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Nuclear-powered bitcoin mining appears to be gaining steam.

Compass Mining has signed a 20-year deal with nuclear fission startup Oklo under which Oklo will supply the bitcoin mining and hosting company with 150 megawatts of energy.

The first Oklo reactors will be deployed in 2023 or 2024 and the costs will be “considerably” less than the energy sources Compass plugs into now, Compass CEO Whit Gibbs said. Oklo plans to build mini-nuclear reactors that produce between one and 10 megawatts of electrical energy compared with the hundreds of megawatts produced at conventional reactors. 

Related: 3 More Chinese Provinces Shutter Crypto Mines as Clampdown Continues

Oklo has applied for a 1.5-megawatt plant at the Idaho National Laboratory in Idaho Falls and is working on additional applications.

Nuclear energy is increasingly part of the conversation when it comes to energy sources for bitcoin mining. Mining firms and their vast racks of power-hungry specialized computers have drawn the ire of environmental groups as bitcoin has surged in price in the last year.

Earlier this week, nuclear power company Energy Harbor Corp. signed a five-year partnership with Standard Power to fuel bitcoin mining in Ohio. Talen Energy announced plans to attach a bitcoin mining operation to a nuclear power plant in Pennsylvania that it already owns and operates. 

Compass is also in talks with Miami about getting power from the Turkey Point Nuclear Plant in Homestead, Fla., according to Gibbs. Miami Mayor Francis Suarez is said to be offering the plant to crypto mining firms as an inexpensive power source.  

Decentralizing power

Related: Abkhazia to Punish Public Officials for Illegal Crypto Mining: Report

Compass allows individual miners to shop for a hosting facility and operates their mining hardware for them. In that sense, it operates as the Airbnb for facilities that host mining hardware. Gibbs said Compass aims to have as much of its mining network on carbon-free energy as possible.

Compass has distributed 0.5% of bitcoin’s hashrate into the hands of individual nodes around the world and plans to capture 10% by the end of 2022, Gibbs said.

Compass now uses third-party facilities that hold power-purchase agreements and can dictate power prices.

“While the facility’s power cost might be $0.030-0.035/kWh (kilowatt hours), they sell to Compass customers for $0.055-0.065/kWh,” Gibbs explained. 

With Oklo, however, Compass holds the power-purchase agreement, and Gibbs said he expects power costs to be between $0.02-0.04/kWh. 

Oklo’s view

As Compass takes advantage of cheaper energy, Oklo gains a partner that can take up extra energy supply at various reactors, said Oklo CEO Jacob DeWitte. Oklo could eventually build reactors that are solely dedicated to bitcoin mining. 

This is the first cryptocurrency company that Oklo has gained as a customer and the first nuclear energy deal that Compass has secured. The deal could serve as a “beacon” for the future intersection of cryptocurrency and clean-energy development, DeWitte added. 

Unlike other commodities, bitcoin doesn’t require a great deal of infrastructure. Once the bitcoin is mined, the commodity can be instantly transported with no shipping costs. 

“As demand might change by a few megawatts here and there, you can put that off into bitcoin mining,” DeWitte said. 

Working with several microreactors as opposed to one large reactor also fits more neatly into the bitcoin ethos of decentralization, DeWitte added. 

Is nuclear energy the future of bitcoin? 

Oklo’s business model aims to buck the traditional economies of scale that conventional nuclear reactors have taken advantage of by building larger reactors over time versus smaller ones. 

DeWitte said he believes nuclear fission has the potential to be the cheapest source of alternative energy, despite the complexity and high costs of building conventional reactors. 

“When you think about it from cost and sustainability purposes, looking at all the tools at our disposal to make energy, fission requires the least materials over its lifecycle,” he said. 

There are some physicists who disagree with him. 

Traditional nuclear plants typically cost billions to build, and while smaller reactors cost less to build, they tend to be proportionally more expensive, said M. V. Ramana, a physicist at the University of British Columbia in Vancouver. A $15 billion reactor might produce 1,000 megawatts, but building a reactor that produces 1 megawatt won’t be a thousandth of the cost of $15 billion, he added.

The costs associated with nuclear energy also pale in comparison with the declining costs of renewable sources of energy such as solar and wind, which are set to become cheaper over the next decade, Ramana said.

“The cost of generating nuclear electricity today is roughly about four times the cost of generating solar or wind power,” Ramana said. 

Costs increase over time for large and small plants, Ramana said. Nuclear energy company NuScale Power, which builds reactors that produce about 60 megawatts of power, saw its costs increase significantly after it went through the regulatory process with the U.S. Nuclear Regulatory Commission (NRC), Ramana said.

It’s unlikely that Oklo would be approved to build by 2023 because its safety standards are unorthodox, said Edwin Lyman, a physicist with the Union of Concerned Scientists in Washington.

“The mindset of Oklo and some of these other new reactor companies is they just want the NRC to accept the reactor is going to be safer, essentially let them do whatever they want,” Lyman said. 

