Category Archives: Voices

Luna Foundation Guard’s Reserves Down to 313 Bitcoins from 80K post-UST Crash | Vitalik and CZ Take to Twitter

CoinDesk | Sam Kessler, Shaurya Malwa | May 16, 2022

moon over waterThe announcement comes after criticism of the Luna Foundation Guard's "lack of transparency."

The Luna Foundation Guard (LFG), official stewards of Terra’s bitcoin (BTC) reserves, released a statement on Monday documenting how it disbursed millions of dollars' worth of crypto in its failed attempt to maintain the peg of stablecoin terraUSD (UST).

In the statement, LFG notes that it has almost entirely depleted its BTC reserves from around 80,000 bitcoins to 313. The remaining assets, which mostly comprise the crashed UST and LUNA tokens, will apparently be used to compensate investors.

In one of the most calamitous events in crypto memory, the $40 billion Terra ecosystem collapsed last week when the UST stablecoin, which is supposed to be worth $1, dropped to below 20 cents. The LUNA token, which is designed to serve as a sort of shock absorber for UST’s “algorithmic” dollar-pegging mechanism, crashed from $80 to below 2 cents.

See:  Terra is transitioning from a dollar-pegged stablecoin to a bitcoin-backed stablecoin

In a tweet on Monday, LFG said it sold off most of the BTC in its reserves for UST as Terra’s ecosystem was beginning to collapse early last week.

  • May 8:  LFG said it transferred more than 50,000 bitcoins “to trade with a counterparty”, as the UST price was originally starting to slump.  It said the funds were used for “directly executing on-chain swaps and transferring $BTC to a counterparty to enable them to enter trades with the Foundation in large size and on short notice.”
  • On May 12, LFG said another 30,000 BTC from its reserves were sold off by Terraform Labs, the original company behind Terra, “in a last ditch effort to defend the peg.”  That, however, failed to restore UST’s peg to the U.S. dollar as traders continued to sell the token for other stablecoins, leading to an exodus of capital away from UST and thus lower prices.
  • LFG confirmed the remainder of its reserves, which once totaled over $3 billion, have sunk almost completely as a result of the unsuccessful effort to defend UST.  Says these funds will be used “to compensate remaining users of UST, smallest holders first.”

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Decrypt | Sander Lutz | May 15, 2022

Vitalik and CZ took to Twitter this weekend to critique Terra—and the very premise of the UST token itself.

In the aftermath of last week's historic collapse of Terra’s stablecoin, UST, and native token, LUNA, crypto leaders have emerged to offer their perspectives.  UST isn’t backed by cash or assets like other leading stablecoins. Instead, an algorithm ties UST’s value to LUNA via a burning/minting mechanism designed to keep UST at $1. That mechanism collapsed last week, wiping out UST and LUNA, and with them some $40 billion in value.

Vitalik Buterin, creator of Ethereum:

“We need to emphasize that the two,” Buterin said, referring to algorithmic stablecoins and asset-backed stablecoins, “are very different.  [The entire premise of UST] from inception [was] intentionally misleading and inherently flawed.

See:  Yellen Renews Call for Stablecoin Regulation After Terra’s algorithmic stablecoin tumbles

After days of uncharacteristic silence, Do Kwon reemerged on Friday with a new plan to resuscitate LUNA. The idea includes abandoning UST permanently and resetting LUNA to a 1 billion token circulation, with tokens to be distributed to both former holders wiped out by last week’s events, and to current holders.

ChengPeng Zhao, Binance CEO tweet:

  • “forking” LUNA, or splitting the blockchain to create a second version, “won’t work. [It] does not give the new fork any value.  That’s wishful thinking."
  • Zhao elaborated that the fatal flaw of such a strategy is Kwon’s failure to understand that “minting coins (printing money) does not create value, it just dilutes the existing coinholders.”
  • Zhao went further, openly questioning the transparency of Kwon and Terra’s handling of the crisis spurred by UST and LUNA’s collapse.  “Where is all the BTC that was supposed to be used as reserves?” Zhao wanted to know.

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NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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7 Essential Ingredients of an (Open) Metaverse Framework

a16z | Liz Harkavy, Eddy Lazzarin, Arianna Simpson  | May 10, 2022

open metaverse

There has been a lot of buzz about “the metaverse” since its coinage in the ‘90s, but especially during the pandemic (given the surge in online activity), and even more so after Facebook changed its name to Meta.

In many ways, the metaverse is just another name for evolving the internet: to be more social, immersive, and far more economically sophisticated than what exists today. There are, broadly speaking, two competing visions for how to bring this about:

  1. One is decentralized, generous with property rights and new frontiers, interoperable, open, and owned by the communities that build and maintain it.
  2. The other vision is centralized, closed, subject to the whims of corporations; and often extracts painful economic rents from its creators, contributors, and inhabitants.

An open metaverse is decentralized, allows users to control identity, enforces property rights, aligns incentives, and ensures value accrues to users (not platforms).

See:  CB Insights: Metaverse stack and companies making it a reality

An open metaverse is also transparent, permissionless, interoperable, and composable (others can freely build within and across metaverses), among other criteria.

