FreeCryptoCurrency.Me

NFT platform X2Y2 hit back at the creators of QQL a day after  the popular NFT project effectively blacklisted its holders from interacting with the marketplace, saying it’s acting like the music industry. 

X2Y2 said in a lengthy Twitter thread that QQL is following the ownership model employed by record labels industry by choosing to block the marketplace through its smart contract. 

“‘Code is law,’ and QQL has made its own law. When someone else can decide where you can transfer your NFT, you are not the real owners anymore,” X2Y2 said. “Sounds familiar? Yes, this is exactly what happens in the music industry — you don’t own the mp3s lying on your hard drive.”

QQL Mint Pass generated $17 million worth of NFTs in its debut yesterday. The project allows someone to mint official art from the QQL generative algorithm created by software engineer Dandelion Wist and Fidenza’s Tyler Hobbs, which is slated to be released to the public.

The project wrote in its smart contract code to block the delegated wallet for X2Y2, effectively prohibiting transactions with the marketplace. X2Y2, along with the NFT trading platform SudoAMM, are two notable marketplaces to not enforce royalties on every transaction, which contributed to online debates last month about the future of NFT artist compensation.

X2Y2 clarified in its thread that it is not a 0% royalty platform as others on Twitter suggested, but that users themselves can choose to enforce (or not enforce) royalties. 

“In this particular case, QQL didn’t even set up their royalty on X2Y2,” wrote the platform, adding that NFT holders can choose to uphold royalties, and that more than 98% of its users opted to pay royalties in September. 

X2Y2 added that it believes in a “fair royalty” model that lets the users choose the royalty amount to pay and allows creators to decide “who they want to serve,” before adding that the platform would love to work with the QQL creators to “find a solution that could still stick to your values.” 

The NFT influencer Farokh questioned X2Y2’s thread. “If a marketplace can decide how much royalty an artist gets, why can’t an artist decide whether or not their NFTs are sold on a platform? How does that mean a user does not own their NFT? Weird response.”

© 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

• In this weekly series, we dive into some of the most interesting data and developments across the Layer 1 blockchain landscape, from DeFi and bridges to network activity and funding
• Cross-chain technologies remain an important area of focus for core blockchain teams as they continue their preparation for the next generation of crypto users
• In the Polkadot ecosystem, liquid-staking is slowly gaining traction as the amount of staked DOT has declined in recent months. Algorand takes a step toward greater interoperability with the release of state proofs. On Avalanche, developers deal with a potential exploit arising from a custom EVM implementation

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

Circle has acquired payment services firm Elements as it looks to scale its own offerings.

Jeremy Allaire’s firm hopes to lower the barrier to entry for merchants looking to access the next generation of payments. The crypto payments firm and USDC issuer announced the acquisition at an event in San Francisco on Thursday. The terms of the deal were not disclosed.

“With Circle, we knew the natural synergy in our business models would create an opportunity to deliver a seamless and low-cost payments and settlement experience for merchants using a digital currency they can trust,” Elements founder and CEO Nafis Jamal said in a statement.

Circle launched a cross-chain transfer protocol to support USDC interoperability on Wednesday in San Francisco.

The firm also announced a strategic partnership with Robinhood this week, which includes an integration with USDC.

© 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.

Bitcoin mining company Rhodium Enterprises is planning to list on the Nasdaq following a merger with SilverSun Technologies Inc., a business application, technology and consulting company.

The deal comes months after Barron’s reported that Rhodium had been looking to go public since last year, but postponed its IPO due to market conditions. 

“We believe access to U.S. capital markets is paramount to sustainable, long-term success in our capital intensive industry,” Rhodium CEO Chase Blackmon said in a statement. “We believe this strategic transaction will unlock long-term accretive value for Rhodium’s shareholders.”

SilverSun shareholders will get a cash dividend of at least $1.50 per share, $8.5 million in total, and a further stock dividend. The deal is expected to close by the end of the year, at which point Rhodium will seek to list the shares. 

The deal will provide SilverSun stockholders “with the opportunity to realize a substantial upfront cash payment” and “participate in the potential upside of Rhodium at an exciting time for the cryptocurrency marketplace,” SilverSun CEO Mark Meller said.

Meller, as well as the other members of the board of directors of SilverSun, will remain in place after the deal.

B. Riley Securities advised on the deal.

Rhodium recently raised $11.9 million of the $30 million that it was looking to get in the form of debt, options and securities, according to an SEC filing from earlier this month.

Besides mining bitcoin, the company also develops liquid cooling technologies, describing itself on its website as a “vertically integrated technology & infrastructure platform.” 

Rhodium had approximately 125 megawatts of mining capacity at its initial Texas site, according to an SEC filing for the IPO filed in January. The company had intended to issue 7.69 million shares at between $12 and $14 each.

