This week In Crypto

This week in crypto: OpenSea's Head of Product fired for insider trading, Solana's outage, measuring global adoption, blockchain use in the supply chain, and plug and play miners.

Photo by Executium / Unsplash
Photo by Executium / Unsplash

OpenSea’s Head of Product Out After Insider Trading

This week, OpenSea’s Head of Product has left the company on news that he has been trading non-fungible tokens (NFTs) on insider knowledge of when the company will be promoting individual works.  OpenSea is the world’s largest exchange for NFTs, which have seen explosive growth in demand and valuations over the last few months.  In August, OpenSea had two million transactions and $3.4 billion in trade volume.

OpenSea features a constantly changing rotation of NFTs on their homepage.  The allegation is that Nate Chastain, OpenSea’s Head of Product, was buying these NFTs before they were featured in expectation that they would appreciate in value.  These exchanges were found by a twitter user, ZuwuTV.  Multiple Ethereum wallets were observed buying NFTs just before they were listed on OpenSea’s homepage; these were subsequently sold for a profit, which was then transferred to Chastain’s main wallet.  Just a few days after the tweet by ZuwuTV, OpenSea announced that “ . . . yesterday, we requested and accepted his resignation.”

This debacle was poorly timed for the company as it overshadowed the launch of their mobile app.  OpenSea is funded by well known venture capitalists like Coinbase Ventures, Andreessen Horowitz, Mark Cuban, and more.  Their recent funding round pushed the valuation of the company over the $1 billion mark.

Photo by Executium / Unsplash
Photo by Executium / Unsplash

Solana Outage Slows Growth and Demonstrates Project's Centralization

On September 14, the Solana network went down for over 17 hours. During the outage, Coinbase, Binance, and other exchanges suspended trading of SOL, locking up over $10 billion. Solana (SOL) ($47 billion market cap) had recently tripled in market cap, but in the days following this outage Solana lost over 20% of its value and has been slow to rebound.

Crypto projects can "go public" through an initial DEX offering (IDO), which is like an initial coin offering (ICO) but on a decentralized exchange (DEX).

According to Solana, the outage was caused by bots flooding the Solana network during an IDO on Raydium (RAY). These bots performed 300,000 transactions per second, which Solana could not handle. Apparently, a fix for this issue was already under development.

When the network was overloaded, Solana's engineers couldn't fix the issue using the current software release, so Solana upgraded and restarted the network.

Crypto engineers and investors tend to dislike projects with centralized control, but engineers continue to choose Solana due to its extremely fast transactions and low fees. This outage calls into question the reliability of Solana and all the projects built on it. Solana claims it will perform a thorough investigation of the outage and prevent similar issues in the future.

Photo by Jezael Melgoza / Unsplash
Photo by Jezael Melgoza / Unsplash

Just How Much Adoption Are We Seeing?

Over the past year, we’ve seen a deluge of stories about companies and countries adopting cryptocurrencies, but is it reasonable to really say we’re seeing “adoption”? Last month, the crypto analytics firm Chainalysis published a report ranking adoption by country, reporting that we’ve seen a global adoption leap of 880% when compared to the previous year.

From their report, Vietnam, India, and Pakistan are leading the way.  In fact, most of the top-20 are composed of countries with emerging economies, including many that have introduced legislation to handle the growth of cryptocurrencies.  Chainalysis attributes much of the emerging market growth to peer-to-peer platform use.  This is the most common on-ramp to cryptocurrency for individuals in these countries, largely because they often have minimal access to centralized exchanges that are available in the developed world.  The primary uses of crypto in this case are to combat inflation in their local currency, to send and receive remittances without being subject to large fees, and to use crypto as a means of exchange.

Some noteworthy countries in the top-20 are Nigeria, where 1 in 3 people use cryptocurrency;  Brazil, where trading volume is up 2,247% in the past year;  Venezuela, which has seen hyperinflation of over 2,000% annually; and Afghanistan (21st on the list), which has recently seen tremendous economic uncertainty as a result of Taliban rule.  Also listed within the top-20 were the US, China, Russia, and Brazil.

Photo by Jezael Melgoza / Unsplash
Photo by Jezael Melgoza / Unsplash

The Supply Chain is Using the Blockchain

International corporations are turning to blockchain solutions to manage their supply chains. Supply chain blockchain solutions offer solutions for tracking and authenticating materials through each stage of the supply chain, as well as payments.

Blockchain payment solutions can increase efficiency in the supply chain by triggering automatic payments from customer to vendor in particular situations, such as with delivery of a specific item.

Tracking and authentication solutions on the blockchain intend to help companies prove a product or material is authentic. Many supply chain cryptos also help companies track their materials through each stage in the supply chain. This tracking data also aids in product recall accuracy and environmental impact tracking and reporting.

Major Projects:

Ethereum (ETH) ($393 billion market cap) - Ethereum’s ERC-721 non-fungible token (NFT) standard allows for tracking everything in a supply chain efficiently. ERC-721 was used by Coca-Cola for a bottling supply chain test.

VeChain (VET) ($7 billion market cap) - Crypto project designed with supply chain management as a core functionality that has developed partnerships with major corporations in China and worldwide. VeChain allows companies to track materials throughout the supply chain in real time using real-world sensors and scannable QR codes.

IOTA (MIOTA) ($4.3 billion market cap) Private blockchain solution intended for enterprise customers with trade secrets and proprietary data. IOTA has established partnerships in agriculture and fashion.

Several smaller projects that focus on specialty business solutions have also gained traction:

OriginTrail (TRAC) ($182 million market cap) - a data exchange protocol for interconnected supply chains that recently doubled in market cap

Waltonchain (WTC) ($89 million market cap) - an internet of things (IoT) focused blockchain for supply chain management

Ambrosus (AMB) ($21 million market cap) - a blockchain specifically for supply chain management in the agriculture and pharmaceutical sectors

Photo by Joseph Greve / Unsplash
Photo by Joseph Greve / Unsplash

Plug-and-Play Miners

There are a number of crypto projects that have launched recently with a physical product that mines their crypto token.  These miners do a lot more than the typical GPU mining, and most contribute directly to the use case of the network.  The only thing they all have in common is that demand greatly exceeds supply – they’re mostly back ordered for months.  Here’s a list of the easiest miners to buy and immediately begin using with minimal technical set-up, called “Plug and Play” mining.

Helium (HNT) - Highly rated ones range from $150 - $430

Helium is a "proof-of-coverage" cryptocurrency project operating a global wireless network intended for internet of things (IoT) devices. The Helium network is powered by special hotspots that provide network coverage and mine HNT coins.  As far as the hotspot miners go, there is a wide range, but most are backordered for months.

Akash (AKT) - $975

Akash Network is the world’s first decentralized open-source cloud, providing faster, more efficient, and lower cost application deployments for high-growth industries including DeFi, decentralized organizations and applications, and machine learning/AI.  Their Supermini is sold out, but was listed at $975.  Technically, this isn’t a miner, but it offers compute power in exchange for tokens.

Deeper Network (DPR) - Starts at $249

Deeper Network combines blockchain, network security, and sharing economy to create a global peer-to-peer network that empowers the real users of the internet and paves the way for the next generation of the web.  Deeper Network has a number of devices available and a low electricity footprint.

TL;DR: Companies are beginning to launch hardware-based crypto projects building distributed networks working around wifi hotspots, distributed VPNs, distributed supercomputing, etc.  Since most of these projects are new, they’re still sold out and backordered.

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