DeWitte noted that Oklo has been accepted into the NRC’s review process, which “represents a high bar and therefore is a major step of itself.” Compass’ Gibbs said he sees a recent $2 million award from the Department of Energy as validation that Oklo will be able to build its microreactors on time.

CORRECTION (June 14, 14:19 UTC): An earlier version of this article stated that Compass had distributed 5% of bitcoin’s hashrate to individual nodes. The company has actually captured 0.5% of bitcoin’s hashrate.

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Apollo Global Management said it will work with fintech firm Figure on a series of blockchain initiatives.

• Apollo, an asset management firm, will collaborate with Figure, a developer of the Provenance blockchain, on applications across the investment lifecycle, an announcement Wednesday said.
• The companies will investigate practical applications such as listing funds on a blockchain, asset securitization and digital marketplaces.
• Figure issues loans and mortgages using Provenance to automate parts of the process.
• Along with Provenance, Figure offers blockchain-enabled products for companies and individuals around fundraising and secondary trading of the private fund market.

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Apollo Global Management said it will work with fintech firm Figure on a series of blockchain initiatives.

• Apollo made a strategic decision to collaborate with Figure, a developer of the Provenance blockchain, on applications across the investment lifecycle, an announcement Wednesday said.
• The companies will investigate practical applications such as an on-chain fund listing, asset securitization and digital marketplaces.
• Figure issues loans and mortgages using Provenance to automate parts of the process.
• Along with Provenance, Figure offers blockchain-enabled products for companies and individuals around fundraising and secondary trading of the private fund market.

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Phantom, a digital wallet that’s on the Solana blockchain network, has raised $9 million in a Series A funding found led by Andreessen Horowitz (a16z).

Other participating investors included Variant Fund, Jump Capital, DeFi Alliance, the Solana Foundation and Coinbase investor Garry Tan.

The funding will be used to expand the Phantom staff, develop new platform features and expand to other blockchains, the firm said. 

Related: CoinFund, ParaFi Lead $5.2M Seed Round for Liquidity Staking Platform ClayStack

Phantom was founded by software engineers Brandon Millman and Francesco Agosti and product designer Chris Kalani. Since releasing its product in April for testing, Phantom has added 40,000 users and secured $500,000 in grants from Serum and Solana.

“With the world moving into a multi-chain future, the strong interest from the participants in our beta group indicates that our team has designed a DeFi wallet for the masses, one that’s in a unique position to provide value to users unlike any other related product on the market,” Millman said.

Most recently Phantom integrated with FTX Pay, which allows users to transfer SOL, USDC and USDT directly from FTX.

Other notable investors in the funding round included Compound Finance, crypto derivatives trading platform dYdX, music streaming platform Audius, bitcoin rewards app Lolli and the Ethereum Foundation.

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Solana-based digital wallet Phantom has raised $9 million in a Series A funding found led by Andreessen Horowitz (a16z).

Other participating investors included Variant Fund, Jump Capital, DeFi Alliance, the Solana Foundation and Coinbase investor Garry Tan.

The funding will be used to expand the Phantom team, develop new platform features and expand to other blockchains, said the firm. 

Related: CoinFund, ParaFi Lead $5.2M Seed Round for Liquidity Staking Platform ClayStack

Phantom was founded by Brandon Millman, Chris Kalani and Francesco Agosti. Since its beta launch in April 2021 Phantom has added 40,000 users and secured $500,000 in grants from Serum and Solana.

“With the world moving into a multi-chain future, the strong interest from the participants in our beta group indicates that our team has designed a DeFi wallet for the masses, one that’s in a unique position to provide value to users unlike any other related product on the market,” said Millman.

Most recently Phantom integrated with FTX Pay, which allows users to transfer SOL, USDC and USDT directly from FTX.

Other notable investors in the latest $9 million funding round include Compound, dYdX, Audius, Lolli and the Ethereum Foundation.

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A non-fungible token (NFT) of Bud Light’s blue knight yelling “Dilly Dilly”? Maybe so. The beer king’s parent company is about to go big on NFTs.

Anheuser-Busch InBev is planning a major ramp-up of its NFT crossover content, Richard Oppy, the company’s vice president of global brands, told CoinDesk. He said the Budweiser brand is investing in a new NFT media shop run by internet entrepreneur Gary Vaynerchuk called VaynerNFT. Budweiser will also become its first client, Oppy said.

Described as a “long-term business play” by beer company executives, the tie-up puts everything from ticketing to merchandise on the table for NFTs from the multinational suds conglomerate.

Related: Axie Infinity’s AXS Token Up 700% From June Lows

At the start, the action will focus on intellectual property held by Budweiser, the world’s most valuable beer brand at $14 billion in 2020, according to Statista.

Budweiser’s breadth “gave us an opportunity, we thought, to go big into” NFTs, Oppy said, “because we don’t think that this is just a fad. We think that this is going to change the way people think about their sponsorship properties in the future.”

Success with Stella

Anheuser-Busch has already had some success with NFTs with its Stella Artois brand. In the last few months, that label has held a handful of niche NFT charity auctions and signed onto some notable projects, such as a digital auction of horse-racing NFTs through Ethereum-based horse racing platform ZED RUN.

