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USD Coin (USDC) issuer Circle Internet Financial will only support the Ethereum proof-of-stake chain after the chain integrations, the company announced in a blog post on Tuesday. 

The integration, dubbed The Merge, is expected to land in the third or fourth quarter of this year, with a soft deadline on December 19. Circle will integrate the current Ethereum mainnet with the new proof-of-stake consensus layer called the Beacon Chain. The existing mainnet is currently secured by proof-of-work, an algorithm that helps the decentralized network reach consensus securely.  

But proof-of-work has been criticized for the environmental impact of its high energy usage. The proof-of-stake chain is expected to help Circle in reducing its energy consumption. 

Following the decision to solely support the proof-of-stake chain, Circle said in the blog post that it does not “anticipate disruptions to USDC on-chain capabilities nor to our fully automated issuance and redemption services.” Users are not expected to do anything with their funds and wallets as well as to upgrade before The Merge, Circle previously wrote.

“While we don’t speculate on the possibility of forks post Ethereum Mainnet merge, USDC as an Ethereum asset can only exist as a single valid ‘version,’” Circle added. 

The announcement was made several days after Ethereum co-founder Vitalik Buterin dismissed the possibility of long-term adoption of Ethereum proof-of-work fork after the transition to the proof-of-stake chain.  

The company also announced its latest testnet plan for the last trial in the proof-of-stake transition: “Circle’s testing environment is connected to the Goerli Ethereum testnet, and we will monitor closely as it merges with Prater in the coming days.” Should no issues arise during the last testnet, developers will work on the last phase of the proof-of-stake mainnet merge. 

USDC is the second largest stablecoin after Tether with a total supply of $45 billion. The stablecoin has become a core building block for Ethereum DeFi innovation.

© 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.

CreatorDAO, a decentralized organization that provides financial and technological support for creators, has raised $20 million in seed funding.  

The crypto-friendly venture firm a16z and Initialized Capital led this round. Additional participants included 2 Ventures, M13, Audacious Ventures, 6th Man Ventures, Abstract Ventures, SV Angel, Hack VC, Fika Ventures, Fuel Capital, Goldhouse, Soma Capital, Alliance DAO, Shima Capital, Olive Capital, Kygo’s Palm Tree Crew, MGU Capital, Position Ventures and Alchemy Ventures. Paris Hilton and The Chainsmokers and other individuals also invested in this round, according to an announcement on Tuesday.  

Creators must apply to CreatorDAO to receive support. Those selected receive financial support, mentorship and technological tools for creating content and growing their brand. In exchange for the support, CreatorDAO retains a portion of the creator’s earnings.  

CreatorDAO is one of a number of projects aiming to provide crypto tools for creators. Startups like Roll and Rally are also investing in social tokens, or cryptocurrencies tied to a creator’s community. 

“Creators today are businesses, but no one’s figured out how to help them realize their growth potential,” said Michael Ma, CEO and co-founder at CreatorDAO, in a statement. “It’s an investment vacuum similar to the one that Y Combinator and angel investors filled for tech entrepreneurs 17 years ago.” 

© 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.

Lysto, a blockchain startup that is building verification tools for gamers, has raised $12 million in a pre-Series A funding round.

Sharing the news exclusively with The Block on Tuesday, Lysto said venture capital firms Square Peg, Beenext and Hashed co-led the round, with Tiger Global and Better Capital participating.

Angel investors, including Balaji Srinivasan (former Coinbase CTO), Paul Veradittakit (Pantera Capital partner), Binny Bansal (Flipkart co-founder) and Bobby Ong and TM Lee (CoinGecko co-founders) also backed the round.

As part of the deal, Tushar Roy, a partner at Square Peg, has joined Lysto’s board of directors, Lysto’s founder and CEO Sadiq Ahamed told The Block in an interview.

With fresh equity capital in place, Lysto plans to continue building its gaming infrastructure platform called proof of play protocol. “We are building a protocol that will help gamers digitize their credentials on-chain and carry it wherever they go,” said Ahamed.

Like how in real life people showcase their physical and online certificates on LinkedIn or when applying for a job, similarly, gamers can showcase their on-chain credentials when planning to join games, said Ahamed. “Gamers can showcase their skill set through these credentials to join a game, form a team and join tournaments,” he said.

