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Eterna's Insights - April 2023

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Key Takeaways:

  • Ethereum Shapella Upgrade

  • MiCA passed by the European Parliament

  • Real Word Credit Scores Onchain

Portfolio Spotlight: Space and Time Partnership with Microsoft

 


Ethereum Shapella Upgrade


The first major event of the month was the completion of the Ethereum Shapella (Shanghai and Capella) upgrade. This upgrade enables validators to withdraw their staked ETH for the first time and marks the completion of Ethereum’s multi-year transition to a Proof of Stake (PoS) network. There was initial worry that the unstaking could cause a large selloff. However, in recent weeks, staking withdrawals have matched deposits.




MiCA is Here


The long-awaited EU crypto legislation known as the Market in Crypto Assets (MiCA) was finally passed by the European parliament with 517 votes in favour and 38 against. The goal of MiCA is to set standard regulations and establish unified rules for crypto assets across the EU. As such, it will establish guidelines for the operations, structures, and governance of issuers of digital asset tokens. It will provide rules on disclosure and transparency requirements for issuing and trading crypto. Furthermore, it will ask firms to report the environmental impact of their activities. The legislation still needs to be approved by the European Council to come into effect sometime in 2024, but it is a major milestone in the path forward to crypto regulation in Europe.




US Regulatory Hostility


While the regulatory climate in Europe is improving, the US regulatory environment is worsening. The SEC filed a lawsuit against crypto exchange Bittrex alleging Bittrex operated as an “unregistered exchange, broker and clearing agency,” Furthermore, in the lawsuit, the SEC named six crypto tokens listed on the platform as securities. This hostility is creating increasing uncertainty for crypto firms operating in the US. Binance.US pulled out of its $1.3bn acquisition of Voyager citing a “hostile and uncertain regulatory climate in the United States.” Furthermore, crypto exchanges such as Coinbase and Gemini have announced plans to look at more friendly jurisdictions outside the US. On a more positive note, the US House Financials Committee published a draft version of a potential landmark stablecoin bill.




Crypto Integrated Phones


Solana’s crypto-forward smartphone called Saga has officially gone on sale. The new device costs $1,000, has 512 GB of storage, two versatile back camera lenses, a 6.67-inch OLED display, and a fingerprint scanner. What makes it crypto-forward is the Solana Mobile Stack (SMS). The SMS has a line-up of custom addons that integrate crypto usefulness into the phone’s hardware and software in addition to security features for sending, receiving, trading, and storing crypto to the device. Furthermore, it has a custom decentralised app (dapp) store that only lists crypto applications.




Pushing the Crypto Frontier


TransUnion partnered with blockchain data platform, Spring Labs, and Web3 identity provider, Quadrata, to launch a new crypto-focused service which will provide individuals’ real-world credit scores to blockchain dapps, when they apply for DeFi loans. According to Jason Laky, TransUnion EVP of Financial Services, “The partnership will allow DeFi lenders to access critical information when making their lending decisions with confidence, ultimately minimising their risk, and providing borrowers more opportunity for better terms.”


SG-Forge, the digital assets subsidiary of Société Générale, launched a euro-pegged stablecoin on Ethereum, called EURCV. It will be offered to institutional clients as a means of bridging the gap between traditional capital markets and digital assets and will address the increasing demand from clients for a robust settlement asset for on-chain transactions, as well as a means for on-chain liquidity funding and refinancing.




BigTech Setting Standards


Mastercard launched the Mastercard Crypto Credential Service, a set of common standards and infrastructure that will help verify interactions among consumers and businesses using blockchain networks. It will ensure that transactions between crypto users and wallets are verifiable and compliant. The first use case of the solution will focus on enabling cross-border transactions between the US and Latin American corridors.


Google Cloud announced a new partnership with Polygon Labs to provide tooling and infrastructure to developers building on Polygon’s PoS Chain, zkEVM, and Supernets scaling solutions. Google will make its node hosting and management service, Blockchain Node Engine, available for Polygon PoS Chain node operators as part of the deal, enabling developers to focus on growth rather than running PoS nodes.




Eterna Portfolio Company Spotlight: Space and Time Partnership with Microsoft


Space and Time announced it is working with Microsoft to make real-time blockchain data available to developers directly from the Azure marketplace. The one-click deployment through the Azure Marketplace will give developers the ability to access, manage and perform analytics on the blockchain data. Businesses can build on the blockchain without revamping their existing tech architecture.

 

Disclaimer: this newsletter was put together for informational purposes only based on our review and analysis. This should not be construed as a solicitation, offer, or recommendation to acquire or dispose of any investment or engage in any transaction.




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