“We sold over a million dollars’ worth of virtual horses,” Oppy said.

Related: Damien Hirst’s NFT Experiment Explores Burning Question

But the Budweiser playbook will go far deeper. Vaynerchuk, a communications executive at his media shop VaynerX, said he’s working with AB InBev’s marketing team to think of ways to put Bud properties to work.

In an interview with CoinDesk, Oppy and Vaynerchuk highlighted experiential NFTs as one potential focus area. That could mean offering NFT-holding sports and music fans access to their stars they couldn’t get elsewhere. 

A marketing team is creating new NFTs, and Oppy named a few they have already forged including digital tokens for such items as collectibles, memorabilia, apparel, merchandise, limited-edition packaging, experiences, Super Bowl tickets and sideline spots at the World Cup. 

“You can take it even further than that, like imagine if you had an NFT that allowed you to get beer, a fresh beer from any of our breweries around the world,” he said.

He said a marketing team will pitch more ideas later this week.

Driving revenue

With more than 500 brands and a marketing budget that in 2019 eclipsed $1.5 billion, according to Statisia, AB InBev has plenty of intellectual property to work its NFTs into.

“We already pay for” well-known assets and sponsorships, Oppy said. “It’s all about rethinking how we utilize them.”

Vaynerchuk said NFTs could drive long-term revenue for Budweiser by capturing a slice of the secondary market. Digital ticket stubs could one day be big money, he said. Smart contracts that activate whenever a digital ticket changes hands would allow Budweiser to tap into that cash stream. 

Tickets in particular are closely intertwined with the beer behemoth. Budweiser pledged to give away 100,000 sports tickets in April.

“I think all the ticketing that we’re involved with around the world, You know, they’re all going to be NFTs in the future,” Oppy said. He said Budweiser would play an important educational role in helping customers navigate the technology of that.

“We’re already rethinking some of the way we structure our deals, whether it’s with our celebrities, whether it’s the music space,” Oppy said. 

Vaynerchuk said the tie-up will begin yielding public projects in the second half of 2021.

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A non-fungible token (NFT) of Bud Light’s blue knight yelling “Dilly Dilly”? Maybe so. The beer king’s parent company is about to go big on NFTs.

Anheuser-Busch InBev is planning a major ramp-up of its NFT crossover content, Vice President of Global Brands Richard Oppy told CoinDesk. He said the Budweiser brand is investing in a new NFT media shop run by internet entrepreneur Gary Vaynerchuk called VaynerNFT. Budweiser will also become its first client, he said.

Described as a “long-term business play” by beer company executives, the tie-up puts everything from ticketing to merchandise on the table for NFTs from the multinational suds conglomerate.

Related: Damien Hirst’s NFT Experiment Explores Burning Question

At the start, the action will focus on intellectual property held by Budweiser, the world’s most valuable beer brand at $14 billion in 2020, according to Statista.

Budweiser’s breadth “gave us an opportunity, we thought, to go big into” NFTs, Oppy said, “because we don’t think that this is just a fad. We think that this is going to change the way people think about their sponsorship properties in the future.”

Success with Stella

AB InBev has already found some recent wins with NFTs through the Stella Artois brand. In the last few months, that label has held a handful of niche NFT charity auctions and signed onto some surprisingly successful crossovers, like a June digital skins sale through Ethereum-based horse racing platform ZED RUN.

“We sold over a million dollars’ worth of virtual horses,” said Oppy. 

Related: Soccer’s Copa America Trophy to Be Minted as NFT

But the Budweiser playbook will go far deeper. Vaynerchuk, a communications executive at his media shop VaynerX, said he’s working with AB InBev’s marketing team to think up ways to put Bud properties to work.

In an interview with CoinDesk, Oppy and Vaynerchuk highlighted experiential NFTs as one potential focus area. This could mean offering NFT-holding sports and music fans access to their stars they couldn’t get elsewhere. 

Right now a marketing team is putting pen to paper for new NFT potentials. Oppy named a few they’ve already forged: collectibles, memorabilia, collaborations, apparel, merchandise, limited-edition packaging, experiences, Super Bowl tickets, sideline spots at the World Cup… 

“You can take it even further than that, like imagine if you had an NFT that allowed you to get beer, a fresh beer from any of our breweries around the world,” he said.

He said a marketing team is pitching even more later this week.

Driving revenue

With over 500 brands and a marketing budget that in 2019 eclipsed $1.5 billion, according to Statisia, AB InBev has plenty of intellectual property to work its NFTs into.

“We already pay for” well-known assets and sponsorships, Oppy said. “It’s all about rethinking how we utilize them.”

Vaynerchuk said NFTs could drive long-term revenue for Budweiser by capturing a slice of the secondary market. Digital ticket stubs could one day be big money, he offered. Smart contracts that activate whenever one changes hands would hard-code Budweiser into that cash stream. 

Tickets in particular are closely intertwined with the beer behemoth. Budweiser pledged to give away 100,000 sports tickets in April, a $10 million flex by the company with 110 pro sports sponsorship deals in the U.S. alone.

