Currently Relevant: Edition #24

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: After a difficult few weeks, money is flowing back into Ethereum ETFs. A new crypto wallet promises to combine the benefits of self-custody with the recoverability of a traditional bank card. The Japanese government thinks that Web3 networks are public goods — a bit like lighthouses — and it has outlined ambitious plans to build a network of public Web3 infrastructure. We also take a look at the biggest Web3 funding and adoption news.

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Ethereum ETF dry spell ends with millions in inflows

After a rough month for Ethereum which saw the value of Ether drop over 20%, this week brought some positive news for nervous investors. Spot Ethereum ETFs in the US were bolstered by $4.9 million in inflows on Monday followed by $24.3 million on Tuesday. The news comes after a CoinShares report indicating $176 million inflows into digital asset investment products last week, with Ethereum leading the way with $155 million. 

Cumulatively, the total net value of Ethereum ETFs now amounts to $7.65 billion, compared to $55.34 billion in the case of Bitcoin ETFs. Both the Ether and Bitcoin spot ETF markets are dominated by three fund providers: Grayscale, Blackrock and Fidelity.

Compared to the much hyped launch of Bitcoin spot ETFs in January, which culminated in BTC reaching a record high of $74,000 in March, the launch of the Ethereum equivalents last month has been more muted so far. This was mainly an issue of timing. Shortly after launch, the crypto market suffered declines which have been linked to a range of macroeconomic factors such as weaker than expected US job growth, the Bank of Japan’s surprise decision to raise interest rates, and a general sell-off of tech stocks and crypto tokens amid concerns that the promise of AI may have been overestimated. 

It will be interesting to track whether the positive ETF flows continue over the weeks to come, signaling renewed institutional confidence in the network. 

Key to Success?: G+D’s new wallet promises self-custody with recoverable keys

The old adage in the cryptocurrency space is “not your keys, not your tokens”. But for many users of self-custody wallets, the flip side of the argument is that if you lose your key, you lose your tokens. Now, German digital security provider G+D is promising the best of both worlds through the launch of a new cryptocurrency wallet solution. 

Dubbed Convego TruSafe, the product, which is aimed at the banking sector, promises to enable customers to store their assets in a self-custody wallet, but recover their key in the event they forget it. The assets are stored on a device that looks like a traditional bank card, but also contains a cold wallet for digital assets including your key. 

In the event you lose your wallet, you can request a new one online after providing biometric proof of your identity. But does this not defeat the purpose of Web3 by relying on a centralized authority? G+D have found quite a clever way of mitigating this problem. 

Described as a “distributed recovery solution”, your private key is initially formed from 3 parts, an anchor shard held on your newly issued bank card, another held by your bank, and one held by G+D. If you are issued a new card, you can simply tap it on your phone to regain access to your account. On the backend, the security key is reconstructed using your new anchor shard, combined with the other two parts held on the distributed servers. This new, complete key is then stored remotely on your card. 

Guiding Light: Japan’s vision for Web3 public goods 

Blockchains are a bit like lighthouses — a public good that benefits everyone. We build lighthouses to guide ships safely and avoid rocky terrain. Everyone in the shipping industry benefits from their existence and it is difficult to exclude any one ship from those benefits. 

This is the perspective that has informed a new Japanese government initiative to create “digital public goods” using Web3. The project is being coordinated and financed by the Ministry of Economy, Trade and Industry (METI) in collaboration with contract winners from the private sector including PwC and Rakuten. 

The drive is part of the Japanese government’s so-called “Society 5.0” vision, whereby physical and digital goods are integrated through public, decentralized platforms. In a video explaining the project, METI states that “in a world where centralized platforms are criticized, there is a need to establish an open and global value exchange platform”. The project provides government funding to companies building four categories of public goods: 

• a marketplace for real-world and intangible assets (contract won by Japan Cryptoasset Business Association, Leaf Publications and NTT Digital)
• smart contracts for portrait rights in the sports industry (contract won by Rakuten)
• guidelines for intellectual property protection (contract won by PwC)
• regional revitalization through governance tokens (contract won by Hiroshima Web3)

One of the first demonstration projects to emerge from the program is Sake World, a platform where users can purchase bottles of Sake that are authenticated via an NFC. The site lets users choose whether to ship the sake directly to their address or have it stored at a special facility for up to two years. Should they choose to store it they can trade the NFT on a secondary market, with the distillery getting a royalty on each transaction. While typically in Japan, you would need a liquor license to sell an alcoholic beverage, this platform gives all adults the ability to buy and sell it.

Web3 adoption round-up

• Web3-powered Olympic weather forecasts: There wasn’t an obvious Web3 presence at the Paris Olympic Games in terms of advertising, but behind the scenes DePIN weather stations were used to collect information about temperature, solar radiation, and air pressure. 
• FIFA teams up with Modex for Web3 push: Football’s world governing body FIFA has announced that it is partnering with Modex to enhance fan engagement using Web3. The partnership builds on its previous partnership with Algorand, which supports its NFT collections on the FIFA Collect platform.
• Samsung & Illuvium bring NFTs to TVs: Samsung has partnered with Illuvium, an interoperable blockchain game, to promote its Web3 TVs which incorporate support for displaying NFTs. 
• Now Lambo? Web3 gaming company Animoca Brands has partnered with sports car manufacturer Lamborghini to deliver “unique experiences” to fans and customers. 
• Sygnum sets sights on EU expansion: The Swiss cryptocurrency-focussed bank Sygnum is expanding its footprint in Europe. The plan envisages the opening of a new European office and obtaining the licenses necessary for a MiCA-compliant market entry to the EU/EEA. 

Funding round-up

• DePIN attracting investment: Decentralized physical infrastructure networks (DePIN) have been catching the eye of investors recently. Internet provider Andrena raised $18 million in an extended Series A led by DragonFly. Meanwhile, distributed energy project Daylight received $9 million through a Series A led by a16z.
• Morpho Labs nets $50M: The decentralized lending protocol Morpho Labs raised $50 million in a private token sale led by Ribbit Capital.
• Decentralized recruitment project secures $5M: Icebreaker, a decentralized recruitment platform which bills itself as “the world’s first open professional network”, raised $5 million in a seed round led by CoinFund.
• Bitlayer raises $11M: Bitcoin layer-2 platform Bitlayer raised $11 million in a Series A round led by Franklin Templeton.