- “Ethereum momentum – In Ethereum we are witnessing the evolution of the substrate of humanity’s social, economic and political operating system. In 2023, Ethereum will continue to be the most widely adopted, widely developed and capital-heavy layer 1 blockchain. The Merge was the greatest event in the industry since Satoshi’s Bitcoin Genesis Block in 2009. More nuanced but equally important developments will launch on Ethereum in 2023, driving greater adoption and capital in a flywheel effect that will situate Ethereum as the leader in the next bull run.
- Fed outlook – The Fed will turn dovish, setting the stage for the next crypto bull market in Q3 2023. By this time, I also predict sufficient regulatory progress will be made in the crypto industry, meaning that the risk-on environment will be accompanied by clearer policies. Altogether, this will engender the next bull run beginning in Q3 2023.
- Regulations in D.C. – Consumer protection will be top of mind for policymakers in 2023. The majority of emerging policy will be around centralized exchanges and stablecoins. A regulatory ontology should be defined to help everyone in the space determine whether a specific token should be classified as a commodity, security, or other type of asset.
- Chartered banks – Banks chartered by the Federal Reserve will offer crypto services.
- More NFT utility – In 2023, the Web3 ecosystem will move past the “jpeg” era of non-fungible tokens that dominated the last two years. A variety of use cases will emerge, all using NFTs as the base technology.
- Investment DAOs – Investment DAOs will grow in prominence as decentralized, secure and transparent alternatives to investing through GP/LP venture structures.
- Filecoin future – Filecoin becomes a fully fledged layer 1 protocol in its own right, paving the way for the world’s largest decentralized data economy. The protocol is releasing smart contracts in Q1 2023 through the Filecoin Virtual Machine (FVM). The FVM will enhance the sophistication of Filecoin’s storage services while unlocking a whole new universe of use cases for the Web3 space.
- Web3 reputation – In 2023, years of progress on the decentralized identity and reputation front will finally come to a head. These systems will start to become critical pieces of infrastructure underpinning most of our interactions and transactions, especially in Web3.
- ZK everything – Zero-knowledge proofs rose to prominence in the past year, with one use case, ZK-Rollups, gaining visibility as the dominant tool for Ethereum scaling. In 2023, a much broader set of use cases will be unlocked by adoption of software development kits (SDK) that allow ZK smart contracts to be programmed into applications (“ZKApps”), executed off-chain, with verification and settlement back on-chain. Off-chain execution opens up a whole new world for data privacy and attestation, and efficiency. It will start to bridge the gap between Web2 and Web3, and will enable new identity use cases, social networking, voting, games and zkML. The zero-knowledge proving market will be larger than bitcoin’s proof-of-work (PoW) market by 2030.
- Web3 gaming – The next wave of Web3 games will look nothing like the Axie-style games of the last two years, and will begin resembling mainstream gaming aesthetics.
- Layer 2 – in 2023 we will see layer 2s come to the forefront of crypto adoption as they handle the wave of consumer applications coming to market.
- Zombie chains – The remaining vaporware blockchains will finally lose their positions as “top” blockchains as even speculative money leaves their ecosystems. For years, vaporware blockchains like EOS and Cardano have remained among the “top” blockchains as measured by market cap. These projects are still riding off of hype from their earliest days, having undergone almost no ecosystem development despite the breakneck innovation happening across the rest of Web3. The death knell will toll for these vaporware blockchains as they finally lose the last remaining mainstream supporters under the undeniable lack of on-chain adoption.
- Enterprise ethereum – In 2023, we will see the “Great Decoupling” and the consequent acceleration of enterprise adoption of Ethereum. As explained by Paul Brody, the Great Decoupling is when ‘the value proposition of Ethereum as a computing platform for enterprises finally gets separated from the focus on the price of Ethereum and financial speculation.'”
“A creditor committee that includes crypto exchange Gemini has presented a plan to Genesis and Digital Currency Group (DCG) to ‘provide a path for the recovery of assets.’
Earlier reports pegged the value of the total amount owed to Gemini at $900 million, from a total of $1.8 billion owed to the creditors’ group. The committee expects a response this week.”
“Sen. Pat Toomey introduced a bill in the final days of the congressional session that he said he hopes will act as a guide for stablecoin legislation next year.
I hope this framework lays the groundwork for my colleagues to pass legislation next year safeguarding customer funds without inhibiting innovation.
The retiring senator’s legislation, introduced Wednesday, would retain privacy for stablecoin transactions, set up the Office of the Comptroller of the Currency as a licenser of companies issuing payment stablecoins, let nonbank entities issue the tokens and clarify that stablecoin issuers that don’t offer interest wouldn’t have to worry about securities laws. It would also require the digital tokensbe fully backed by reserves.
His new legislation is pointedly meant to keep the Federal Reserve away from this sector, avoiding what he termed a potential conflict of interest if the Fed is authorized to create a digital dollar in the future.”
“Core Scientific (CORZ), one of the largest bitcoin (BTC) miners by computing power, filed for bankruptcy protection on Wednesday and reached a deal with some of its lenders to restructure its debt. Shares of Core Scientific were down over 27% at $0.1519, during pre-market trading.
Core Scientific reached an agreement with some of its creditors, in what appears to be a prepackaged bankruptcy. Existing convertible note holders will “equitize their debt into a significant majority of the common stock of the reorganized company,” the mining firm said. This support will help it go through the bankruptcy process, which it intends to do “swiftly,” the press release said.
These funds, along with ongoing cash generated from operations, are anticipated to provide the necessary financing to effectuate the planned restructuring, facilitate the emergence from Chapter 11, and cover the fees and expenses of legal and financial advisors.
Core Scientific is one of several miners struggling to keep afloat as rising energy prices increase costs, while stubbornly low bitcoin prices slash revenue. The bankruptcy of Core Scientific, which accounts for about 10% of computing power on the bitcoin network, operating 143,000 mining rigs and hosting another 100,000 is the biggest yet. Compute North, another major firm in the space, filed for Chapter 11 bankruptcy in late September.
Core Scientific’s estimated liabilities are between $1 billion-$10 billion, according to the filing. It has around 1,000-5,000 creditors. The miner’s estimated assets are between $1 billion-$10 billion, according to the filing. At the end of the third quarter, Core Scientific’s assets stood at $1.4 billion, whereas its liabilities were about $1.3 billion.”
“The Bahamas has determined that the provisional arrest, and subsequent written consent by SBF to be extradited without formal extradition proceedings satisfies the requirements of the Treaty and our nation’s Extradition Act.
Bankman-Fried reportedly changed his mind about fighting extradition over the weekend.”
“Credit institutions and payment service providers will manage services associated with a digital euro issued by the European Central Bank, according to the bank’s latest progress report on a retail digital currency. The ECB will supervise the intermediaries and handle the issuance and redemption of the CBDC.
Intermediaries supervised by the ECB will function as the direct counterparts for individuals, merchants and businesses, using the CBDC. Their responsibilities would include offering user-facing services, such as opening accounts or wallets, payment instruments and onboarding and offboarding, encompassing know-your-customer and anti-money laundering checks. They would also provide devices or interfaces to pay with a digital euro in physical stores, online or person-to-person.”