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Just over 1,700 venture capital deals focused on the crypto space occurred in 2021, netting these startups, projects and protocols some $25.1 billion in financing.

Compared to 2020, the new figures represent a 126% increase year-over-year in the number of deals and a 719% increase year-over-year in total funding. These findings were included in The Block Research’s 2022 Digital Asset Outlook Report.

As The Block has reported in its funding deal coverage, numerous crypto companies achieved so-called unicorn status – that is, scoring valuations above $1 billion.

Per The Block Research’s findings, at least 65 companies achieved this distinction during 2021. On a two-year horizon, that represents a 491% increase.

Recent unicorn-status funding rounds include FTX, Alchemy, TaxBit and Dune Analytics. Other well-known companies, including Binance and its US-based offshoot, are also said to be raising at multi-billion-dollar valuations.

Read the full 2022 Digital Asset Outlook Report here.

© 2021 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.

Former US President Donald Trump recently reiterated that he’s not a fan of cryptocurrencies, despite saying positive things about former first lady Melania Trump’s recently-announced NFT platform.

“She’s going to do great,” Trump said of the former first lady’s NFT project while speaking with Fox News anchor Maria Bartiromo on December 20 during her Mornings With Maria television program. 

However, Trump went on to decry cryptocurrencies as “a very dangerous thing,” reinforcing comments he made in June on the news network.

“Well, I never loved it, because I like to have the dollar, I think the currency should be the dollar, so I was never a big fan. But it’s building up bigger and bigger, and nobody’s doing anything about it,” Trump told Bartiromo.

Trump continued: “Look, I want a currency called the dollar, I don’t want to have all these others — and that can be an explosion someday like the likes of which we’ve never seen. It’ll make the big tech explosion look like baby stuff. I think it’s a very dangerous thing.”

Based on the actions of Republicans in the House and Senate over the past year — including specific moves taken during the fight over a bipartisan infrastructure bill — Trump would appear to be at odds with his political party on the subject.

From Sen. Ted Cruz’s push for Texas to welcome more bitcoin miners to crypto-holding senators like Cynthia Lummis, the GOP has largely taken the pro-crypto position, as a recent House Financial Services Committee hearing also demonstrated. 

This fall, the leading Republican on the HSFC, Patrick McHenry, sought to codify in law a safe harbor provision for token-focused startups, drawing on a proposal from SEC commissioner Hester Peirce, herself an advocate for a more open regulatory approach to crypto. 

© 2021 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.

Arcade (formerly Pawn.fi), a platform that lets users borrow against their NFTs as collateral, has raised $15 million in a Series A funding round.

Pantera Capital led the round, with Castle Island Ventures, Franklin Templeton Blockchain Fund, Golden Tree Asset Management, Eniac Ventures, Protofund, Probably Nothing Capital, and Lemniscap also participating.

Angel investors such as BlockFi CEO Zac Prince and Quantstamp CEO Richard Ma also joined the round.

The fundraise was an equity funding round and will help Arcade expand its team, launch the platform publicly, and reach more users, co-founder Robert Masiello told The Block. Arcade’s current headcount is 13, and the startup is hiring for various roles across product, business development, marketing, and engineering functions.

Arcade is currently available in a private beta form and will open to the public in early Q1 next year, said Masiello. In its private release, Arcade says it has facilitated the largest loan of $800,000 and that its total loan volume to date has been $3.3 million.

The platform currently supports Ethereum-based NFTs as collateral for getting loans in all ERC-20 tokens such as wrapped ether (wETH) and stablecoins USDC and DAI. Masiello said other blockchains and Layer 2 networks are also being explored for support in 2022.

Arcade is mainly targeted at institutional lenders and high-net-worth retail investors. As for its business model, the platform earns “a small percentage” of every transaction completed on it, said Masiello.

