Kirill Gertman confirmed that their spending limit had either been cut or revoked in the days following the email from Ramp — two days after Genesis Global Capital suspended redemptions. 

“We are always monitoring and responsive to what’s going on in the market,” said a Ramp spokesperson. “In light of unprecedented events in the crypto ecosystem, we conducted a comprehensive risk review of businesses on our platform in the crypto, blockchain, NFT, and DeFi space and took proactive steps based on the outcome of that review.” 

The company has since reinstated many of the original spending limits, said the spokesperson but the incident shows some of the issues crypto companies when handling fiat and crypto. Conduit’s Gertman said over the Telegram message that the incident has inspired him to look for another vendor. 

Indeed, Starlight’s clients are heavily weighted towards crypto companies, with NFT community platform Highlight and DAOs such as CabinDAO using its services, but Nguyen hopes that it can branch out to larger companies interested in crypto payments as well. 

“We’ve been chatting with large companies — S&P 500 type of companies. They’ve come to us and we’ve been showing them how we can simplify the process,” he said. “You’ve seen this sort of playbook play out already in the Web2 space with Ramp and Brex really starting out with the small guys and then going to the larger enterprises.”

© 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.

Aeria Canada Studio has partnered with Ready Games to migrate its most popular mobile titles to web3.

The games will be revamped to include NFTs and decked out with Ready Games’ web3 infrastructure before being re-released.

First up is Rescue Robots: Sniper Survival, which has over 5 million downloads on Google’s app store. Beta testing is expected to start on Dec. 1 and a full global release is slated for January.

This will create a secondary marketplace for trading game assets while allowing players to pursue different upgrade paths as they make their way through Rescue Robots, according to a statement from Ready Games.

“We are removing the barriers for mainstream game companies to migrate from web2 gaming economies into web3 gaming economies and reach that mainstream game player who otherwise may have never tried a web3 game where they’re at right now, which is primarily on the mobile phone,” said David S. Bennahum, CEO of Ready Games.

Web2 vs. web3

Several of the biggest gaming companies in the US remain wary of web3, particularly the use of NFTs in games. Microsoft’s gaming CEO Phil Spencer has said he doesn’t like them, as has the CEO of Valve. Microsoft’s subsidiary Mojang Studios has banned them from Minecraft servers. More recently, Rockstar Games also banned NFTs on Grand Theft Auto servers.

But Bennahum thinks there are some dimensions of web3 that are “super exciting” for web2 gamers.

“Number one, they get to become the legal owner of the asset they buy because it’s backed by an actual contract on-chain,” he said. “Number two, where game publishers allow it to happen, they can migrate that asset from one game to another, equip it in multiple games, creating even more value for that asset.”

“Number three, they become the owner of all their game data and their profile and, over time, can become economically rewarded for having committed to playing games for many years,” he added.

Ready Games itself is a recent convert. In May, it raised $3 million in token sales to fund its web3 pivot. Bitkraft Ventures, Hashed, Mapleblock Capital, Mulana Capital and Polygon were among the investors.

© 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.

Regulation should focus on the use cases rather than technology, metaverse and NFT industry leaders told European Parliament lawmakers, in a meeting to discuss Web3 industry recommendations for future policy. 

“We are in the early days and not even scratching the surface,” said Ripple’s Markus Infanger in the meeting, while outlining that adoption of a “new, economic sphere” would be boosted by regulation. 

At the helm of the meeting was MEP Stefan Berger, who led the Parliament’s negotiations on the Markets in Crypto-Assets regulation. MiCA largely excludes NFTs, barring a reference to large groups of NFTs which may be considered “fungible” financial instruments. That will be up for the interpretation of regulators who will write implementation rules for the bill next year.

“Thinking of NFTs solely as financial instruments is not the right approach,” Fabian Vogelsteller who authored the Ethereum-based ERC-20 token standard, which gave rise to the ICO hype of 2017. 