Achieving a “true” metaverse — one that’s open versus closed — requires seven essential ingredients intrinsic to this sought-after state. We argue that these are necessary to meet the minimum requirement to be called a metaverse. Our goal is to clear the fog of misinformation about what is and isn’t a true metaverse for builders and would-be participants, and to provide a framework for evaluating early metaverse attempts.

  1. Decentralization
  2. Property Rights
  3. Self-sovereign identity
  4. Composability
  5. Openness/open source
  6. Community ownership
  7. Social immersion

We believe — as is evident in this framework — that a metaverse cannot exist without the fundamental foundations of web3 tech.

See:  Blockchain-based replacement for traditional crowdfunding: DAOs

Openness and decentralization are the pillars upon which the whole edifice rests. Property rights rely on decentralization — they must endure despite the influence of powerful adversaries. Community ownership prevents unilateral control of the system. The approach also bolsters open standards, which are helpful for decentralizing and composability, a closely related property downstream of interoperability.

The development of an ideal multi-dimensional virtual world will come about gradually. Many problems remain to be solved.

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NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Meta to Start Testing NFTs on Instagram (Facebook and Other Apps To Follow)

Go Banking Rates | May 9, 2022

Meta rolls out NFTs to instagramAdam Mosseri, head of Instagram, tweeted that the company [Meta] will begin to test digital collectibles this week “with a handful of U.S. creators and collectors who will be able to share NFTs on Instagram.” He added that “there will be no fees associated with posting or sharing a digital collectible on IG.”

NFTs on Instagram will have a unique “shimmer” effect to differentiate them from traditional images and photos, and will be attributed to both the collector and the original creator, according to Decrypt. In addition, Instagram will add support for NFTs on blockchains including Ethereum, Solana, Flow and Polygon.

See:  CB Insights: Metaverse stack and companies making it a reality

Some experts, however, voiced their dissatisfaction with Meta’s foray into NFTs. Hugo Feiler, CEO and co-founder at blockchain network Minima, told GOBankingRates:

While NFTs are decentralized and have the associated benefits of being tamper-proof and accessible, it seems that this approach by Meta to integrate NFTs on various platforms is another sign of them not truly understanding the purpose of the underlying technology.  Blockchain wasn’t meant to be leveraged by a few powerful parties to increase stickiness of their platforms and therefore ad revenue. It’s a technology that, when used right, empowers individuals, from artists to art lovers and anything in-between.

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Mark Zuckerberg | May 9, 2022

[Zuckerberg] enjoyed talking to Tom Bilyeu about NFTs, web3 and the metaverse. This week we're starting to test digital collectibles on Instagram so creators and collectors can display their NFTs on their profile. Similar functionality is coming to Facebook soon, along with augmented reality NFTs on Instagram Stories via Spark AR so you can place digital art into physical spaces.


NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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An Innovator’s Voice in government: Senator Deacon’s Second Reading on Bill S-6 (An Act respecting regulatory modernization)

Treasury Board of Canada Secretariat | Apr 28, 2022

Senator deacon

Backgrounder on Bill S-6

In the 2018 Fall Economic Statement, the Government of Canada introduced a requirement to ensure that Canada’s regulatory system continues to adapt to changing technologies and reflects the realities of Canadian businesses.

By seeking Parliament’s approval for regular, common-sense updates to existing regulations, the Government continues to facilitate innovation and business competitiveness, while continuing to protect Canadians’ health, safety, and the environment.

See:  Senator Peter Boehm and Senator Colin Deacon give Fintechs a Voice in Canada

Previously, the Budget Implementation Act, 2019, No 1 included a regulatory modernization component that modified 12 pieces of legislation and included changes to digitalize paper-based processes, enable innovation through regulatory sandboxes by allowing exemptions from certain regulatory requirements to test new products, and make changes in consideration of zero-emission vehicles.

If passed by Parliament, many of the proposed amendments stemming from Bill S–6 would reduce administrative burden for business, facilitate digital interactions with government, simplify regulatory processes, make exemptions from certain regulatory requirements to test new products, and make cross-border trade easier through more consistent and coherent rules across governments.

 

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NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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California governor Newsom embraces blockchain and issues executive order on crypto

CNBC | Yasmin Khorram | May 4, 2022

Gavin NewsomTech investors and businesses in California have been betting on crypto for well over a decade. Now, the governor of the U.S. state with the largest economy is joining the party.  If you are unaware of how to start an llc in california, then consider checking out startmyllc website.

California Gov. Gavin Newsom issued an executive order Wednesday on cryptocurrencies, laying out a road map for regulatory and consumer protections and examining ways the state can take advantage of blockchain technologies and digital assets.

Dee Dee Myers, senior advisor to Newsom and director of the Governor’s Office of Business and Economic Development:

Of the 800 blockchain businesses in North America, about a quarter of them are in California, dramatically more than any other state.  We’ve heard from so many that they want to be here, and we want to help them do that responsibly.

See:  Can Silicon Valley still dominate or are global innovators redrawing the map?