“I think all the ticketing that we’re involved with around the world, You know, they’re all going to be NFTs in the future,” Oppy said. He said Budweiser would play an important educational role in helping customers navigate tech rough spots – setting up a MetaMask, for example.

“We’re already rethinking some of the way we structure our deals, whether it’s with our celebrities, whether it’s the music space,” Oppy said. 

Vaynerchuck said the tie-up will begin yielding public projects in the second half of 2021.

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BlackRock CEO Larry Fink said in a CNBC interview on Wednesday that he is not seeing much demand for digital assets.

• Talking on CNBC’s “Squawk Box” before a call to discuss BlackRock’s second-quarter earnings, Fink said he has been asked about crypto and bitcoin in the past, but not in the last two weeks.
• “We see very little demand for those [crypto] types of things,” Fink said. 
• He had previously said that bitcoin has “caught the attention” of many people and that the cryptocurrency market was still relatively small compared with others.
• “If we could improve financial literacy. If we could help more people focus on not just speculating of markets and the ups and downs but translating that into investing in the long run,” Fink said in December, commenting on meme stocks.
• BlackRock said Wednesday it has about $10 trillion of assets under management.

Read more: BlackRock’s Fink Says Bitcoin Can Possibly ‘Evolve’ Into Global Asset

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Blackrock CEO Larry Fink said in a CNBC interview Tuesday that he is not seeing much demand for digital assets.

• Talking to CNBC Squawk Box before a call to discuss second-quarter earnings, Fink said he has been asked about crypto and bitcoin in the past, but not in the last two weeks.
• “We see very little demand for those [crypto] types of things,” Fink said. 
• He has previously said bitcoin has “caught the attention” of many people and that the cryptocurrency market was still relatively small compared with others.
• “If we could improve financial literacy. If we could help more people focus on not just speculating of markets and the ups and downs but translating that into investing in the long run,” Fink said, commenting on meme stocks.
• BlackRock said Wednesday it has about $10 trillion of assets under management.

Read more: BlackRock’s Fink Says Bitcoin Can Possibly ‘Evolve’ Into Global Asset

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Blockchain auditing platform CertiK has raised $37 million in a Series B funding round co-led by Coatue Management and Shunwei Capital, with participation from Coinbase Ventures.

The blockchain and smart-contract security firm has raised some $48 million since 2018, with a list of backers that includes Binance, IDG Capital, Lightspeed Venture Partners, Yale University and others.

The strength of the Series B round reflects the explosive growth in decentralized finance (DeFi), which runs on automated smart-contract code and decentralized exchanges, some of which are subject to bugs and hacks.

Related: DeFi Lending: 3 Major Risks to Know

Founded in 2018 by professors from Yale University and Columbia University, CertiK has provided audits and checking to DeFi-related projects like Aave, Polygon, Binance Smart Chain, Terra, Yearn, and Chiliz.

In addition to code auditing, CertiK’s DeFi-focused “Skynet” analytics service scrutinizes on-chain and off-chain data like social sentiment, privileged governance controls, market volatility and suspicious transactions. To date, Skynet has monitored more than 2 million smart-contract addresses and about 2 billion on-chain transactions, the company said.

“We’re proud to advance transparency in the space by providing the tools and resources – including our official audit reports – so the community can make sense of vital security information,” CertiK co-founder Professor Ronghui Gu said in a statement.

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The European Central Bank (ECB) said it will move from discussion to exploration in its plans to develop a digital euro.

• The ECB decided to start the investigation phase of a euro-zone central bank digital currency (CBDC), which will last 24 months, an announcement Wednesday said.
• The ECB has been discussing the potential launch of a CBDC for the 19 euro countries since the beginning of this year. President Christine Lagarde said in March that one could be launched within four years.
• “We will commit the resources necessary to design a marketable product,” ECB board member Fabio Panetta said in a blog post. “But a decision about whether or not to issue a digital euro will only come at a later stage. And in any event, a digital euro would complement cash, not replace it.”
• Research by the central bank last year highlighted a drop in the usage of cash since 2019, with the COVID-19 pandemic attributable for an acceleration in the long-term decline.
• The ECB said prior experimentation suggested that an architecture “combining centralized and decentralized elements are possible.”
• The move from discussion to exploration of a CBDC is one that numerous other central banks including those of the U.K. and Japan have made in the past year.
• Among major economies, China leads the way in its advancement of CBDC plans. South Korea and Sweden both appear to have moved from exploration to testing in recent months.

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The new frontier of miner maximal extractable value (MEV) on Ethereum may have negative consequences for network finality and immutability. Key to defending Ethereum against these MEV forces is the upcoming transition to Eth 2.0 and proof-of-stake (PoS). But will the transition come soon enough? 

This article originally appeared in Valid Points, CoinDesk’s weekly newsletter breaking down Ethereum 2.0 and its sweeping impact on crypto markets. Subscribe to Valid Points here.

Pulse check

Bitcoin dominance tends to fall every crypto bull market cycle. As background, BTC dominance is a metric tracking the percentage of total cryptocurrency market capitalization made up by BTC. 

