Crypto Weekly 24/1/2022

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WEEKLY $2 cryptoweeklymag.com January 2022 | Volume 11

Digital Collectables

Has Ether Lost a Chain?

China`s Digital Money

Gov Control of Crypto Spending

Crypto "Fatwa" Declared

Microsoft Eyes Metaverse

How NFT`s Work

U.S. Regs block DeFi Access

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CONTENTS $2 cryptoweeklymag.com January 2022 | Volume 11

Entry Barriers to the Metaverse are Rather High ��������������������������������������������������������������������������������������������������������������� 02 As 'digital collectibles' flourish in China, analysts say it is unlikely that NFTs will be banned. ������������������������� 03 Crypto Supercycle Could Bring Bitcoin to $400k ������������������������������������������������������������������������������������������������������������� 04 FUDDOXX INSIDER ������������������������������������������������������������������������������������������������������������������������������������������������������������������������ 06 Market regulators in Europe Want to Ban Proof-of-Work Crypto Mining ���������������������������������������������������������������� 09 NFT Marketplace OpenSea Acquires DeFi Wallet Firm Dharma Labs ����������������������������������������������������������������������� 09 Microsoft: All Eyes on the Metaverse Arena �������������������������������������������������������������������������������������������������������������������������� 10 Downloads of China's Digital Yuan Top Apple and Xiaomi App Stores Before Lunar New Year ����������������������12 Bank of England Tells Ministers to Intervene on Digital currency 'Programming' ��������������������������������������������������������������������������������������������������������������������������������������������14 Ethereum Is No Longer a One-Chain Ecosystem �����������������������������������������������������������������������������������������������������������������16 Bitcoin, Ether, and Altcoins Suffer Losses as Market Slips Below $2 Trillion ������������������������������������������������������������������������������������������������������������������������������������������������������17 Video of the week �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������18 'Fatwa' Issued Against Bitcoin As Crypto Gets Declared Haram in Indonesia ����������������������������������������������������������������������������������������������������������������������������������������������������� 20 How NFTs Work: A Simple Explainer ���������������������������������������������������������������������������������������������������������������������������������������22 China’s digital currency nearly doubles user base in two months to 261 million ahead of Winter Olympics ���������������������������������������������������������������������������������������24 Shiba Inu and CoinMarketCap Settle Dispute over Wormhole Addresses �����������������������������������������������������������������������������������������������������������������������������������������������������������26 Spain Sets New Rules for Influencers Who Promote Cryptocurrency ��������������������������������������������������������������������������������������������������������������������������������������������������� 27 Hidden Gems �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������28 A Polygon-backed Esports Metaverse Platform Raises $2.25 Million ������������������������������������������������������������������������ 30 Beginners Guide Proof of stake vs. proof of work �������������������������������������������������������������������������������������������������������������������������������������������������32 As the Federal Reserve Ends the Easy-Money Era, a Crypto 'Ice Age' May Come ������������������������������������������������������������������������������������������������������������������������������������������������������36 U.S. regulators are blocking Americans' access to DeFi ���������������������������������������������������������������������������������������������������38 How to Make Money in the Metaverse ������������������������������������������������������������������������������������������������������������������������������������ 40 Cryptos Are Rising, and Capital Is Flooding In. But a ‘Crypto Winter’ May Be Coming �����������������������������������������������������������������������������������������������������������42

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EDITOR’S LETTER Welcome to Crypto Weekly Welcome, this is the 11th issue of Crypto Weekly. Rumors of wars have laid a heavy hand on the crypto industry, much less all of us combined with pandemics and cataclysms worldwide. We all, the people, go about our days and do what we do to live our lives in peace as best we can. Why are we here? I have my reasons, and I am sure all of you have a lot of different reasons for taking part in the crypto revolution. For me, it is the power of immutable truth that crypto holds. Encoded meticulously, smart contracts and all manner of interactive applications have created a way for humans to be held accountable to the truth. All I have ever wanted in a government is honesty, and we all know as the people being imposed upon that we never get it. We never get it. But now we have it. It is in our hands, and we can use it. We should all take it because it is ours.

That is why I am here. Maybe you have a different story. Being a man of the world, I have heard the stories of the ages, and all I know is this man belongs to no one but himself.

