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In preparation for the Ethereum merge happening later this year, developers have activated the merge on the Ropsten test network.

The merge took place on Wednesday afternoon after the move was first announced on June 3.

Ropsten’s proof-of-work chain was merged with its proof-of-stake beacon chain by combining their codes into one. Today’s merge is critical to check if client software using Ethereum nodes performs without any glitches. Client software teams participated in the merge including Lighthouse, Lodestar, Prysm, Teku, Besu, Erigon, go-ethereum (geth) and Nethermind.

The same process is set to happen later this year with the Ethereum mainnet merge, for which a date has not yet been set. In effect, today’s event was intended to serve as a major practice session for the mainnet merge, which will see Ethereum transition from proof-of-work consensus to proof-of-stake.

Previous tests included a shadow fork on the main network in April and another merge on Kiln, another testnet. 

Today’s test is measured by a metric called terminal total difficulty. The merge is considered activated once this level of block difficulty is reached on the proof of work version. The proof-of-work version of Ropsten crossed a pre-set 50 quadrillion measure to protect the merge from any malicious activity by artificially acquiring the hashrate.

Before the activation of the merge, node operators had to manually configure their clients to override the Ropsten Terminal Total Difficulty for both the proof-of-stake version and proof-of-stake clients, as explained by The Block’s Vishal Chawla in an explainer published Tuesday.

© 2022 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 bitcoin network mining difficulty jumped back up by 1.29% on Wednesday after dipping more than 4% two weeks ago, according to data from BTC.com.

That previous decline represented the biggest drop in mining difficulty since July of last year when miners were forced to shut down operations in China.

The network’s hash rate has increased by about 2.3% from May 25, the date of the last update, according to data compiled by The Block Research.

Mining difficulty refers to the complexity of the mathematical process behind mining, during which miners are repeatedly trying to find a hash below a set level. Miners that “discover” this hash win the reward for the next transaction block. Mining difficulty adjusts every 2,016 blocks (roughly every two weeks) in sync with the network’s hash rate.

Crypto miner Argo said that it mined 25% less bitcoin in May, in part due to the increase in difficulty that the network experienced in May.

Difficulty increased by 5.56 % on April 27 and 4.89% on May 11.

© 2022 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.

Sam Kazemian and Travis Moore, co-founders of Frax Finance, have published a new governance proposal Wednesday for a $20 million buyback of the protocol’s Frax Shares (FXS) token.

Frax Finance is a fractional algorithmic stablecoin protocol and its stable currency is called FRAX. The stablecoin maintains its US dollar peg via two mechanisms — partial collateral backing by USDC and an algorithm that trades FRAX and FXS.

The proposal’s authors say the buyback is necessary to reverse the token’s price downtrend. FXS is down more than 85% from its all-time high price of $42.80 reached at the start of the year.

Today’s proposal acknowledged that FXS, like the rest of the crypto market, has lost a lot of its value during the course of the current bear market. Kazemian and Moore, however, countered that Frax’s as a stablecoin project is still in a healthy condition.

As such, FXS at its current price is the most undervalued asset in the project’s treasury. The proposal stated that a buyback of the token is “the best use of capital dollar for dollar spent.”

If passed, the protocol will buy back and burn $20 million worth of FXS. The buyback and burn process will remove those tokens from circulation leading to a decrease in circulating supply.

Frax is currently trading at $6, up from $4 when the proposal went live. At the current price, a $20 million buyback could remove about 3.37% of the 99.8 million coins in the token’s total supply.

The buyback will happen via Fraxswap, a decentralized exchange built to process large trades at minimal slippage if the community approves the proposal. The process could take between three days or a month to be completed.

This latest governance proposal on Frax goes against the recent trend seen in some DeFi protocols where community members are calling for emergency treasury management actions.

The Block recently reported that a Lido developer proposed the project sell $17 million of ether from its treasury funds to “prepare for the bear market.”

Other projects like Fei are also looking at plans to liquidate a portion of their treasuries for the same reason.

© 2022 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

• Crypto Unicorn is a Polygon-based farming simulation game by Laguna Games.
• Like most P2E games, Crypto Unicorn’s virtual economy is based on a dual-token model: RBW and UNIM. 
• Its land gameplay is different from most social and gaming metaverses as it doesn’t offer a “world map” for its land.  
• This piece takes a deeper look at Crypto Unicorn’s game design and its token economics.

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Data and trade execution service provider Skolem Technologies announced Wednesday that it has closed a $20 million Series A round led by Galaxy Digital.

Point72 Ventures, Jump Crypto, Fenwick and West, Morpheus Ventures and Dragonfly Capital also joined the round, according to a release. 

Skolem aims to provide a safe and secure entry point for institutional investors wishing to access the constantly evolving decentralized finance (DeFi) markets, according to CEO and founder JP Smith. Proceeds from this round will go toward hiring and improving the company’s technological capabilities in order to further enable institutional-grade access to DeFi. 

“The options for institutions today are either roll-your-own tech stack and hire an engineering team or let Skolem do the heavy lifting,” Galaxy Digital’s Will Nuelle said in the statement. 

Haseeb Qureshi, managing partner at Dragonfly Capital, said that DeFi markets currently lack the guardrails necessary for institutions with strict risk and reporting requirements to get involved. Quereshi went on to note that the Skolem team has created a “simple, yet cutting-edge, solution to enable DeFi to reach its full potential.”

The deal comes as DeFi-focused venture deal activity dropped in May to its lowest point since September 2021, according to data gathered by The Block Research. 

Funding for the month came in at $176 million as — for the first time since July 2020 — DeFi wasn’t one of the two most popular deal types, according to John Dantoni, an analyst at The Block Research.