Lysto’s proof of play protocol is currently live on Polygon in the beta phase. The plan is to support almost all blockchains in the future, and expansion will start with Solana, ImmutableX and Flow, according to Ahamed.

Lysto caters to both web3 as well as web2 gamers, meaning traditional game players can also verify their credentials through the protocol, said Ahamed.

There are currently around 25 people working for Singapore-based Lysto, mostly from India, and Ahamed plans to hire some people in the business development role in the near future.

Lysto’s pre-Series A round brings its total funding to date to $15 million. The firm raised $3 million in seed capital in November last year.

© 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.

Someone is sending small amounts of ether (ETH) from sanctioned Tornado Cash wallets to a variety of wallets belonging to well-known crypto individuals and celebrities. This move appears to be some kind of protest against the protocol getting hit by US sanctions.

As noted by Astaria CTO Joseph Delong (the former CTO of SushiSwap), an individual is sending 0.1 ETH to a range of crypto wallets, primarily ones associated with ENS names and prominent crypto individuals. They have sent such amounts to EthHub co-founder Anthony Sassano, pseudonymous crypto trader Loomdart and Coinbase CEO Brian Armstrong. Talk show host Jimmy Fallon, YouTuber Logan Paul and Mark Zuckerberg’s sister Randy Zuckerberg have also received amounts.

The ether is being sent from crypto wallets that were just yesterday sanctioned by the US Treasury. As a result, this could raise issues for the recipients. For example, if the ether is sent to a wallet belonging to a US-based entity, such as a crypto exchange, it’s possible they would need to freeze the funds.

While the individual doing so has not identified themselves — although one pseudonymous account did say they intended to do exactly this — it suggests that they have taken issue with the recent sanctions. Many crypto advocates have pushed back against the sanctions, calling it government overreach to sanction a protocol.

ShapeShift founder Erik Voorhees made this argument on Twitter yesterday. “Reality: [Tornado Cash] is not a person, nor a business entity. It’s an open-source software tool. It cannot be sanctioned, it does not respond to subpoena or legal request. It is privacy-seeking Americans who have been sanctioned.”

The sanctions have already affected many crypto users. For instance, Circle — which runs the stablecoin USDC — froze a pool of USDC held in the newly sanctioned wallets. This means many crypto users, who may have been making perfectly legitimate transactions, have had their money frozen.

 “Seems like USDC has indeed blacklisted the @TornadoCash contracts, meaning if you had USDC deposited in Tornado you can not access it anymore even if everything you did was perfectly legit and legal,” Gnosis co-founder Martin Köppelmann said on Twitter.

© 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.

Pinata, a firm building a decentralized media management system for non-fungible tokens (NFTs), has raised a total of $21.5 million dollars in venture capital.  

Greylock, Pantera Capital and Offline Ventures co-led the funding round, with additional participation from Volt Capital, Opensea and Alchemy. The $21.5 million is made up of $18 million in Series A funding and $3.5 million in seed funding.  

Pinata integrates with the Interplanetary File System (IPFS), a decentralized data storage system, to give users the infrastructure they need to build NFT projects, marketplaces other web3 apps on any blockchain. The firm intends to use the funding to bolster its product lineup and expand its team.  

Pinata joins a growing list of web3 firms creating blockchain-based versions of services like GoDaddy Amazon Web services. 

“Creators need storage capabilities and a fast and powerful way to distribute their content across marketplaces, metaverses, social media, and the internet en masse,” CEO Kyle Tut said in a release. “Pinata empowers creators of all kinds to serve content at scale without any technical experience required.” 

© 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 miner Cipher Mining has finished deploying mining rigs to its 40-megawatt wind powered facility in Alborz, Texas, representing about 1.3 exahash per second (EH/s) in hash rate.

The new site will be able to produce up to 5.7 bitcoin per day, the company said in its second-quarter results presentation.

“Against challenging cryptocurrency market conditions, our attractive bitcoin mining unit economics uniquely position us to move ahead successfully,” said CEO Tyler Page.

The Alborz facility is Cipher’s first site. The US-based miner has started shipping rigs to its second and third centers (Bear and Chief, in Texas), which have an initial capacity of 10 megawatts each and are expected to add a combined 0.6 EH/s to the company’s hash rate.

Cipher is also preparing to start shipping miners soon to its 205-megawatt site in Odessa, Texas, and is scheduled to deploy them throughout the second half of 2022.