We should all take that power. It is yours to have, but remember, we live in a world of free beings. We must hold all of this in certain respect honoring all who live and breathe in this world and the world itself. These are the systems that give us life. Of course, that is what we should do. I am not a liberal snowflake and I am not a conservative ass. My feelings aren't fragile, my heart isn't bleeding. I am a badass believer in human rights.

My toughness is in tenderness. My strength is in the service of others. There is nothing more fierce than formidable unconditional love. There is not a thing more courageous than compassion. But if my belief in equity, empathy, goodness, and love indeed makes me or people like me snowflakes, then you should know - winter is coming.

Crypto Weekly will answer all of your questions. Whether you're new to crypto or have some experience, we're here to help. I hope you all have fun. Now that we have reached the end, it is time to turn the page, but let us know your thoughts. If you would like to see something featured, please get in touch with me..

editor@cryptoweeklymag.com

Robert Stone Editor

www.cryptoweeklymag.com

January 2022 | Volume 11

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NEWS Crypto Weekly

environment still remains up in the air.

She believes that Walmart entering the NFT space represents a "digitization of products" for the company while offering its customers a different type of experience.

Yahoo Finance reached out to Walmart for comment on what the company's recent patent filings mean for the future of the retailer.

Entry Barriers to the Metaverse are Rather High Thomas Hum

F

ollowing recent patent filings by Walmart (WMT) suggesting the major retailer may join the likes of Meta (FB) and Apple (AAPL) in entering the metaverse technology arena, consumers are now asking how they can access the virtual space on their own.

The access to the metaverse continues to be difficult for average consumers, says CoinDesk Global Macro Editor TV Anchor Emily Parker.

"The metaverse is not that easy to access for many of the average users right now," Parker told Yahoo Finance Live. "The barrier to entry is relatively high. Therefore, these established players could make the experience more mainstream, opening it up to a wider audience."

$299 and $399 for 128 GB and 256 GB versions, respectively. Despite this, cost and consumer awareness may limit the uptake of the metaverse by potential everyday users.

Metaverse adoption by corporations In regard to Walmart's move into the metaverse, Parker said that how exactly the big box retailer may leverage the technology of the virtual

"Walmart is continuously exploring how emerging technologies may shape future shopping experiences," a Walmart spokesperson told Yahoo Finance. "We don't have anything further to share today, but it's worth noting we routinely file trademark applications as part of the innovation process."

In addition to Microsoft's acquisition of Activision Blizzard (ATVI) for $70 billion, Parker cited Nike's and Adidas' moves in the "metaverse play" market.

Decentralization, however, is one of the metaverse's most important concepts.

"We could see the danger of monopolization of the space that's supposed to be decentralized and revolutionary by these big corporations, similar to what we saw in the social media space," she said. "So I think [more companies pursuing the metaverse is] possibly a good development, but there are some dangers as well." 

Yahoo Finance

A metaverse is a shared virtual world that can be accessed through virtual reality (VR) and augmented reality (AR) devices.

Even though many modern smartphones have limited VR and AR capabilities, Apple's VR/AR headset, for example, is expected to cost at least $2,000.

While not all VR/AR devices are that expensive, Meta's Oculus Quest 2 costs

January 2022 | Volume 11

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NEWS

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Crypto Weekly

threat to financial stability and capital control.

As 'digital collectibles' flourish in China, analysts say it is unlikely that NFTs will be banned.

W

Ann Cao

hile it is unlikely that Chinese authorities will ban non-fungible tokens (NFTs) outright as they have done with cryptocurrencies, analysts expect them to keep a watchful eye on the country's mushrooming blockchainbased "digital collectibles."

Beijing has remained vague about its intentions for domestic projects as global interest in NFTs surges. Last October, China's authorities summoned tech companies to warn them against "hyping up" the concept but not declaring NFTs illegal.

Analysts and industry insiders said that Chinese authorities are trying to ensure that NFTs are safe and controllable.

"China is cautious about NFTs," said Ma Xin, secretary of the Institute of Electrical and Electronics Engineers (IEEE) 's Digital Transformation working group. "The Chinese would not tolerate an NFT market filled with scams during the early days of blockchain development."

