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Episode 48 of Season 4 of The Scoop was recorded remotely with The Block’s Frank Chaparro and Antonio Juliano, Founder & CEO of dYdX.

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

In his last appearance on The Scoop, Antonio Juliano — founder and CEO of decentralized derivatives platform dYdX — was preparing to integrate StarkWare’s layer-2 scaling technology into the third iteration of the dYdX protocol.  

Just over a year later, dYdX has grown to dominate the decentralized derivatives space, with the majority of decentralized perpetual swap trading volume occurring on the platform, according to data from The Block.

In this episode of The Scoop, Antonio Juliano explains why his team remains undeterred by the global market drawdown as they work towards the upcoming dYdX v4 release, which will fully decentralize governance of the protocol.

As Juliano said on the show, his long-term vision extends past market cyclicality:

“It’s really important for us to maintain that mentality of: the markets may go down, people may write us off to some level, but really what we’re building for is five years from now.”

While most “blue chip” DeFi tokens have fallen significantly from last year’s all-time highs, Juliano believes the recent trend of centralized exchanges like Coinbase and Robinhood providing users with streamlined access to Web3 platforms will provide an influx of new market participants to DeFi protocols.

As Juliano explained during the interview,

“It’s just going to be a huge magnifier and multiplier in terms of the types of people and the number of people that can interact with DeFi. I’m really excited about this — I’ve been excited about this narrative playing out for a while now. I thought it would probably take a little bit longer, to be honest than it did… but it’s something that that I’m really excited about and I think will be a huge multiplier for DeFi.”

During this episode, Chaparro and Juliano also discuss:

• Differences between centralized and decentralized financial systems
• Intricacies of decentralized protocol governance
• dYdX liquidity incentivization

This episode is brought to you by our sponsors Fireblocks, Coinbase Prime & Cross River
Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, lending desks, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. Fireblocks serves over 725 financial institutions, has secured the transfer of over $1.5 trillion in digital assets, and has a unique insurance policy that covers assets in storage & transit. For more information, please visit www.fireblocks.com.

About Coinbase Prime
Coinbase Prime is an integrated solution that provides institutional investors with an advanced trading platform, secure custody, and prime services to manage all their crypto assets in one place. Coinbase Prime fully integrates crypto trading and custody on a single platform, and gives clients the best all-in pricing in their network using their proprietary Smart Order Router and algorithmic execution. For more information, visit www.coinbase.com/prime.

About Cross River
Cross River is powering today’s most innovative crypto companies, with banking and payments solutions you can rely on, including fiat on/off ramp solutions. Whether you are a crypto exchange, NFT marketplace, or wallet, Cross River’s API-based, all-in-one platform enables banking as a service, ACH & wire transfers, push-to-card disbursements, real-time payments, and virtual accounts and subledgers. Request your fiat on/off ramp solution now at crossriver.com/crypto.

© 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

• Introduced by Perpetual Protocol in 2020, virtual AMM’s have become a popular framework for experimentation with on-chain perpetual swaps. 
• Drift is a protocol for on-chain perpetual swap liquidity on Solana.
• Leverages a modified vAMM implementation with repegging and dynamic liquidity (termed a dynamic AMM or DAMM), Drift attempts to solve some of the shortcomings of previous vAMM iterations.

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NFT startup Immutable submitted a proposal to the ApeCoin DAO on May 27 to have the Otherside metaverse built on its network: Immutable X.

Immutable’s proposal notes that the cost to integrate, mint and transfer assets on its network would be zero, while primary and secondary sales would incur a fee of just 2%. The proposal goes on to say that Immutable has been working to bridge the “gap between highly technical and complex blockchain technology and mass-audience adoption for years.” 

Immutable X is a platform designed for creating and trading NFTs. It’s built on Ethereum but represents a second layer that’s designed for better scalability and cheaper fees. It’s currently used by several platforms, including OpenSea, TikTok and GameStop. 

The company’s proposal asserts that its scalable network, no-fee transactions and carbon-neutral environment make it the best fit for Yuga Labs’ metaverse project. 

Otherside is a blockchain-based virtual world which Yuga Labs, the creator of BAYC and Mutant Ape Yacht Club (MAYC), is behind. The metaverse project, linked to the BAYC NFT collection, is still under development following its land auction at the end of April. The project sold out all 55,000 of its available Otherdeed land NFTs within three hours of the public sale on April 30. 

The notoriety of Yuga Labs projects has attracted proposals from several networks, including Avalanche, which made a proposal of its own on May 25.

While ApeCoin DAO members have control over matters related to ApeCoin (APE) itself, they have no direct control over how Otherside should be built. Yuga Labs may or may not take ApeCoin DAO proposals and votes into account when deciding where to build the metaverse project. 