There are several such platforms that facilitate loans against NFTs, including NFTfi and Pawnfi. Masiello said Arcade’s competitive edge is that it allows multiple NFTs to be included in a bundle to acquire a single loan through a wrapped asset called wNFT. This helps with lower gas fees since there is a single loan transaction instead of multiple ones, he added.

The Series A round brings Arcade’s total funding to date to $17.75 million. In May, the startup raised $2.75 million and that was also an equity round, said Masiello.

Arcade currently does not have its native token, but it is evaluating the launch of one, said Masiello.

© 2021 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 floor price of Bored Ape Yacht Club (BAYC) NFTs has flipped that of Larva Labs’ CryptoPunks for the first time. The floor price is the lowest price at which a type of NFT is currently available for sale.

The current floor price of a BAYC NFT is 53.9 ETH ($215,350), whereas the floor price of a CryptoPunk NFT is 52.69 ETH ($210,515).

Why is this significant?

The flip is significant because BAYC NFTs are much newer to the market than CryptoPunks — seen as the OG NFT. The former were released in April of this year and the latter in 2017.

Both BAYC NFTs and CryptoPunks are a collection of 10,000 unique digital collectibles on the Ethereum blockchain. CryptoPunks were created by two Canadian software developers Matt Hall and John Watkinson whereas BAYC NFTs were created by a team of four pseudonymous developers: Gargamel, Gordon Goner, Emperor Tomato Ketchup, and No Sass.

The rarer an NFT, the higher price it generally fetches. For instance, BAYC #2087, the 9th rarest bored ape with rainbow-colored skin, trippy fur, angry eyes, and the cigarette in the mouth, was sold for 769 ETH in September (around $2.3 million at the time and around $3 million at current prices). That’s the highest sale price of a BAYC NFT to date.

From the CryptoPunks collection, CryptoPunk #7523, one of 9 Alien punks, was sold for a record $11.8 million at the auction house Sotheby’s. On Larva Labs’ native marketplace, the highest sale price to date has been for CryptoPunk #4156 for $10.26 million (barring those pesky flash loan sales).

Why the flip?

Over the last few months, the floor price of CryptoPunks has fallen steadily, whereas that of BAYC NFTs has increased. There are multiple factors at play.

“BAYC NFTs have generous IP rights compared to CryptoPunks,” Bobby Ong, co-founder of CoinGecko and an NFT expert, told The Block. “Some people are not happy that Larva Labs is not assigning more rights.”

Put simply, CyptoPunk NFT owners do not get rights to use their NFTs for any commercial purpose, whereas BAYC NFT owners get IP rights. Bored Ape owners are using these IP rights to build a blockchain-based game in partnership with Animoca Brands.

Another recent boost has been their adoption by celebrities such as Jimmy Fallon, Steph Curry, and Post Malone. Ong said BAYC has a concierge team onboarding celebrities to own apes versus Larvalabs, which is not doing much in that regard. Just yesterday, Snoop Dogg bought a Bored Ape, plus two mutant apes and a Bored Ape Kennel Cub (two of its offshoot projects) through MoonPay.

The BAYC team is also expected to release its native token next year, which also appears to be a driving factor for apes’ higher floor price, said Ong.

© 2021 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.

As part of a massive product and brand overhaul, L2 Labs, the team behind ZKSwap, has announced the launch of the new comprehensive ZKSpace platform on December 20th. The platform hosts an upgraded Layer 2 AMM DEX ZK-Rollups ZKSwap v3.0, an NFT minting center and marketplace called ZKSea, and payment services, ZKSquare.

 The upgrade will coincide with the official shutting down of ZKSwap v1.0 and the original PoG consensus mechanism in due time.

ZKSpace – A Full-Featured Layer2 Platform

The all-new ZKSpace platform is comprised of three main parts: ZKSwap, ZKSquare, and ZKSea, with an all-new-look user interface, NFT support, unlimited token listing, smoother withdrawal, optimized efficiency, and multi-chain support.

