Currently Relevant: Edition #23

Welcome to Currently Relevant, THE RELEVANCE HOUSE’s regular roundup curating the best of news, views, and stories from the blockchain, crypto, and Web3 space.

This month: Polkadot targets crypto newbies with a radically simplified app, the German government offloads $2 billion in Bitcoin, and BTC ETF inflows continue apace with Blackrock leading the pack, as the major players get ready for the expected launch of Ethereum ETFs next week. Meanwhile, we explore why some investors are happy they got robbed on Mt. Gox.

Polkadot announces new user-friendly app targeting newbies

Polkadot’s development arm Parity Technologies has announced a new app that is squarely focused on ease of use. The goal is to try to attract new users to the blockchain with a user experience that is more reminiscent of a traditional Web2 app. The designers have gone to considerable lengths to try to eliminate some of the pain points that typically hinder adoption.

Gone is the need to store or memorize seed phrases or passwords. Instead, users log in with a standard username, with credentials backed up to the Apple or Google cloud. While this use of centralized cloud providers will be controversial in some quarters, it will undoubtedly make the login process more convenient.

The app includes the features you would typically expect from a self-custodial wallet, such as the ability to transfer and manage DOT and to stake it to receive rewards. In addition, however, similarly to some Web2 payment apps like Twint or Paypal, it enables users to send DOT to any other person via a link in an SMS, Whatsapp message or email. Perhaps the most notable feature is the ability to pay with DOT at over 1 million stores in the US directly from the app and receive 20% cashback on every purchase. The new payment options are the fruit of a partnership with Raise, a fintech active in the US gift card and loyalty program industry.

The app was by no means the only interesting news at the event. Parity announced Agile Core Time, a new way for smaller projects to rent fractional space rather than an entire Polkadot core. The service is being pitched as being similar to a modern cloud offering. In addition, a new, universal ledger app was also recently announced, which promises convenient management of assets across the entire Polkadot ecosystem.

Why did the German government just sell $2 billion of Bitcoin?

The German government has just sold over $2 billion of Bitcoin. No, there isn’t a secret crypto whale in the Bundestag: the move is the result of the seizure of almost 50,000 BTC from defunct piracy site Movie2k in January by the Eastern state of Saxony.

Initially, BTC investors were spooked by the sale, leading to a steep fall in value in early July. But although $2 billion sounds like a lot of money, it pales in comparison to Bitcoin’s overall market cap of over $1 trillion. In addition, the Police Office, known as the “Bundeskriminalamt” or BKA, did seem to take some steps to reduce the impact on the market, splitting the sale over multiple exchanges and separating it into tranches sold over a few weeks.

Thus, the FUD proved to be temporary and BTC is back up above $57,000 at time of writing, marking a 122% increase over the past 12 months. But that hasn’t stopped some crypto pranksters having a bit of fun, by replenishing the government wallet with BTC “donations” after everything had been sold. In straitened economic times, beggars can’t be choosers — perhaps the embattled Bundesbahn could ask for a cut?

Blackrock continues to dominate BTC ETFs

Bitcoin spot ETFs saw a seventh consecutive day of positive flows on Monday, with $301 million flooding into the funds. As the largest of the SEC-approved ETFs, Blackrock continued to lead the pack with $117.25 million in inflows, closely followed by Ark Invest / 21Shares with $117.19 million, Fidelity with $36.15 million and Bitwise with $15.24 million. To date, BTC spot ETFs have garnered a cumulative total of $16.11 billion in inflows since their January launch.

First shots fired in Ethereum ETF fee battle

The news about BTC inflows came amid an expectation among industry sources that eight spot Ethereum ETFs will launch next Tuesday, July 23, including offerings from BlackRock, VanEck and Franklin Templeton.

As was the case the last time round, the competition is hotting up regarding fees. This week, BlackRock set a fee of 0.25%, compared to 0.19% for Franklin Templeton, and on the other end of the scale, 2.5% for Grayscale.

It is worth noting that most of the prospective Ethereum ETF issuers have also announced temporary fee waivers, as outlined in the table below.

Mt. Gox: A crypto hack with a happy ending?

In 2014, Mt. Gox became a byword for the dangers of centralized exchanges when a major hack caused the Japanese-based platform to file for bankruptcy. At its peak, it processed 70% of Bitcoin transactions, but its precipitous decline led to investors suffering $400 million in losses. So began a long, slow battle for investors to recover some of their funds through the Japanese court system.

“I’m happy I was dumb enough to use Mt. Gox”

Now, after much heartache and 10 years of stress, users are finally beginning to get their Bitcoin back. And in an unusual twist of fate, many of them are actually profiting from the ordeal. While victims will only get back about 15% of the Bitcoin they held on the exchange, the massive increase in price since then means that some are in for a windfall. Overall, around $9 billion worth of BTC is due to be disbursed at current market prices. One very honest Swedish customer, who was 17 at the time of the hack, summed up the mood, remarking “I’m happy that kid was dumb enough to use Mt. Gox… I know I would have spent all the coins way earlier if my hands weren’t tied”.

Other crypto news in brief

• JPMorgan-Backed Partior Secures $60M: The payments network Partior, which uses blockchain to enable programmable cross-border payments and foreign exchange transactions, has raised $60 million in a Series B funding round led by Peak XV Partners. The network aims to increase the efficiency of transactions while mitigating settlement risk. Partior is backed by some very prominent players from traditional finance, including JPMorgan and Standard Chartered.
• Web3 meets AI in new Grayscale fund: Grayscale has launched a new fund that focuses on the intersection between Web3 and AI, encompassing the tokens of protocols such as Near (NEAR), Render (RNDR), Bittensor (TAO), Filecoin (FIL) and Livepeer (LPT).
• Mira raises $9M for decentralized AI infrastructure platform: With AI continuing to dominate the headlines and the attention of VC funds, a new wave of Web3 startups are trying to build the infrastructure necessary to set it on a more decentralized footing. One such player is Mira, which has just raised $9 million in its seed round.
• Claude developer joins forces with Menlo for new AI accelerator: California-based VC firm Menlo Ventures has teamed up with AI company Anthropic to launch a new $100 million accelerator for startups leveraging generative AI. The program will provide startups with financing as well as access to Anthropic’s AI models, which underpin the popular Claude chatbot.

Crypto Checkout - Stripe’s EU upgrade: The global online payment company Stripe has expanded crypto payment support to the EU. The move means that e-commerce websites running on Stripe can now add a crypto purchasing widget to their checkout. KYC and all other regulatory responsibilities will be handled by Stripe.