Last week, the South China Morning Post reported that the state-backed

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Blockchain Services Network (BSN) plans to build infrastructure to support NFT development in China later this month. He Yifan, chief executive of Red Date Technology, provides technical support to BSN. He said that NFTs don't pose a legal issue in China as long as they distance themselves from Bitcoin.

Beijing has shifted its attitude towards cryptocurrencies over the years. While it initially tolerated investment by individuals, the government eventually launched a forceful crackdown as it began to view cryptocurrencies as a

Mainland companies have ditched the term NFT in favor of "digital collectibles" to escape government scrutiny. Digital collectibles are similar to NFTs, which convey ownership of digital assets such as original artwork. But unlike mainstream NFT projects, backed mainly by Ethereum, digital collectibles are not linked to any cryptocurrency, with trading heavily restricted. Even so, mainland investors have shown strong interest in digital collectibles minted

by Post owner Alibaba Group Holding, Tencent Holdings, and JD.com, as well as the official Xinhua news agency.

The government may not rush to ban NFT, said Matteo Giovannini, a senior finance manager at China's Industrial and Commercial Bank.

"The regulators are genuinely interested in the nature and potential benefits of virtual assets, but not at the cost of the entire society," Giovannini said.

"Therefore, a more supervised approach with the creation of isolated and safe sandboxes could give authorities the time necessary to explore this asset class better."

China's regulatory agenda will include preventing domestic investors from accessing overseas ethereum public chains through NFTs, said Wei-Tek Tsai, a member of IEEE and director of the Digital Society and Blockchain Laboratory at Beihang University.

Cai Weide, director of Beihang University's Digital Society and Blockchain Lab. Managing director at business advisory firm All In Consulting, Stanley Chao, said China would eventually have an NFT market, but the government will completely supervise its trading rules. Chao said China had learned a lesson from its crackdown on cryptocurrencies. "China let cryptocurrencies get out of hand to the point that they had to shut it down cold turkey. They won't make the same mistake with NFTs," Chao said.

South China Morning Post

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NEWS Crypto Weekly

Crypto Supercycle Could Bring Bitcoin to $400k Justinas Baltrusaitis

A

ccording to Harry Yeh, founder, and managing partner of Quantum Fintech Group, the current cryptocurrency trends indicate the market is entering a supercycle. This is in part due to stable coin activity. During a recent interview with Bloomberg Markets, Yeh acknowledged that the cryptocurrency market is still in its infancy but still experiencing a unique stable coin bull cycle despite the current volatility.

"Cryptocurrencies are in a teething stage. However, we are starting to see something very similar to the 2017 bull market. We are definitely in the middle of a bull market, but this one gets a little bit more unique than the last bull market. There weren't any stablecoins, but there are a lot of stablecoins in this current bull market. This could be the supercycle mainstream adoption of cryptocurrencies because stablecoins are starting to happen," said Yeh.

Yeh believes that the current bull market differs from the previous one due to the increasing role of stablecoins that he noted are leading mainstream adoption.

Yeh stated that stablecoins play a crucial role in crypto payments, suggesting that they address 'inefficiency' shortcomings by assets like Bitcoin and Ethereum.

In 12 months, Bitcoin is expected to be worth $400,000

January 2022 | Volume 11

Despite Bitcoin beginning the year on a losing streak, Yeh expressed bullishness for the asset in the next 12 months, projecting a price target of $400,000.

He noted that the projection is guided

The current bull market differs from the previous one due to the increasing role of stablecoins that he noted are leading mainstream adoption

Harry Yeh by the Federal Reserve activity, where he ruled out any near-term interest rate hikes.

According to the managing partner, the Fed will likely continue money printing, and Bitcoin stands out as a hedge.

Finbold reported earlier that Yeh believed the dollar's weakening would likely propel Bitcoin's growth because it is a crucial alternative. He maintained that investors should not be concerned about any possible market crash at this point.  Finbold

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Readers get a chance to whitelist for the ambitious KAPEX project brought to you by Koda Cryptocurrency, Launch is expected next month (Feb 22) and public presale opens from 15th Feb. For more information visit https://KAPEX.me and join the conversation on telegram.

Referral code: CWEEKLY22 2 random applicants will be accepted to band A, and 10 band B. Other applicants guaranteed standard presale if before 15th Jan (up to maximum allocation).

