The U.S. Treasury warned today that the NFT art market is susceptible to money laundering and other types of fraud.
It also suggested that some (but not all) NFTs can be considered virtual assets under Financial Action Task Force rules.
The Treasury did not directly comment on other issues in the NFT sector, such as plagiarism and phishing.
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Wikipedia may not consider NFTs to be art, but the U.S. Treasury apparently does, and it has observed their role in art-related crime.
Treasury Warns of Money Laundering
The U.S. Treasury acknowledged NFT-based art today, focusing on money laundering and possible regulation of the sector.
The Department of the Treasury published a press release and report on illicit finance in high-value art markets, in which it took particular note of the emerging NFT sector and its capacity for money laundering.
The Treasury specifically warned that NFTs can be used in self-laundering, a practice in which users spend funds on an NFT that they already own in order to create obfuscated transaction trails on the blockchain.
This sort of money laundering was one explanation offered when a CryptoPunk NFT was sold for more than $500 million in October 2021.
The Treasury additionally warned that the NFT market currently lacks of standard and due diligence and no central body. It argued that this can “create perverse incentives,” as automated and rapid NFTs sales can encourage money laundering. It noted that, by contrast, experts in the traditional art and auction industries tend to conduct their business much more carefully, with several institutional safeguards in place.
Further, the Treasury expressed the concern that “the incentive to transact can potentially be higher than the incentive to verify the identity of the buyer of the work.”
The Treasury did not directly address the issue of NFTs based on plagiarized media, which has been a growing issue. Nor did it address phishing scams, another frequent problem for NFT owners.
NFTs Could Fall Under VASP Rules
The Treasury observed that NFTs have moved a significant amount of value recently. It said that NFTs saw $1.5 billion in trading volume in Q1 2021—a 2,627% increase over the last quarter.
The government body also noted that NFTs that are used for payments and investments could be defined as virtual assets. As such, companies that create or transact NFTs could be considered a Virtual Asset Service Provider (VASP) and subject to regulation under Financial Action Task Force (FATF) rules.
It added that NFT platforms such as Dapper Labs, SuperRare, OpenSea, and art houses could fall under these rules “depending on the nature and characteristics of the NFTs offered.”
The Treasury also acknowledged that NFTs that primarily serve as collectibles “are generally not considered to be virtual assets.”
Guidance released by the FATF last October similarly suggested that NFTs could be considered virtual assets if they are used for payments, but otherwise fall outside that definition.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
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The United States Securities and Exchange Commission (SEC) has once again delayed its ruling on whether to approve Grayscale’s application for a Bitcoin (BTC) exchange-traded fund (ETF), citing familiar concerns around manipulation, liquidity and transparency.
In a notice published Friday afternoon, the SEC expressed concerns about how the digital asset manager intends to convert its Grayscale Bitcoin Trust (GBTC) into a spot ETF. Namely, the regulator wasn’t convinced that Grayscale’s proposal was designed to prevent alleged fraud and manipulation in the Bitcoin market. The SEC has invited the public to comment on these issues, giving interested parties 21 days to respond in writing.
The SEC has just delayed their decision on whether GBTC can convert to a bitcoin ETF.
— Pomp (@APompliano) February 4, 2022
As Cointelegraph reported, Grayscale’s initial application to convert shares of GBTC into a spot Bitcoin ETF was submitted to the SEC in October. Less than two months later, the securities regulator announced that it was postponing its decision on Grayscale’s application and a similar proposal put forward by Bitwise.
Grayscale is the world’s largest digital asset manager with $36.5 billion in assets under management as of Feb. 4. Its GBTC product accounts for over 71% of its total assets.
02/04/22 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
Related:Canadian Bitcoin ETF sees its third-biggest daily inflow ever
While the SEC has been hesitant to approve a spot Bitcoin ETF, the regulator has been much more receptive to a futures-linked product. In October, the ProShares Bitcoin Strategy ETF became the first Bitcoin futures fund to be approved in the United States. Shortly thereafter, the SEC approved a pair of Bitcoin-linked Strategy ETFs from Valkyrie and VanEck.
