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Spatial Labs, a web3 infrastructure firm focused on improving metaverse and commerce, raised $10 million in a seed funding round.

Blockchain Capital led the round, with existing investor Marcy Venture Partners, the venture firm co-founded by rapper Jay-Z, also participating, among others, according to a release from Spatial Labs. The round brings Spatial Labs’ total funding to over $14 million, having raised a pre-seed round of $4 million last year.

Spatial Labs’ fundraising came against a tough background of weakening crypto markets. The startup began raising in mid-2022 and completed the equity round by December, Iddris Sandu, its 25-year-old founder and CEO, said in an interview.

The round is also notable as a rare slice of cash for a Black founder in the U.S., where only about 1% of venture capital funding went to startups with Black founders in 2022, according to Crunchbase data. Sandu thinks he’s the first Black founder under 30 to raise a double-digit million seed round.

Born in Ghana and raised in the U.S., Sandu founded Spatial Labs in 2020, aiming to improve consumer experience with blockchain-enabled technology. Spatial Labs develops software and hardware tools that connect brands and consumers. The firm launched its first product called LNQ (pronounced “link”) in May 2022. LNQ is a chip that uses Polygon’s blockchain technology to authenticate products and create “digital twins,” virtual copies of physical objects.

“LNQ allows users to have a single sign-on or ID for all the brands they are involved with, and it enables them to track provenance,” Sandu said. “Brands, on the other hand, can access data related to how consumers are behaving with products and unlock new revenue models.”

Fresh capital 

Sandu said around 10,000 LNQ IDs have been issued thus far in the product’s testnet phase. The mainnet will go live in the coming months, he added.

With fresh capital in hand, Spatial Labs plans to continue building its products and increase its team size. There are currently around 25 people working for the firm, and Sandu is looking to double headcount by the end of the year.

“By empowering new business models, delivering immersive experiences, and providing insights into consumer needs, Spatial Labs will continue to shape and power the future of commerce and connectivity in web3,” Bart Stephens, founder and managing partner of Blockchain Capital, said in the release. Stephens is also joining Spatial Labs’ board of directors, said Sandu.

© 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.

Transaction volumes on Optimism, a scaling solution for Ethereum, have dropped 70% following a major spike earlier. The daily transactions have declined to 238,000 after a peak of almost 800,000 transactions per day on Jan. 12, according to data from blockchain explorer Blockscan.

The fall in activity coincided with the end of an incentive program called Optimism Quest, which aimed to increase user engagement and educate users about the Optimism Layer 2 network.

The surge in on-chain activity during Quest was said to have been associated with speculations on a second airdrop by the Optimism team, according to a recent report by The Block Research.

Airdrop Optimism

In April 2022, Optimism announced an airdrop, a free token giveaway for early users, with amounts ranging from $500 to $10,000 per user. The team also mentioned a second, larger airdrop, however no further details were provided.

This sparked speculation among users that completing tasks during the Optimism Quest program, which rewarded participants with non-fungible tokens (NFTs), could make them eligible for the airdrop.

During the Quest program, that lasted for four months, 450,000 wallets minted over 3.4 million NFTs after completing tasks involving the use of decentralized apps in the Optimism ecosystem, on-chain data shows. The program was powered by Galxe, an on-chain credentials framework.

A similar NFT program on Optimism’s closest competitor, Arbitrum, called Odyssey, had been instrumental in increasing the amount of activity on the network, also driven by airdrop speculators. However, in Arbitrum’s case, there has so far been no airdrop.

“The uptrend in on-chain activity serves as a reminder that the speculation of a potential airdrop can sometimes be used to boost on-chain activity, just like how the Arbitrum Odyssey had caused a surge in on-chain activity for Arbitrum,” noted Arnold Toh, research analyst at The Block.

Despite the decrease in transactions, Optimism’s native token, the OP token, reached an all-time high recently. The token has risen about 150% since the start of the year and currently trades at $2.25, according to CoinGeko.

© 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.

DeFi lending platform Aave is set to launch the third version of its protocol on Ethereum after a successful DAO vote.

Aave v3 on Ethereum will be launched with support for seven assets: wrapped bitcoin, wrapped ether, wrapped staked ether, USDC, DAI, link, and aave. These assets were proposed by DeFi risk manager Chaos Labs. The Aave DAO voted in favor of Chaos Labs’ risk-off approach for the initial deployment of Aave v3 on Ethereum earlier in January.