Immutable closed a Series C funding round worth $200 million in March — at a $2.5 billion valuation — with the view to acquiring new customers.

© 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

• Total adjusted on-chain volume decreased by 5.9%, to $782 billion.
• A total of 198,122 Ethereum, equivalent to $480 million, was burned.
• Monthly volume of NFT marketplaces on Ethereum decreased by 32.6% to $4.85 billion.
• Centralized exchange spot trading volumes increased strongly by 19.6% to $830.4 billion.
• FTX came in 2nd for the first time in CEX spot trading volume, ahead of Coinbase, with a share of 10.8%.
• Derivatives presented a mixed bag, with open interest declining for futures but increasing for options, and trading volumes up across the board.

This research piece is available exclusively to
members of The Block Research.
You can continue reading
this Research content on The Block Research.

Big Whale Labs, startup building a social protocol to facilitate pseudonymity through zero knowledge and crypto, announced on Wednesday it has raised $3.8 million in a Seed round.

The round was led by M13 and Road, with participation from Slow Ventures, C2, Goodwater, Panache, NFR, and angel investors Balaji Srinivasan (ex-CTO of Coinbase) and Roman (founder of Tornado Cash), along with others.

The app lets people better manage their interactions online and aims to build trusted relationships through verifiable accounts. 

Blockchains such as Ethereum are public ledgers, which means transactions are visible for others to see. If someone knows who a wallet address belongs to, they can see its transaction history and continue to keep track of its transactions, such as which non-fungible tokens (NFTs) they have bought and what decentralized autonomous organizations (DAO) they have joined.

Pseudonymity – and whether or not high profile people should reveal their identity – is a hot topic in crypto. From the founders of Bored Ape Yacht Club NFT franchise, to the controversies surrounding the real identity of DeFi protocol Wonderland, it’s hard not to acknowledge that credentials matter.

Big Whale Labs’ project SealCred will be an open-source privacy-focused protocol that lets users create pseudonymous wallets – that are verified – to transfer social capital from one wallet to another.

“The main problem is everything on a blockchain is immutable,” said Jason Kim, CEO and co-founder of Big Whale Labs, in an interview with The Block. “It’s relatively permanent and traceable. And so if you couple professional identity, other social identities along with like financial data, it allows basically more attack vectors for users.”

If users get hacked, not only is all their crypto lost, but social identity and other credentials can be hacked as well, says Kim. “So we’re adding a privacy layer on top of open blockchains like Ethereum and Solana and others to provide more privacy for users.”

While the team, which is still less than 10 people and fully remote, is focusing on NFT ownership as a use case, it’s also looking to expand into other use cases like anonymous peer reviews of DAO members, anonymous reviews of DAOs and other cases in Web2 like Twitter verification.

With this funding round, the company has raised a total of $4.4 million so far.

© 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.

Binance Labs, the venture capital and incubation arm of crypto exchange Binance, has raised a new $500 million fund to back web3 projects.

Backers of the fund include DST Global Partners, Breyer Capital and unnamed private equity funds, family offices and corporations as limited partners, Binance Labs announced today. This is the firm’s first fund with outside capital, a Binance spokesperson told The Block.

Binance Labs’ new fund is a sign of confidence among crypto-focused venture capital firms, even as crypto prices sag. Last week, Andreessen Horowitz (a16z) unveiled a $4.5 billion crypto fund, the industry’s large to date. Two former Binance executives — Ling Zhang and Wayne Fu — also revealed a $100 million fund named Old Fashion Research.

Binance Labs was formed in 2018 to invest Binance’s own money. The firm has funded more than 100 startups to date, including Axie Infinity developer Sky Mavis, move-to-earn startup StepN, decentralized exchange aggregator 1inch, and blockchain audit firm CertiK.

With the new fund, Binance Labs will continue to back startups focused on increasing crypto adoption. The firm is looking to invest in projects across three stages: incubation, early-stage development and late-stage growth.

Binance Labs also runs an incubation program for early stage companies and is currently supporting its fourth cohort of 14 startups. For early-stage investments, the firm plans to back both token and equity rounds.

For later-stage investments, Binance Labs is planning to back web3 startups that are looking to integrate into Binance’s ecosystem.

“In a web3 environment, the connection between values, people and economies is essential, and if these three elements come together to build an ecosystem, that will accelerate the mass adoption of the blockchain technology and crypto,” Changpeng Zhao, founder and CEO of Binance, said in a statement. “The goal of the newly closed investment fund is to discover and support projects and founders with the potential to build and to lead web3 across DeFi, NFTs, gaming, metaverse, social and more.”

© 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.

Crypto exchange Binance may still invest in Forbes, despite reports that the media firm has scrapped plans to go public through a special purpose acquisition company (SPAC) listing.

