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Author: Thomas Bialek
A startup that wants to create a Web 3.0 version of Quora just raised $3.1 million in a new funding round led by a16z.
Launched in May 2021, Mem Protocol is part of the newest wave of entrepreneurs seeking to improve existing social media services with decentralized architectures. To start, the firm will release a Q&A application akin to Quora or the now-defunct Yahoo! Answers.
The goal is to weed out spam and users who lack a certain level of expertise on a given topic, said co-founder Abhi Vyas. With existing centralized Q&A platform’s “you can’t trust that someone claiming to be a professor in math is one,” Abhi Vyas argued.
Mem Protocol, however, will store information on network participants — including social media history, on-chain activity, and professional experience — in cryptographically secured “vaults.” That data is controlled by the users, rather than Mem Protocol, and can serve as a “social credit score”—or social graph—when a user gives a green light.
As for the round, other investors include former Coinbase CTO Balaji Srinivasan, Polychain’s Olaf Carlson-Wee, and Charlie Cheever.
Still, Mem’s ambitions for the protocol are broader than just a Q&A application. Ultimately, the team expects its architecture can be used for a wide range of applications including product reviews, social media, and job hunting.
“You can take your social graph and social capital across the web,” said Don Walpola, Mem Protocol’s CTO. A former machine learning engineer at Comcast, Walpola said that a potential Web 3.0-version of LinkedIn could build on top of Mem to analyze the skills of potential employees. e-Commerce sites could implement the protocols into their product review process to tailor reviews for each individual user.
© 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.
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Author: Frank Chaparro
Acting Comptroller of the Currency Michael Hsu wants to redefine the bank regulatory perimeter to determine how best to oversee crypto firms.
In comments to the Federal Reserve Bank of Philadelphia this week, Hsu advocated for consolidated supervision — the idea of an agency or group of agencies empowered to oversee a firm and all of its subsidiaries, including branches that might not fall under traditional lines of supervision. He compared the failed oversight of AIG subsidiaries which led to the firm’s large-scale collapse in the 2008 financial crisis with what could happen should regulators fail to take a multi-pronged approach to crypto regulation.
Hsu said historically, a failure leads to the widening of the banking perimeter to include at-risk firms undertaking banking-like activities. He’s advocating regulators widen that perimeter now, since crypto firms are already undertaking some activities that resemble banking services.
“Alternatively, we could start now, by considering which crypto activities should be separated; where the line for comprehensive, consolidated supervision should lie; and how such supervision can best be achieved,” he said in his remarks.
Hsu has made similar comments in the past, including warning AIG-like consequences should regulators fail to take a holistic look at crypto regulation. For that reason, he reiterated his call for inter-agency cooperation.
“There needs to be less regulatory competition and more cooperation, less parochialism and more teamwork, less go-it-alone independence and more interdependence,” he said.
As head bank regulator, he said the Office of the Comptroller of the Currency “stands ready to lead the way” in this collaboration. And so far it has, having recently completed a cooperative sprint with the Federal Reserve and Federal Deposit Insurance Corporation to work on the crypto problem. Those results have yet to be communicated, but Hsu said in today’s remarks that releases detailing findings are forthcoming.
“To the extent the OCC’s prior communications have been interpreted as tacit encouragement to engage in crypto activities, the forthcoming releases will clarify that safety and soundness is paramount,” he said. “The releases should not be interpreted as a green light or a solid red light, but rather as reflective of a disciplined, deliberative, and diligent approach to a novel and risky area. We will proceed carefully and
cautiously and will hold banks to the same.”
Hsu’s time as OCC head may be coming to an end as the nomination process for President Biden’s pick for the agency, Saule Omarova, moves forward. A vote has yet to be set, but many Republican representatives have expressed their opposition to Omarova, who they’ve called “anti-bank.”
© 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.
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Author: Aislinn Keely
ConsenSys, a New York-based company that develops and invests in projects built on the Ethereum blockchain, has raised $200 million, tipping its valuation to over $3.2 billion, according to an announcement. Its investors include HSBC, Coinbase Ventures and Marshall Wace.
Last month, The Financial Times reported that the company was raising funds in a round that would value it $3 billion, some six months after raising a $65 million fund from Mastercard and JPMorgan in April.
ConsenSys is known for its plethora of blockchain products, including developer tool Infura and wallet browser extension MetaMask. Both have seen rapid growth in the past year with Infura growing 250% from 100k to 350k users and Metamask’s monthly user base numbering 21 million.
