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Blockchain agnostic connectivity layer Redeem has raised $2.5 million to enable individuals to participate in web3 using just their phone numbers.

The pre-seed funding round is led by Kenetic. Other investors in the round include VC3 DAO, CMT Digital and Flyover Capital, the company said in the release.

The startup, founded by Toby Rush, a former Alibaba executive and the founder of biometric startup EyeVerify, wants to provide the infrastructure to enable users to tap into web3 using just their phone numbers. “If there were a through line between the various companies, I would say it’s around how do you let people do more by doing less,” Rush said. “A more tongue in cheek way, people are lazy and I try to help them be productive while being lazy,” he added.

Sending NFTs by text

Redeem’s model is business- to-business and business-to-customer with a focus on exchanging utility NFTs, Rush said.

“We have not yet really gotten to peer-to-peer NFTs,” Rush said. “I love the concept. I don’t know how we’re gonna handle that piece.”

A business will be able to send or receive NFTs or web3 rewards using familiar services such as Whatsapp or iMessage through Redeem’s connectivity layer. “I feel like I need a t-shirt to say I heart phone numbers,” Rush said. “They’re just a fascinating construct that we’ve already fully opted into and so we’re trying to create this connectivity layer between phone numbers and the rest of web3 and blockchain to be able to specifically unlock utility in daily life.”

While the vision may seem ambitious, a prototype is already in use, Rush said. At an event over the weekend, individuals could scan a QR code from Redeem and select between WhatsApp or SMS to claim an NFT from the event. On the back-end, the startup is creating a wallet, putting NFTs into a wallet and sending a link immediately back to the user. 

“Near-term roadmap, you can configure what you want your default wallet to be,” Rush said. “And it would simply route the appropriate NFT to the wallet that you’ve chosen.”

A web2.5 play

The startup hasn’t yet integrated with any wallet providers and is currently using its own wallet. Integrations will be customer driven. 

It also aims to be blockchain agnostic, but the current prototype runs on Polygon because it is fast and cheap. It’s also using web2 technologies such as Twilio and Amazon to make the service possible.”It’s definitely a web2.5 play where there’s some [technology] in the web3 world, some is in the web2 world,” Rush said.

Wait, what about anonymity?

While Redeem’s connectivity layer offers users ease, the linking of phone numbers to wallets could also be viewed as a threat to some of the core ideals of web3 and the anonymity of blockchain wallets. Rush disagrees.

“As soon as you order something that gets sent to your house, they know your name, they require your phone number, so it’s just not realistic that the entire web through blockchain crypto world stays anonymous forever,” Rush said. “We need much better privacy layers, we need the ability to not necessarily always live out in the open but I guess I’m a bit of a contrarian in that I don’t think anonymity is the big unlock of blockchain and crypto.”

The funding raising round closed in November and will be used to continue building out a core feature set ahead of a second-quarter strategic partnership launch, the company said.

“Adoption is the holy grail of web3,” said Jehan Chu, founder of Kenetic, in the release. “Redeem’s core features allow users to access the universe of web3 in seconds with no prior crypto blockchain knowledge.”

© 2023 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.

Decentralized oracle network Chainlink has launched a new developer platform called Chainlink Functions to help connect decentralized applications (dApps) with traditional web apps in a seamless manner.

The platform is now available in beta on the Ethereum Sepolia and Polygon Mumbai testnets.

Chainlink’s oracle network is designed to enable smart contracts and applications to utilize off-chain data in a secure and decentralized manner. It is the most widely used oracle network in the industry with over 650,000 active users, per data from Dune Analytics.

The introduction of a new platform called “Functions” is going to complement its Oracle service. It will allow blockchain developers to connect their dApps or smart contracts with any application programming interface from within the traditional tech space without having to manage additional cloud infrastructure. The platform already integrates with various cloud providers, including Amazon Web Services, Meta and others.

According to Kemal El Moujahid, Chainlink’s chief product officer, the launch of Chainlink Functions will remove a significant obstacle in the adoption of web3.

“With the launch of Chainlink Functions, we are removing a major roadblock in the adoption of web3 and making it easier than ever for developers to combine smart contracts with the powerful APIs and web2 data sources they need to build amazing applications,” Moujahid said.

© 2023 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 California resident filed a complaint against crypto lender Nexo citing harm from the firm’s “fraudulent inducement” to take out loans.  