Related: Ether Erases Early Losses, Faces Resistance Above $2K

During the most recent bull market cycle, BTC dominance dropped from roughly 70% in January to as low as 40% in May. While the volatile crypto markets have since turned bearish over the latter half of Q2 2021, causing BTC dominance to pick back up again, the metric continues to trend between the range of 40% and 50%. 

Among the alternative cryptocurrencies eating up the market share of BTC, the native cryptocurrency of Ethereum, ether, is the next largest coin, making up roughly 18% of total crypto market share. While ETH is the second-largest cryptocurrency next to BTC and has been since as early as 2016, it is not the fastest-growing altcoin on the market. 

In 2021 Q2, the fastest-growing altcoin, excluding stablecoins, by monthly market cap growth, was the native token of Chiliz, a blockchain services network for sports and entertainment providers.

The chiliz token (CHZ) is the exclusive marketplace currency on Socios.com. Socios.com aims at decentralizing fanbase interaction with sports teams by leveraging blockchain infrastructure to facilitate payments for team merchandise, voting rights and other rewards. The marketplace has partnered with over 20 sporting and esports organizations including FC Barcelona, Juventus and Atletico de Madrid. 

Related: DeFi Startup Optimism Launches Alpha of Its Uniswap Layer-Two Solution

Fans for each of these teams can purchase branded “Fan Tokens” on Socios.com that allow them to vote on certain team decisions such as renaming facilities or changing entrance songs. Since the CHZ is the exclusive means of exchange in the marketplace, the token accrues in value alongside demand for voting rights and rewards provided by the entertainers on the Socios.com platform. 

The sports industry alone has a yearly value in the hundreds of billions of dollars and could gain further value through strong customer loyalty programs like the ones being experimented on through CHZ and Socios.com. The Chiliz token is one way to speculate on the use of Ethereum-based tokens for fan engagement and the continued growth of the Socios.com marketplace as the main platform to do this. 

Teddy Oosterbaan

New frontiers: Does Ethereum need a stronger defense against MEV?

Block subsidies, transaction fees and miner/maximal extractable value (MEV): These are the three main revenue streams of Ethereum miners. 

In efforts to combat currency inflation, protocol developers lowered block subsidies from 5 ETH to 3 ETH in 2017, and again from 3 ETH to 2 ETH in 2019. Starting in August 2021, transaction fees are also expected to decline as a result of Ethereum Improvement Proposal 1559 and its fee-burning mechanism. The only revenue stream that is expected to grow larger and more lucrative for miners in the months to come is MEV. 

MEV refers to the income a miner receives as a direct result of their ability to insert, leave out and reorder transactions within a block. The order of transactions is of utmost importance in the context of high-frequency trading on decentralized exchanges (DEXs) where automated bots can identify buy or sell orders waiting for execution on Ethereum and front-run these trades before they get executed. 

The higher the liquidity and value being moved on-chain through these DEXs, the greater the profit opportunity for miners to earn additional income through MEV. 

*Missing values for daily extracted MEV appear in this chart as interpolated dotted lines that connects the plot points immediately preceding and succeeding the missing value

The larger MEV rewards become in comparison to block subsidies and transaction fees, the greater the financial incentive for miners to adjust not only the order of transactions but also the order of blocks themselves. In what is known as a “time bandit” attack, miners may begin to identify MEV opportunities in blocks that have already been finalized and reorganize the blockchain in their favor if potential rewards from frontrunning are larger than earnings from honest mining (i.e., block subsidies and transaction fees).

Speaking to the potential for miners to reorganize Ethereum blocks and disrupt chain finality, Georgios Konstantopoulos and Leo Zhang from Paradigm Research wrote in a blog post back in March, “This scenario is not obviously plausible: Miners are (for the most part) structurally long ETH, and such an action would directly negatively impact their ETH investment.”

Theory manifesting into reality

However, it would appear the tools for MEV extraction by way of block reorganization are actively being built and already being executed in primitive forms. 

Edgar Aroutiounian of Flashbots tweeted on Thursday, July 8, that he had created a personal GitHub repository codifying how payments to miners can be facilitated in exchange for destabilizing blockchain consensus. Shortly thereafter, on Saturday, July 10, Twitter user “0xbunnygirl” announced their own code repository for MEV extraction through block reorgs called “Request for Reorg.” 

While the possibility of MEV negatively impacting chain finality and immutability has been a long-running concern, discussed as early as November 2020 among Ethereum researchers, the reality of this happening appears to be manifesting today. 

In light of this reality, there are a handful of defense mechanisms that researchers insist will protect the integrity of Ethereum’s blockchain. First, there is the collective will of the Ethereum community to censor this kind of behavior. Users can leave mining pools that are using their computational power, also called hashrate, to reorg blocks. Honest miners can resist accepting blocks they know to be from hostile miners engaging in these MEV practices. 

