Coinbase Summer Bash 🪩 🎉
Results are out, Coinbase dances with regulators, parties with Coca-Cola. July: Not so good for NFTs. BlackRock: Not so eco-friendly. Journalists gonna be jobless?
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Coinbase is getting legal with SEC again - filing order seeking dismissal of SEC lawsuit.
Paul Grewal, chief legal officer at Coinbase, said that he would seek to dismiss the Securities and Exchange Commission's suit, arguing that the crypto exchange never sold securities as the regulator alleged.
During their earnings call, Grewal expressed major confidence.
"We do think we can win. We expect to win."
But beyond just the court case, Coinbase's main goal is to get some regulatory clarity. They want to clear up the confusion and conflicting messages in the crypto space. It's not just about winning in court, it's about winning understanding.
"The reason why we are so focused on pushing for regulatory clarity here in the U.S. is that at present, under the status quo, we have very conflicting messages about what the law provides," he said. "Regardless of any particular outcome on any motion or any court case, clarity itself is the goal. That's how we define winning."
Coinbase Q2 Performance:
Net Revenue: $663 million
Down 10% from Q2 2022 but beat estimates
Net Loss: $97 million
Narrower compared to Q2 2022
Adjusted EBITDA: $194 million
Up from an EBITDA loss of $151 million in the prior year
Total Transaction Revenue: Down 13% compared to Q1
$327 million in transaction revenue
37% drop in overall trading volume
Non-trading Revenue: Surpassed trading revenue
$335.4 million of net revenue from subscriptions and services
Consumer Trading Volume: Dropped 33% in Q2
Institutional Volume: Down 37%
What's paying off?
Custody deal with BlackRock
Institutional focus
Growing Market dominance in US.
SEC isn't backing down
Last month, SEC lawyers argued that the crypto exchange was fully aware that it violated securities laws, dismissing Coinbase's claim that its 2021 registration statement approval meant the SEC's enforcement action had no merit.
The SEC's stance is firm, emphasising that Coinbase, being a multi-billion-dollar entity with sophisticated legal counsel, cannot plead ignorance of the law. They assert that approving the registration statement did not grant blanket approval for all of Coinbase's past and future business activities.
“Our agency has put out rules about what it is to be an exchange, what it means to be a broker-dealer, what it is to be an adviser of custody and assets, and how to register a securities offering,” SEC Chair Gary Gensler said in May.
Base is almost here:
Coinbase is about to unleash its layer-2 blockchain, Base, to the public on August 9. Base has been under wraps, but it's finally stepping into the limelight. The blockchain, built with Optimism's OP Stack, has been tested by developers in July. And now, the time has come.
Now users can bridge their ETH to the new network.
Onchain Summer
To celebrate the occasion, Coinbase is throwing an explosive "Onchain Summer" party.
As part of "Onchain Summer," Coinbase has partnered with mainstream brands like Coca-Cola, Atari, OpenSea, Pixelmon, and Showtime to offer daily mints of on-chain collectibles. These collectibles will cover everything from art and music to gaming and advocacy.
Coinbase is in a generous mood and is giving away over 100 Ethereum in grants to teams building apps on Base. That's $183,000 worth of Ethereum up for grabs!
TTD NFTs 🐝
July: Not so good for NFTs
In July, the NFT market experienced a chilly freeze under the ongoing crypto winter. According to a report from DappRadar, the numbers paint a bleak picture for NFTs.
Freezing Stats
NFT trading volume declined by a staggering 29%.
The number of sales dropped by 23% compared to the previous month.
Floor prices of top-tier collections like Bored Ape Yacht Club and Azuki reached two-year lows.
A Bigger Worry
Looking back at the beginning of 2023, the decline is even more alarming. NFT sales dropped a whopping 49% from January to July, and trading volume plummeted from $1.1 billion in January to just $600 million in July.
Not all hope is lost, though. The Polygon network saw a surge in activity, with 772,424 traders dominating the sales count with 27% of all trades in July. Brands like Starbucks, Reddit, and Nike have chosen Polygon for their Web3 digital collectible efforts.
Shift in Top Collections
The report also noted intriguing changes in the top collections. While Yuga Labs' Bored Ape Yacht Club retained its crown as the most traded collection, it was the only Yuga Labs collection in July's top ten. This marks a stark contrast to a few months ago when Yuga Labs dominated over 50% of every ranking.
Alchemy Web3 Development Report:
The NFT market may be facing a rough patch with a 41% decline in trading volume, but the Web3 development space tells a different story. The report reveals a surge in smart contract deployments across EVM-compatible chains.