The Parliament’s center-right European People’s Party worked together with a Brussels-based crypto advocacy group, Blockchain for Europe, to organize an educational workshop on NFTs and metaverse covering use cases and policy recommendations.

The industry experts said that NFTs are not an asset class, and expanded on wide-ranging use cases from real estate to entertainment to commerce. Different uses of blockchain must be regulated on a case-by-case basis, they said, and innovation must not be stifled on the way. 

They gave various analogies to bring their point across: A collectible football card is not the same as a Tesla share, and should not come under the same provisions. When it comes to the underlying technology — a contract is not the same as toilet paper, though both are made of paper, for example.

“We welcome regulation — we just hope you get it right,” said Jeffery Haas, chief revenue officer of AtomicHub at the meeting. 

MEPs Stefan Berger and Stelios Kympouropoulos assured their guests that the lessons from the workshop into Parliamentary discussions and that the discussion is ongoing. 

NFTs will receive a bespoke report from the European Parliament nudging the European Commission to propose legislation following the suggestions. When it comes to metaverse, the EU institutions are still in early exploration days. The Commission launched a Virtual and Augmented Reality Industrial Coalition in September as a bridge for the VR industry to communicate with policymakers.

NFTs may still see more stringent regulation coming from the anti-money laundering package currently in negotiation in the Parliament, which is anticipated to face a vote in early 2023.

© 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 wallet Phantom is expanding to the Ethereum and Polygon blockchains — posing a potential threat to the current market leader, MetaMask. The crypto wallet is set to go live in beta within a few weeks, with a public launch to come shortly afterward.

Phantom is the most popular wallet on the Solana blockchain. Created by a bunch of Ethereum developers — who built the 0x decentralized exchange — it became dominant due to its friendly user experience and ability to show NFTs, now counting more than 3 million active users. Its widespread success on Solana is what makes it one of the most potent threats to MetaMask’s grip on the market.

“We definitely want to become the most dominant wallet,” said Phantom CEO Brandon Millman in an interview. “I think we really do have what it takes in terms of just being able to taste that amount of scale and understand what it needs and what is required to run a wallet from an operational perspective.”

Phantom’s path to Ethereum has been a long-time coming. The founding team originally wanted to build a better version of MetaMask but thought — rather than compete directly straight away, a better go-to-market strategy would be to start with a nascent ecosystem first. Now it’s taking on MetaMask, not from scratch but with roughly a tenth of its user base.

“I think overall the market’s definitely ready for a different wallet. It’s sort of been in the cards for a while. No shade on MetaMask at all but it’s a very different product, it’s very developer-oriented,” said Millman. “I feel like we really need to make a kind of paradigm shift to more consumer friendly applications.”

One key way Phantom will be different is that it will show its users’ tokens — across all blockchains it supports — in one view. This contrasts to MetaMask, which forces the user to switch between blockchains to see their different tokens. Phantom’s approach is similar to Zerion, which is also launching a multi-chain web extension. 

Offering more crypto tools

Like MetaMask, Phantom also lets users make token swaps within the web extension. This is the only source of revenue for its 53-person team, according to Millman, who said it brings in around a 7-8 figure sum per year, depending on the state of the market. 

With Phantom offering token swaps and supporting multiple blockchains, the wallet could theoretically enable cross-chain swaps in the future. This is not in the immediate roadmap, Millman said, but the team is keeping a close eye on it. 

Phantom is planning to offer more crypto tools within the web extension, which will let it generate new sources of revenue. The wallet already offers swaps and staking, but may add NFT auctions and other features, Millman said. “We’re going to start experimenting more with monetization in those areas.”

As Phantom expands across different blockchains, a big question is whether it will try to cover as many chains as possible or take a slower approach. Millman said the team is evaluating this every day but reckoned that there would be some kind of a consolidation toward just a few key ecosystems, which it might choose to focus on. “But we definitely don’t want to end up in a world where we’re a jack of all trades, master of none.”

When token?