Second, there is the forthcoming upgrade to a proof-of-stake (PoS) consensus protocol with Eth 2.0, after which miners will no longer have the ability to propose blocks or reorder transactions within blocks. These two responsibilities will fall into the hands of validator node operators, who are required to own a large investment of ETH, worth roughly $63,600 or 32 ETH, and have skin in the game in order to participate in blockchain consensus. 

Weak lines of defense

Neither of these two defenses is convincing. The former assumes the collective will of the community is homogeneous and aligned on resisting MEV extraction through block reorgs despite clear evidence to the contrary. For some, such as Aroutiounian, if block reorgs can be done on Ethereum and there is a clear financial incentive for them to happen, they should – regardless of how it impacts public perception of the network. 

The upgrade to Eth 2.0 and PoS as a defense against block reorgs for MEV extraction does not address the present reality and the impact these events can have on the value of Ethereum in the interim before the upgrade is ready for deployment. The readiness checklist which outlines all the tasks needed for PoS activation remains in large part unfinished. The earliest that developers estimate Ethereum’s transition to PoS will happen is the beginning of 2022. 

Ethereum needs a stronger line of defense to combat the reality of MEV extraction through block reorgs. 

Validated takes

• Short-term profitability proves more important for decentralized exchange (DEX) users on Polygon than Ethereum. TAKEAWAY: Polygon’s DEX trading volume and liquidity came and went with a spike in rewards during the month of June, while remaining comparatively more stable on Ethereum over the same time period. (Data, Glassnode)
• Sygnum Bank becomes the first banking institution to offer staking services for Ethereum 2.0. TAKEAWAY: The Swiss bank built for digital asset custody, brokerage and tokenization is expanding its offering of yield generating products by offering clients up to 7% per annum on their ETH through staking. In today’s low or negative interest rate environment, the bank wrote in a blog post, digital assets offer an alternative to yield generation.  (Article, Yahoo)
• Gas prices on Ethereum have been on a downward trend since late April, dropping from roughly 150 gwei to 15 gwei. TAKEAWAY: A higher block capacity, the rising popularity of layer 2 scaling solutions and increased use of alternative payment channels between DEX traders and miners are all likely factors contributing to lower gas prices on Ethereum. (Newsletter issue, Coin Metrics)
• Circle, the co-creator of dollar-backed stablecoin USDC, is set to go public at a $4.5 billion valuation. TAKEAWAY: USDC is the second-largest stablecoin on Ethereum by circulating supply next to tether. In a presentation on Circle’s plans to go public, the company  predicted sevenfold growth in USDC’s market capitalization by 2023. The predicted circulating supply would be $190 billion, much higher than leading stablecoin, USDT, which currently is sitting around $63 billion. (Article, CoinDesk)
• Weekly volumes in dollar markets for BTC and ETH reached new all-time highs in 2021 Q2. Notably, notional volumes in ether-dollar pairs consistently surpassed bitcoin pairs for the first time ever in the month of May. TAKEAWAY: Surging interest in NFTs and DeFi since the beginning of this year are likely factors contributing to the growth of ether trading volumes. (Report, CoinDesk)

Teddy Oosterbaan

Factoid of the week Open comms

Valid Points incorporates information and data directly from CoinDesk’s own Eth 2.0 validator node in weekly analysis. All profits made from this staking venture will be donated to a charity of our choosing once transfers are enabled on the network. For a full overview of the project, check out our announcement post. 

You can verify the activity of the CoinDesk Eth 2.0 validator in real time through our public validator key, which is: 

0xad7fef3b2350d220de3ae360c70d7f488926b6117e5f785a8995487c46d323ddad0f574fdcc50eeefec34ed9d2039ecb. 

Search for it on any Eth 2.0 block explorer site.

New episodes of “Mapping Out Eth 2.0.” with Christine Kim and Consensys’ Ben Edgington air every Thursday. Listen and subscribe through the CoinDesk podcast feed on Apple Podcasts, Spotify, Pocketcasts, Google Podcasts, Castbox, Stitcher, RadioPublica, IHeartRadio or RSS.

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The High Court of Delhi has called for standardized disclaimers on crypto-related advertising on national television.

• The Securities and Exchange Board of India (SEBI) and other relevant bodies should issue appropriate guidelines for crypto exchanges advertising on TV, the High Court said, according to reports Wednesday.
• The court is seeking responses from SEBI, the Ministry of Information and Broadcasting and some of India’s prominent crypto exchanges like WasirX, scheduling the matter for discussion in August.
• This request comes after lawyers Ayush Shukla and Vikash Kumar petitioned for SEBI to mandate disclaimer text covering 80% of the screen, with a voiceover reading slowly for five seconds.
• The suggested format compares with current practice where a disclaimer is displayed briefly in small text with wording such as “Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks,” according to the request.
• Should guidelines be issued, that might be interpreted as a further sign of India moving away from the outright crypto ban that had been threatened by the government and adopting a more lenient approach by regulating the industry.

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While many Chinese provinces and cities are cracking down on crypto mining, most are trying to boost their local blockchain industries.