Pricing for all assets apart from wrapped bitcoin and wrapped staked ether will come directly from a Chainlink feed. Chainlink is an oracle protocol that can provide data such as price feeds to smart contract protocols. The wrapped staked ether and wrapped bitcoin pricing feeds will rely on price adapter smart contracts, according to Aave developer BGD Labs. These price adapter smart contracts are still based on Chainlink feeds as well.

Aave v3 on Ethereum will come with only one eMode activated. Aave’s eMode feature allows for maximum capital efficiency for collateral and borrowed assets with high price correlation. The initial deployment will only support eMode for ether-correlated assets. As such, the eMode for Aave v3 on Ethereum will only support wrapped ether and wrapped staked ether.

Aave v3 launching on Ethereum expands the DeFi protocol’s multi-chain approach. The third iteration of Aave’s lending app signaled the project’s intention to deploy its protocol on multiple networks. Aave v3 has already been launched on six chains: Avalanche, Optimism, Polygon, Fantom, Harmony and Arbitrum.

Aave v2 on Ethereum is the largest DeFi lender by total volume locked. The protocol controls over $3.5 billion worth of assets, according to DeFiLlama. The third version of the protocol will exist alongside its predecessor. This is because the DAO decided to go for a fresh deployment of v3 rather than deprecating v2. As such, users have the option of migrating their positions from v2 to v3. BGD Labs has been working on a tool to ease the migration process.

© 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 exchange Sushiswap is launching a decentralized perpetual futures exchange on the Sei Network, “Head Chef” Jared Grey said at a conference in Miami.

“It’s a new play for us,” Grey said at Quantum Miami, adding that a contract had been signed earlier in the week. “We’re working hand-in-hand with them on what developer resources need to be allocated from their side for Sushi to leverage what they’ve built so that we can provide value, as a brand, back to them.”

Sei Network, a new Layer 1 blockchain that specializes in decentralized trading applications, is “focused on having an order book and matching engine in their consensus layer, and they want to focus solely on that vertical, and I think that makes a lot of sense,” Grey said.

The move will take Sushiswap into non-Ethereum-based ecosystems and a different sector of decentralized finance. The decentralized exchange passed a governance proposal earlier this week to revamp its tokenomics to try and redirect value back to its native token, sushi, and the new exchange could impact Sushiswap’s tokenomics plan and add a new source of revenue for the protocol.

As a part of the Cosmos ecosystem, Sei is one of the largest non-Ethereum based blockchains that allows developers to build customized chains for specific applications. Sushiswap plans to work alongside the protocol in developing its ecosystem.

Perpetual futures in crypto is among the fastest-growing sectors, climbing to the number eight spot in combined Total Value Locked, according to DeFiLlama. The perpetual futures, or derivatives market, represents over $1 quadrillion in value in traditional markets, according to decentralized oracle network Chainlink.

Sushiswap was one of the first decentralized exchanges to gain major traction, but has faced challenges with its internal team, financial runway and the overall growing scrutiny the industry faces from regulators.

Sei Network did not immediately respond for comment.

© 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.

Arkham Intelligence announced it is adding support for Polygon, giving users the ability to track, monitor and identify wallets on its chain.

This is the second chain Arkham Intelligence will add support for besides Ethereum, which it will do in the first quarter. Arkham said it chose Polygon for its second integration because of its partnerships with Disney, Starbucks and Stripe, as well as its large user base.

Support for additional blockchains is important for data analytics platforms to expand their appeal to wider audience. On-chain activity continues to expand to multiple blockchains and Polygon is of the largest Layer 1 blockchains by Total Value Locked, according to DeFiLlama.

Arkham plans to add support for other blockchains in the future and said having multiple chains integrated on its platform “opens new possibilities for on-chain research.”

Arkham Intelligence rolled out private beta testing for its platform last year. It currently lets whitelisted users share referral links, which will be used to airdrop its ARKM token.

“Once we launch the $ARKM token network, as a referrer you will be rewarded with $ARKM tokens directly to your wallet of choice for every person who signs up with your link,” the Arkham Referral Program acceptance email reads.

Arkham Intelligence said it raised a Series A funding round that included the founders of Palantir and ChatGPT’s parent company OpenAI. Its analytics platform can be used to label specific wallets and monitor transactions. It also has a unique visualizer that allows users to see how wallets are connected to each other.