Fortescue Metals Group Chairman Andrew Forrest has filed a criminal case against Facebook in Australia for its failure to stop scam ads featuring his image. According to the Australian mining billionaire, this is the first time that Facebook is facing a criminal charge anywhere in the world.
“I’m doing this on behalf of innocent Australians who don’t have the resources to take on companies like Facebook,” Forrest said in his lawsuit.
Following Forrest’s criminal suit, the Australian Competition & Consumer Commission (ACCC) has reportedly started an investigation.
“While Dr. Forrest’s proceedings concern similar advertisements to those that the ACCC is investigating, the ACCC’s investigation is separate and concerns different questions of law. Dr. Forrest’s proceedings have been brought under the Commonwealth Criminal Code,” ACCC Chair Rod Sims told The Australian.
Forrest’s Lawsuit
Forrest alleged that fake crypto investment ads on Facebook used his image to claim that the mining billionaire endorsed certain investment schemes, and it resulted in many conned people. According to Forrest’s lawyers, Facebook “knowingly profits from this cycle of illegal ads,” and it amounts to a violation of anti-money laundering laws.
They also noted that Forrest had spent thousands of dollars since 2019 when these ads started appearing to dissociate himself from the false claims.
In an open letter in November 2019, Forrest asked Mark Zuckerberg to stop fake ads on Facebook featuring his face as an endorsement of the crypto investment schemes. But there was no appreciable change in the social media’s ad policy, and ads featuring celebrity testimonials continued to appear as sponsored posts. However, the Australian financial watchdog cautioned investors about fake crypto ads and sites with celebrity testimonials.
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Meta, the parent company of social media giant Facebook, offered a clarification without acknowledging Forrest’s lawsuit. It said, “We don’t want ads seeking to scam people out of money or mislead people on Facebook – they violate our policies and are not good for our community.”
Where is the Problem?
Social media companies often blame “cloaking” for dubious ads to bypass the checks. Cloaking is a process that lets scammers show different content when it’s being reviewed by social media filters, while the actual ad to run on the platforms could be different.
“I want social media companies to use more of their vast resources and billions of dollars in annual revenue to protect vulnerable people who are targeted and fall victim to these scams,” Forrest said in his lawsuit.
“Like Dr. Forrest, we consider that Meta should be doing more to detect, prevent, and remove false or misleading advertisements from the Facebook platform so that consumers are not misled and scammers are prevented from reaching potential victims,” Sims from ACCC said.
Earlier this week, Facebook’s parent company Meta revealed disappointing Q4 2021 results, leading to a substantial double-digit price decline of its shares in after-hours trading.
Featured Image Courtesy of The West Australia
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GameStop has sold nearly 15 million IMX tokens in the past few days.
Immutable, the developer of Immutable X, has so far sent around 37.5 million IMX tokens to GameStop, with around 15 million more to come.
Yesterday, Immutable announced it had been tapped by GameStop to help build its NFT marketplace.
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GameStop has dumped almost 15 million IMX tokens it had received as part of a development deal with Immutable.
IMX Floods Market
Yesterday, Immutable, the developer of Ethereum Layer 2 scaling solution Immutable X, announced a partnership with GameStop that included building out its NFT marketplace.
As part of the deal, GameStop was set to receive up to $150 million worth of its IMX token in grants upon the completion of certain milestones. Transaction records on Etherscan indicate that GameStop received has received more than 37.5 million IMX tokens over the past four days.
Since then, GameStop has dispensed with 14,989,293 of those tokens.
Over a series of three transactions—two of which took place two days prior to the partnership announcement, and one which took place a few hours after the announcement—GameStop moved the roughly $44 million in IMX to centralized exchanges Binance, Huobi, and OKX.
With a current circulating supply of around 225 million, 15 million IMX tokens represents about 6.5% of the token’s supply.
The flood of IMX tokens onto the market has likely contributed to its sharp price decline in the past day and a half. Following Immutable’s announcement yesterday, the IMX token reached prices of over $4.20, but today the token sits under $3 at press time, representing a 40% price decline.
Immutable X is a Layer 2 NFT protocol for Ethereum that allows for quick transactions without gas fees. It utilizeszero-knowledgerollups to scale on Ethereum.
In September, Immutableraised$60 million in funding for its Immutable X scaling solution platform.
