Maven's Insights - September 2022

06 October 2022

September was marked by one of the most important moments in cryptocurrency history with the long anticipated Merge event for Ethereum. The Bellatrix 4update took place on the 15th of September, leading to the transition of the consensus mechanism from Proof-of-Work to Proof-of-Stake in the culmination of an extraordinarily complex and decentralized development process. This change of consensus mechanism will enable anyone to contribute to the security of the network without the need for expensive and specialized hardware, and drastically improves the economics of the network through its reduction in ETH issuance. Importantly, the move away from Proof-of-Work means that the Ethereum blockchain is not secured anymore using energy-intensive mining equipment, which resulted in a net reduction of 99.9% in energy consumption (and thus also CO2 emissions) of the Ethereum blockchain.

This month multiple mainstay names from the traditional financial sector announced their (further) involvements in the crypto industry. Financial heavyweights Charles Schwab, Citadel Securities and Fidelity announced the start of cryptocurrency exchange EDX Markets. Additionally, Nasdaq announced their plans to offer crypto custody services to institutions looking to dip their toes into the industry. The exchange has been a service provider in the market for some time, but this latest move puts them into competition with the likes of Coinbase, BitGo and Gemini. Finally, CME Group announced their plans to roll out Ethereum options contracts. The move comes in response to the high trading volumes seen on their Ethereum futures product, having seen a 43% increase in average daily volume year over year.

Earlier this year, the ECB had launched a call for partners such as banks and FinTech companies to jointly develop a prototype of a digital Euro. This month the ECB announced that a consortium consisting of five organizations, namely Amazon, CaixaBank, Nexi, Worldline, and the European Payments Initiative (EPI) have been selected to help develop these digital Euro prototypes and its underlying infrastructure.

Cryptocurrency exchange FTX was granted an investment firm license from the Cyprus Securities and Exchange Commission (CySEC); to obtain this license, it is mandatory to the standards laid out in the MiFiD II directive  of the European Union. Since FTX secured this license, they are the first exchange worldwide to operate under this license, which allows them to operate across the European Economic Area. In addition to this, Coinbase became the first crypto service provider to gain regulatory approval in the Netherlands. The registration from the DNB, the Dutch central bank, doesn’t put them under the prudential supervision of the DNB, but the Dutch financial regulators are already supervising the different European Coinbase entities that operate in the EU.

Multinational coffeehouse chain Starbucks announced their partnership with Polygon to launch their NFT collection dubbed ‘Odyssey’. The goal of  Odyssey is to ‘enhance member experience and ownership on an unprecedented level’ and aims to retain and gain new potential customers. Moreover, this month saw the launch of Walmart’s metaverse, the main objective of this project is to create an unique user experience with both a virtual merchandise store and a universe that contains various worlds and games. Helium, the crypto-based wireless network, announced the launch of 5G Helium Mobile network in a 5-year partnership with T-Mobile. The service will rely both on T-Mobile’s nationwide 5G network and Helium's user-operated 5G nodes to provide US customers with network connectivity.

This month our venture investment in Fuel Labs was announced, having raised an impressive 80 million USD from its backers. Fuel is a scaling solution that separates the execution layer from the consensus and data availability layers. Its execution layer uses its own novel Sway language, and allows for parallel computing to create a blazingly fast and optimized execution environment on top of modular blockchains to improve transaction throughput.  

Our portfolio company, Maple Finance, has seen the launch of a new pool aiming at supporting bitcoin miners. Additionally, this month saw prominent marketmaker Wintermute, one of the borrowers of our pool, get exploited for 160 million USD. Lenders should be reassured that their post-hack financials remain solid and no negative impact is expected. For a short recap of September as a Pool Delegate on the platform, please check out the full articles on our USDC, wETH and KYC USDC pools. If you would like to learn more about being a lender on Maple Finance, you can reach out to us directly.