In November, the crypto sector saw key advancements: Celestia's modular ecosystem grew as appchains utilized its Data Availability services; Binance resolved disputes with the U.S. DoJ, a significant industry milestone; and Chainflip's token generation event underscored the dynamic evolution of crypto assets and blockchain technology.
Celestia has been live for a month and the modular thesis is rapidly spreading through the crypto industry. The network has been running stably and the initial CIPs (Celestia Improvement Proposals) were discussed on the first Celestia “core developer call”, indicating the excitement around the network. The Celestia ecosystem has unsurprisingly started expanding, with Arbitrum announcing that their Orbit chains can utilize Celestia’s DA, and Unidex has built an appchain that leverages Celestia’s DA. Other first movers into the ecosystem are Initia and Movement Labs, which both allow their new rollups to utilize Celestia’s DA. The modular thesis has also continuously made waves outside of Celestia; following Coinbase and the launch of their L2 ‘Base’, Kraken is now also joining the trend of launching their own chain. The exchange is seeking partners to help build its own L2 network and is currently in talks with Polygon, Matter Labs and the Nil Foundation to co-create the platform.
A major positive development this month was the long-awaited settlement of the Binance legal proceedings. The US DoJ and the CFTC took enforcement action against Binance in 2018 over potential money laundering allegations. Binance has now reached a settlement with the SEC, finally removing the uncertainty that long weighed on the exchange’s future plans and very positively impacting the wider crypto industry. The settlement includes a $4.3 billion fine for Binance, and a $50 million fine for CEO Changpeng Zhao who is also barred from returning to run the company. The settlement importantly is seen by many as removing one of the remaining roadblocks on the way to a spot Bitcoin ETF approval.
Markets are still eagerly anticipating the potential spot Bitcoin ETF approval. BlackRock along with many other major asset managers previously submitted their applications and have been updating them based on feedback from the SEC. Additionally, BlackRock registered an Ethereum trust with the SEC, and immediately filed to convert this trust to a spot Ethereum ETF. An important sign of trust in Coinbase came from the fact that many of these ETF applicants have appointed the leading US crypto exchange as the designated custodian for these funds. Following this news the South Korea national pension fund started acquiring significant portions of Coinbase shares.
CoinDesk, one of the premier crypto news outlets, was fully acquired by the crypto exchange Bullish, which is led by the former New York Stock Exchange president Tom Farley. Similarly, The Block, another major crypto news website, was acquired by Foresight Ventures who designed the acquisition with the goal to expand into Asia and the Middle East.
Stablecoin issuer Circle continues expanding their foothold in the space. Circle introduced the bridged USDC standard, distributing USDC access across the ecosystem and thereby reducing fragmentation. This enables native USDC to be deployed on EVM rollups. Additionally, Circle launched V2.2, upgrading USDC and their Euro stablecoin. Geographically, Circle extended their reach in Asia by partnering with Japanese securities and banking giant SBI Holdings. They are working towards the circulation of USDC and building out the infrastructure for stablecoins in Japan. In a similar vein, South Korea is working on a CBDC pilot together with the Bank of Korea and national financial regulators in a program involving 100.000 citizens. Participants will be able to use the CBDC solely for the purpose of payments, with Korea eyeing programmable payments for government grants and fixing existing voucher systems as future use cases.
On the institutional front, Coinbase has been making huge steps to becoming a dominant player. Previously having launched their successful L2 Base, becoming the underlying custodian for the spot ETFs, and many more exciting developments. Additionally, this month Coinbase received regulatory approval to offer crypto futures trading to US customers where they included “nano” bitcoin contracts to attract retail traders. The exchange also introduced their Onchain Payment Protocol to offer instant settlement, low fees and a broad asset support to improve the payment experience for users. Finally, they announced the Coinbase Verifications program, which allows users to bring their identity verification information on-chain in a safe and privacy-preserving manner.
Microsoft, Tencent, and sixteen other Web2 giants have partnered with Consensys on its mission to decentralize the Infura network through the DIN (Decentralized Infrastructure Network). The Infura network provides many broadly-used tools and infrastructure which help developers interact with Ethereum and its ecosystem. The aim of the DIN is to increase decentralization on the Infura network, which should help prevent outages of the Web3 services that leverage it such as MetaMask.
Furthermore, portfolio company RiscZero just open sourced three of their technological innovations. Their high-speed recursion, which is for building fast and private computing systems, their proof commission which is for verifying one zkVM proof inside another zkVM, and their STARK-to-SNARK wrapper which brings applications on-chain by shrinking proofs. These innovations have undergone successful external audits and are now ready to be used by millions of developers. Furthermore, on the back of Coinbase’s success, portfolio company Maple Finance decided to tap into this potential. Previously having integrated with Ethereum and Solana, Maple has now launched their protocol on Base. The goal is to tap into the promising market of Coinbase’s institutional investors.
Maven 11’s portfolio company Chainflip underwent their highly anticipated mainnet launch and token generation event. The network is now slowly being phased into development, with a robust set of validators participating in the network and a significant portion of their token supply being locked in a strong vote of confidence from the community. Finally, Superform publicly introduced their universal yield marketplace protocol. Superform is a suite of non-upgradeable, non-custodial smart contracts that act as a central repository for yield and a router for users. Users can execute into an arbitrary number of vaults on any chain, using any token, in a single transaction, abstracting away much of the complexity of our industry. With the current optimism in the wider crypto markets, we foresee the impending launch of their platform and many others garnering significant interest.