Down from its highs of around $380 per share last January, GameStop stock hovers slightly above $100 at press time. It is up around 3% today.
Disclosure: At the time of writing, the author of this piece owned IMX, ETH, and several other cryptocurrencies.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
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Video game retail giant GameStop is entering the crypto world through a partnership with an Ethereum-based digital assets marketplace.
In a new press release, GameStop says they are teaming up with Ethereum layer-2 scaling solution Immutable X (IMX) to create a joint non-fungible token (NFT) marketplace.
“Immutable X will also become a layer-2 partner and platform for GameStop and the company’s NFT marketplace that is expected to launch later this year.”
The deal will establish an up to $100 million fund in IMX coins to kickstart the creation of NFTs, and the possibility of earning $150 million more in tokens if certain achievements are met.
“The partnership establishes an up to $100 million fund in Immutable X’s IMX tokens, which the parties intend to use for grants to creators of non-fungible token content and technology…
In addition, the terms provide for Immutable X providing up to approximately $150 million in IMX tokens to GameStop upon the achievement of certain milestones.”
The gaming retailer first stated its intentions to create an Ethereum-based NFT marketplace last May, though they had not yet picked a partner at that time.
News of the partnership sent Immutable X skyrocketing, as the token went from a seven-day low of $2.49 to a peak of $4.13 in just a few days, a staggering 66% increase. IMX has since stabilized and is exchanging hands at $2.94 at time of writing.
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Featured Image: Shutterstock/Natalia Siiatovskaia/WindAwake
GameStop has sold nearly 15 million IMX tokens in the past few days.
Immutable, the developer of Immutable X, has so far sent around 37.5 million IMX tokens to GameStop, with around 15 million more to come.
Yesterday, Immutable announced it had been tapped by GameStop to help build its NFT marketplace.
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GameStop has dumped almost 15 million IMX tokens it had received as part of a development deal with Immutable.
IMX Floods Market
Yesterday, Immutable, the developer of Ethereum Layer 2 scaling solution Immutable X, announced a partnership with GameStop that included building out its NFT marketplace.
As part of the deal, GameStop was set to receive up to $150 million worth of its IMX token in grants upon the completion of certain milestones. Transaction records on Etherscan indicate that GameStop received has received more than 37.5 million IMX tokens over the past four days.
Since then, GameStop has dispensed with 14,989,293 of those tokens.
Over a series of three transactions—two of which took place two days prior to the partnership announcement, and one which took place a few hours after the announcement—GameStop moved the roughly $44 million in IMX to centralized exchanges Binance, Huobi, and OKX.
With a current circulating supply of around 225 million, 15 million IMX tokens represents about 6.5% of the token’s supply.
The flood of IMX tokens onto the market has likely contributed to its sharp price decline in the past day and a half. Following Immutable’s announcement yesterday, the IMX token reached prices of over $4.20, but today the token sits under $3 at press time, representing a 40% price decline.
Immutable X is a Layer 2 NFT protocol for Ethereum that allows for quick transactions without gas fees. It utilizeszero-knowledgerollups to scale on Ethereum.
In September, Immutableraised$60 million in funding for its Immutable X scaling solution platform.
Down from its highs of around $380 per share last January, GameStop stock hovers slightly above $100 at press time. It is up around 3% today.
Disclosure: At the time of writing, the author of this piece owned IMX, ETH, and several other cryptocurrencies.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
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The cryptocurrency market has an interesting way of catching even the most seasoned veterans off guard as each bull and bear market initially shows similarities to previous cycles only to veer off in an unexpected direction and wipe out the fortunes of newly minted crypto millionaires.
This was the case with the weak close of 2021 which completely went against the bullish $100,000 BTC price estimates that crypto analysts and influencers were peddling nonstop.
Currently, Bitcoin price is more than 50% away from its $69,000 all-time high and altcoins have fared worse, with many down more than 60% in the last 2 months. In times like these, traders need to regroup and re-evaluate their investment strategy, rather than just buying every price dip.
Here are five strategies traders can use to survive an unexpected crypto winter and retain as much value in one’s portfolio as possible.