Moving forward, the formula underpinning the innovative Layer 2 AMM DEX utilizing ZK-Rollups technology will feature an important change that enables more flexibility for users. When trading with stablecoins, ZKSwap v3.0 resembles the original Curve V1.0 model, but when trading between non-stablecoins, ZKSwap v3.0 will allow for adjustable-price ranges. This means users will be able to choose at which price range to lock in LPs, and in turn, avoid excess slippage for trades that drain liquidity from those ranges. Building from the Uniswap v3.0 model, ZKSwap v3.0 does this by using ERC721 LP tokens and an ‘internal oracle re-pegging mechanism’.

With the intention of providing a standard for Layer 2 NFTs, users on ZKSpace can create, mint, buy, and sell NFTs via ZKSea. This will be an important step moving forward as gas prices are inhibiting the growth of the Layer 1 NFT marketplace and raising the barrier to entry for new users. In addition, the protocol will also feature NFT Transaction Mining and NFT Liquidity Mining which will enable users to retrieve the locked liquidity of their NFT assets and gain in a percentage of transaction fees paid by other users.

Compared with the testnet, ZKSpace adds several interesting new features to its NFT product, including Likes, Collects, Add Tags/Attributes, Share to Facebook/Twitter, etc.

About ZKSwap v1.0 & Proof of Gas Mining (PoG)
After initially launching in February 2021, the innovative ZKSwap gas fee mining model served hundreds of thousands of users across its 10-month lifespan. The model allowed protocol users to enjoy zero-gas fast transactions and meant more people could try out and work with Layer 2 technologies. During this period, thousands of ETH in gas were spared at the cost of more than $10 million, providing millions as profits to users mining gas fees on the platform. This innovation was unprecedented for Layer 2 platforms and one of the key defining qualities of ZKSwap in the beginning.

With the launch of ZKSpace, the team has made the decision to stop ZKSwap v1.0 and PoG mining in due time. This means Layer 2 transactions will now incur gas fees, but these will remain low at around 1/10th of those required for Layer 1 transitions as the platform will subsidize a percentage of the fee.

After the PoG mining contract stops producing ZKS, users’ assets in the smart contract will still remain intact and can be withdrawn at any time. Of the remaining ZKS to be distributed by the PoG smart contract, this will be mined via other methods to incentivize the further development of the Layer 2 ecosystem.

Stay Tuned
With more updates to be announced in the coming days and weeks, stay tuned to @ZKSpaceOfficial on Twitter or join the official Telegram group chat for further details about ZKSpace.

© 2021 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.

Xinhua, one of China’s primary news agencies, plans to issue non-fungible tokens (NFTs) at noon UTC on Christmas Eve.

The NFT collection will feature 11 photos taken by journalists during the course of the year, Reuters reported on Wednesday. These 11 photos will be released as limited edition NFTs, totaling 10,000 copies each and will be available for free, the report stated.

According to The Block Research’s Wolfie Zhao, the 11 photos in the NFT collection memorialize landmark moments for China in 2021 including winning the first gold medal at the Summer Olympics in Tokyo and the 100th anniversary of the Chinese Communist Party (CCP).

Xinhua’s NFT collection will be issued via Zxinchain, Tencent’s government-authorized enterprise blockchain network. Tencent itself did issue NFTs on this same chain in September with the collection containing digital cave paintings from the Mogao Caves, a UNESCO world heritage site located in China’s Gansu province.

If Xinhua’s NFT launch proceeds similarly to Tencent’s, then the NFTs will not be available for trading on any kind of secondary market. Previous NFTs launches on Chinese permissioned blockchains have typically prohibited secondary selling or auctioning.

© 2021 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.

Arsenal Football Club has been reprimanded by the UK’s advertising regulator over a Facebook post and content on its website that promoted fan tokens.

The Advertising Standards Authority (ASA) banned the content for taking advantage of consumers’ inexperience in cryptoassets. The posts also misled consumers by not making it clear that fan tokens were a cryptoasset that had to be bought using another cryptocurrency, the regulator said. 

