A weekly recap of the most insightful news, analysis, and capital flows in the wild west we call crypto.

Hello and welcome back to the Web3 Rewind! Per usual in this industry, lots has happened this past week. Here's what we have in store for you:

• Tether’s endurance

• Uniswap Wells notice

• Hong Kong ETF approval

• Parcl airdrop

• BlackRock BUIDL and USDC

• Sui gaming console

The Latest

Tether’s endurance

Building a warchest dept.

Uniswap wells notice

Last Wednesday, Uniswap received a Wells notice from the SEC. If you want a rundown on the Wells notice and what the implications are, give last week’s edition a read here. I’m not going to rehash the Wells notice again other than the fact that the enforcement will likely be related to whether Uniswap is an unregistered securities exchange, which boils down to the question of whether many of these tokens being traded qualify as securities.

Here’s a slightly different angle to the story. Last Saturday, it was discovered that Uniswap Labs had increased the fee on swaps through its interfaces and expanded the set of fee-eligible trades. The fee increased to 0.25% from 0.15% and now includes all tokens excluding stablecoin pairs and wrapping/unwrapping WETH. Surprisingly, this move came a few hours after the announcement of the Wells Notice. This is about the largest middle finger that Uniswap could give to the SEC. Hey, we don’t care about your Wells notice. We’re flipping a switch that makes us more money from what we’ve built. Is it boosting the war chest for an ensuing legal battle? Can’t blame Uniswap for doing it.

However, many users, and more importantly token holders, were left dissatisfied with the decision. If you’ll remember, Uniswap has historically struggled to turn on a fee switch that would return a portion of fee revenue back to token holders. And so to token holders who have been holding what is technically a worthless technical governance token this whole time, it’s a slap in the face that Uniswap Labs has done something that would direct even more revenue into the firm’s pockets.

There are a few statements here that I would like to make. First of all, no crypto protocol has even come close to winning long-term yet. Uniswap has done a little more than $2T in volume to date. Nasdaq alone sees ~$250B in volume daily. Given that liquidity providers are the lifeblood of Uniswap, and probably the only group of people who matter to the protocol, it is sheer insanity to decrease the revenue they receive just so that token holders can receive something to the tune of a ~3% “dividend yield” on their tokens.

At the end of the day, Uniswap Labs is a company. A company needs to monetize and generate a profit in order to fund operations, and in Uniswap’s case, continue the development of its products. Generating that profit through ancillary products such as an interface for Uniswap (anyone can create an interface to interact with the Uniswap AMM) or a Uniswap wallet seems like the least reductive way to do it, without taking anything from users or liquidity providers. However, a fundamental zero-sum game will always be played between Uniswap Labs (equity holders) and token holders. Perhaps it is for the better that in recent years, crypto has heavily skewed to token investments and Simple Agreements for Future Tokens (SAFTs). — Joseph Cooper, Decential Media

Quick Bits

Hong Kong ETF approval

• On Monday, Hong Kong regulators approved the launch of spot Bitcoin and Ethereum ETFs. Three ETF providers have been approved, including Harvest Globa, Bosera International and ChinaAMC.

• Following a large crackdown during the previous bull, there is speculation that this may finally open the floodgates to wealth in that region which had previously wanted to invest but was unable to do so.

Parcl airdrop

• Parcl is a Solana DeFi protocol that allows anyone to trade real estate prices with up to 10x leverage. The protocol also allows anyone to be a liquidity provider and operates a unique oracle for real estate pricing that has been utilized in popular media.

• On Tuesday, they airdropped their token, PRCL, to recipients. Unfortunately, unlike previous airdrops that launched to much fanfare and ridiculously high valuations, PRCL was unable to do the same. Perhaps it’s a sign of airdrop exhaustion and a lack of willingness for market participants to hold worthless tokens.

Blackrock BUIDL and USDC

• Last week, Circle launched USDC smart contract support for BlackRock BUIDL holders. This allows anyone holding BUIDL, a tokenized US dollar fund offering US dollar yield, to transfer their shares to receive USDC in exchange.

• Many have called BlackRock the fourth arm of the government, and this integration, which is likely the first of many, firmly cements USDC as the institutional stablecoin of choice. Dare I say a future CBDC?

And last but not least

Sui gaming console

Last Wednesday, Sui announced a new handheld gaming device, dubbed SuiPlay0X1, at its very own Sui Basecamp Event in Paris. It’s a handheld gaming device that runs the Linux-based Playtron OS and will be a competitor to popular handheld gaming consoles like the Nintendo Switch or the Steam Deck. However, the SuiPlay0X1 will differ through its deep integrations with crypto. Sui assets owned by users will be linked to their Playtron (the device creator) account, letting them access them from any such device. Users can log in through Sui’s zkLogin (which allows one to log in through web2 logins such as Gmail), and users can pay for traditional games using Sui’s wallet. The goal of this device is to make blockchain games first-class citizens with a crypto-friendly device, something that is just not possible with current devices given that it doesn’t support the simple infrastructure needed such as a wallet. Despite the strong blockchain support, the device will also support existing non-blockchain games from stores such as Steam and Epic.

Other notable crypto protocols have tried to launch hardware devices in the past. Most notably, Solana launched Saga, a purpose built mobile phone for crypto users, and more importantly, to break up the Apple/Google app store duopoly. Similarly, Aptos launched the Jambo phone, a low-cost entry-level mobile phone that aims to empower individuals in developing economies across Africa, Southeast Asia, and Latin America, costing only $99. The natural question to ask is, do any of these “crypto” hardware make sense?

The Solana Saga arguably only saw success due to BONK, with buyers receiving a BONK airdrop that handsomely covered the cost of the phone. Do we need a crypto phone? Probably not yet, or not until the high-cost Solana Saga can compete with the brand and functionality of existing behemoths such as Apple and Samsung. People don’t buy a phone so that they can access DeFi dApps, they buy a phone for the camera, the brand as a status symbol, the deep network of apps, good hardware performance, and interoperability with an existing ecosystem. Until crypto-specific phones can match all that, it’s hard to justify why it should exist. 

On the other hand, the Aptos Jambo phone lies on the opposite end of the luxury spectrum, a low-cost $99 phone that is attractive even in developing economies. For people in these economies, all they likely want is a hard, sturdy phone that has access to existing app stores and allows them to send messages and make phone calls among other basic functionality. In this scenario, the Jambo phone may be an attractive alternative, because even ignoring the fact that it’s a phone produced by a crypto protocol and all the associated crypto-specific features, it is fundamentally still a valuable and attractive product at that price point. The SuiPlay0X1 seems much more similar to the Solana Saga as of right now. Gamers still want a performant gaming device with a great library of games, and until blockchain games start regularly topping the charts and shaking up the entire gaming industry, it’ll probably be a while before a device like this takes off. As cynical as I sound right now, I appreciate the experimentation from crypto companies, and if anyone is going to usurp existing monopolies/duopolies, crypto might as well try to give it a shot.  — JC

Have you read the definitive history of Ethereum? No? Well then get your copy of Out of the Ether while you can.