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Eterna's Insights - September 2023

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Key Takeaways:

  • Nine ETH Futures ETFs launch

  • Tokenisation of Real World Assets gains momentum

  • MetaMask launches Snaps enabling non-EVM compatibility

Portfolio Spotlight: Space and Time Integrates Verifiable Computing Layer into Chainlink

 


The Emergence of Crypto ETFs


Despite the SEC once again delaying their decision on Spot BTC ETF applications, there has been a promising development in the crypto ETF space. Several ETH Futures ETFs started trading for the first time on the Chicago Board Options Exchange (CBOE). The ETFs were launched by ProShares, VanECK, Bitwise, Valkyrie, Kelly, and Volshares. ProShares launched three funds: the Ether Strategy Fund (EETH), the Bitcoin and Ether Strategy ETF (BETH), and the Bitcoin and Ether Equal Strategy ETF (BETE). Even though trading has gotten off to a slow start, this is a positive sign for the industry as it awaits the potential approval of Spot ETH ETFs and Spot BTC ETFs in the US.



Tokenisation Gaining Steam


The tokenisation of Real World Assets has long been an interesting use case in Blockchain but has only recently gained significant momentum, driven by the tokenised US Treasuries market, which has grown an astonishing sixfold in the last year, surpassing $650 million in value. Major players in the financial industry like Deutsche Bank and Citigroup have taken notice, with Deutsche Bank partnering with Swiss crypto firm Taurus to offer custody services for institutional clients' cryptocurrencies and tokenised traditional financial assets, and Citigroup introducing Citi Token Services for access to tokenised deposits, cross-border payments, and automated trade finance solutions. The London Stock Exchange Group has announced plans to launch a blockchain-powered digital markets platform, signalling a move towards asset tokenisation. Additionally, stablecoin issuer Circle has expanded its presence by launching the Perimeter Protocol, an open-source foundation for tokenised credit markets, accommodating various use cases including invoice factoring, payroll advances, instant settlement for merchants, and credit trading for institutional investors.



Big Moves by Big Players


Consensys, a prominent Ethereum developer and the creator of Metamask, a leading cryptocurrency wallet, has unveiled a significant new feature called "Metamask Snaps." This innovative feature enables users to incorporate third-party functionalities into their wallets. Initially, users will have access to a selection of 34 Snaps, each offering diverse capabilities, including enhanced transaction insights and informative notifications pertaining to decentralised applications within their MetaMask accounts. One of the standout functionalities is the ability to make the wallet usable in non-EVM blockchains such as Cosmos and Solana, a development that could spur the growth of these non-EVM blockchain ecosystems.


Coinbase has been making noteworthy strides in its global expansion efforts. The company has obtained regulatory approval from the Bermuda Monetary Authority (BMA) to facilitate perpetual futures trading for eligible non-US retail customers, further expanding its international presence. Furthermore, in an attempt to capitalise on large failures in crypto lending, Coinbase has rolled out a crypto lending service for institutional investors in the US. The new platform will be operated through Coinabse Credit and is designed to allow users to receive up to $1m through Bitcoin collateral.



CBDC Exploration Continues


Exploration of CBDCs has continued. The Bank of International Settlements (BIS) has wrapped up its cross-border CBDC trial called Project Mariana, which was done in collaboration with the Monetary Authority of Singapore, Banque de France, and the Swiss National Bank. The project tested cross-border trading and settlement of wholesale central bank digital currencies (wCBDCs) by utilising concepts in DeFi on a public blockchain. While the project successfully validated the trading and settlement of a hypothetical Euro, Singapore dollar, and Swiss franc wCBDCs, there are more trials planned to investigate further opportunities and obstacles tied to CBDCs. In addition, Swift announced that three central banks are now beta testing its Swift CBDC connector solution, which enables the use of CBDC for cross-border payments. Two of the named central banks are the Hong Kong Monetary Authority (HKMA) and the National Bank of Kazakhstan.



Eterna Portfolio Company Spotlight:

Space and Time Integrates Verifiable Computing Layer into Chainlink


Space and Time announced that Proof of SQL, the platform’s novel zk-proof for SQL queries, will run its zk-Verifier natively on Chainlink nodes. This integration leverages the Chainlink Network to establish consensus on proof results. Notably, Space and Time has also been designated as the official preferred data warehouse solution for the Chainlink ecosystem.


Originally designed for use within the Space and Time data warehouse, Proof of SQL, released in August, can now be attached to any SQL database, whether centralised or decentralised, offering verifiable, zk-proven query results for smart contracts, AI models, and enterprises. This development represents a significant step towards ensuring the integrity of data and computation, particularly as the realms of blockchain and AI converge, envisioning a future where Space and Time's zk-proof verification becomes a standard for all databases.

 

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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