John Cress had a Nexo interest-bearing account and moved his digital assets to Next to earn interest, according to a complaint filed on Monday in the U.S. District Court in the Northern District of California. Cress alleged that Nexo made false assertions to get him to borrow against the digital assets he deposited and invest in complex financial products rather than just earn interest on his own assets.  

The suit alleges that Cress ultimately, “suffered millions of dollars in losses because of those misrepresentations when he was liquidated of substantially all his digital assets,” according to the filing.  

Cress is a long-time investor in crypto, according to the complaint. He bought bitcoin in 2014 and bought ether in 2017. He transferred those to Nexo in March 2021 to earn yield on his assets.  

Cress also noted regulatory legal actions against Nexo, including the SEC’s charges in January for failing to register the offer and sale of its Earn Interest Product. Nexo agreed to pay $45 million in total to the SEC and state regulatory authorities.

Last December Nexo announced it would “gradually” leave the U.S. after unsuccessfully petitioning the Consumer Financial Protection Bureau to argue that it was outside the bureau’s jurisdiction, after the consumer financial regulatory began investigating the crypto lender. 

Nexo and its co-founder Antoni Trenchev rejected the claims Cress made, calling them unfounded. 

“Mr. Cress has previously been in contact with us regarding his Nexo account, but he himself walked away from the conversations,” a Nexo spokesperson said. “Thus, we believe that this court claim has opportunistically been filed now due to the news of our phasing out Nexo’s products from the U.S. market.”

© 2023 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 prices were slightly higher halfway through the week, with most trading within a narrow range. Crypto stocks dipped after the open.

Bitcoin was trading around $23,760 by 10 a.m. EST, up a little over 2%, according to TradingView data. Ether was trading up 3.4% to $1,660. Cryptocurrencies were broadly higher across the board. CFX added over 9% following a $10 million token round. 

BTCUSD chart by TradingView

Crypto stocks

Silvergate was down 2.7% by 10:15 a.m. EST, having whipsawed after the open. Shares in the crypto-friendly bank have traded down since the beginning of the year. 

SI chart by TradingView

KBW analysts led by Michael Perito downgrade the stock to market perform from outperform, citing “increasingly limited visibility.” The bank changed its price target to $16 from $25. 

“As SI’s shares have fallen, we have defended the bank’s management, operating platform, role within FTX’s platform, and strength of their balance sheet,” the note read.

The firm cited Silvergate’s strong operating procedures, particularly with regard to compliance, social media claims that “continue to fundamentally misrepresent” the bank’s role and exposure to FTX and the bank’s ability to survive the “significant deposit run in Q4.” 

The downgrade comes amid a lack of information and updates, two months on from year-end financials.

“Our market perform rating reflects increased patience, particularly after the bounceback in the shares off the lows of nearly $10,” the note read. KBW concluded that for investors looking for exposure to high-growth digital banks, “we think more established banking-as-a-service players, such as top-pick CCB, makes more sense from a risk/reward standpoint.”

Coinbase flipped between red and green, trading down 1% to $64.16. Block and MicroStrategy fell by 2% and 1.4%, respectively. 

© 2023 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.

Sebastien Borget, chief operating officer of The Sandbox, believes the future of the metaverse platform lies in the hands of individual creators, not the brands that have made it something of a corporate crypto darling.

Since The Sandbox was bought by Animoca Brands in 2018, the vision has been to build an “open world.” However, from the outside, it seems its growth has been driven by bluechip corporate deals.

So far, the platform has worked on projects and partnerships with the likes of HSBC, Warner Music, PlayBoy, Gucci and Ubisoft. It also raised $93 million led by the SoftBank Vision Fund 2 in November 2021.

Now, through this base layer of brand recognition, more independent creators will be “onboarded,” Borget argued, speaking to The Block at NFT Paris. 

“You need a catalyst to start something. Our experience doing user-generated content for almost 15 years is that it doesn’t just start with a blank page and saying ‘use it,’ you always have to seed a community of creators to see what the possibility is and then from there, people will be inspired,” he said in an interview.

‘Less likely to succeed’

Last year, there were reports of dwindling users on metaverse platforms, which prompted leaders to set the record straight about how many users they actually have. In October, The Sandbox said it has 201,000 monthly active users, 4.1 million total wallets, 128 million in staked SAND tokens and more than 22,200 land owners.

