FreeCryptoCurrency.Me

Coinbase climbed higher shortly after the open today, while Silvergate and other crypto-related stocks dipped. 

Shares in the crypto exchange traded up by 1% to about $66 by 10:45 a.m. EST, according to Nasdaq data.

Coinbase is set to deliver earnings after the close today, with revenue expected to have fallen to $589 million, according to FactSet estimates. 

COIN chart by TradingView

Coinbase also faces renewed regulatory scrutiny, with analysts expecting the topic to dominate the earnings call later today. U.S. regulators set their sights on crypto-staking services two weeks ago, and COIN tumbled 22%.

KBW analysts estimate 13.4% of the company’s net revenues for 2023 will come from staking, with a large majority driven by retail. With about 75% of retail staking revenues passed back to clients as staking rewards, “we model staking to only contribute 3.5% to COIN’s 2023 gross profits,” analysts at KBW, led by Kyle Voigt, said. 

Elsewhere, Silvergate shares dipped by 5.6% after Moody’s said it downgraded the ratings of Silvergate Capital and its bank subsidiary Silvergate Bank. Silvergate Capital’s long-term issuer rating was cut to B3 from B1, and the outlook remains negative. 

SI chart by TradingView

MicroStrategy dropped 5.2%, and Jack Dorsey’s Block slipped 3.3% in the same period. 

© 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.

Tatum, a company that offers a framework for developers to build blockchain applications, debuted an accelerator program in partnership with deep tech incubator StartupYard. 

The Tatum Blockchain Accelerator will look to fill the gap between traditional accelerators lacking crypto knowledge and web3 accelerators focusing too heavily on tokenization.

“In most cases, [web3 accelerators are] focused on tokenization or if they have the proper whitepapers,” said Tatum CEO and co-founder Jiri Kobelka, “But what we feel is not really considered is the actual business and the value for customers.”

Kolbelka believes that while those graduating from crypto-native accelerators often come out with great ideas on how to distribute a token, there’s a lack of knowledge about the benefits and use cases of tokens for the end user. Tatum also hopes its accelerator can also facilitate a change in the narrative in the market, with more focus on product and customer fit.

“You can see with a lot of founders in the web3 space, it’s guys with little experience,” Kobelka said. ” They don’t know how to run a business. They have little understanding of what it means to have some financial plans.” 

Accelerated investments

Despite record levels of capital allocated to web3 VCs last year, crypto projects only received $631 million in funding last month compared to $4.3 billion in February of last year, per The Block Research. 

Web3 accelerators such as Tatum’s, have begun to gather steam as venture capitalists assess the market and take more time to deploy. 

In December, Polgon co-founder Sandeep Naiwal launched Beacon, a web3 accelerator attached to his venture capital firm Symbolic Capital. That followed web3 accelerator initiatives by a member of the Hong Kong Legislative Council, and even conglomerates like Meta and L’Oréal. A16z is also set to kick off the second iteration of its Crypto Startup School next month. 

Backed by VCs such as Rockaway Capital and Credo Ventures, Tatum’s accelerator offers a mere €40,000 convertible note for participation in the startup accelerator, with equity stakes varying depending on the stage of the startup. That’s a small ticket compared to other web3 accelerators, with Outlier Ventures offering $100,000 and a16z’s crypto startup school’s half a million.

Kobelka was quick to note, however, that founders also receive a free Tatum license for 12 months, worth $40,000, free of charge. While the program will be less structured than a typical accelerator, there’s also access to mentoring, and personalized intros to time-short investors. Also, contacts at blockchain networks and Participants can leverage Tatum’s position in the market. 

Kobelka claims that, through its product offering and the companies its serves, the firm can easily discern the latest trends and goings-on in the crypto sector — even letting participants know which chains are being used, and how, ahead of the competition. 

The startup CEO said projects could be early stage with a working demo across any web3 subsector — “anything which is not illegal is fine.” Currently, there are around five projects accepted into the program with the aim of bumping that to 4o participants. 

© 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.

As investors flock away from crypto and into AI, one investment firm is taking a different approach.

