TLDR Crypto 2024-04-01

The crypto venture capital landscape saw a significant uptick in Q1 2024, with $2.52 billion raised across the sector. Competitiveness among VCs has created a founder-friendly environment, leading to higher valuations and more favorable terms for startups. While the market is expected to remain bullish throughout 2024, regulatory uncertainty and the absence of large deployers of capital from the previous bull market may prevent funding levels from reaching the heights seen in 2021 and 2022.

Head of Legal at the Blockchain Association, Marisa Coppel, shares her insight into recent Coinbase case developments for the industry. With the SEC’s claim that the Coinbase Wallet is an unregistered broker being dismissed, developers can rest assured that peer-to-peer technology does not fall under the oversight of the SEC. Though the rest of the case still stands, this is not unexpected, as the court must take all claims by the SEC as fact until the upcoming discovery period.

Crypto influencer Cobie has begun beta-testing Echo, his platform for crypto angel investing. The company hopes to tackle the currently fragmented market for startup investments and provide a marketplace for qualified investors to make collective investments. The platform is invite-only and subject to local restrictions around sophisticated investors.

After seeing success with Bitcoin Ordinals trading, NFT marketplace Magic Eden has announced that it will support Bitcoin’s Runes fungible token standard upon its April 20th release. Ordinals trading has helped Magic Eden capture a large portion of NFT trading volume, taking 52% across all chains over the past 24 hours, with 69% coming from Ordinals. Magic Eden currently has a Diamonds rewards program, incentivizing traders to use the platform in anticipation of a future token.

Ethereum founder Vitalik Buterin provides his take on the current state of the memecoin market, opining how memecoins can be positive-sum and more than a tool for speculation. He argues for integrating memecoins with a specific initiative or charity but notes potential limitations with a simple partnership. His main point centers on memecoins tied to fun, engaging games that leave lower-income players better off while still being enjoyable for those playing without monetary incentives – “World of Warcraft on the blockchain.” Buterin concludes by expressing disdain for the racist or derogatory memecoins but hopes that the positive ones could have a significant societal impact.

Monolithic blockchains like Bitcoin and Ethereum integrate all functions — execution, data availability, consensus, and settlement — within a single chain, which offers simplicity and security but struggles with scalability and flexibility. On the other hand, modular blockchains distribute these functions across multiple layers or components, allowing for a customizable and scalable system. This architectural evolution aims to balance security, scalability, and decentralization, offering solutions like Celestia for data availability and the Fuel Network for independent modular protocols, despite the complexity and potential interoperability issues that come with modular designs.

Taproot Wizard’s Eric Wall explained why he believes the $10 billion protocol is significantly overvalued in a post that took Crypto Twitter by storm this weekend. In the post, he expressed frustration at the redundancy of the model computations and how they are incentivized to give extremely similar results or otherwise not be rewarded tokens. Wall also noted that the models have similar content filters to ChatGPT and thus offer no benefits over centralized solutions.

This thread presents a view on how to implement effective tax policies for crypto assets with the goal of treating them fairly vs other assets and making crypto holders’ lives easier. For example, it describes giving crypto assets capital gains treatment, but exceptions under $5,000 to avoid forcing taxpayers to track tiny capital gains for gas spent on transactions.

A story from the perspective of one of the twenty attendees in SBF’s trial that covers anecdotes from the courtroom proceedings, in particular the damning testimonial from Nishad Singh, the third-largest FTX shareholder and the company's previous Director of Engineering.

North Korean developers were hired by the Munchables team, leading to a ~$63m hack - four developers who recommended each other and were hired by Munchables appear to actually be the same person.

Former Jump Trading employee James Hunsaker filed an SEC whistleblower complaint against Jump before UST and Terra’s $40 billion collapse.

DN404, a recently created standard to bring liquidity to NFTs, has been formalized into an Ethereum spec titled ERC-7631: Dual Nature Token Pair.