Borget thinks that through this audience the virtual world will start seeing an influx of individual creators releasing content — not attached to brands — in the next 12 to 24 months. This will be orchestrated through more community-focused curated events and through the creation of a DAO, which is expected to happen by the end of the year.

“No matter how good the technology is, without fun, story telling and being relevant to the audience and creator friendly, the metaverse is less likely to succeed,” he said. 

So far, decentralization of the platform has come through its SAND token and the sale of virtual, blockchain-backed land via that token. Sand will dictate governance in the DAO. Centralized curation decisions and grants from the foundation will therefore be put in the hands of the community.

“The Sandbox will be at the service of the community, as just one holder of the token,” he added. 

Saudi Arabia and beyond

Borget isn’t just looking at growth online — he has IRL expansion on his mind, too. He wants to understand how the platform can fit into different cultures so it can attract different kinds of users.

A recent meeting with Saudi Arabian leaders sparked a rally in the price of SAND. The company also netted a recent partnership with Dubai, which uses The Sandbox as its “metaverse headquarters.”

“Five years ago, Saudi Arabia was still a country where music was forbidden. It’s progressively opening to the rest of the world and has a very young population, which is interested in gaming and mobile gaming,” explained Borget. 

Borget is optimistic about the phase of education that is currently in progress in the region.

“I don’t see a world in 2030 or 2050 where the Middle East isn’t playing a big part,” he added. 

© 2023 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.

Safe, a Swiss-based self-custody infrastructure provider previously known as Gnosis Safe, launched Core, an open-source stack that integrates account abstraction to simplify smart contract development on the Ethereum blockchain.

The new feature separates smart contract functionality from the concept of an externally owned account such as a user wallet, making it easier for developers to create and manage them. Safe Core includes partner solutions from payments giant Stripe and decentralized finance protocol Gelato to enhance its features and simplify transaction fee and payment flow, as well as allow for fiat on-ramping.

Safe co-founder Richard Meissner believes that account abstraction is essential for onboarding new users and improving web3 usability, and thinks that Safe Core will attract more developers to build on Ethereum and contribute to the growth of the web3 ecosystem.

“With Core, we are putting a modular stack in the hands of developers to grasp this massive opportunity,” Meissner said. “We have partnered with the best in the business to improve UX capabilities for on-ramping, relaying, and authentication as part of Safe Core kits.”

The Safe team said it will run a a month-long hackathon called “March for Account Abstraction” to encourage developers to participate and build on Safe Core, with bounties offered by partners including Stripe, BASE, Gelato, Web3Auth, Gnosis Chain, Cowswap, and Superfluid.

Safe’s smart contract wallet and custody infrastructure already secures nearly $40 billion in assets across several Ethereum-based apps.

© 2023 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.

Visa remains committed to its crypto strategy, a company spokesperson told The Block, despite the hammering digital assets have taken in recent months.

“At Visa, we don’t pick winners and losers,” a spokesperson said. “Our job is to support an array of ways to pay and to study new technologies that may impact the future of payments. To that end, we’re focused on growing our core competencies in web3 infrastructure layers and evaluating the blockchain protocols driving crypto development.”

The statement came following a Reuters report claiming that Visa would be “slamming the brakes” on its plans to form new partnerships with crypto firms. Visa had “decided to push back the launch of certain products and services related to crypto until market conditions and the regulatory environment improve,” the report said.

On Tuesday, Visa’s head of crypto, Cuy Sheffield, countered the report in a tweet claiming that the Reuters story was innaccurate.

Despite challenges and uncertainty in the crypto ecosystem, Sheffield wrote, “we continue to partner with crypto companies to improve fiat on and off ramps as well as progress on our product roadmap to build new products that can facilitate stablecoin payments in a secure, compliant and convenient way.”

© 2023 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.

Robinhood Wallet, which supports both the Polygon and Ethereum networks, is now available to all iOS customers worldwide. 

The self-custody wallet, which had a waitlist of over 1 million users, can connect to a range of decentralized applications, Robinhood said in a blog post. Tokens currently supported include COMP, MATIC, SHIB, SOL, UNI and USDC, and users can also view and store NFTs on both Ethereum and Polygon.

“Users have told us they love how accessible and easy to use the app is, and that they really enjoy the ability to self-custody their digital assets and swap with no network fees on Polygon,” Robinhood Crypto GM Johann Kerbrat said. “While we recognize it’s been a tumultuous few months in the crypto space, we remain committed to our mission to make Robinhood the most trusted, lowest cost, and easiest to use on-ramp to crypto.”