Dragonfly Capital is leading Kaito AI’s $5.3 million raise to build an AI-powered search engine for the crypto industry. The product has been in private beta with institutional investors since December and the investment firm is saying it is “revolutionizing” the way they invest.

“With so much information and data available, it can be overwhelming to identify the most valuable insights for informed investment decisions,” said Gengmo Qi, partner at Dragonfly, in a release. “Kaito is solving this challenge by not only aggregating information, but making it readily accessible and actionable.”

Kaito’s cap table for this round features several industry heavyweights including Sequoia Capital, Jane Street, AlphaLab Capital and Mirana Ventures, said the company in the release.

ChatGPT and the AI boom

So what’s drawing investors in? Could it perhaps be the mention of buzzy new AI technology ChatGPT, which Kaito AI is using to bolster its search engine experience?

Since the launch of ChatGPT in late November, an AI chatbot developed by Sam Altman’s OpenAI, a frenzy has formed around ChatGPT as well as AI-linked projects and crypto tokens.

Big tech companies are already looking to make a land grab in the space. Microsoft relaunched its Bing search engine with ChatGPT technology, naming it Sydney.

Despite the novelty, there have been some issues; a recent conversation with Sydney unsettled New York Times columnist Kevin Roose. Meanwhile Google unveiled its ChatGPT rival Bard, which made a factual error in its first demo.

On the opposite end of the spectrum, more AI startups are emerging including within the crypto space. For example, two-month old ImgnAI, a crypto startup that touts its use of AI, is seeking to raise $7.5 million at a $50 million equity valuation, The Block reported.

Crypto’s information problem

At its core, Kaito is an AI startup that is trying to solve  the information fragmentation issue in crypto. Data and information is often dispersed across a number of sources such as Discord, Medium, Mirror, podcast transcripts as well as news and research platforms, the company said in the release. Kaito brings this information all in the one place through its AI-powered search engine.

The startup leverages AI not only to aggregate information but also for ranking, recommendations and topic mining, the company said in the release.

“Over the past 12 months Kaito has built one of the most extensive information databases in crypto,” said Yu Hu, founder and CEO of Kaito, in the release. “By combining this database and our in-house AI technologies with the advanced language models of ChatGPT/GPT-3, we aim to offer a far superior search experience compared to current alternatives in the market.”

The product will be available on public beta from today.

© 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.

TipLink, a crypto payments platform built on the Solana blockchain, raised $6 million in a seed funding round.

Sequoia Capital and Multicoin Capital co-led the round, with Solana Ventures, Circle Ventures, Paxos and others participating, TipLink said Tuesday. Angel investors, including Vinny Lingham and Sarah Guo, also backed the round.

This was an equity funding round, which began in April last year and closed in July, TipLink co-founder and CEO Ian Krotinsky told The Block in an interview. But the startup chose to announce now with the launch of its API, which allows developers to create TipLinks for free, said Krotinsky.

What is TipLink?

TipLink lets users send crypto, stablecoins and NFTs with a link. The sender has to connect to a Solana wallet and create a TipLink by depositing a token or NFT they want to send. They can then copy the TipLink URL and send it to anyone. The receiver doesn’t have to have a crypto wallet. They can receive tokens even through a Gmail login, said Krotinsky. TipLink also supports QR codes.

With its newly launched API, TipLink lets developers and companies deposit digital assets and create TipLinks for their users. “That just opens up the market size for so many companies in magnitudes more than they currently have,” said Krotinsky. “Their users don’t need to download anything and are onboarded into crypto.”

Daniel Chen, partner at Sequoia Capital, said in a statement that he believes TipLink can potentially onboard the first billion people into crypto. Thus far, TipLink has helped create and send “tens of thousands of links,” according to Krotinsky.

TipLink plans to continue building link wallet functionality, improve its API, and expand engineering and business development teams. There are currently eight people working for TipLink, said Krotinsky. As for new features, Krotinsky said users should be able to deposit more money to link wallets and withdraw funds to a bank account in the near future.

TipLink wants to stay on Solana for the foreseeable future, but Krotinsky said other blockchains offering high throughput and low cost could be explored.

© 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.