The New York Times reported on Tuesday that the SPAC was off amid a cooling in investor appetite for such deals and greater regulatory scrutiny.

Forbes had hoped to raise $400 million through a merger with a SPAC called Magnum Opus Acquisition Ltd. Half of that was set to come from Binance, as announced in February, with the deal initially due to close in March.

But Binance may still find a way to invest in the media company. “We’re continuing to review all possible options and look forward to working with the leadership team at Forbes in the months ahead,” a spokesperson for the crypto firm said on Wednesday.

Forbes was contacted for comment but did not respond by press time.

The pair make for an odd match given their history. Binance sued Forbes for defamation in 2020 after the publication ran a story based on leaked documents that it claimed revealed elaborate efforts to avoid regulation. Binance voluntarily dropped the lawsuit in February of the following 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.

Japanese entertainment and gaming firm Akatsuki said on Wednesday that it has raised a $20 million fund focused on investing in web3 projects.

The fund, dubbed Emoote, will look to back startups working on projects in GameFi, non-fungible tokens (NFTs) and the metaverse, Akatsuki said in a press release. 

The name Emoote was chosen to signal that NFT consumption is based on “emotional values,” Akatsuki added. 

The business has form for investing in crypto-adjacent projects, having funded more than 20 early stage startups, including rapidly scaling move-to-earn startup Stepn. 

Its investment focus is 50% in Asia and 40% in the United States, with the remainder of funds being channeled towards other regions. The firm said the fund would also focus its efforts on collaborating with Japanese entertainment and media companies. 

Akatsuki is a Tokyo-listed business first incorporated in 2010. It gained global presence for co-developing the hit title Dragon Ball Z: Dokkan Battle with Bandai Namco Entertainment. The title has earned over 350 million downloads worldwide as of May 1.

Emoote follows a number of investors hoping to hit it big through web3 projects. Earlier in May, venture capital firm Andreessen Horowitz launched a $600 million fund known as Games Fund One. 

© 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.

Prada, the Italian luxury fashion designer, will debut its first solo NFTs on Thursday, which will be available for 24 hours with the purchase of a physical item.

The NFT will be part of the brand’s ongoing Timecapsule initiative, originally launched in December 2019, which drops limited-edition physical products on Prada’s e-commerce site on the first Thursday of every month.

This Thursday, the shirts dropping on Prada’s website will come with a free NFT that is designed like a pill capsule and backed up on the Ethereum blockchain. There will be 100 shirts and NFTs in total.

The black or white button-down unisex shirts are designed by artist Cassius Hirst, son of NFT artist Damien Hirst. The corresponding NFT will refer to the drop’s serial number and an item number associated with each physical shirt. 

The NFTs will give owners exclusive access to perks and experiences, all of which will be revealed on Prada’s new Discord server “Prada Crypted,” which is set to launch on Thursday as well. 

Aura Blockchain Consortium, a nonprofit founded by LVMH, Prada, and Cartier, is behind Prada’s latest NFT drop. Aura uses Quorum, an Ethereum-based enterprise blockchain service. 

A larger ‘phygital’ trend among luxury brands

This isn’t Prada’s first move into the NFT space. Earlier this year, it partnered with Adidas to launch a Beeple-inspired NFT.

Many luxury fashion brands have also recently been experimenting with ‘phygital’ launches, which ties existing physical items with an NFT with utility or a digital experience on a blockchain game.

Beauty brand Lancôme recently announced the launch of customized gift boxes with exclusive NFTs for China’s 520 holiday, according to data compiled by Vogue Business.

Similarly, Balenciaga also recently launched an animated pixel game and NFT avatar for the same holiday, which is normally celebrated with festivals in real life, but COVID outbreaks in Shanghai, Shenzhen, and Beijing have left people and brands to gather online. 

Gucci, the first luxury brand to introduce an NFT, most recently launched a “Gucci Town” on Roblox, offering games and virtual handbags to players in exchange for Robux, the virtual currency on Roblox that can be purchased with a credit card. Gucci even has a Web3 team, called the “Dream Big” team, dedicated to experimenting more in the blockchain and crypto area and turning it into a sustainable revenue stream. 

© 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 New York Times reported Tuesday that Forbes has canceled its plan to raise funds via a special purpose acquisition vehicle or SPAC.

Citing two sources familiar with the matter, the Times said that the decision was made “amid cooling investor appetite for the once-popular financial instrument.” Scrutiny from officials at the US Securities and Exchange Commission (SEC) has also raised pressure on the market for SPACs. 

Per one source, an announcement regarding the decision will be made in the coming days.

In February, it was revealed that crypto exchange Binance would invest some $200 million in Forbes via the SPAC. It’s not clear at this time whether Binance will seek to invest in Forbes via another means.  

© 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.