• Out of China’s 34 provinces and province-level cities, 33 have enacted policies to accelerate blockchain innovation, local media reported, citing research from Chinese blockchain news site ChainNews.
• The newest issue of China’s most important economic-planning document, the Five-Year Plan, named blockchain a nationally strategic technology for the first time, calling on local governments to spur innovation in the field.
• Fourteen governments are offering financial rewards to companies that excel in blockchain innovation.
• Ganzhou, a city in one of China’s poorest provinces, Jiangxi, is promising 17.5 million yuan ($2.7 million) to companies that become unicorns, according to the report.
• Shanghai is offering permanent residency to highly skilled workers that move there to work on blockchain, the report said. Permanent residency in Shanghai is a lifetime aspiration for many Chinese citizens because it allows them to live, buy property, and access public services in the country’s most international city.
• At the same time, several provincial and city governments have moved to shut down or curtail crypto mining, following signals from China’s top leadership.

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Ether buyers stepped in below $1,900 on Wednesday, helping the second-largest cryptocurrency erase early losses. At press time, the native cryptocurrency of Ethereum’s blockchain was trading unchanged on the day at about $1,941.

• The relative strength index on the hourly chart shows bullish divergence and scope for further upside.
• The RSI on the four-hour chart also favors a recovery rally, while the weekly chart stochastic is signaling interim oversold conditions.
• The upside signaled by short-term indicators may run into resistance at $2,040. That level is housing the widely tracked 200-day simple moving average (SMA) resistance.
• A break higher would expose the make-or-break 50-day SMA hurdle lined up at $2,310.
• “We would add exposure if ether can confirm a breakout above its 50-day MA, as with bitcoin, with next resistance on the chart above $3,000,” Katie Stockton, founder and managing partner of Fairlead Strategies, said in the weekly research note published Monday.
• Support levels to watch out for are the daily low of $1,865 followed by the June low of $1,700.

Also read: Bitcoin’s Range Play Likely to End With Bullish Breakout: Analyst

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Bitcoin extended Tuesday’s decline even as gold, a traditional inflation hedge, remained resilient to increased bets that the U.S. Federal Reserve will tighten its monetary policy sooner than previously expected.

The leading cryptocurrency was trading near $32,300 at press time, a 1.4% drop on the day. Prices hit a 2 1/2-week low of $31,669 early today, having run into offers above $33,000 on Tuesday, CoinDesk 20 data show.

The drop to the lowest level since June 26 comes a day after futures tied to the federal funds rate and eurodollars, which track short-term interest-rate expectations, raised bets on Tuesday that the Fed would increase interest rates between December 2022 and the first quarter of 2023. According to Reuters, the repricing happened after the U.S. Labor Department said the consumer price index increased 5.4% year-over-year in June, the fastest pace since 2008.

Related: Visa Approves Australian Startup to Issue Debit Cards for Spending Bitcoin

Rate hikes, or possible tapering as signaled by Federal Reserve Bank of St. Louis President James Bullard, boost the attractiveness of holding fiat currencies, in this case the dollar, and dilute the appeal of perceived store-of-value assets such as bitcoin and gold.

However, while bitcoin is nursing losses, gold is trading 0.35% higher on the day at $1,814 an ounce. The discrepancy spurred Amber Group, a crypto services provider, to call for caution in reading too much into the rate-hike narrative for the time being.

“Bitcoin’s weakness this morning could be associated with the Fed rate-hike fears,” Amber Group said. “However, it’s hard to force this rate-hike narrative as a headwind if other risk assets (stocks) are hitting new highs and gold remains bid.”

Trader and analyst Alex Kruger said the cryptocurrency has been looking heavy for a long time, courtesy of weak flows, and “the CPI may have helped.”

Related: Market Wrap: Bitcoin Weakens as US Inflation Hits 13-Year High

That said, some analysts say concerns over tightening or gradual unwinding of stimulus may not be a threat to traditional markets, but present immediate downside risk to bitcoin.

“Is tapering a real concern? Not for broad markets, but arguably it is a risk for bitcoin, considered by fiat-based institutional investors at the extreme end of the risk spectrum,” Messari’s Mira Christanto said in a blog post dated May 27. “Capital to this new asset class is still mercenary and tends to over-react on the bull and bear side.”

The mid-May sell-off from $58,000 to $30,000 occurred after a reported surge in U.S. inflation in April increased concerns that the Fed may consider an early rate increase or reduction of liquidity-boosting asset purchases, known as quantitative easing.

Stack Funds Chief Operations Officer Matthew Dibb said, “The recent increase in Fed rate-hike bets may not bode well for BTC in the short term, as the recent correlation is more tied to equities, liquidity and retail sentiment, rather than BTC being a ‘hedge’ to inflation.”

Dibb said the cryptocurrency has been looking weak on technical charts for the past few weeks, and the latest U.S. CPI release may add to the selling pressure.

However, while bitcoin has come under pressure this week, it is still locked in the broad two-month range of $30,000 to $40,000. “It’s hard to read too much into the price action currently while we’re still stuck in this range,” Amber Group said.

Also read: Bitcoin’s Range Play Likely to End With Bullish Breakout: Analyst

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Three provinces in China have joined a growing list of jurisdictions in the country that have ordered a halt to crypto mining amid a nationwide crackdown on the industry.