Looking ahead to 2023, Cipher is considering adding 200 megawatts at a facility in Andrews, Texas, co-located with a new solar farm. It is also looking at several possible sites with its joint venture partner WindHQ.

Cipher had a net loss of $29.2 million in the second quarter, translating to $0.12 per share.

The company said that it had no debt at a corporate level, other than its share of an equipment finance facility at its Alborz joint venture of approximately $11 million. Through Alborz LLC, a joint venture between Cipher Mining and WindHQ, the miner secured financing for the Alborz center through a $46.9 million loan from BlockFi in early May.

The miner scaled back its hash rate forecast for the beginning of 2023 from 7.5 EH/s last quarter to 6.9 EH/s.

Power contracts

Cipher has sourced power via five-year purchase agreements with an average fixed price of $2.73 per kilowatt-hour, Page said during the earnings call on Monday.

“These contracts are an incredible asset to have,” he also said. “In the current power and bitcoin price environment, the cost of power for someone without a fixed cost contract can exceed the revenue generated by mining bitcoin.”

Whenever the potential revenue for selling power is higher than the revenue that can be generated from mining bitcoin, Cipher plans to sell that power to the grid rather than use it to mine.

Several bitcoin miners in Texas have agreements with the grid regulator, Electric Reliability Council of Texas, to power down in times of high electricity demand. Riot, for instance, reduced operations by 11,717 megawatt-hours in July and made $9.5 million in power credits, which outweighed what it could have generated in mining revenues, according to its own estimates.

“With an average price of power of roughly $17 per megawatt-hour, cipher can be very successful even in the current environment,” Page said.

© 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 startup RISC Zero has raised a $12 million seed round led by Bain Capital Crypto to build a scalable blockchain using zero-knowledge proof technology.

Investment firm Geometry remains a follow-on investor, according to a release on Tuesday. Others involved in the round include D1 Ventures and Cota Capital, as well as angel investors like Jinglan Wang, co-founder and CEO of Ethereum scaling solution Optimism, and Meltem Demirors, chief strategy officer at crypto asset manager Coinshares. 

RISC Zero’s area of expertise is zero-knowledge proofs, an authentication method that enables information to be verified without revealing its contents. 

In March of this year, RISC Zero launched a zero-knowledge proof virtual machine, its first open-source product leveraging the authentication approach. The virtual machine enables developers to build zero-knowledge proofs that can be executed on any modern computer using a variety of programming languages, according to RISC Zero’s website. 

Now the startup is taking this a step further with plans to build a scalable blockchain using zero-knowledge proof technology and its virtual machine, per today’s release. 

Developers with familiarity of programming languages like Rust, Go or C++ will be able to write decentralized applications on the blockchain, which look and feel more like traditional web applications, the release said. The RISC Zero team hopes this will unlock web3 to a larger percentage of the global developer community. 

Developers will get a sneak peek of the network in the third quarter of this year. 

This is RISC Zero’s second round. It raised $2 million in pre-seed round led by Geometry Research and Ramez Naam Ventures, per the release. The pre-seed took place in March, according to a Securities and Exchange Commission filing.

© 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.

Line Games’ web3 gaming arm Nerdystar announced a $5.8 million seed round on Tuesday to produce blockchain games based on some of the brand’s most successful web2 titles.

South Korean investment firm Blocore led the round, which also saw participation from Bitkraft Ventures, FTX Ventures, GuildFi, Formless Capital, VistaLabs, Seum and SBXG. The company previously received $5 million from Line Games, bringing its total funding to almost $11 million.

Nerdystar launched in February this year with Line Games’ former head of business, Alan Huh, as CEO. It currently has a team of more than 100 developers and artists, most of whom are transplants from Line Games’ Oozoo studios.

Line Games is an affiliate of the Japanese social media giant Line, which itself launched a non-fungible token (NFT) marketplace earlier this year. 

In emailed comments to The Block, Huh said Nerdystar has plans to develop features such as a marketplace and a DAO and offer NFT staking. The company is looking at DAOs as a way of granting players greater ability to develop and operate games as they desire.

It also plans to read and analyze users’ on-chain transactions to provide them with personalised NFT items. 

“For example, if the user is interested in investments and trades, we will provide NFT items that could contribute to the game economy. If the user is more down to playing games, an NFT item that could boost their gameplay will be provided,” Huh said.