As for the possibility of Phantom offering a token, this seems to have largely died down. Last year, Millman said offering a token was on the table, but there were no concrete plans. Now he seems a lot more skeptical. “We have no immediate plans to do a token,” he said.

Offering a token is very risky, Millman claimed. First, he highlighted that there’s a lot of regulatory uncertainty surrounding token offerings, particularly in relation to airdrops. Second, he said a badly timed token launch could single-handedly kill a company. If the token goes up after launch, you could generate a loyal community, but if it does go down — for any reason — then you could end up creating a “legion of undying haters.”

© 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

• Lens Protocol is a decentralized social graph on Polygon built by the Aave team.
• Lens aims to bring data ownership back to the users as opposed to centralized databases seen in traditional social platforms.
• Content on Lens has unique resource identifiers posted onto the blockchain.
• Lens has a growing number of applications, from social applications to analytics and DAO tooling.
• Lens’ main challenge will be to attract and scale its non-crypto user base in the long term.

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Serum, a decentralized crypto exchange backed by FTX, notified its 215,000 Twitter followers the project is “defunct” after the crypto exchange giant’s sudden collapse — while pointing users towards a community-led fork of the project. 

“The Serum program on mainnet became defunct” following FTX’s implosion, Serum tweeted. “As upgrade authority is held by FTX, security is in jeopardy, leading to protocols like Jupiter and Radium moving away,” it added, referring to two DeFi projects on the Solana blockchain.

Earlier this month, the now-bankrupt FTX exchange was hacked for more than $400 million, which is said to have compromised the security of Serum’s code. This is because the “update authority” for its code was held solely in the hands of insiders at the FTX exchange, Serum explained. 

The team also commented on its native Serum (SRM) token, stating its future was “uncertain” and that developers have proposed to scrap its use due to exposure to FTX and its sister trading firm Alameda Research.

However, Serum also flagged growth at a community-led fork of the protocol called OpenBook, which has gone live on Solana. OpenBook is processing a daily volume of over $1 million whereas the volume and liquidity for Serum has now dropped to near-zero, Serum noted.

“With Openbook’s existence Serum’s volume and liquidity has dropped to near-zero. Users and protocols are safe using an alternative fork such as OpenBook, after finding out security risks on the old Serum code,” the team said.

As the hack came to light, Serum’s code could not be securely updated in time to deal with potential vulnerabilities. In response, Solana co-founder Anatoly Yakovenko, along with other developers, suggested forking its code. The fork was led by Mango Max, who also serves as the developer at the lending project Mango Markets. 

© 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.

Aptos, the Layer 1 blockchain, is partnering with web3 fintech firm MoonPay through an integration with Petra, the crypto wallet built by Aptos Labs.

The partnership will make it easier for users to recruit into the Aptos ecosystem through MoonPay’s offerings.

“Integrating with the growing Aptos ecosystem, first through the Petra wallet, is another step to deliver on our mission, especially as the blockchain expands and its usage grows,” said Bree Blazak, vice president of global sales at MoonPay in a company release.

MoonPay also recently listed Aptos token APT on its platform. The token started trading on exchanges alongside the blockchain going live on mainnet in October.

Aptos has been one of the buzziest projects in crypto this year. It was co-founded by Mo Shaikh and Avery Ching, both of whom previously worked on Meta’s Diem project. The chain uses Move, a programming language that builds on top of Rust — the language used on the Solana blockchain. Move was developed by Meta for the Diem project.

The startup raised $350 million from investors this year including Binance Labs, a16z and Multicoin Capital.

Following the integration with Petra, MoonPay intends to partner with other decentralized applications on the chain. MoonPay offers several on-and-off ramp services as well a concierge service to enable high net worth individuals to buy NFTs and a self-service NFT minting platform called HyperMint. It has previously partnered with the likes of Universal, Trezor and Opensea.