Reduce exposure to highly volatile altcoins
Once a widespread market downturn commences, the first step to take is to reevaluate current positions and reduce exposure to the most volatile assets.
Oftentimes these are new projects that have come out of the trending sectors of the crypto market such as meme coins, NFTs or rebase projects like Wonderland (TIME), because many of the token holders are new to the community and not long term investor like the user bases for more established projects.
$TIME to pack it up. pic.twitter.com/hJI3jB6eU0
— humble defi farmer (@PaikCapital) January 25, 2022
A good way to begin the evaluation process is by looking at a project’s GitHub account to see the level of activity and the number of developers dedicated to building out the protocol.
If there is hardly any development despite flashy marketing gimmicks and big promises, the project may be one an investor should cut when the market begins to lose momentum.
Traders could then put these funds in stablecoins that can be staked to earn yield or buy future market dips.
Dollar-cost averaging
Dollar-cost averaging (DCA) is the process of buying an asset in tranches over time to average out the price paid and account for volatility-induced changes in price.
There’s a reason that bitcoiners have the most aggressive dollar-cost-averaging community.
They correctly identify work and true scarcity, and understand it. It’s hard to rival that force and utility of something that *can’t* be increased in supply.
— Lyn Alden (@LynAldenContact) January 31, 2022
While DCA strategy is a good way to increase exposure to fundamentally sound projects over time, it is usually best to wait until after the dust has settled somewhat and a period of consolidation has commenced.
The focus of dollar-cost averaging should be on projects that have active development, engaged communities and a roadmap that lays out how the project will continue to grow and remain viable in the future.
Staking
Staking is perhaps the simplest way to increase the value of a portfolio long-term and it removes the pressure of obsessing over daily price fluctuations since the staked asset is continuing to accrue tokens.
Most layer-one protocols offer the ability to stake their native token on the network to earn a yield, including Solana, Cardano, Polygon and Avalanche.
Ether holders can also stake their tokens on the beacon chain for Eth2, but it’s important to note that staking rewards will not be able to be claimed until Eth2 is fully launched.
There are many other staking options out there from gaming protocols like Axie Infinity and Illuvium to NFT marketplaces like LooksRare, so once a deep dive has been made and fundamentally sound projects are chosen, staking becomes a matter of setting it and forgetting it.
Find projects with growing ecosystems and perks
Projects that help token holders earn via staking, liquid staking, borrowing and airdrops are also worth considering when the market turns bearish.
Staking is the simplest form of this as the number of tokens increases over time, but other options include token launchpads, NFT marketplaces and protocols known for offering airdrops to community members.
One example of a protocol where early adopters are being rewarded is the Cosmos (ATOM) network and its growing community of projects connected via the Interblockchain Communication Protocol (IBC).
Best site to keep track of @Cosmos Airdrops https://t.co/XzOOIb5TAG
Builders: submit your upcoming airdrop on that site if you want to increase awareness.@CosmosUplink pic.twitter.com/IPoDqZ8ymp
— Cryptocito | YouTuber ⚛️ (@Cryptocito) January 26, 2022
ATOM stakers and those who have engaged with the Osmosis (OSMO) decentralized exchange have been rewarded with a long list of airdrops from projects launching within the ecosystem as a way to help bootstrap activity within their communities.
Invest in yourself
One of the most personally beneficial things an investor can do during a down market is to invest in themselves by learning something new.
Not only will this help investors to avoid the urge to sell and miss out on future gains, but it can also lead to new avenues to build wealth.
Level up and invest in yourself:
– read more books
– work out well more often
– spend time with family and friends
– take a course and learn a new skill
– invest in a hobby to share w/others
You get out of life what you put into it.
Find your values and invest in them.
— Wealthy Tree (@WealthyTree) February 1, 2022
Despite the market downturn, cryptocurrencies continue to advance along the path to mass adoption and the number of jobs in the blockchain sector is only going to increase moving forward.
Whether it’s learning to program in Solidity, experimenting with graphic and digital design to create a new line of NFTs or just doing research to gain a deeper understanding of the various sectors of the market.
Ultimately, the key to surviving a bear market is staying positive and being patient.
Want more information about trading and investing in crypto markets?
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
CryptoPunks creators Larva Labs apologized for selling old “V1” CryptoPunks NFTs from a scrapped smart contract.
The firm suggested potential legal action against the community-led project, which “wraps” the discarded NFTs to make them functional.
Larva Labs’CryptoPunksare considered by many to be the gold standard ofEthereumNFT profile pictures, with the collection generating billions of dollars in sales as Crypto Twitter’s preferred status symbol. However, its star may be fading somewhat due to recent events, and now Larva Labs is facing fresh scrutiny for its own actions.
When the CryptoPunks were first minted in 2017, a glitch in the originalsmart contract—the code that programsNFTcollections and decentralized applications—prompted Larva Labs to scrap the first edition and reissue the NFTs. The second edition eventually became crypto-famous, with some$2 billion in trading volumeto date, perCryptoSlam.
However, some of those “V1 CryptoPunks”NFTs have been “wrapped”via a community-made smart contract and reissued as ERC-721 Ethereumtokens, each with a different background color than the standard Punks. That makes it possible to sell the NFTs as historical relics—with interest and prices rising of late.
“This recovery of the original Punks smart contract is a community-led and rapidly-growing phenomenon consisting of original Punk claimants, NFT historians, digital archeologists, and extremely talented developers,” reads the unofficialV1 Punks website.
Larva Labs recently went on the offensive, suggesting that they weren’t “real” CryptoPunks NFTs. However, the creators were sending mixed messages, selling off dozens of their own V1 Punks while claiming that they shouldn’t be considered legitimate CryptoPunks.
PSA: “V1 Punks” are not official Cryptopunks. We don’t like them, and we’ve got 1,000 of them… so draw your own conclusions. Any proceeds will be used to purchase real Cryptopunks!
— Larva Labs (@larvalabs) January 25, 2022
“PSA: ‘V1 Punks’ are not official CryptoPunks,” Larva Labstweeted on January 25. “We don’t like them, and we’ve got 1,000 of them… so draw your own conclusions. Any proceeds will be used to purchase real CryptoPunks!”
On Wednesday, in a statement posted to the official Larva Labs discord, co-founder Matt Hall apologized for selling its own V1 Punks, calling the move “stupid” and a “bad decision.”
“We made a mistake by interacting with this contract,” Hall said of wrapping and selling the V1 CryptoPunks. “We thought that by announcing our intentions and selling some of the tokens, we would signal our distaste for it, and maybe others would follow. That was a bad decision. We regret it, and we apologize to the community.”
Hall said that Larva Labs generated 210 ETH (about $622,000 today) from the V1 NFT sales and used some of it to purchase one of the standard (V2) CryptoPunks. The team plans to spend the rest of the funds buying back additional CryptoPunks NFTs, and will also match the amount with a further 210 ETH donation to The Rainforest Foundation.
“We feel like we’ve had a well-principled approach to the CryptoPunks project from the very beginning up until the moment we did this stupid thing,” Hall added. “We’ve learned a hard lesson, but hope something good can come of it via this donation.”
CryptoPunks collapse?
Reactions to Larva Labs’ announcement have been widely negative. That continues a growing trend among some holders of the 10,000 CryptoPunks NFTs, as the community reckons with their place in the evolving NFT space, what utility (if any) they should provide, and what Larva Labs’ role should be in their future ahead.
In recent months, some CryptoPunks holders havecomplained about the state of the project, particularly the still-unclear extent to which holders can commercialize their owned image(s). Other complaints have come regarding Larva Labs’ increasingly hands-off approach, which stands in stark contrast to some newer, popular profile picture (PFP) projects.
TheBored Ape Yacht Club(BAYC) has rapidly become the other giant in the NFT space, and the differences between them are significant.
Bored Ape holders can use their owned images for any purpose—including merchandise, metaverse bands, and brand promotion—plus Yuga Labs has provided holders with additional free NFTs, exclusive merchandise and events, and more. It’s a private club loaded with perks and a public-facing avatar for social media cachet, no less.
Celebrities have recently flooded into the Bored Ape Yacht Club, as well, raising the NFTs’ mainstream profile—and quite likely their asking price too. In December, the floor price (or cheapest available NFT) for Bored Apespassed that of CryptoPunks for the first time, and the gap has only widened of late.