The company’s first game, Desperado B218: The Scars of Exos, will launch by the end of this year on Polygon through Nerdystar’s blockchain gaming platform, Luxon.

© 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.

Tron DAO Reserve (TDR), a group that governs the Decentralized USD (USDD) stablecoin, says it has signed up Wintermute as its latest member. 

Wintermute, one of the largest trading firms in crypto, will act as one of nine whitelisted institutions in the DAO that can mint and redeem USDD. The firm will also participate in other activities to help stabilize USDD’s value, according to the media announcement. 

“The appointment authorizes Wintermute to mint and burn USDD as a collaborator with the Reserve. As a Member and Whitelisted Institution, Wintermute will advise the TDR and make recommendations to enhance, develop, and supply general aid for the USDD network,” TDR said in a Tuesday announcement.

The USDD stablecoin features an algorithmic mint and burn mechanism. All of the supply of USDD is minted with $1 worth of its own sister token tron (TRX), the native cryptocurrency of the Tron blockchain. Per its design, when the USDD price falls below the $1 target, users can burn their USDD to mint TRX, which brings the USDD price back to the target level.

The caveat is that only certain parties have the exclusive right to swap between UST and TRX. These parties are referred to as whitelisted institutions, with Wintermute being the latest. So far, no redemptions have yet been made.

Wintermute is one of the leading crypto market makers on both centralized and decentralized crypto exchanges, trading billions of dollars per month. The firm will join eight other members of the Tron DAO, which are Alameda Research, Amber, Ankr, FalconX, Poloniex, Mirana, Multichain, and TPS Capital.

Besides the mint and burn mechanism, the USDD stablecoin maintains the peg with centrally controlled reserves. This reserve is made of various tokens exceeding USDD’s total value and is held as collateral to backstop the stablecoin in case it faces a bank run. 

At the moment, USDD’s market capitalization is slightly over $745 million, whereas the DAO holds about $2.3 billion in collateral reserves, with a 300% overcollateralization ratio. In the long run, TDR says it plans to raise $10 billion for its reserves.

© 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.

Arbitrum, one of the leading Ethereum Layer 2 scaling platforms, has partnered with Reddit to bring its Community Points system onto a public blockchain.

Arbitrum runs two layers on the Ethereum blockchain: Arbitrum One, which has been around for a while, and Arbitrum Nova, which was recently launched in a beta mode. Arbitrum Nova is a separate network designed specifically for gaming and social applications that maintain security from Ethereum.

Reddit will build its Community Points system on Arbitrum Nova. This will allow developers to build gaming, social, and other applications that make use of Reddit’s token.

The partnership will create opportunities for collaboration among the Ethereum and Reddit communities, and give Reddit users more ways to utilize their community points on the Ethereum blockchain. 

“One of the beautiful things about Reddit doing community points on Nova is that it’s an open public network where anyone else can launch points, contracts, and applications on,” said Arbitrum CEO Steven Goldfeder. 

Tim Rathschmidt, who oversees Reddit’s Consumer and Product communications, told The Block that Reddit has been preparing for the arrival of web3. “Unlike other social platforms that need to entirely rehaul or risk being disrupted by new entrants, Reddit has been building for this all along,” he said. 

Community Points have been in development for almost two years. The three main points Reddit emphasized they were looking for was decentralization, developer-friendliness, and broad ecosystem support (other projects in the ecosystem).  

“We believe the technology should be in service of something much more foundational and fundamental to human interaction and connection,” Rathschmidt added. “Like everything we do at Reddit, our involvement will be open, self-sustaining, focused on empowerment, and have community at the heart.” 

Currently Reddit’s community points are held on Ethereum’s Rinkeby testnet. While they are on testnet and theoretically shouldn’t have any real value, there is a market for these testnet tokens. For instance, Moons from the r/cryptocurrency subreddit are currently going for $0.08. Yet it is relatively hard to sell the tokens at present since they have to be transferred across blockchains — a friction point that should disappear when they move to Arbitrum Nova.

While this is the first major deployment on Nova, many other firms are participating in the chain’s highly anticipated launch. 

FTX, Consensys, P2P, and QuickNode will be inaugural members of Nova’s so-called Data Availability Committee, which will help Nova achieve cost savings by sending data to the committee versus putting data on-chain. 

Other prominent DeFi protocols, including Maker’s DAI token and Sushiswap also plan to deploy on Nova.

© 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.