Welcome to our July issue,
Summer is upon us - about time, right? After weeks of moving sideways, the markets seem to be moving upwards again too. Is this just a brief fad or is the bull back at it? Well, to be blank: it doesn't really matter since we are in it for the long run, right? With news such as JP Morgan allowing its advisers to dabble in crypto trust, Goldman presenting bullish stats, and Fidelity projecting that most institutions will soon own crypto, we are in good (institutional) company, too. You can read more about that in our 'Quick Takes' at the end of this newsletter. As always, enjoy the read!
Composition of USD amount staked at Staking Facilities
We'll have that metric available again in our next issue - please stay tuned.
Percentage staked across the whole network
Across the board, the share of staked tokens (in % of the Circulating Supply) across the whole network for each of our portfolio projects remains largely unchanged. Notable outliers are Solana with almost 10% more SOL that is being staked compared to last month. The Graph, Ethereum, and Edgeware can each record a ~2% increase in native assets being staked on their network. For Cosmos and Polkadot we can see a slight decrease of ~2% whereas, for Kusama, we can see a decrease of ~3.5% in native assets that are staked across the whole network. Thorchain saw the highest decrease with about 4% less RUNE being staked compared to four weeks ago.
Nominal vs. Real APY of each network
This chart compares the Nominal & Real APYs across our portfolio networks as well as how these figures have changed since the last issue. For most of the networks, we provide you with a precise reward calculator, which you find on the subpage of the respective network on our homepage. Please note that the calculator is not available on mobile devices.
Ethereum 2.0 - On your mark, Reddit, go!
Unlike the world cup, Ethereum is having its' England moment with the London upgrade slated to take place as soon as August 4th! London will result in a 1-2% reduction of ETH issuance (currently at ~5%) as reported by Bankless. With 'EIP 3675' now up on GitHub, we could see 'The Merge' taking place sooner than expected too. The Merge marks the end of Ethereums' Proof-of-Work era and leads to another ~4% reduction on the ETH issuance. You can learn more about 'London' in our June issue and more about 'The Merge' in our April issue.
Besides the exciting development updates, a lot is happening on the adoption side of things too: the technology behind Arbitrum, an Ethereum Layer-2 scaling solution was chosen by Reddit to power their community tokens, which are set to tokenize Reddits' rewards point system. Reddit launched their own Layer-2 rollup with the help of Offchain Labs, the company behind Arbitrum, on Ethereums' Rinkeby testnet. Arbitrum uses optimistic roll ups to batch multiple transactions into one in order to increase transaction speeds and to save on gas fees.
The next frontier is here!
With the launch of curation alongside The Graph Explorer & Subgraph Studio, July 8th marked yet another big milestone for The Graphs’ decentralized network. Now anyone can publish a subgraph (= open API) via the subgraph studio that can then be queried by dapps to populate their frontend with curated blockchain data. Indexers closely collaborate with curators w.r.t. which subgraphs provide the highest quality and accuracy of data and in turn, should be indexed and prioritized for processing queries. Anyone can become a curator via The Graph Explorer and earn a portion of the respective subgraphs query fees - however, please note that curation is not a risk-free endeavor! For more information, please check out this post by The Graph Foundation.
On further news, the Graph Foundation published a list of their 'Wave 2 Grant & Ecosystem Support' recipients. Next to supporting infrastructure, tooling, dapps, subgraphs, and community building efforts, the funds are used for R&D as well as security audits.
Solana's having a pool party!
Solana continues on its quest to become the most censorship-resistant network and recently announced that 'Stake Pools are coming to Solana'. The ultimate goal behind stake pools is to increase the 'superminority' of the network. The 'superminority' is the smallest set of validators that cumulatively control 33.33% of stake and hence, could theoretically halt the network. You can see which validators compose the superminority on Solana Beach. You can learn more about Stake Pools here.
On the same day, the Solana Foundation also announced that they joined forces with Metaplex and Audius for the 'Creator Fund', a 5 Million USD fund focused on the creative industry. Next to capital, the fund will also provide technical support and expert advice on matters such as tokenomics.
More good news comes from the multi-chain front as Neon and SolBridge saw the light of day in the second half of July. Neon is a fully EVM-compatible environment set to launch on Mainnet Beta later this year. SolBridge, you might have guessed it, strives to bridge Solana to several EVM chains such as Polygon, Binance Smart Chain, HECO, and, well, Ethereum.
Parachains are boomin'
The Substrate ecosystem around its' two powerhouses, Polkadot and Kusama, continues to flourish. There are now six parachains live on Kusama - time for a short recap:
Statemine is Kusamas' instance of Statemint. Both are 'common-good parachains' that provides core functionality to the overall network. These parachains are granted their slot through governance rather than auctions. Statemine recently upgraded its' runtime, which made it fully permissionless. Now anyone can create fungible and non-fungible assets!
Karura, which won the first parachain auction, recently launched Karura Swap with KSM/KAR as the first trading pair and big plans in the pipeline: kUSD stablecoin loans, staking, and liquidity mining.
The Moonriver Network, a fully Ethereum-Compatible Parachain, entered the second phase of its' parachain launch process. During the second of a total of five phases, on-chain governance will be enabled once the core team is confident about the stability of the network. This will ultimately put the future of Moonriver in the hands of the community.
