Eterna's Insights - September 2022

The Merge is Finally Here

It has been a very busy month in the world of crypto. The biggest highlight was the long-awaited and highly anticipated completion of the Ethereum Merge. Ethereum successfully completed its shift away from Proof of Work to Proof of Stake consensus following the merge of the Mainnet and the Beacon Chain on September 15th. The key advantage of the Merge is that Ethereum’s energy usage will be reduced by 99%.

Another Hack

Security weaknesses have long been a problem in crypto, and unfortunately another major exploit occurred this month. Crypto market maker, Wintermute, was hacked for $160m from its decentralized finance unit. The attack was likely the result of a hacker exploiting an old Wintermute wallet address which still retained administrative access to their vault contract. As of now, none of the funds have been reclaimed, in spite of a $16m reward for the return of the funds.

Web3 Moves

Starbucks officially announced its new Web3 initiative, called Starbucks Odyssey. The new initiative allows Starbucks Rewards Loyalty Program members in the US to earn and purchase digital collectible stamps in the form of NFTs. Polygon was selected as the initiative’s blockchain provider. According to reports, members will be able to engage with various activities which Starbucks calls “journeys”. As these journeys are completed, members can collect early digital collectibles in the form of NFTs. Robinhood has begun rolling out a beta version of its non-custodial wallet to 10k customers. The product, called Robinhood Wallet, will launch exclusively with Polygon, and will allow users to access dApps directly on the Polygon network, including DeFi apps such as Uniswap, Balancer and Kyberswap. Ahead of the release, Robinhood also listed USDC for traders.

NFTs Galore

LG announced the launch of a NFT marketplace called LG Art Labs, which will allow users to discover, buy, sell, and trade NFTs on LG’s smart TVs. It partnered with Hedera Hashgraph for its NFT integration. Auction house, Christies, launched a new on-chain Ethereum NFT marketplace called Christie’s 3.0. According to Christies, the new platform allows for NFT auctions to be conducted entirely on the Ethereum network from start to finish. Ahead of the 2022 Qatar World Cup, FIFA launched an NFT based collection of FIFA World Cup and FIFA Women’s World Cup moments, called FIFA+ Collect. The new platform will run on Algorand.

Entertainment’s Embrace of NFTs

Ticketmaster announced that it has partnered with Flow blockchain from Dapper Labs for NFT tickets. This comes following a 6-month pilot program where Ticketmaster automatically issued ticket NFTs as memorabilia to attendees of specific events, including the Superbowl. Ticketmaster has now built a wallet and marketplace feature into its site, which will allow NFT ticket holders to view and trade NFTs they receive. Warner Music Group entered the world of Web3 following an announcement that it is partnering with NFT marketplace, OpenSea, to provide a platform for select musical artists to build and extend their fanbase into the Web3 community. The new feature will enable artists to launch their NFT collection and limited-edition projects on their own customizable and dedicated drop pages.

Metaverse ETFs

Franklin Templeton launched a Metaverse ETF for European investors. The fund, named the Franklin Metaverse UCITS ETF, will track Solactive Global Metaverse Innovation Net Total Return Index. This includes companies that have significant exposure to the metaverse, including blockchain applications, examples being Block, Electronic Arts, and Galaxy Digital.

It has also been reported that BlackRock is following suit with plans to launch a new ETF aimed at capitalizing on metaverse-facing companies, called the iShares Future Metaverse and Communications ETF.

Institutional Plays

In what has been a landmark moment for the crypto industry, KKR announced that it will be tokenizing its Health Care Strategic Growth Fund. Individuals will be able to invest in KKR’s health-care fund through a tokenized feeder on Avalanche, with the hope that the tokenized health-care fund will provide a more accessible investment vehicle to individual investors.

It was reported that Nasdaq is creating a new group to offer digital asset custody services to institutional clients, starting with BTC and ETH. In addition, the firm hired Ira Auerbach, who previously led prime broker services at crypto exchange Gemini, to lead its new Digital Asset Business. Furthermore, Société Générale expanded its cryptocurrency asset management services by introducing new services for its asset manager clients looking to develop crypto-based funds. According to the release, those services will allow asset managers to act as fund custodian, validator, and liability manager, with these tools designed to facilitate the addition of cryptocurrencies into institutional investors’ portfolios.