Maven's Insights July

02 August 2021

This month the “London” upgrade of the Ethereum network was agreed upon to take place at block 12,965,000 (which should be the 4th of August). This will be the 12th hard fork (the way to upgrade blockchains) for Ethereum, which also celebrates having been launched six years ago this month. In the London hard fork the Ethereum Improvement Proposal 1559 (EIP-1559) will be included. This EIP was put forward to make transaction fees less volatile on the Ethereum network, creating a better user experience. Additionally, a small part of Ether gets burned in every transaction. This could make Ether less inflationary or even deflationary as the network gets utilized a lot. 

Square announced that they will be building a Bitcoin hardware wallet. The CEO of the USD 115B fintech giant, and long time Bitcoin fan, Jack Dorsey, tweeted that the company is moving forward with development. The head of hardware at Square also stated “We have decided to build a hardware wallet and service to make bitcoin custody more mainstream”. Square seems to continuously double down on making Bitcoin accessible for all. 

In July, Visa announced that it is partnering with over 50 cryptocurrency companies including FTX and Coinbase to allow clients to spend and convert digital currencies through its card program. The partnership will make it easy for clients to convert and spend digital currencies at 70 million merchants worldwide, even those that do not accept digital assets. "The merchants don't have to change anything," Cuy Sheffield, Visa's head of cryptocurrency, told Insider. "It will be the same as any other Visa transaction to them. But on the backend, the crypto assets are instantly converted into fiat."

July has been rather fruitful in terms of regulatory discussions and actions towards cryptocurrency space. Representative Don Beyer has introduced a bill that would create a far-reaching regulatory framework for digital assets. The bill would compel the SEC and CFTC to provide legal clarity for most of the digital asset market through a process of joint rulemaking. It would also add digital assets under "money instruments" in the BSA, which means crypto would be subject to already established anti-money laundering, record keeping and reporting standards. Furthemore, the proposed law also would put a big backstop for stablecoins in place, requiring any fiat-backed coin be approved by the Secretary of the Treasury prior to issuance. It won't grandfather in any projects, so existing dollar-pegged coins will have to apply for oversight like any new issuer.

July brought news from China where Local companies have transferred $508 million across international borders using a blockchain-based platform developed by authorities in the Chinese province of Yunnan. As of June, 208 companies had used the platform for 638 transactions. The system, launched in December, helps export-oriented firms in Yunnan cut red tape, reducing the time needed for international money transfers to 15 minutes from as long as two days. In addition to being efficient for companies, the platform helps local authorities monitor transactions and implement regulations.

Coca Cola is the next big corporate getting into the NFT space. The company announced this month that it went into a partnership with Tafi (an avatar developer) that will launch its branded virtual wearables such as branded bubble jacket or a sound visualizer. One feature specific to this NFT launch is that the digital assets can be worn within the virtual world Decentraland.

This month we are very proud to announce that we started our role of Pool Delegate in Maple Finance protocol. Maple is a decentralized corporate debt marketplace. Pool Delegates are standing in between liquidity providers and the borrowers. They need to assess the creditworthiness of the borrowers and set up appropriate terms such as collateralization ratio as well as the interest rates itself. To enhance our credit risk assessments we hired a highly reputable advisor from TradFi banking that will cooperate with us and ensure that the proper risk metrics are in place to secure the capital of our LPs. On top of that, Maven 11 is staking their MPL:USDC holdings to provide the last resort capital, in case of the default of a particular borrower.

Apart from the Maple pool delegate role various venture investments were also announced this month. Our participation in the Nym Technologies series A was covered by Techcrunch. We also participated in the fundraise of the TracerDAO, a decentralized derivatives platform, which was covered by Cointelegraph. Finally we announced our investment in Visor Finance. Visor Finance is an active liquidity management tool for Uniswap V3 liquidity provision.