The Shiden Network is one step ahead and recently completed the second phase of its launch process. Crowdloan contributors can now expect their Kusama PLO. The Shiden Network natively supports EVM and WebAssembly.
Substrates web3 cloud, Phala Network, launched the Phala Wallet through which users can claim their Khala Crowdloan and Vendetta testnet rewards.
The winner of the most recent auction, Bifrost, which strives to bring staking and parachain auction derivates to the substrate ecosystem, released a review post about the auction that showcases their highlights.
Hey there, DEXy!
History was made on July 12th as the proposal to integrate the first-ever cross-chain DeFi protocol to launch on the Cosmos Hub successfully passed. It brought to life the Gravity DEX, which takes IBC to the next level. Given the importance of Inter-Blockchain-Communication (IBC) to the Cosmos network, Charly Fei and Jack Zampolin, took the stage to explain IBC in more depth in the first episode of 'IBC Explained to Cosmonauts'. Anyone looking to test the Gravity DEX waters with something else than the CLI will soon be able to do so via the Emeris Beta UI in conjunction with the Keplr wallet (check out our Keplr Guide here). At Beta launch, ATOM, REGEN, DVPN, IRIS, CRO, OSMO, ION, XPRT, and AKT will be supported.
dApp, dApp, hooray!
After the introduction of the SKALE IMA Bridge, which brings security, fast transfer speed, preservation of custody, cost efficiency, and customization to SKALE / Ethereum transfers, the SKALE mainnet is ready to onboard its' first set of dApps. Each of these dApps will run on its' own application-specific SKLAE chain: Boot.Finance, Covey, CurioDAO, Human Protocol, Ivy, and Minds. The use cases include DeFi, NFTs, social networks, as well as tokenization. Kudos to all the fellow validators and developers for hacking away day and night to make this happen!
Dfinity's on fleek!
The Internet Computer is gaining more traction by the day and can record a quarter-million users already. With the recent launch of Distrikt, a professional social network similar to LinkedIn, and the proliferation of Fleek, which provides web services (e.g., hosting, storage, gateways, domains, and more) for the Internet Computer, this number is likely to grow even more.
So long, Tezos - it's been a blast!
After three exciting and fun years, we are shutting down our Tezos bakery. October 15th, 2021 will mark the final day of our Tezos validator, but we kindly ask all of our delegators to switch to a new bakery as soon as possible in order to not miss out on any rewards. Please note that we will stop paying out rewards for any cycles past October 15th, 2021!
Due to legal reasons (please refer to this post by StakeNow for more context), we were not able to vote in the past few months. Furthermore, we had to make a strategic decision as we are currently restructuring and streamlining our focus and resources towards other projects that we are involved in. Hence, we concluded to shut down our Tezos operations altogether rather than just dragging along.
We want to thank everyone in the Tezos ecosystem for everything they did and wish them all the best going forward. A special thank you goes out to our delegators. We have always highly appreciated your support and felt honored to be the baker of your choice! Serving you fresh tacos every three days has been a blast!
Beyond HODL
Our CEO and co-founder, Wolfgang took the stage at the 'Crypto Asset Conference' on Monday, May 31st to share his take on the emerging narrative and growth of productive assets. You can watch a recording of his presentation and answers to a couple of live questions down below - as always, Wolfgang drops a lot of knowledge and industry insights:
German Finance Ministry on Crypto Regulation
The German Federal Ministry of Finance (BMF) recently published a draft on the income tax treatment of virtual currencies and tokens with the goal of providing authorities and public administrators with a clear guideline. The draft is the result of consultations between the Federal Ministry of Finance and the supreme tax authorities of the German states. It deals with numerous "individual questions on the income tax treatment of virtual currencies and tokens". While most of the German crypto community, including ourselves, welcome a proper regulatory guideline, parts of the draft could severely hinder the growth of the German crypto market and are not in alignment with the ’Blockchain Strategy’ that the German government published in September 2019. So far, German crypto investors were able to sell their assets tax-free after holding them for a minimum of twelve months, the so-called ‘Haltefrist’ (holding period). The draft suggests changing this holding period to ten years in case the funds are used for, amongst other things, staking. Not only does this impede the competitive position of Germany for entrepreneurs and investors, it also disincentivizes German Pos-token holders to participate in staking, which ultimately could have negative effects on the overall security of those networks if such guidelines were to be adopted beyond German jurisdictions.
We shall see how the BMF reacts to this, but are confident that the authorities will pay close attention to what industry insiders have to say. For more on this, please check out the PoS working group within the European Blockchain Association.
Maybe it's worthwhile to quote Sam Bankman-Fried at this point:
“The biggest change we’ve seen in the last year is that crypto has got big enough for regulators to care”
'Eurosystem launches digital euro project' (read)
'JP Morgan just became the first big bank to give retail wealth clients access to cryptocurrency funds' (read)
Goldman Sachs - 18% of World's Super Rich See Crypto as Inflation Hedge (read)
Fidelity - 'Vast Majority' of Institutions Will Own Crypto by 2026 (read)
'Grayscale is launching an institutional-grade DeFi fund and index' (read)
Vitalik, Mila Kunis & Ashton Kutcher (yes the Vitalik, the Mila Kunis the Ashton Kutcher, you read that right):