© 2022 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.

Valkyrie Investments has raised $11.15 million in a new strategic funding round.

The round saw participation from the likes of BNY Mellon, Wedbush Financial Services, Clearsky, Zilliqa Capital, C-Squared Ventures, Belvedere Strategic Capital and SenaHill Partners, among others. 

Valkyrie has launched a number of trusts this year, with multiple products providing exposure to single assets. Other recently launched products include an exchange-traded fund that invests in firms engaged in bitcoin mining. It also surpassed $1 billion in assets under management earlier this year.

The firm has been among a group of issuers vying to be the first to bring a spot bitcoin ETF to market, though none have been successful. It was, however, one of the earliest to bring a bitcoin futures product to market, posting an $80 million debut with its bitcoin futures ETF. 

Valkyrie plans to use this fresh round of funding to increase its headcount and continue building out proprietary technology infrastructure with an eye toward bringing more products to market.

Valkyrie previously raised $10 million in a Series A round last year. 

© 2022 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.

South Korean crypto exchanges Upbit and Bithumb have announced today that they will delist Litecoin because of its newly activated privacy features.

On May 20, Litecoin developers activated a privacy-preserving protocol on the coin, called MimbleWimble Extension Blocks (MWEB). This MimbleWimble update will allow Litecoin to conceal transactional data yet maintain its ability to process a lot of transactions quickly.

Yet this causes an issue for Korean exchanges, which have to comply with strict laws on privacy coins.

Upbit stated that the reason for delisting Litecoin relates to Anti-Money Laundering (AML) rules that require exchanges to record data on crypto transactions. According to its delisting notice, given the nature of the Mimlewimble privacy protocol, the exchange will no longer support Litecoin transfers and the coin will be removed from the exchange.

Upbit will stop support for Litecoin on 20 June, and give users a month to withdraw their funds, per its announcement. 

Similarly, Bithumb stated that it will stop all Litecoin deposits from June 8. It has given users until July 25 to withdraw their Litecoin, after which time withdrawals will no longer be supported.

“Bithumb decides to terminate transaction support for virtual assets in accordance with the revised Act on Reporting and Use of Specific Financial Transaction Information, in compliance with regulations on virtual assets with high anonymity,” the exchange said in its delisting notice.

According to crypto news site 8 BTC, three other exchanges including Coinone, and Korbit and Gopax have also notified users of removing Litecoin markets.

Litecoin is one of the top 20 crypto assets with a market cap of over $4 billion. The delisting of Litecoin on Korean exchanges comes a day after fintech giant PayPal started allowing its users to transfer a few popular crypto assets, including Litecoin.

© 2022 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

• In May, fintech investment slightly recovered from the prior month’s year low. 
• Fintech startups raised $7.3 billion in May, up from $6.4 billion in April. 

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Crypto hardware wallet maker Ledger and global venture capital firm Cathay Innovation have teamed up to launch a €100 million ($110 million) fund to invest in web3 startups.

The fund, dubbed Ledger Cathay Capital, is backed by the French public investment bank Bpifrance. Some other investors have also supported the fund, Denis Barrier, co-founder of Cathay Innovation, told The Block, while declining to name them for “compliance and privacy reasons.”

Ledger Cathay Capital will invest in early-stage startups across areas such as decentralized finance, security, infrastructure and digital ownership technologies. The fund is still new and hasn’t made any investments yet, said Barrier.

When asked why it’s launching the fund now amid challenging market conditions, Barrier said Ledger Cathay Capital sees web3 as a “multi-decade investment opportunity” and that the space is still evolving.

“We have no plans to slow down or reduce our investment activities and believe that the current environment is a real opportunity for us to start the fund and actively invest in the world’s crypto startups,” said Barrier.

Ledger chairman and CEO Pascal Gauthier concurred, saying that the fund will actively invest in startups building the decentralized future for the next billion users.

Ledger and Cathay Innovation are not new to each other. The VC firm has invested in Ledger’s three funding rounds, including its latest $380 million Series C, according to data from Dealroom.

For the new fund, Ledger and Cathay Innovation will combine their expertise to source and assess investment opportunities, but Cathay Innovation will manage it, said Gauthier.

Ledger had been separately investing in crypto startups, but now its investments will also be managed by Ledger Cathay Capital.

The fund will back both equity and token deals, with average check sizes in the range of $550,000 to $4.3 million, said Barrier.

As for total investments, the fund targets creating 20-25 portfolio companies and expects to fully deploy in the next two to three years, said Barrier. 

© 2022 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.

Kushki, a payments platform based in Ecuador, has raised $100 million in Series B financing at a unicorn valuation. 

The round includes investors such as Kaszek Ventures, SoftBank Latin America Fund and Dila Capital among others, according to a statement on Wednesday. 

“Reaching this milestone in times of historical economic uncertainty speaks to the quality and resilience of our entire team and the enormous Latin American talent that exists in the region,” CEO and co-founder Aron Schwarzkopf said in the statement. 

Kushki’s core product line includes infrastructure to make it easier for businesses across the Latin American region to send, receive and process digital payments globally. The company said it will use the funding to accelerate the adoption of this infrastructure. Currently, it operates only in five countries in the region. 

The news comes as investors continue to funnel capital into fintechs in the Latin American region. Last month, Brazilian fintech Dock raised $11o million at a $1.5 billion valuation. Alongside this, crypto players continue to look at the region actively with trading platform Huobi acquiring crypto exchange Bitex and Tether recently launching a new stablecoin pegged to the Mexican peso.

© 2022 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.