The order is designed to “create a transparent and consistent business environment for companies operating in blockchain, including crypto assets and related financial technologies, that harmonizes federal and California laws, balances the benefits and risks to consumers, and incorporates California values, such as equity, inclusivity, and environmental protection.”

The opportunities are almost endless.  We can do things like remove middlemen from transactions involving real estate or even automobiles. We can use it to protect people’s identity and provide benefits to people through government services. If we’re selling carbon offsets, we can make sure the same forest isn’t being sold twice and that there’s some record that’s transparent.

Under California’s plan, the order would align with the Biden administration’s proposal in March to examine the risks and benefits of cryptocurrencies.

Read:  Crypto’s use case during times of conflict

Some 37 states have pending legislation on cryptocurrencies and other digital assets, according to the National Conference of State Legislatures. In February, New Hampshire issued an executive order to propose new bitcoin laws.

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NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Dan Breznitz: Unless we change Canadian business, our kids will have a worse life than us

The Logic via National Post | Murad Hemmadi  | Apr 19, 2022

Dan BreznitzA prominent political economist and a frequent, vocal critic of federal innovation policy, Breznitz had spent years warning that declining productivity and business investment imperiled Canada’s long-term prosperity. Now Finance Minister Chrystia Freeland was standing in the House of Commons and announcing billions to fix the problems he’d identified.

For three decades in Canada, “we have been telling a story for ourselves that we’re great,” Breznitz says as we look over the menus. “We’re not.”

See:  Nov 20, 2017: NCFA Canada Welcomes Competition Bureau’s recommendations to encourage competition and innovation in Canada’s financial services sector

To hear him tell it, Canada has created the world’s most educated workforce and its best research infrastructure, but our businesses’ investment in R&D and adoption of new technology have lagged ever further behind the pack. “How could that happen in exactly the same period?”

The numbers back up the hand gesture. A larger share of Canadians hold a post-secondary credential than elsewhere in the OECD, and our higher-education institutions do more research. Meanwhile, our businesses spend far less on R&D and invest less in information and communications technology, while workers’ wages have grown slower.

“Our kids will have a worse life than us, unless we change Canadian business,” says Breznitz, who has two children. And “unless we do significant structural and systemic changes, it’s not clear how we are going to become a green economy without becoming poor.”

Breznitz is blunt about who he thinks is at fault for Canada’s economic woes.

Big business has become the problem,” he says, through its failure to innovate or adopt new technology.

Until very recently, economic growth was not in the top agenda of [the finance department],” Breznitz agrees. But that’s changed, and the private sector hasn’t. “Big business need to start engaging with new technology and innovation, and stop just complaining and bitching non-stop.

See:  Is productivity, wealth creation and competition at the forefront of Canada’s growth agenda?

Ottawa needs to kick-start this process of experimentation and discovery.  What I think it really means is a final realization that growth really matters for our futures.  It’s been years since someone in Freeland’s job talked about Canada’s productivity problem.

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NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Sequoi’s Shaun Maguire on decentralization and crypto venture conviction

TechCrunch | Lucas Matney | May 1, 2022

Shaun MacquireIn a conversation on TechCrunch’s new web3 podcast Chain Reaction, Sequoia crypto partner Shaun Maguire talked about the firm’s commitment to the sector, regulatory challenges and what plenty of crypto investors still don’t understand.

Earlier this year, Sequoia announced a $500 to $600 million sub-fund dedicated exclusively to buying up cryptocurrencies. The firm has made a number of equity investments in crypto startups over the years including Fireblocks and FTX, but while Andreessen Horowitz was early to commit to a dedicated crypto fund in 2018, Sequoia has continued made its equity investments through its general funds.

See:  Crypto dating show leverages Crowdfund to raise $6 million (including from Paris Hilton) to build ‘Netflix of Web3’

While the crypto industry continues to mint new unicorn startups, the rapid cooling of public market tech stocks has threatened to stall growth in the emerging category, which has still proven awfully susceptible to macro conditions. In our conversation, Maguire emphasized his belief that plenty of other funds dipping their toes into crypto “are going to pull back” when the market grows less frothy, but he believes that Sequoia has already committed to a lengthy relationship with the sector — “we have permanent intentions.”

The crypto category has dealt with plenty of skeptics, some in the venture capital community, who believe that the sector’s benefits are being oversold and that the web3 promise of decentralization is just smoke and mirrors.

Maguire says:

Decentralization is not a silver bullet that just solves all problems and is better for everything. You know for the vast majority of compute, you want it to be centralized. For a lot of decision making, centralization can be better for certain types of decisions.  More important than decentralization for its own sake, is the ability of users to 'be able to leave with their identity and data'

See:  A Normie’s Guide to Becoming a Crypto Person (and down the rabbit hole)

...an effort which should protect consumers from platform overreach. While decentralization allows for a certain type of consumer protections, Maguire still contends that the rulebook of traditional investor protections shouldn’t be thrown out.

I think people sometimes forget that a lot of the consumer protections put in place by US law were won out of hard-fought lessons over like a century. And there’s a lot of wisdom in there.

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NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter