Gate.io Podcast: Dogecoin Spiked As Elon Musk Joins Twitter Board, US Sanctions Russia_s Darknet Market & Crypto Exchange
This episode is brought to you by Gate.io and League Of Ancients (Airdrop). One of the most trustworthy crypto hardware wallet brands Ledger launches Nano S Plus hardware wallet for NFT support while semiconductor manufacturing titan Intel doubles down on ESG with the launch of Blockscale ASIC second-gen Bitcoin mining chip. US imposes sanctions on Russian darknet market Hydra and crypto exchange Garantex. Followed by a Deep-Dive on discovering the inescapable controversy over the two most popular NFT markets in 2022.
In today’s Headlines:
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Dogecoin Rallies Again After Elon Musk Joins Twitter Board | 1 | 2 | 3 |
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Ledger Launches NFT-focused Hardware Wallet While Promoting Crypto Education In The Metaverse | 1 | 2 |
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Lightning Labs Raises $70M to Bring Stablecoins to Bitcoin | 1 | 2 |
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Intel Launches New Bitcoin Mining Chips Focused on Sustainability | 1 | 2 |
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US Sanctions Russia's Largest Darknet Market Hydra And Crypto Exchange Garantex | 1 | 2 |
Deep Dive: The Dark Side of the NFT Market | 1 | 2 | 3 | 4 |
Introduction:
Welcome back to the Altcoin News Podcasts, this is the show to get a neutral perspective on some of the latest headlines in DeFi, Metaverse, NFTs, and Big Tech. Brought to you by Gate.io, a centralized exchange with a neutral stance on current events and uphold privacy & security.
The information presented in this podcast is to help you stay up-to-date on the latest happening in the crypto space, and nothing presented hereby is financial advice. The news that I cover in this podcast will have the original source at your discretion. Stick by this podcast as I show you how to stay vigilant and learn to do your own research.
Now, without further ado.
Dogecoin Rallies Again After Elon Musk Joins Twitter Board | 1 | 2 | 3 |
It was revealed on Monday that Elon Musk, the CEO of Tesla, took a 9.2% stake in Twitter, a stock purchase worth just under $3 billion, this makes him the largest stakeholder in the platform. The news instantly pumped Twitter shares by more than 22% in early trading and Dogecoin, the cryptocurrency that Musk owns and frequently supports, immediately spiked 10% on the news.
Regulatory filings show that Musk filed a form 13G with the agency on April 4, officially reporting his ownership of more than 5% of Twitter. The form, however, states the person acquiring said securities is doing so “not with the effect of changing or influencing the control of the issuer,” which would include joining the board. If the buyer of shares wishes to become an activist or join the board, that would require the filing of a form 13D, in which those intentions would be stated.
A follow-up report on Wednesday noted that as part of the deal to join the board, Musk had agreed to not bring his stake any higher than 14.9% from the current 9.2%. Dogecoin then experienced the second spike in two days on Musk/Twitter-related news. While Monday’s move quickly reversed, DOGE had continued to rise and topped $0.16 for the first time in two months.
What Elon Musk’s investment could mean for Twitter’s crypto plans
Twitter CEO Parag Agrawal and Musk exchanged tweets Tuesday morning expressing their excitement and interest in working together. Agrawal expressed that “Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to the board.” while Musk stated that “Looking forward to working with Parag and Twitter board to make significant improvements to Twitter in coming months!”
Over the past few months, Musk has promoted dogecoin, even allowing for DOGE to be accepted for payment at Tesla’s supercharging stations and its online merchandise store. Now, being the largest individual owner of Twitter shares and a board member, Musk might push for DOGE payments to somehow be integrated into the social media company’s platform.
“Free speech is essential to a functioning democracy,” Musk tweeted on March 25, “Do you believe Twitter rigorously adheres to this principle?” He added that the “consequences of this poll will be important. Please vote carefully.” A day later, Musk insinuated that he might be looking to start a new social media platform.
Apart from Musk using this event to tweet a funny poll, there was no official announcement regarding the billionaire’s plans for the company. However, given the history of both the Tesla CEO and the social media company with crypto, one possible hypothesis would be that the event will further Twitter’s exploration of more crypto and blockchain-based features.
On the other hand, Twitter has also been dabbling into blockchain-based technologies such as nonfungible tokens (NFTs). Apart from this, Twitter also supports tipping with crypto through its tipping jar function.
Ledger Launches NFT-focused Hardware Wallet While Promoting Crypto Education In The Metaverse | 1 | 2 |
Ledger announced on Tuesday that it was launching a brand new wallet specializing in nonfungible tokens (NFTs). Launched in 2014, Ledger is one of the world’s largest providers of hardware cryptocurrency wallets, the company has sold over 4.5 million wallets and launched six different wallets so far.
The new product, called Ledger Nano S Plus, is the next generation to the original Nano iteration released in 2016 and is the sixth hardware wallet produced by Ledger since the company introduced its first wallet HW1 back in 2015. The product is also the first hardware wallet that Ledger has released since the debut of the Ledger Nano X in 2019.
Ledger Nano S Plus is designed with NFT collectors' needs in mind and combined with the recent support of “clear signing” technology through Ledger Live aims to provide a safer user experience for Web3 customers. Clear signing technology is able to provide all the details of a transaction, removing the risk of "blind signing," or consenting to a potentially risky transaction.
Ledger chief technology officer Charles Guillemet had previously warned users about the risks of blind signing blockchain transactions in the aftermath of a major phishing attack targeting the world’s largest NFT marketplace OpenSea in February.
According to chief experience officer Ian Rogers, while the new Ledger wallet natively supports the secure management of NFT transactions, some previous iterations of Ledger wallets have also supported NFTs, Rogers noted:
“Ledger Nano users have always been able to store NFTs on their devices through partners, on the Ledger Nano X, and now Ledger’s software application Ledger Live prioritizes NFT support where users can view their NFTs in Ledger Live and securely transact through clear signing.”
Ledger partners with The Sandbox
Ian Rogers also announced another news at Non-Fungible Conference on Monday, which was they had partnered with blockchain game The Sandbox to promote crypto education in its virtual world. He said that the new partnership aims to bring security into The Sandbox’s world and provide Ledger with a place in the metaverse to educate people about crypto.
A spokesperson for Ledger said that the company plans to announce more details about the partnership at a later date.
Lightning Labs Raises $70M to Bring Stablecoins to Bitcoin | 1 | 2 |
Bitcoin-focused company Lightning Labs has raised $70 million in a Series B funding round led by Valor Equity Partners, with participation from Baillie Gifford, Robinhood CEO Vlad Tenev, Goldcrest Capital, and others.
The funding will help enable stablecoin transactions on the Lightning Network using Lightning Labs’ new Taro protocol. Bitcoin’s Taproot upgrade, which went live back in November 2021, is what made the Taro protocol technically possible. Taro—whose name was inspired by the taro root plant—allows developers to move stablecoins from the Bitcoin network to the Lightning Network.
The Lightning Network is a layer-two solution for Bitcoin transactions, enabling instant, low-fee transactions with Bitcoin—but without using Bitcoin’s blockchain verification for each transaction. Lightning Labs builds features for the Lightning network. It’s already developed a few different products, including Lightning Pool for Bitcoin liquidity.
Lightning Labs CEO and Co-Founder Elizabeth Stark believes Taro will enable further Bitcoin adoption because it will allow those without bank accounts in developing countries to send and receive money in the form of stablecoins, which are designed to hold their value relative to currencies like the Mexican peso or U.S. dollar, through mobile applications.
Bitcoin’s Lightning Network is currently being used by the country of El Salvador, the Bitcoin payments company Strike, Twitter's tipping feature, and the Kraken cryptocurrency exchange, to name a few. Now, anyone looking to transfer stablecoins will be able to do so through the Lightning Network.
How it works
Lightning Labs describes Taro as an asset overlay network on Bitcoin. The security of Taro is based on embedded consensus, which means that transactions on Taro include Bitcoin data that needs to be verified on the Bitcoin blockchain.
There are additional rules to govern that data as defined by the Taro protocol, similar to how LN is an overlay network that uses Bitcoin smart contracts but has its own set of rules to enable the instantaneous transfer of BTC.
These are rules the Bitcoin blockchain doesn't necessarily care about. Most importantly, Lightning Labs released the technical specifications for Taro as a Bitcoin Improvement Proposal (BIP) so that the protocol can be built with feedback from the broader developer community.
While Taro might become available first on land, Lightning Labs’ implementation of LN, its status as an open-source protocol will allow other popular LN implementations, like ACINQ’s eclair or Blockstream’s Core Lightning, to use Taro. A critical distinction between Taro and other stablecoins, is that Taro is only the infrastructure to enable the movement of assets over Lightning, be they stablecoins or some other asset. Taro is not a stablecoin, collateralized, algorithmic or otherwise, it is simply infrastructure to enable the movement of assets. Developers still need to build projects using Taro.
Intel Launches New Bitcoin Mining Chips Focused on Sustainability | 1 | 2 |
Semiconductor manufacturing titan Intel unveiled its new Bitcoin (BTC) mining chip, Blockscale, On Monday. Building on years of Intel research and development (R&D), this application-specific integrated circuit (ASIC) will provide customers with energy-efficient hashing for proof-of-work consensus networks.
For proof-of-work algorithms that are compatible with ASIC-based systems and SHA-256 hashing, the Intel Blockscale ASIC will provide the energy efficiency and computing power needed to achieve scalability and sustainability. And given the nature of the silicon powering this technology, Intel will be able to supply it in volume without compromising the supply of new CPUs or GPUs.
Compute requirement for blockchains utilizing proof-of-work consensus mechanisms is growing at a rapid rate due to their resiliency and ability to scale without sacrificing decentralization. This growing pool of computing power requires an enormous amount of energy, necessitating new computing technologies that can provide the requisite power in a more energy-efficient manner while also being durable enough to mitigate long-term e-waste concerns.
As told by Intel, Blockscale will have a hash rate of up to 580 gigahash per second (or 0.58 terahash per second, TH/s), consuming between 4.8 to 22.7 watts of power, and having an energy efficiency of up to 26 joules per terahash (J/TH). Each chip can be combined and merged into a single mining unit, increasing its output with a maximum of 256 integrated circuits per chain.
In comparison, Bitmain's Antminer S19 Pro, one of the leading Bitcoin mining machines on the market, has a hash rate of 110 TH/s, consumes 3,250 watts of power, and possesses an energy efficiency of 30 J/TH. Theoretically, a mining unit composed of 256 Blockscale chips would have a total hash rate of 148.5 TH/s and consume between 1,228 to 5,811 watts of power at around the same energy efficiency.
Intel says shipments of Intel Blockscale ASIC to customers will begin in the third quarter of 2022. Argo Blockchain, Block, Hive Blockchain Technologies and GRIID Infrastructure will be among the first companies to develop new systems based on Intel’s ASIC.
US Sanctions Russia's Largest Darknet Market Hydra And Crypto Exchange Garantex | 1 | 2 |
In a Tuesday announcement, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) said it had worked with the Department of Justice, the Federal Bureau of Investigations, the Drug Enforcement Administration, the Internal Revenue Service Criminal Investigation and Homeland Security Investigations to sanction the Russia-based darknet marketplace Hydra Market, as well as virtual currency exchange Garantex.
The move from the U.S. government agencies came the same day when the German Federal Criminal Police announced it had shut down Hydra’s servers in Germany and seized more than $25 million worth of Bitcoin (BTC) connected to the marketplace. Launched in 2015, Hydra is titled as the “ the most prominent Russian darknet market, and the largest darknet market left in the world” on the Treasury’s official press release.