Android support should come later this year, and the company is also planning features including a web3 browser, in-app rewards and support for more coins. 

© 2023 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.

Impossible Cloud, a Germany-based decentralized cloud platform, raised $7 million in seed funding, led by HV Capital and 1kx. 

The equity round, which closed last month, featured participation from Protocol Labs, TS Ventures and Very Early Ventures. The startup began fundraising toward the end of the third quarter of last year, according to a written interview with founders Kai Wawrzinek and Christian Kaul. 

Wawrzinek is the founder of gaming studio Goodgame Studios while Kaul is a former Airbnb director, who later joined Goodgame initially as a head of talent acquisition before rising up to VP level. The pair are joined by co-founder and CTO Daniel Baker, formerly of open source platform D2iQ. 

Impossible Cloud looks to provide decentralized cloud services for B2B customers looking to delve into web3 tech.

The problem in the clouds, and a silver lining

Currently, the startup says that centralized cloud platforms offered by big tech players such as Amazon, Meta and Microsoft suffer from complex pricing models, capacity limitations and a single point of failure, with one server vulnerability resulting in the possible loss of data.

It’s also made intentionally difficult to change providers, meaning users are locked into using one particular service even if it could benefit from another one. That’s not to mention that some states require data to fulfill certain standards, such as storage in a particular country which centralized providers with large but few data centers are unable to cater for. 

“We feel that web3 is inevitably the future of the most relevant cloud services, like cloud storage and computing, and is a highly positive development for business and government,” said the founders. “It’s a natural progression from web1 (read-only), web2 (read-write, highly centralized by now) to web3 (read-write-own, decentralized Cloud).” 

A cloud service powered by web3 technologies would benefit from an incentive system to speed up scaling, a distributed system to solve the issue of the geographical location of data storage and enable many participants to have a stake in the cloud systems that they use every day. 

Target users

Sales for the services offered by Impossible Cloud will be done in fiat so users can benefit from the possible benefits that web3 technology could offer without having to change the fundamentals of their business models.

It will look to target online picture or video platforms and industries that rely on frequent backups of large datasets, such as surveillance video companies, said Wawrzinek and Kaul. 

“More generally, we’re targeting companies that already incur more than $10,000 in Cloud storage bills and want to save up to 70% of their monthly total cost of ownership,” they added. 

The company will primarily use the funding to finance its cloud storage solution, add further staff and incorporate in the U.S. 

© 2023 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.

Episode 16 of Season 5 of The Scoop was recorded remotely with The Block’s Frank Chaparro and Arkham Intelligence Founder and CEO Miguel Morel.

Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher, or wherever you listen to podcasts. Feedback and revision requests can be sent to podcast@theblockcrypto.com.

Miguel Morel is the Founder and CEO of Arkham Intelligence — an analytics platform that is attempting to de-anonymize the crypto markets. It is backed by high-profile investors including Tim Draper and the founders of Palantir and OpenAI. 

In this episode, Morel unpacks how increased on-chain visibility can help traders and investors alike discern the ‘truth’ behind market activity, and how Arkham’s technology can help prevent another FTX-type of event.

During this episode, Chaparro and Morel also discuss:

• Whether or not anonymity is a good thing in crypto
• How technology tends to drift towards ‘GovTech’
• What’s on Arkham’s roadmap

This episode is brought to you by our sponsors Circle, Railgun, Flare Network

About Circle
Circle is a global financial technology company helping money move at internet speed. Our mission is to raise global economic prosperity through the frictionless exchange of value. Visit Circle.com to learn more.

About Railgun
Railgun is a private DeFi solution on Ethereum, BSC, Arbitrum and Polygon. Shield any ERC-20 token and any NFT into a Private Balance and let Railgun’s zero-knowledge cryptography encrypt your address, balance and transaction history. You can also bring privacy to your project with Railgun SDK and be sure to check out Railgun with partner project Railway Wallet, also available on iOS and Android. Visit Railgun.org to find out more.

About Flare
Flare is an EVM-based Layer 1 blockchain designed to allow developers to build applications that can use data from other blockchains and the internet. By providing decentralized access to a wide variety of high-integrity data from other blockchains and the internet, Flare enables new use cases and monetization models. Build better and connect everything at Flare.Network.

© 2023 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.