© 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.

Seventeen percent of voters in four U.S. states long known as electoral battlegrounds hold cryptocurrencies and NFTs, according to survey results published by Haun Ventures.

The poll, conducted by digital polling firm Morning Consult, was intended to capture the degree to which issues around web3 were impacting voter preferences ahead of the November midterm elections in the U.S. Divided by states, 19% of polled voters in Ohio and Nevada reported owning digital assets, compared to 13% and 16% in New Hampshire and Pennsylvania, respectively.

The poll’s findings suggest dissatisfaction across the political spectrum with the state of digital privacy and the degree of power held by major digital platforms.

“75% of voters agree that Big Tech has too much power over people’s lives, and favor greater individual autonomy and digital decentralization,” the blog post noted. “72% of voters who own digital assets say they do so because they want an economic system that is more democratized, fair, and works for more people.”

Morning Consult polled 800 likely midterm in New Hampshire, Nevada, Ohio and Pennsylvania between Sept. 15 and Sept. 20. 

© 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.

Rostin Behnam, chair of the Commodity Futures Trading Commission, is continuing the CFTC’s charm offensive with the crypto industry by floating a price boost for Bitcoin if the panel receives more direct authority over crypto markets. 

Speaking at a panel at New York University first covered by CoinDesk, Behnam reportedly said “Bitcoin might double in price if there’s a CFTC-regulated market.”

“These incumbent institutions in the crypto space see a massive opportunity for institutional inflows that will only occur if there’s a regulatory structure around these markets,” Behnam continued.

Behnam’s remarks come as he pushes for legislation to give the agency he chairs more direct oversight in crypto markets. The CFTC and Securities and Exchange Commission both oversee markets, with the CFTC regulating derivatives and futures while the SEC regulates securities investments. SEC Chair Gary Gensler has expressed concern over the possibility multiple regulators on the crypto beat. 

Senate Agriculture Committee Chair Debbie Stabenow (D-Mich.), who Benham used to work for as a staffer, says the bill may receive a committee vote before the end of this Congress, though passage through the entire Senate this year looks unlikely. 

Former Treasury Secretary Larry Summers also told an audience at Circle’s Converge22 event last night that increased regulation could be a boon to the digital asset industry. 

© 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 CryptoPunk NFT selling for more than $4 million, the collection’s biggest transaction in more than seven months, provided a small glimmer of hope on Wednesday amid a dark crypto winter marked by cratering prices and volumes.

Part of the most-valuable NFT collection to date, CryptoPunk #2924, an 8-bit image of a hooded ape set against a purple background, sold for 3,300 ether, according to OpenSea, the world’s largest marketplace for digital assets.

CryptoPunk #2924’s sale, valued at about $4.4 million – given ether’s current USD value – constitutes an anomaly amid a broader picture of falling NFT sales volumes. The single sale ranks as the fourth highest price paid for one of the collection’s tokens, in ether terms, but it was only the tenth highest price paid in USD terms due to ETH’s falling value.

The largest CryptoPunk sale ever, in both ether and USD terms, occurred in February when #5822 fetched 8,000 ether, which at the time was $24.8 million.

The market has been particularly challenged since May when sales for the art and collectibles genre of NFTs plummeted from a weekly volume of nearly $300 million to as low as $50.8 million, a more than 80% drop. After sliding further, volumes have leveled off slightly in recent weeks, with weekly sales hovering around the $20 million to $25 million range, according to data compiled by The Block Research.

“Investor-turned-DJ” and NFT connoisseur Danny Maegaard, also known as DJ Seedphrase, sold Cryptopunk #2924 to a buyer in Texas, according to CoinDesk. Maegaard owns 20 more NFTs from the same collection, the news site also said.

CryptoPunks are a rare NFT collection composed of 10,000 individual tokens. The pixelated headshots come in the form of humans, apes, zombies and aliens.

© 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.

In the wake of Ethereum’s proof-of-stake merge, staking pools have become the default source of validation on the network.

But some critics say that as a result of that change, the network is now more centralized than ever.

Speaking on the state of Ethereum network centralization post-Merge, StakeWise co-founder Kirill Kutakov and business development lead Jordan Sutcliffe joined The Block for an exclusive interview. StakeWise is an Ethereum and Gnosis Chain staking pool company that hosts more than 75,000 ETH in staked assets.

“As someone that’s very much aligned with the values of decentralization and censorship resistance, I am personally alarmed,” said Kutakov, who added that, with respect to the services available to counteract network centralization, “the whole industry could have done better.”

Kutakov said that perhaps as soon as December 2022, his company will launch StakeWise V3, an open source protocol with a noncommercial license that will allow users to spin up validator nodes and adjust staking fees, and provide additional measures to ensure the safety in a bid to attract depositors who stake ETH. Kutakov believes the protocol will help introduce a layer of decentralization within the StakeWise user base and become a model that he hopes other pools will adopt.