Garantex was founded in late 2019 and originally registered in Estonia. The majority of Garantex’s operations are carried out in Moscow. The U.S. government agency alleged Garantex had “willfully disregard[ed]” Anti-Money Laundering and Combating the Financing of Terrorism requirements imposed by many regulators on virtual currency exchanges. In addition, it hinted the firm was run by individuals exhibiting a “wanton disregard for regulations and compliance.”
According to the Treasury Department, the sanctions were part of an international effort aimed at “[disrupting the] proliferation of malicious cybercrime services, dangerous drugs and other illegal offerings.” Treasury Secretary Janet Yellen said ransomware operators and those engaging in other cybercrimes were able to operate in Russia “with impunity,” posing a potential threat to U.S. interests.
In addition to sanctioning Hydra and Garantex, OFAC has identified over 100 virtual currency addresses associated with the entity’s operations that have been used to conduct illicit transactions.
As a result of today’s action, all property and interests in property of the individuals and entities described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.
Sponsor | League of Ancients
Before I continue with today’s deep dives, I must tell you about today’s sponsor, League of Ancients, the world's first Free-to-Play and Play-to-Earn crypto MOBA game, native to the BNB Chain.
MOBA refers to Multiplayer Online Battle Arena, where two teams of players compete against each other on an enclosed battlefield. MOBA games are fun and addictive, and have achieved enormous success in the industry. League of Legends and Defense of the Ancients 2 (Dota2) - the biggest titles in the genre - have a combined total of 120 million active users.
Inspired by Dota 2 and League of Legends, League of Ancients aims to bring the best 5v5 PVP Metaverse gaming experience to Android and iOS users. 10 players will be thrust into the game’s Ancient Realm tileset map which is divided into two sides called the Luminous and the Dark Souls. The objective of the game is to destroy the base of the opposing team.
Seeing the potential of the MOBA game, the project has received US$100K in pre-sales so far. Some notable partners aiding in LOA’s funding include Gate.io Labs, Kucoin Labs, OKEx Blockdream Ventures, Master Ventures, and LD Capital, to name a few.
With P2E mechanics embedded, the game is free to play, and players will earn small amounts of $LOA (the game's native cryptocurrency) simply by playing and winning battles. The earned tokens can then be used to buy new items or skins—often regarded as the in-game NFTs—which can then be traded on external NFT marketplaces for crypto or real-world money.
LOA was set to launch its own NFT marketplace by the end of Q1 2022, according to its roadmap. By early March, the interface and functionalities of the marketplace were already completed and ready for roll-out. However, the team finally made the decision to delay as they dived deeper into testing and QC phase and promised to take the responsibility to preempt and minimize risks as much as they can.
Although an exact date is not able to be provided as the team is still waiting for their smart contract to clear the audits, you can get a head start on LOA NFT Marketplace by participating in our podcast airdrop!
6,100 $LOA tokens are reserved for 50 podcast listeners until April 14. What’s more, we also have an exclusive airdrop for our Turkish listeners! 50 winners are going to share $500 SLC tokens! Do not miss out!
DD | The Dark Side of the NFT Marketplaces | 1 | 2 | 3 | 4 |
The glories of the NFT market
NFT exploded in 2021, and the number of websites that facilitate NFT transactions has been springing up on a much larger scale. These platforms are known as NFT marketplaces where users can mint, list, buy, and sell crypto arts and digital collectibles.
The industry has become more gorgeous by capturing the attention of several A-list celebrities, sports stars, and veteran investors, including Shawn Mendes, Melania Trump, Paris Hilton, Tom Brady, Mark Cuban, Justin Bieber, John Legend, and many more.
According to a Chainalysis report, in 2021 alone, the NFT marketplaces recorded a massive inflow of more than $40 billion worth of assets traded across different platforms. And data from DappRadar revealed that NFT sales volume totaled $24.9 billion in 2021, compared to just $94.9 million the year before.
Among them, just as we reported in the previous episode, OpenSea is no doubt the “King” in this market as transaction volume on OpenSea surpassed $14 billion last year, up by a factor of 646 compared to 2020.