“ConsenSys has been at the heart of Web3 and developing products for [users] from literally day zero,” said Lex Sokolin global fintech co-head and head economist at Consensys. “I mean, more so than anyone. This is an ecosystem that we have largely seeded and built. And now we’re in the process of helping people scale it out.”
Hinting at the company’s post-funding plans, CEO and co-founder Joseph Lubin recently floated the prospect of a MetaMask native token — a plan that Sokolin was unable to confirm or deny. He added, however, that it was very exciting to him that the community was so enthused about tokens across ConsenSys’ product range.
According to a statement released on Wednesday, the company plans to use the $200 million to enhance its presence in Asia. Marshall Wace partner Amit Rajpal, who oversees the hedge fund’s operations in Asia, led its investment in ConsenSys.
ConsenSys is supporting ten CBDC projects worldwide with six in the Asia Pacific region, notably in Hong Kong, South Korea and Singapore.
“When a company like Marshall Wace talks about Asian expansion, I think the signal is probably deeper engagement with [Asian] regulators, institutional partners, institutional asset managers and financial players to provide access to retail and institutional users for ConsenSys,” said Sokolin.
Aside from its Asian plans, the company will further focus on driving mainstream adoption of NFTs and will hire 400 new people.
The new hires come after previous employee culls. In February 2020, the company fired 20% of its staff to make the company more attractive to outside investors. Previous restructuring efforts occurred in 2018.
According to Coindesk, a group of these former employees and shareholders are currently readying legal action over improperly valued assets during a transfer between ConsenSys Inc and ConsenSys AG — its investment arm also known as Mesh.
“We believe that these shareholders are confused on a number of key factual points,” a ConsenSys spokesperson told Coindesk. “We have been working to share information with them that we think will further clarify the record and give them a greater understanding of matters they do not yet accurately understand.”
© 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.
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Author: Tom Matsuda
The European Central Bank (ECB) has listed the crypto market among other “pockets of exuberance” that it says could exacerbate possible financial market downturns if economic recovery plans fail to live up to expectations.
This warning is part of the ECB’s November financial stability review published on Wednesday.
According to the report, investors continue to seek investment avenues that promise significantly higher yields on the back of declining interest rates and rising inflation. This trend, the bank argued in its report, has led to surging investment activity in market segments like crypto, junk bonds, and housing.
The ECB stated that such a situation could cause problems down the line especially if abrupt changes to global liquidity conditions were to occur.
“A correction in markets could be triggered by a weaker than expected economic recovery, spillovers from adverse developments in emerging market economies, a re-intensification of stress in the non-financial corporate sector or abrupt adjustments in market expectations regarding the prospective path of monetary policy normalisation,” the ECB stated in its report.
Concerning cryptocurrencies, the ECB warned that virtual currencies “remain subject to speculative bouts of volatility.”
Apart from issuing warnings about the possibility of a crypto market crash, the ECB also identified specific risks associated with stablecoins. According to the report, the growth of the stablecoin market has “strengthened” the links between the crypto space and traditional finance.
While adding that stablecoins currently pose “limited financial stability risks” in the Eurozone, Wednesday’s report called for urgent regulation given their rapid growth and utilization. In its earlier report back in May, the ECB stated that crypto assets on the whole did not pose any significant risks to the region’s financial stability.
Both cryptocurrency and stablecoin regulations are among the issues under consideration by the European Commission in its proposed Markets in Crypto Assets (MiCA) framework.
© 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.
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Author: Osato Avan-Nomayo
At Pinata, we like to relate Web3 concepts to everyday objects that people can easily understand. For this analogy, we’ll look at the idea of digital coffee shops to stay grounded. In real life, most business owners of coffee shops don’t own the actual building. They most likely own an LLC that leases the building, buys the coffee, and then sells it to you. Now consider NFTs as a digital coffee shop. What’s confusing is that NFTs can actually represent the building, the lease, the LLC, and a single cup of coffee.
This causes a lot of friction when discussing NFTs because some might only think of NFTs as the building, while others might think of NFTs as the individual cups of coffee.
To eliminate this friction, we’ve created an internal framework that places NFTs on a spectrum of assets to consumables. In our digital coffee shop, the LLC of the coffee shop is an NFT that’s an asset, while the cup of coffee is a consumable NFT. It’s obvious that an LLC and a cup of coffee are very different in what they consist of and provide to the person that owns them. Nobody expects a cup of coffee to maintain value, since its purpose is temporary for the simple means of consumption. On the other hand, no one expects an LLC to be served in a cup to go. In the real world, it would be silly to confuse the two. But in the digital world, many often confuse this and believe that both should last forever. This is the dilemma we face in defining the different types of NFTs in the space today.