As of this writing, theBored Ape floorsits above 100 ETH ($294,000) compared to CryptoPunks at 69 ETH ($203,000). CryptoPunks trading volume also dropped 28% from December 2020 to January 2021, per data fromCryptoSlam, despite awider NFT market upswing.
Also in December, notable NFT collector andNouns projectco-creator 4156sold his namesake CryptoPunks NFTfor $10.26 million worth of ETH. He decided to exit the project due to Larva Labs’ handling of the IP rights situation, including attempts to remove unofficial derivative projects via DMCA takedown requests—such as the reverse-facing CryptoPhunks.
Larva strikes back
That last detail is key, because in yesterday’s statement, Hall hinted that Larva Labs will pursue some kind of legal action around the Wrapped V1 CryptoPunks.
“We originally didn’t go after the V1 project for copyright infringement of both the art and the CryptoPunks name, because we didn’t want to give it any additional attention,” he wrote, “but now many CryptoPunks owners have called for us to take action, and we agree with them.”
“Let there be no confusion about the legitimacy of this ‘V1’ project,” Hall continued. “It has no right to use the art or the name. We will be taking appropriate steps in the coming days.”
.@larvalabs just dumped 210 eth worth of v1punks on buyers that they will be taking legal action against. You can’t make this shit up.
— Chopper (@chopper__dad) February 2, 2022
What that move might look like is currently unclear. Larva Labs could potentially issue DMCA takedown notices against marketplacesOpenSeaandLooksRarefor letting users trade the NFTs, for example, or target the V1 Punks marketplace website orthat of the smart contract used to wrap V1 Punks.Decryptreached out to Larva Labs for comment, but we did not hear back.
Hall’s announcement regarding the V1 project—particularly with the suggestion of legal action after Larva itself sold wrapped NFTs from it—has been met with vocal criticism from holders. Some see the move as being anti-community, anti-blockchain, and anti-decentralization, continuing some of the other recent debates around CryptoPunks.
“I have never seen any team bungle a project with such desirable IP as Larva Labs has done with CryptoPunks,” collectorDCinvestor tweeted. “At this point, I do think the move is to convey individual IP rights to ‘official’ Punk NFT holders à la BAYC. That’d nullify most of the mess they’ve created.”
Another prominent NFT collector, Anonymoux,tweeted a threadabout their own personal saga with CryptoPunks—and the decision to sell and move on following Larva Labs’ disclosure. Anonymoux wrote that they had felt “anxiety” around the project recently, but that it “melted away” after choosing to depart the CryptoPunks collective.
“It is time to sell Punk #2311,” they wrote. “I wouldn’t own stock in a company where the executives constantly tripped over their own feet. Not going to do it here either. Thank you Punks for playing a large part in my NFT journey.”
Will V1 thrive?
What about the Wrapped V1 CryptoPunks then? Larva Labs’ next moves are currently unclear, but the V1 NFTs remain available for purchase from marketplaces—and some collectors have made bets on their sustained or potentially expanding value ahead.
On Wednesday, prior to Larva Labs’ announcement, NFT investment fundMeta4 Capitalannounced that it purchased a pair of V1 CryptoPunks: one for 1,000 ETH (almost $2.8 million) and another for 200 ETH (about $556,000).Meta4 tweetedthat the prices reflected an offer worth one-quarter of the estimated value for the “real” or V2 version of each Punk.
While we take a long term buy-and-hold approach, and firmly believe we are acquiring rare digital antiquities, we are very much cognizant of the risk/reward profile for the assets we’ve acquired: v1 Punk 5905 (Alien) and v1 Punk 5795 (Ape). pic.twitter.com/qMm2fKR4b0
— Meta4 Capital (@Meta4Capital) February 2, 2022
Meta4 Capital Managing Partner Brandon Buchanan toldDecryptvia email on Thursday that he respects Larva Labs and its co-founders, Hall and John Watkinson, and their need to protect the IP and oversee the CryptoPunks ecosystem. He called them “thoughtful and innovative in a nascent asset class wherein rules and standards are mostly being made on the fly.”