Arsenal had partnered with Socios, which uses blockchain technology to provide fan tokens, collectibles and other digital assets to sports organizations. The club’s fan token, $AFC, can only be purchased on the Socios app using the cryptocurrency Chiliz ($CHZ), which was also invented by Socios. 

Arsenal argued the promotion of the tokens was “designed to raise awareness of […] the opportunity to interact with the Club such as the right to vote on official Club decisions.”

The soccer club added that fan tokens were not promoted as financial products or an investment vehicle and it did not encourage the trading of fan tokens. 

It also said it believed Socios was well-known in the footballing community as a cryptocurrency platform because it sponsored and partnered with a number of European soccer clubs.

Nevertheless, the ASA ruled the ads must not appear again in the form they were complained about. The club was also warned not to trivialize investment in cryptoassets. 

Data on CoinMarketCap shows that since $AFC began trading in October, its price has more than halved from around $6.55. It had reached lows of around $2.76 by mid-December. 

The recent moves to rule against fan token advertising in the UK comes as part of a wider crackdown. Earlier in December, the ASA also published a volley of rulings against cryptocurrency advertising on London’s transport network, calling crypto assets a “red alert priority”. 

The seven companies whose ads were deemed to have broken the Advertising Standards Authority’s (ASA) rules included trading platforms eToro and Coinburp; exchanges EXMO, Luno, Kraken and Coinbase; as well as a promotion from pizza chain Papa John’s. 

© 2021 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

• If everything goes according to plan, 21 public and 5 pending-listing Bitcoin mining firms in North America will add more than 95 EH/s next year to the Bitcoin network.
• Their collective billion-dollar contracts have been made after an unprecedented growth of the Bitcoin mining force in North America this year.
• That means the network is poised to reach or even cross the 300 EH/s threshold if these institutions don’t default on the monthly installments for miners preorders.

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On Tuesday, crypto exchange service Kraken announced that it had acquired Staked, a non-custodial staking startup.

Though details of the acquisition deal were not disclosed in the announcement, Kraken said that the acquisition was “one of the largest crypto industry acquisitions to date” and would help the exchange company “develop innovative new staking products for all our clients and expand the number of proof-of-stake networks supported on our platform.”

“We are excited to add Staked to our portfolio of yield products, which has seen great uptake by a growing population of crypto investors,” Jesse Powell, CEO and co-founder of Kraken, said in a statement. “Staked is highly complementary to our existing staking business and will allow us to further strengthen our product offering through world-class infrastructure for clients who prefer to retain custody of their staked assets. We’re excited to welcome Staked’s clients to Kraken.”

The development comes as Kraken mulls a public offering, a route that Powell has publicly floated in the past as a potential over the next two years.

© 2021 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 digital asset-focused bank in Switzerland is seeking to become whitelisted on Arc, the institutional platform developed by the team behind DeFi lending protocol Aave.

In a governance post shared Tuesday, a representative from the bank said that it has sought the white-listing in order to enable its clientele to more broadly access the Aave platform, stating that “[d]ue to various regulatory restrictions in their jurisdictions, SEBA’s institutional clientele has not been able deploy liquidities at large scale in Aave until now.”

“The launch of Aave Arc with its permissioned layer represents a great opportunity for them to access DeFi yields while remaining compliant with their regulatory obligations. At SEBA, we believe that this will directly benefit the Aave community with institutional liquidities accelerating growth in TVL and in protocol revenues,” the rep said.

“SEBA has received increasing institutional demand to access DeFi liquidity protocols like Aave over the past months,” they later explained in the post, noting: “SEBA has a significant interest from its client base to participate in Aave Arc and with its tight connections to money managers in Switzerland and beyond, SEBA is ideally positioned to bridge institutional liquidities in the Aave Arc protocol.”

As previously reported, Arc is a permissioned platform, meaning that participants have gone through a know-your-customer process and, via Arc, can participate with other whitelisted users in a dedicated lending pool. 

© 2021 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.