Entering 2022, another NFT market growing at a rapid pace, On Jan. 13, LooksRare’s sales volumes were more than five times higher than OpenSea, yet it did so with less than 3,000 users, compared to OpenSea’s 70,000. What's more, it achieved this only three days after its launch!
However, do you know what is hidden behind these impressive figures?
Is OpenSea a sea of fakes?
For as long as NFTs have existed, artists have complained that scammers have stolen their work and minted it on the blockchain. Countless works had been listed without the owners’ knowledge on OpenSea. Bots can scrape artists’ online galleries easily, or just use keyword searches on Google Images, and then create collections with auto-generated texts. Finally, those listings have proliferated on OpenSea.
Many experts have said that OpenSea has conceded that approximately 80% of the works on its platform are not authentic. According to NFTTheft, a collective of artists highlighting fraudulent listings, OpenSea allows the creation of NFTs using “lazy minting,” where users list NFTs for sale without writing them to the blockchain. Sellers don’t pay fees until an NFT sells, allowing scammers to list as many stolen items as they want in the hopes of nabbing a sucker. While other marketplaces allow “lazy minting,” OpenSea’s popularity and its spotty vetting system make it an ideal place for bots to lurk.
Earlier last year, DeviantArt introduced Protect, an image recognition tool, to notify users of copyright infringement on NFT marketplaces, leading to a flood of matches. But once artists get tipped off about the thefts, it’s up to OpenSea to get those listings removed. As you may have guessed, it would take weeks for artists to complete a separate request for each of tens of thousands of fraudulent listings, as required by OpenSea.
Last December, Lois van Baarle, a massively popular Dutch illustrator, was able to get over 100 stolen listings taken off OpenSea in 48 hours after blasting the company on Twitter. But her case is the exception. Artists with smaller followings have reported waiting weeks or even having takedowns denied.
A class-action lawsuit could succeed if artists can prove a platform is “encouraging and profiting from a continued and persistent practice of infringement,” according to Tonya Evans, a professor at Penn State Dickinson Law School who specializes in technology and intellectual property law. But marketplaces are protected from liability so long as they adhere to the Digital Millennium Copyright Act (DMCA), which can shield platforms from user-generated copyright infringement.
Attorney Vivek Jayaram also stated that absent a letter that brings specific violations to their attention, operators like OpenSea are free to scoop up transaction fees while conducting no due diligence about products sold on their website. Remarkably, OpenSea told The Wall Street Journal in February it would let anyone mint unlimited NFTs without checking to ensure whether the minted works were infringing, fraudulent, or counterfeit.
This is because, under the Section 230 of the Communications Decency Act (CDA), website operators like OpenSea can claim immunity for a variety of conduct that may occur on the site and for which they lack specific knowledge. To be clear, however, Section 230 immunity does not apply to claims for intellectual property violations.
However, in assessing secondary liability claims for copyright and trademark infringement, federal courts have taken a somewhat analogous “230-like” approach in applying the Copyright Act to marketplace infringement. These courts conclude that if website operators do not have “specific knowledge” of infringement, they won't be held liable for fakes sold on their sites.
What helps LooksRare beat OpenSea?
Debuted on Jan. 10, LooksRare transacted over US$1 billion in sales after 3 days while its total sales figures are more than 40% of OpenSea’s entire sales volume for the first week, according to DappRadar.
While LooksRare’s figures may seem hard to believe, the platform’s controversial incentive structure reveals how this may have been possible. LooksRare launched by airdropping its native LOOKS token to any OpenSea customer who had spent more than 3 ETH in the second half of 2021. This tactic is known as a “vampire attack” — when one platform uses incentives to lure away users from another.
It also rewards users with LOOKS based on total volume traded, raising concerns much of the total sales volume came from wash trading — a process where users buy and sell their own NFTs to generate rewards. LooksRare says its systems ensure that any wash trading would be unprofitable, as daily LOOKS rewards are fixed while each transaction incurs fees, disincentivizing the practice.
However, about $18 billion of the trading volume on the platform, or about 95% of the total activity, can be attributed to what’s often referred to as wash sales, according to the latest data compiled by NFT tracker CryptoSlam.