Understanding this framework for NFTs is not only crucial for the success and growth in the Web3 space, but it also enables teams to push the boundaries and build new use cases for NFTs. We know that Web2 fails in giving users zero opportunity to own any of these concepts. But Web3 fails if we believe that ALL NFTs are assets and none are consumables. Leveraging insights from our 75,000 users building NFTs, Kyle Tut, CEO of Pinata, offers a deeper dive into the nuances of NFTs including whether they should appreciate or depreciate, what the reasonable lifespan of NFTs should be, and more in our blog here.
Pinata is making NFT media easier than ever for creators and builders. To learn more about how to get started, visit https:/pinata.cloud.
© 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.
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Author: Sponsored
Swedish buy now, pay later (BNPL) giant Klarna shows no sign of stopping its acquisition spree.
The lender has acquired discount browser extension Piggy, according to a report from FinanceFWD. Much like the PayPal-acquired Honey, Piggy alerts users to cheaper offers when browsing shopping websites.
This is the eighth startup the BNPL firm has bought in recent months. It acquired comparison site PriceRunner for a cool €930 million (roughly $1.05 billion) earlier this month. Market officials estimate that Piggy was not quite as pricey at $100 million.
Klarna’s acquisitions are a sign that it increasingly sees itself as becoming the de facto superapp for shopping, putting it in direct competition with PayPal.The acquisitions by the American payment company have concentrated on regional players like Sweden’s iZettle and Japanese BNPL solution Paid’y.
PayPal also bought out crypto security firm Curv as part of its push into digital assets. Klarna, whose CEO has previously cast doubt on the gold rush into digital currencies, is yet to make any moves in the space.
The Block has reached Klarna for comment.
© 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.
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Author: Tom Matsuda
Constitution DAO, a newly formed group of crypto investors, has so far raised $11 million in its quest to bid on a very rare print of the U.S. Constitution.
But it is still a few million away from the auction house’s minimum of $14 million and even further from the group’s own target of $20 million. It only has until tomorrow.
This is the story of an ambitious plan that was put in motion just one week ago. The idea was to pool thousands of people’s funds together to collectively bid on an early surviving copy of the U.S. Constitution, with the goal of distributing control of it to those who got involved.
The copy of the U.S. Constitution is going on sale at Sotheby’s on Thursday at 18:30 EST. According to the DAO, as long as they have a sufficient amount of ether (ETH) — and meet some other requirements — the auction house will let them bid on the rare text. Those who contribute to the fundraise will receive governance tokens that they will be able to use to vote on what should happen to the rare print.
But it’s a stretch goal. After getting some initial soft commitments, the DAO started raising funds in cryptocurrency on November 15. In that timeframe they have raised 2,632 ETH, currently worth $11.1 million — although that could change depending on the price of ether.
The goal is to get to between $15 to $20 million, which is the auction house’s estimated range. Even if they meet this target, however, the auction could exceed expectations and move beyond their purchase power.
“We don’t know how much other bidders are planning to bid. We know that $14MM allows us to participate in the auction, $30MM will make us competitive, and $40MM+ gives us a great chance of winning,” said a FAQ document provided by the DAO.
In just the short time period, the DAO has already formed an LLC company to bid on the auction, since the DAO was unable to bid directly. While the auction house will accept its ether balance as proof of funds, it will need to swap the funds for dollars if its bid is successful. Crypto exchange FTX has offered to fulfil that service if needed.
© 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.
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Author: Tim Copeland
The crypto world has only just begun digesting the finalized crypto reporting requirements from the Financial Action Task Force, or FATF.
The years-long process began in the summer of 2019 when the FATF made public its initial version that called for what it dubbed virtual asset service providers, or VASPs, to undertake an unprecedented degree of information-sharing about their customers and the transactions they conduct. Since then, the guidance has gone through numerous iterations and accounted for emerging use cases like decentralized finance (DeFi) and non-fungible tokens (NFTs), to name a few.
At the heart of this framework is the so-called travel rule, requiring businesses that facilitate the movement to collect and share information about the parties to a transaction. How VASPs – like exchanges – will comply with this as FATF-supporting countries go live with the requirements is an active and evolving question.
In this special episode of The Scoop, The Block reporter Aislinn Keely breaks down the implications of the FATF framework and how it might shape the evolving regulatory landscape in the United States.
To unpack the questions at hand, Keely spoke with former FATF executive secretary and current ACAMS director Rick McDonell, Shyft co-founder Joseph Weinberg and Elliptic director of policy and affairs David Carlisle.
This special episode takes a closer look at:
© 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.
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Author: Aislinn Keely
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