A handful of the most interesting and current stories in the blockchain/web3 world not published on Decential this past week in case you missed them

Hello and welcome back to the Web3 Rewind! Per usual with the industry, lots has happened this past week so without further adieu, let’s dive into this week’s news.

The Latest

The Shanghai upgrade is in sight and a new stage of development in the crypto markets is unfolding before our eyes. As the Ethereum ecosystem drives so much of the development we see across dApps, it cannot be understated how important this upgrade is to the crypto space. As noted last week, the number of L2s building novel scalability solutions is expanding rapidly. Simply put the space is moving and progress is coming with it.

The rise of CBDCs across the globe continues as nations are seemingly pulled between whether to regulate - or simply eliminate - what could be potential competitors to their traditional currencies.

Venture funding continues to pour into the space, and it's becoming clearer and clearer that while stables potentially have a lot to lose from the pending release of various CBDCs, projects focused on infrastructure continue to thrive, especially those that can provide blockchain interoperability and security solutions.

Meanwhile, AI continues to be the "talk of the town" and while prominent CEOs like Elon Musk are calling for everyone to stop and hit the breaks on development, others like Bill Gates don't see any reason to put a pause on this snowballing technology. That's just in the US. In other countries, like Italy, ChatGPT has been temporarily banned, but India has announced that it has no plans to slow down AI or its rollout.

There are two sides to every coin, and the news this week shows just how important it is to zoom out from time to time and see what's going on around the world. As one project leads the way, others follow suit. When two companies fight over market share, the real fight becomes with the very governments they pledge allegiance to. Following the money gives us insight into what's on the cutting edge, but we'll let you be the final arbiter of that. Let's dive in. — Parker Dresdow, Decential Media

The 💰💰💰 dept.

What bear market?

These days, whenever I talk with people outside the industry about crypto funding and growth, they're surprised. Looming headlines of crypto winter have not been so quickly forgotten and to outsiders, the industry is a dumpster fire of action (see: FTX). But, this past week was a perfect example of what investors are willing to put their money towards in the industry: innovative tech.

Over the course of March, an estimated $758 million was poured into 61 companies with Ledger and EigenLayer taking some of the biggest lots at $109 million and $50 million, respectively. The interest in Ledger is no surprise as infrastructure and exchanges seem to be crumbling left and right - and more importantly, locking up consumer coins with them - consumers are looking for tangible assurances that their funds are safe and Ledger can do just that…so long as you don’t throw said tangible assurance (or that pesky seed phrase card) away. If you don’t already own a Ledger device or some other cold wallet at this point, you must be quite confident with letting other people hold the purse strings.

On the flip side of this funding wagon, we have EigenLayer who sees a stability problem in the way new blockchains and protocols validate. Instead of turning to a new coin or token, EigenLayer wants to provide better stability in the form of restaking, using the Ethereum validator set, thereby reducing the volatility of smaller, riskier, native blockchain rewards. The company’s goal is to lower the cost of capital so that entrepreneurs can experiment and build more trustworthy and powerful systems, while not having to worry about whether validators are properly incentivized.

While there’s the practical side to both these companies that surely contributed to investors' decisions to sign the term sheet, they're also helping push forward the future of digital assets and the Ethereum ecosystem.

Quick Bits

Another Huuuge Funding Alert 🚨

• LayerZero has raised $120 million in their Series B with a $3 billion valuation. This represents a 3x in valuation since their Series A in March of last year.

• Andreessen Horowitz, Sequoia, Chirstie's and Opensea are some of the most notable backers in this latest raise. Techcrunch notes, "this messaging protocol lets users send different types of messages between blockchains, like cross-chain interactions, eliminating the need for intermediaries." The funds will help propel LayerZero into the APAC market as well as build out their gaming capabilities.

Shanghai - Just Over the Horizon 🌇

• The next big milestone for Ethereum as an ecosystem is the Shanghai Upgrade, set to take place next week on Wednesday, April 12th. This upgrade will allow the staked ETH to finally be withdrawn. While the impacts of this event are widely debated, and arguably priced in, it's interesting to also flag that limitations in various staking pools will prevent them from withdrawing all staked ETH at once.