Moody’s downgraded the ratings of Silvergate Capital and its bank subsidiary Silvergate Bank following the downgrade of its standalone Baseline Credit Assessment to b2 from ba3.

Silvergate Capital’s long-term issuer rating was downgraded to B3 from B1, and the outlook remains negative. The downgrade was driven by the substantial decline in capital following the company’s $1 billion loss in the fourth quarter and comes as Susquehanna Advisors Group and Citadel Securities have been buying substantial stakes in the bank, driving shares higher. 

“While the company has reduced its workforce by around 40%, given the substantial decline in deposits from crypto centric firms, we anticipate profitability will be heavily challenged in coming quarters,” Moody’s said in a report.

Silvergate Capital continues to be well capitalized, but the company faces the potential for further unanticipated shocks to erode capital given elevated regulatory and legal risks and constrained profitability, the ratings agency said. The company is also facing challenges in preserving its funding and liquidity profile as it looks to reduce its reliance on brokered deposits and Federal Home Loan Bank funding.  

© 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.

Coinshares reported outflows from digital asset investment products totaling $32 million last week, the largest weekly amount since December. 

Outflows had reached $62 million mid-way through the week, but sentiment improved by Friday, the firm said. Bitcoin trended lower through mid-week and has since picked back up, surpassing $25,000 last week for the first time in more than six months.

Coinshares said bitcoin accounted for most of the outflows for the week, totaling $25 million, while short-bitcoin investment products saw inflows of $3.7 million.  

BTC chart from Tradingview

© 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.

Venture capital firm Lightspeed Venture Partners led a $6.4 million seed funding round into web3 observability platform Sentio. 

The equity deal, which closed in September of last year, according to founder Fuyao Zhao in an interview with The Block, also saw participation from Hashkey Capital, Canonical Crypto, Essence VC and GSR Ventures. The startup clinched a $32 million post-money valuation through the funding round, said Zhao. 

Zhao used to be a software engineer at Google. He founded an enterprise code search engine named Insight with ex-LinkedIn engineer Chongzhe Li, now his fellow founder at Sentio. The team is also joined by former Microsoft employee Yulong Huang and Kan Qiao, TikTok’s former head of engineering who spearheaded the social media giant’s initiative for blockchain applications, said Zhao. 

Observability but for crypto

Observability measures a system’s current state based on the data it generates. In crypto, where applications are built on top of smart contracts, there currently doesn’t exist a uniform process to do this, meaning that many either develop an in-house solution taped together from fragmented third-party tools or operate without such monitoring. 

Through Sentio’s software development kit, users can collect metrics and event logs based on smart contracts’ events, transactions, traces and states across blockchains, including Ethereum, Aptos, Polygon and Avalanche. Sentio handles the indexing process for this information, but users can then build dashboards that visualize such data. This allows them to monitor for possible breaches or issues and receive alerts for certain activities on the blockchain. 

“Say if the total amount of money transferred by [a user] is great than $100 or…  if the rate of transfers from a person is higher than $100 per day, you can trigger an alert,” explained Zhao. 

While small teams are offered a free tier, customers are charged monthly, depending on what features they opt into. This could range anywhere from $50 to $2000 per month. 

The seed-stage company already has customers, including Goldfinch, PancakeSwap and Wormhole, among other decentralized organizations. Still, Zhao admitted that selling to these companies differs from web2.  Many web3 organizations are much smaller than their web2 counterparts, meaning they’re less siloed off, with staff fulfilling various roles. 

“In web2, the people who look at operations or business analytics might be two different groups,” said Zhao. “But in web3, it might be the same person.” 

The firm will use the funding to run its built infrastructure and expand its team. 

Investors love infra

Infrastructure firms such as Sentio made up 22% of blockchain seed and pre-series A deals in January, according to data from The Block Research. Only the NFTs/Gaming subsector bested infrastructure, coming in at 25%. 

“In past cycles, the infrastructure category has attracted interest and investment, as active investors who remained looked to discover foundational companies and projects,” said John Dantoni, research director at The Block Research, in the January report. “Over the past 6 months, infrastructure projects have accounted for roughly 20% of all seed deals.” 

© 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.