Heifi Online, a Chinese state-owned website in Anhui, reported Wednesday that the province will “clean up and shut down” crypto mines to avoid an imminent power shortage.

Also on Wednesday, Chinese journalist Colin Wu reported that the provincial departments of China’s State Grid Corp. in Henan and Gansu will shutter local mining industries in those provinces.

Related: Almost All Chinese Provinces Have Blockchain-Boosting Policies

The two provincial State Grid departments are implementing a decision that the state-owned enterprise made late last month, Wu told CoinDesk on Wednesday. The notice by State Grid’s headquarters calls on provinces to “clean up and crack down” on crypto mines that are using up electricity from the national grid.

More provinces are expected to follow suit, Wu wrote.

Gansu province is in West China, bordering Xinjiang, Qinghai, Sichuan and Inner Mongolia. It accounted for 2% the country’s hashrate between September 2019 and April 2020, according to the Cambridge Bitcoin Electricity Consumption Index.

China’s National Energy Administration has warned that Anhui’s electricity demand will exceed its supply starting in 2022, Hefei Online wrote.

Related: Paraguay Proposed Bitcoin Law Includes Crypto Registration: Report

Henan and Anhui are landlocked provinces in eastern China.

At a May meeting of China’s State Council, ministers discussed a crackdown on crypto mines. Provinces, prefectures and cities have moved against the industry since. Qinghai, Xinjiang, Inner Mongolia and Sichuan announced they are either cleaning up or shutting down mining.

The concern is partly environmental and partly financial. China is gearing up to achieve ambitious carbon neutrality goals set in its five-year plan in March, while regulators are concerned about crypto’s impact on financial stability.

In response, mining firms are starting to move their rigs overseas.

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Blockchain investment firm QR Capital is to list an ethereum exchange-traded fund (ETF) on Brazil’s stock exchange after winning approval from the markets regulator.

• The ETF will list on the Sao Paulo-based B3 exchange under the ticker QETH11, QR Capital said in a tweet Tuesday.
• QETH11 won approval from Brazil’s Securities and Exchange Commission and will use institutional custody provided by crypto exchange Gemini. It is Latin America’s first ethereum ETF, QR Capital said.
• QR Capital will buy ether and offer investors exposure to it without them having to worry about wallets or private keys.
• Last month, QR Capital’s bitcoin ETF began trading on B3, itself the first bitcoin ETF to be approved in Latin America.

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Four men were arrested by Japanese police for allegedly defrauding thousands of investors out of millions of dollars, according to a report by Asahi Shimbun Digital on Monday.

Shoji Ishida, Yukihiro Yamashita, Takuya Hashiyada, and Masamichi Toshima stand accused of cheating 20,000 investors out of more than 6 billion yen (US$54.3 million) by promising to generate large returns through the use of artificial intelligence (AI) on their crypto trading platform.

Investors, who are filing civil lawsuits, say the men ran a crypto scheme known as the “Oz Project” which purported to automatically trade on a user’s behalf through the use of AI.

Related: UK Police Seize $250M Worth of Crypto

The scheme promised two-and-a-half times a user’s initial principle in return on their investment over a four-month period, per the report. A “solicitation officer” held seminars calling for further investment into the project.

Those who invested also invited friends and acquaintances, increasing the total pool of investors, Asahi reported.

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Binance-backed travel website Travala’s Q2 revenue rose 141% over the previous three months amid a rebound in global travel, the company said in a report.

The London-based company generated $9.8 million in revenue from April to June, which was also a whopping increase from the $274,718 it generated in the same period last year when the coronavirus pandemic kept people home. In the Q2 report, Travala also attributed the strong performance to “strategic initiatives, optimisations and partnerships” that have broadened its offerings and improved service.

The Q2 result also signaled a wider embrace of the company’s blockchain-based travel booking platform after Travala generated only $249,365 in revenue for Q2 2019, a year prior to the pandemic’s onset. Co-founder and CEO Juan Otero told CoinDesk in an email that he was heartened by the improvement and expects 2021 revenue to be seven to eight times higher than last year’s.

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Travala, which accepts over 40 cryptocurrencies, Binance Pay and fiat payment forms, allows guests to purchase hotel stays, flights and experiences directly through its platform. According to data from Travala, crypto purchases account for approximately 70% of the platform’s business.

“Travala.com has been through some challenging times,” Otero said in a written response to CoinDesk questions. ”Now we are starting to see travel rebound and all the hard work we’ve done is starting to pay off. We’re extremely optimistic about travel coming back stronger than ever.”

While hotels account for the largest share of Travala’s revenue, it expanded its flight offerings following a merger with competitor TravelbyBit in May 2020. An existing partnership with tour and activity provider Viator is expected to help Travala increase its revenue.

Otero said Travala plans to find new partners within the crypto industry and traditional travel sector as part of wider expansion plans. Travala is also developing a concierge service that will cater to crypto-VIP and corporate clients looking for crypto-paid luxury travel experiences.

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