Aptos also recently announced a headline partnership with Google Cloud where the search engine giant will power some of the blockchain’s validator nodes as well as a program to encourage new talent through an accelerator program and hackathon.

© 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.

Cryptocurrencies traded higher, while some crypto-related stocks dipped over contagion fears. 

Bitcoin rose 1.6% from yesterday, trading at $16,448 at 8:30 a.m. Eastern, according to CoinGecko. Ether was changing hands for $1,213, climbing over 3.6%.

BTCUSD chart by TradingView

GBTC’s discount to NAV is widening again, now at 40.5%. The discount to NAV of Grayscale’s other structured product, ETHE, has widened to 43.7%.

Meanwhile, BlockFi became the latest crypto lender to declare bankruptcy on Monday. The bankruptcy petition noted more than 100,000 creditors and between $1 billion and $10 billion in assets and liabilities.

The lender’s Chapter 11 filing underscores “significant asset contagion risks associated with the crypto ecosystem, and, potentially, deficient risk management processes,” said Monsur Hussain, senior director of financial institutions at Fitch Ratings.

“Restructuring processes can be notoriously lengthy – Mt Gox’s creditors are only getting closer to being paid eight years after the operation failed,” he said.

Crypto stocks

U.S. stock index futures were flat, with S&P 500 futures unchanged and Nasdaq 100 futures ticking up 0.15%.

Silvergate dipped 2.3% pre-market, trading around $25, according to Nasdaq data. Shares in the crypto bank plummeted on Monday, dropping over 11%. 

The La Jolla-based firm said it has less than $20 million of its total deposits from crypto customers come from BlockFi, adding that it has “minimal” exposure to the company now in bankruptcy proceedings.

Coinbase gained 1.2% to trade around $43 pre-market. Block was up 1%, and MicroStrategy was unchanged, having closed down 3% on Monday.

© 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.

Compound will enforce loan limits on 10 crypto tokens in its version 2 protocol at the end of November, thus reducing the amount of the affected collateral that users can borrow.

This decision is based on a governance vote concluded on Monday. The governance vote was on a proposal submitted by DeFi risk management protocol Gauntlet to the Compound DAO. Gauntlet’s proposal called for Compound to set borrow caps on certain collateral assets. This move, Gauntlet explained, was to adjust the risk parameters of Compound v2.

The 10 crypto collateral assets affected include Compound’s own COMP token as well as wrapped bitcoin (WBTC) and Uniswap’s UNI token. Other tokens include SushiSwap’s SUSHI, Aave’s AAVE, and MakerDAO’s MKR. In total, 10 collateral assets will have borrow limits on Compound v2. Half of these tokens, including WBTC and SUSHI, did not previously have any borrow caps.

The new borrow cap for non-stablecoin collateral on Compound v2. Table: Compound governance

For Gauntlet, the need to enforce loan limits has to do with limiting the impact of high-risk attack vectors. The DeFi risk manager pointed to DeFi lender Aave, which recently incurred $1.6 million in bad debt. Aave’s bad debt originated from a big short position on the CurveDAO token (CRV).

Gauntlet argued that borrow caps on non-stablecoin collateral assets had insignificant capital efficiency risks. This is because 96% of Compound’s lending volume is in stablecoins. The DeFi risk manager added that these limits could be increased in the future if organic demand for the affected collateral assets begins to increase.

Not everyone in the Compound community agreed with Gauntlet’s plan. Some community members argued that enacting borrow caps could reduce Compound’s competitiveness in the DeFi market and force volume to migrate to competitors like Aave. Despite these objections, the vote passed with unanimous approval.

Compound setting borrow caps on these assets is the latest move by DeFi lenders to protect against market manipulation and other tail risks associated with tokens with unfavorable liquidity profiles. Compound previously suspended the use of four tokens — 0x, basic attention token, yearn, and MKR — as lending collateral. These tokens are among the list of ten tokens with borrow limits. Aave has also paused the use of 17 Ethereum-based tokens in its lending platform.

© 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.