Web3 infrastructure startup Polyhedra Network raised $10 million in a round co-led by Binance Labs and Polychain Capital.

The strategic round also saw participation from Animoca Brands and Dao5, said the company in the release.

Polyhedra has developed several infrastructure offerings using zero-knowledge (ZK) proof technology, including a ZK bridge (zkBridge) solution to send assets between web2 and web3 systems; a ZK decentralized identity solution (zkDID) and a scalability solution, using a large-scale distributed proof generation network called ParaPlonk, to accelerate ZK rollups.

A ZK proof is a cryptographic technique that confirms whether a statement is true or false without revealing that statement’s contents. 

The startup plans to integrate with more blockchains and make it more accessible to developers with API and SDK tooling. It also intends to refine its ParaPlonk protocol to attract developers seeking efficient and distributed ZK-rollup solutions, the company said in the release.

Polychain’s ZK push

“Polyhedra is pushing boundaries on some of the most innovative ZK infrastructure within web3,” said Luke Pearson, a Polychain Capital partner, in the release. “The well-oiled architecture facilitates cross-chain operations that will interconnect blockchain ecosystems to build the next generation of financial technology.”

Polychain has bet on a number of ZK startups recently including leading the round for ZK chip startup Cysic’s $6 million raise as well leading ZK tech developer Nil Foundation’s $22 million raise and Ethereum scaling startup Scroll’s $30 million raise.

Over the past 6 months, infrastructure projects have accounted for roughly 20% of all seed deals, wrote John Dantoni, a research analyst, in The Block Research’s January funding report.

Breakdown of blockchain venture spend from The Block Research

The funds from the raise will be used for hiring engineering talent as well as research and development, the company 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.

 Microsoft partnered with web3 infrastructure provider Ankr to offer a node service for enterprises in need of blockchain data access.

The two firms will work together on a new node hosting service in Microsoft’s Azure cloud marketplace, with tailored memory and bandwidth specifications for blockchain nodes.

The enterprise node deployment service would enable web3 projects or developers to deploy smart contracts, relay transactions and read or write blockchain data, according to a company release.

“Our partnership with Ankr will enable developers and organizations to access blockchain data in a reliable and secure way as they explore how web3 can address real-world business challenges,” said Rashmi Misra, Microsoft’s general manager for AI and emerging technologies in the release. “Together, we are building a robust web3 infrastructure layer.”

RPC services

Ankr provides a remote procedure call service (RPC) that allows application developers and users to connect cloud nodes to 19 blockchains, including BNB Chain, Ethereum, Polygon, Solana, and Avalanche.  

After this collaboration, developers will be able develop on Ankr’s RPCs and middleware platform for decentralized apps, and meet their scaling needs with Microsoft’s cloud platform. For example, Azure can optimize transaction processes on multiple proof-of-stake chains and quickly route RPC requests to the most appropriate nodes, according to a note shared with The Block.

Through RPC nodes such as those offered by Ankr, decentralized applications can link to blockchains and access user data. For this reason, they serve as a critical piece of infrastructure for the blockchain sector. Within the infrastructure niche, the RPC continues to be an important vertical and is occupied largely by both centralized and decentralized  players including Ankr and competitors such as Infura, QuickNode, Alchemy and others.

© 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.

Polygon Labs announced plans to reduce headcount by 20%, with about 100 staff affected. 

The firm noted it “consolidated multiple business units” under the Polygon Labs banner earlier this year. “As part of this process, we’re sharing the difficult news that we’ve reduced our team by 20%, impacting multiple teams and about 100 positions,” a company statement reads.

Today’s announcement comes months after the firm’s head of human resources said it planned to increase overall headcount by over 40%. Bhumika Srivastava said the company hoped to capitalize on the misfortune of other companies in the space. 

In the intervening period, sentiment in the crypto market and the broader economy has worsened. The collapse of FTX brought crypto prices down across the board and welcomed renewed regulatory scrutiny. All the while, governments across the globe have continued to raise interest rates to combat inflation.

Layoffs, which first affected the crypto industry in June of last year, have come across big tech and continued to affect crypto in the past few weeks. 

© 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.