Still, Buchanan doesn’t think the creators “should be concerned with being the arbiter of taste; let the market dictate taste or distaste as it may be.” Instead, he suggested that Larva Labs should focus on driving value to NFT holders and listening to the community. “Once Larva Labs and its holders are fully aligned, I think more value will be unlocked,” he added.
In its original Twitter thread, Meta4 Capital pointed to the history of defective versions of products commanding a premium on secondary markets. The V1 Punks are based on code that Larva Labs deployed to an immutable blockchain platform—it’s not a knockoff, even if Larva takes exception with the way that they’ve been brought back to life.
“This isn’t really a copyright issue,” Buchanan suggested, “as they’re trying to police secondary markets for an asset that had already been distributed and claimed.”
“There’s a long history of collectibles (like comic books) having errors or being recalled, and they being sold on secondary markets,” he continued. “I view V1 Punks in that same sort of mode. I actually think this is an exciting development for Larva Labs, and the history/lineage should be embraced rather than repelled.”
Matt Sanders (a.k.a. M. Shadows), the singer of metal band Avenged Sevenfold and creator of the Deathbats Club NFT collection, likewise toldDecryptthat he believes that both V1 and V2 CryptoPunks are “authentic and valuable in their own ways.” Like Meta4, he owns both V1 and V2 CryptoPunks.
In music we have demos and iterations before the finished product. IMO that is where v1’s land. V2’s are the OG’s meant to be enjoyed by the creators. I love listening to demos of great songs… but it would be disingenuous of me to claim “the demo” as the true version. pic.twitter.com/qiUXdIXKNq
— M. Shadows (@shadows_eth) February 2, 2022
Sanders likened the V1 Punks to a band’s demo recordings, which can help provide a historical record of art and develop the narrative around it. Some fans or collectors might even find the V1 or “demo” versions more meaningful, he said—but as a creator himself, he suggested that Larva Labs’ perspective on what constitutes “real” CryptoPunks should be honored.
“Most collectors will prefer the ‘official’ seal of authenticity of V2, which is what the original creators intended to be the final, published product,” said Sanders. “That distinction matters: it was the creators’ intention, which rightfully confers a certain status.”
Cardano announced its Hydra protocol last year and has continued to develop on it ever since. The project which finally gained smart contract capability in 2021 has been making strides in proving that it is a force to be reckoned with in the space. Its decentralized finance (DeFi) space has begun to take off. Now, it offers insight into the Hydra protocol and how much progress the team has made with scaling it.
Hydra Has Evolved
In a recently published report on its official website, the developer behind Cardano known as IOG has provided more information on what the project Hydra is up to. It explains where the protocol is now if far from where it is coming from. Hydra which was created by the Ouborous team to increase throughput, minimize latency, and provide cost-efficient solutions without sacrificing storage resources continues to evolve.
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Hydra has now matured into a proof of concept protocol, something that was not in the initial roadmap. This has pushed the project towards “a more defined implementation for the testate MVP.”
There are different Hydra Heads, which involve a robust network layer between Cardano and other blockchains, as well as other smart contracts that will drive the lifecycle of a Hydra Head. Acting as a mini-ledger, it works similarly to the on-chain main ledger of the Cardano network, but on a smaller scale, as well as off-chain.
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With the consensus algorithm provided on this protocol, all parties involved in a transaction need to agree before it is allowed to go through. This provides a very high level of security for those using the protocol.
“A consequence of this is that, as a participant, I cannot lose money I haven’t explicitly agreed to lose. Why? Because any valid transaction requires my explicit approval,” the report reads.
Cardano Heading To A Million TPS
One of the selling points of the Cardano network is how many transactions per second it can process. The proof of stake network is significantly faster than ethereum, its leading competitor. The project is committed to improving the TPS. However, that is not all Hydra is about.
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Although TPS can sound like an important metric, the report establishes that it is the least meaningful metric to use when carrying out a comparison since transactions can come in different shapes and sizes. Yes, the blockchain is working towards more scalability but “scalability isn’t about a million TPS.”
Instead of looking at TPS, the report asks to look at throughput, finality, and concurrency, since these metrics rank as more important in the grand scheme of things. These three metrics represent volume, speed, and amount of work done, the report says.
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