Nearly six million smart contracts were deployed across networks like Ethereum, Arbitrum, Optimism, and Polygon, marking a 302% surge since Q1 and a whopping 1,107% increase since Q2 2022.
The report's findings suggest a positive direction for Web3's growth and potential mass adoption. While not all these smart contracts may be used for NFTs, the surge in development activity is a promising sign.
Gaming has emerged as a strong use case for NFTs, inspiring developers to continue building on the blockchain.
Standout use cases in Q2 include Nike's Our Force 1 NFT collection drop, Lens Protocol's growth as a decentralised social media platform, and Google Play's support for games integrated with NFTs.
TTD BlackRock 🪨
BlackRock, the world's biggest asset manager is facing some serious criticism for its not-so-environmentally-friendly record, and it's not helping their socially conscious image.
They're eagerly waiting for the SEC to approve their Bitcoin ETF application, so any bad press and FUD is definitely not what they want. But alas, InfluenceMap's Asset Managers & Climate Change Report 2023 gave them a less-than-stellar C+ grade.
You see, BlackRock has been preaching about ESG standards and being all climate-friendly, but this report says otherwise. Despite all the talk, they haven't made much progress on climate goals. Even their boss, Larry Fink, has dropped the term ESG, calling it too politicised.
InfluenceMap's study looked into their equity portfolios, stewardship, and sustainable finance policy engagement activities. And BlackRock and other big US asset managers like Vanguard, Fidelity Investments, and State Street Global Advisors didn't score too well.
The report pointed out their "lack of effective climate stewardship processes" and criticised them for not pushing companies to go green. Meanwhile, European managers got some praise for their climate stewardship game.
To make matters worse, they hired Amin Nasser, the head of Saudi Aramco, the massive oil giant. Saudi Aramco is responsible for a lot of greenhouse gas emissions, and people are raising eyebrows at BlackRock's move.
TTD Bounty Hunt🤑
Arkham Intelligence, the blockchain data firm, has announced bounty for the person who can uncover the FTX exploiter from November 2022. If you're up for the challenge, you could walk away with a cool 100,000 ARKM, worth a sweet $46,000.
But this is no ordinary bounty hunt. Arkham wants more than just a name. You'll need to back up your findings with solid research, cited sources, and concrete evidence to prove that the identified entity was indeed the culprit behind the hack.
The exploit, which went down on November 11, 2022, rocked the crypto world as an unknown entity made off with $400 million worth of crypto assets from FTX. And to make matters worse, FTX had to file for Chapter 11 bankruptcy protection on the same day.
Despite all the efforts, the hacker has remained elusive. With the clock ticking, bounty hunters have until August 17 to submit their findings and claim the prize.
But not everyone is thrilled about this bounty game. Arkham Intelligence's Intel Exchange platform has faced some controversy. Some worry that it could lead to the release of personal information or even point fingers at the wrong person.
Yet, Arkham's CEO, Miguel Morel, sees it differently. He believes this platform can help bust bad actors in the crypto space and make it a safer playground for all.
TTD AI 🤖
The media world is buzzing with talk of artificial intelligence (AI) potentially taking over journalism.
European media giants are sounding the alarm, claiming that AI might just replace journalists, leaving industry professionals wondering if they could soon be out of a job.
Axel Springer SE, a major media group, fired the first shot, with CEO Mathias Döpfner warning that AI could outperform humans in information aggregation. While he acknowledged the importance of human-driven storytelling and exclusive content, he couldn't deny the AI's growing capabilities.
"In short, the creation of exclusive and attractive content remains irreplaceable and is going to become even more critical to success for publishers. Only those who create the best original content will survive," Döpfner said.
Tech giant Google is joining the fray with its AI tool called Genesis. Some see it as a savior, freeing journalists from mundane tasks so they can focus on the good stuff. But others fear it could lead to massive job losses and the loss of that unique human touch.
But hold the presses! Google's spokesperson Jenn Crider insists that these AI tools won't replace journalists but will offer alternative options and writing styles.
The real challenge lies in content creation, where AI is flexing its algorithms and threatening to take over tasks that were once solely human. Germany's largest tabloid, Bild, is a living example, announcing layoffs and attributing many functions to machines.
TTD Surfer 🏄
Block Inc. reported a 34% increase in Bitcoin revenue in Q2, with $2.4 billion in Bitcoin sales on its Cash App platform.
The MIT Digital Currency Initiative has introduced the PArSEC platform, designed for central bank digital currencies (CBDCs).
Ilya Lichtenstein, the husband of notorious hacker Razzlekhan, has admitted to being the hacker behind the 2016 Bitfinex hack.
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