© 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.

Bitcoin jumped above $23,200 as Aptos’s APT soared 46% while traditional markets were muted.

The largest cryptocurrency was up about 1.6% over the past day at 4:35 p.m. EST after trading little changed, according to TradingView data.

BTCUSD chart by TradingView

Ether and BNB reversed earlier declines, with the former flat on the day. Dogecoin and shiba inu were also little changed. 

The vast majority of the current crypto-pullback is being driven by smaller-cap coins that experienced “surprising bounces” coming out of the holidays, said Stephane Ouellette, CEO of FRNT Financial. 

Coins such as FTT and SOL nearly doubled in value coming out of the holidays, and these are among the coins driving the current decline, Oullette said. In contrast, tokens like BTC, which have stronger market fundamentals, remain relatively stable. 

Layer 1 Blockchain Aptos’s APT hit a record, surging 46%.

Crypto stocks and structured products

Silvergate rose 1.3%, according to Nasdaq data, while Coinbase dropped 1.4%.

MicroStrategy fell about 0.7%, as Block remained stable, dropping by 0.2%.

© 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 exchange Deribit is setting up shop in Dubai as it works to execute on a new strategy aimed at maintaining its dominance in the crypto options market, the exchange confirmed to The Block. 

The firm, which has operations in Panama and Amsterdam, will move the exchange’s main headquarters to the burgeoning crypto center as it seeks a Full Market Product license under the so-called Virtual Asset Regulatory Authority (VARA) regime, the firm’s Chief Commercial Officer Luuk Strijers told The Block. The Dubai office will house staff including management, compliance and support roles.

The move to secure a license in Dubai is part of a broader push by the firm to instill greater confidence in its exchange in the wake of the meltdown of defunct derivatives exchange FTX. The firm also plans to secure a top four auditing firm and release proof of reserves snapshots on a daily basis. 

“Clients want checkboxes, check for audit, check for custody, check for license,” Strijers said. 

Deribit’s marketshare in bitcoin options stands above 90%, according to The Block’s data dashboard. 

“Two years ago clients onboarded with us, and once we said they were good to go they could start trading,” Strijers added.  “Now it’s mutual onboarding and we have to complete lengthy due diligence forms and checks to make sure they feel comfortable with us.”

© 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.

Sen. Elizabeth Warren, D-Mass., pushed for tighter regulation on the crypto industry on Wednesday in an event hosted by the American Economic Liberties Project called “Confronting the Crypto Challenge: Learning From a Meltdown.”

“The solution starts with the SEC,” said Warren, D-Mass., in her keynote. “The SEC has a long history of fighting exactly the battles that we now face.”

The event assembled a who’s who of Washington, D.C.’s most notable crypto critics, ranging from legal scholars to progressive policy wonks.
 
“I would ban crypto,” said panelist Hilary Allen, a law professor at American University.

The SEC’s legacy on crypto took center stage, particularly the effectiveness of Chair Gary Gensler. “There is a smear campaign against Gensler right now from the industry trying to blame Gensler for what the industry did,” said Matt Stoller, a director of research at the American Economic Liberties Project. 

Gensler’s action — or, for critics, inaction — on FTX in particular emerged as a critical battleground for the future of crypto regulation almost as soon as FTX went down. The event’s participants came down decidedly on the side of Gensler. “Gary Gensler is demonstrating that he is the right leader to get the job done,” Warren said.

Event participants also pushed for the rollout of a real-time payments system by the Federal Reserve, which has faced repeated delays. Such a system, if functional, would undercut the argument from the crypto industry that digital assets can speed up transactions. 

One-time federal banking nominee and current Cornell Law professor Saule Omarova said the new project, known as FedNow, “would relieve a lot of the actual market need for faster payments and would eliminate a lot of claims for the use of all of these crypto payments systems.”

Omarova’s fellow panelists, including Allen and Stoller, agreed that they wanted FedNow to launch sooner rather than later, saying that the crypto industry had pointed to a legitimate problem of payments access as an advertising point without solving the problem.

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

© 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.

Bitcoin mining stocks tracked by The Block were mostly lower on Wednesday, with six gaining and 12 declining.

Bitcoin fell 0.5% to $22,936 by market close.

Here is a look at how the individual miners performed 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.