• Coinbase has noted the unstaking might even take weeks or months to complete requests, especially with volume. More interestingly, The Block points out, "total supply of ether has decreased by 75,000 ($134.5 million), representing an annual decrease of 0.114%. For comparison, if The Merge never happened, the total supply of ether would have increased by 2.2 million — worth more than $4 billion at current prices."

Not So Stable Stablecoins 🪙

• As the relationship between stablecoins and the banks holding their reserves grows more tenuous in light of recent banking insolvencies and a depeg, USDC has lost roughly $9 billion in market share, while USDT has gained roughly the same amount. Ironically, not too long ago, USDT underwent heavy regulatory and audit scrutiny as they had the validity of their reserves questioned by the SEC and others.

• The question here is whether USDC will be able to claw back market share. Having sourced up new reserve partners and issuers in the US, and moving with impressive haste, most expect USDC to regain the trust of stablecoin holders. After all - it wasn't on-chain money that failed us, it was the banks (and the Fed).

Consumers Coalesce to Crypto 🤝

• As noted in last week's newsletter, Gucci has continued to deepen its crypto exposure with Yuga Labs, and we're now seeing the fruit of that relationship in the form of their "KodaPendant" (released on Thursday with both a physical item and NFT). It originally went for 450 ApeCoin (APE) with 3,333 mints/pendants. The NFTs can be used in the Otherside ~metaverse~.

• FIFA also rolled out their "AI League" - a mobile game that will enable PVP football matches. Long-term plans are for the avatars to become tradable NFTs. And lastly, Jack Daniels will use Polygon and Yahoo Creative Studios to roll out an augmented reality (AR) experience in five cities across Australia. The globally famous spirits brand will have "crates" containing various collectibles and real-life experiences.

And last but not least

Talking crypto around the world 🌎🤔

In Canada - WonderFi, Coinsquare and CoinSmart are going to merge into what will be the largest crypto exchange in Canada and one of the largest in the world. The three exchanges have over $600 million in assets under custody. This move is important, presenting a new player in the North American mega-exchange theater. As US exchanges continue to come under disjointed pressure from the SEC and CFTC (amongst others), Canada and other countries have a chance to capitalize - and provide a more attractive harbor for US crypto consumers and companies. This can be achieved through clear, and more consistent regulation, where even if regulation is tighter than in the US, at least it provides clarity into the do's and don'ts.

The need for uniformity can be seen in other parts of the globe as the Japan Financial Services Agency (FSA) has sent warnings to ByBit, BitGet, MEXC Global, and Bitforex, with the goal of getting them to register with the proper regulatory authorities. Japan, like Canada in some ways, has laid out clear rules and guidelines for regulation of crypto - specifically for the treatment and separation of client assets from exchange-traded assets, in light of the demise of FTX and others.

Yet, across the pond in the UK, there seems to be a surprising regression of what once posed itself as a potential crypto haven. The UK has continued under the guise of “consumer protection” to block its citizens and companies affiliated with crypto. Historically, some of the country’s largest have put limits on transaction volume on exchanges to just over $1,000 in an “attempt” to mitigate volatility and consumer risk. Despite Prime Minister Sunak’s crypto-forward background, the government has yet to provide clear regulations for banks and consumers to follow. This plot-line is beginning to sound fairly similar to the one going on in the US... and that's truly unfortunate.

There's one thing we know for certain: blockchain technology will continue to march forward, regardless of regulatory waffling. Nation states can dampen the efforts and progress of innovation, but they'll never halt the passion and ethos of this industry's brightest builders. Governments around the world are still fleshing out their stance on this transformative form of digital cooperation we call web3 - and in the meanwhile, we'll continue pushing the boundaries we can control.

Out of the Ether: Special NFT Edition

Have you read the definitive history of Ethereum? No? Well then get your special edition of Out of the Ether while you can. There are only 1,000 that were printed and each copy is an NFT that can be registered on the Lukso blockchain’s Universal Profile protocol.