Through the yet-to-be-launched protocol, stakers will be able to select nodes based on categories including geographical locations, the extent of collateralization, operational performance, state infrastructure, and other metrics that StakeWise populates with on-chain data. Each category will contribute to a quantifiable “vault score,” the algorithm for which Kutakov said the team is still fine-tuning.

Since node operators with higher vault scores might attract a majority of depositors, Kutakov said StakeWise V3 will “penalize participants that control too high or too big of a share of the network, precisely out of concerns like centralization and censorship potential.”

Concerns over censorship on Ethereum may be more prescient than ever, as on-chain metrics would seem to back critics of Ethereum’s centralization.

Currently, five major staking pools, account for just over 76.38% of staked ETH, with Lido leading the pack. Lido is followed by Coinbase, Kraken, Binance, and an unknown pool, based on data from Beaconcha.in.

As staking pools show more centralization on the network, the prevailing use of a popular maximal extracted value (MEV) service, Flashbots, means that censorship is also on the rise. Since The Merge, Flashbots censored all transactions from sanctioned cryptocurrency mixing service Tornado Cash, according to a study published by Ethereum researcher Toni Wahrstätter.

StakeWise currently offers Flashbots integration on its platform and intends to offer it to solo stakers on its upcoming V3 protocol. Acknowledging the conflict of ideals, Kutavok expressed that the team’s personal opinions shouldn’t be construed with that of the StakeWise DAO, which is responsible for the project’s general governance.

“In the team’s opinion, censorship in its various forms is undesirable on Ethereum, and we publicly expressed support for relays that do not censor transactions,” said Kutakov, who added that the team leaves the decision of whether or not to use relays that may censor wallet addresses to the discretion of node operators.

© 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.

Members of the European Parliament criticized the European Central Bank’s (ECB) decision to bring in Amazon as a partner in designing the digital euro prototype. 

The main concerns MEPs raised in the Economic and Monetary Affairs (ECON) Committee of the European Parliament on Tuesday were Amazon’s “questionable” social and tax policy, including an alleged violation of EU data protection regulations that led to a record fine from regulators last year, though Amazon appealed the decision. 

Fabio Panetta, a member of the ECB executive board, appeared Thursday before the Parliament in a quarterly exchange between the institutions to deliver an update on the progress made in the ECB’s investigation into the digital euro.

MEPs took this opportunity to vent their dissatisfaction with having Amazon involved in this process. Center-left MEP Eero Heinäluoma referred to the €746 million fine the corporate giant received for violating GDPR rules in the EU to question the central bank’s decision.

Panetta tried to quell concerns by explaining that Amazon’s current role on the project is not guaranteed to continue in a potential next phase. He also said that the project benefitted from Amazon’s expertise in designing a user interfaces for payments, and that Amazon was not compensated for their work on the project.

This drew deeper criticism from centrist parliamentarian Stéphanie Yon-Courtin. “We know that Amazon wants to be paid with data.”

Other members of the panel shared Yon-Courtin’s concern. 

“Honestly, I am now more worried than before,” said Jonás Fernández, an MEP from a left-leaning party.

The prototype design phase is scheduled to wrap up in March 2023, and a decision on whether to move forward with implementation of the digital euro project could come in October 2o23.

Panetta originally came to discuss collaboration needed between the private and public sector on the euro-CBDC. He outlined that the ECB aims to replicate “cash-like” privacy features for low-value transactions.

Evelien Witlox, the program director for the ECB’s digital euro project spoke about designing two privacy tiers in the CBDC in an offline and online digital euro. For the offline case, authorities can only monitor things like top-ups but other transactions will simulate the privacy of cash, she said at the Frankfurt Forum on Thursday.

© 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.

NFT marketplace OpenSea has partnered with the U.S. record label Warner Music Group. 

Artists who signed under Warner Music Group will have their own drop pages on OpenSea in an attempt to bolster fan engagement and build community, according to a Warner Music Group release. 

“As a massive music fan myself, I’m thrilled to work with a partner who understands the significance of this technology, and wants to use it for good — to empower artists to own their fan connections directly,” OpenSea’s Vice President of Product Shiva Rajaraman said in the statement. 

Warner Music Group partnering with OpenSea follows other developments the music NFT ecosystem saw in 2022.

In February, Universal Music Group partnered with the entertainment NFT platform Curio to drop digital assets for the record label. Music streaming giant Spotify announced in May that it will begin trialing NFTs on its platform. 

NFTs can offer certain perks to performance artists, such as letting artists generate recurring revenue through royalties and allowing their work to be used in virtual worlds, founder of the music NFT platform HitPiece Rory Felton previously 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.