6

FEATURE Crypto Weekly

FUDDOXX INSIDER The home of safer investing Here at Fuddoxx our sole aim is to create a safer ecospace for investors on the BSC chain. As such we will now publish a weekly rundown in the Crypto Weekly Magazine which will provide an insight into the latest scams circulating the BSC space, new projects that we have verified, and regular updates on how our verified projects are doing.

We are very pleased to say that this article has very kindly been made available through the generosity of Crypto Weekly Magazine and a sponsorship from the CMCC project.

LATEST NEWS

Fuddoxx lists CMC Coin as their latest doxxed and verified project (subject to document confirmation checks).

BUDZ is removed from the FUDDOXX platform due to the original doxxed developer moving onto another project.

CMC Coin has made huge waves and great progress since its launch the eighth of December reaching a very healthy marketcap of $3,389,716 at the time of writing.

With very unique and innovative ideas around their whole upcoming ecosphere and utilities coupled with a vastly experienced team of business and Crypto professionals, this is definitely one to watch.

BUDZ is a fantastic project built around the use of Cannabis and Cannabis based products. The team have been successful in reaching a $1.5 million market cap off of launch and although they are currently sub $100k they continue relentlessly to drive forward.

(Please note that BUDZ are in the process of doxxing their new developer to Fuddoxx)

January 2022 | Volume 11

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FEATURE

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Crypto Weekly

NFT Artist Laven1der joins the fudcoin NFT platform.

Three years after quitting due to her art work being stolen NFT artist LAVEN1DER signs up to an exclusive deal for fudcoin NFT to mint and sell her work, This is a great story, be sure to catch it next week. (We will run a piece on this next week and what can be done to mitigate the scams in NFT’s)

Pre-sale doxxed project PATRONUS delays launch due to an issue with Pinksale.

Pinksale seem to have been causing issues for all sorts of projects over recent months and have even had a project released by enraged investors in order to try and bring them down. We will be looking into this in more detail next week.

FUDDOXX announced this week its charity wallet for rugged victims.

Fuddoxx are about to release a charity wallet for rug victims which has been received well by most affiliated projects who will help to fill the wallet with their native tokens for airdrops to victims. More to come on this next week.

ZAINS WEEKLY RUG RUNDOWN: Another week, another RUGPULL.

LATEST SCAMS I

t seems that with every passing day scammers and con artists continue to develop ever more complicated and malicious ways to take money from both investors and developers. This latest week is no exception to that rule. We have a new scam to warn you about, I'm sure some of you will have heard about this but it is worth a read if you haven’t.

Traditionally dusting is where a token will be airdropped to your wallet and when you realise it is there and leap with joy for the $10,000 of tokens you inevitably move or sell them, In a dusting this action then allows the scammers to gain access to your wallet and drain all of your available funds.

Of late this has been taken to a new level whereby the scammers will dust you (airdrop) such a small amount of bnb to your wallet that you will not even realize it has been added, As you go about your normal trading activities you inevitably spend that dusted bnb which instantly give the hackers access to your funds.

This very hack/scam recently happened to a holder within the Fuddoxx community and cost him in excess of $20,000.

Fortunately there are ways you can eliminate this risk, depending on which wallet you use to trade you can switch on either 2FA (2 Factor authentication) or you can switch on your biometrics security in your settings. This method requests the use of biometric confirmation for all transactions and as such stops the scammers in their tracks!!!

January 2022 | Volume 11

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Crypto Weekly

Market regulators in Europe Want to Ban Proof-of-Work Crypto Mining Justinas Baltrusaitis

A

ccording to a Financial Times report, Erik Thedéen, the European Securities and Markets Authority vicechair, said the European Union should ban proof-of-work mining for Bitcoin.

The energy-intensive work impedes climate goals and takes away resources from other projects, Thedéen explained.

"The solution is to ban proof-of-work," he said.

European regulators should instead prioritize proof-of-stake mining over the more energy-intensive proof-ofwork mining, he told the FT.

The two primary ways to verify cryptocurrency transactions are through proof-of-work and proof-ofstake. Proof-of-stake — the less energyintensive method — asks participants to put up cryptocurrency as collateral for the opportunity to approve transactions successfully.

"We need to discuss shifting the industry to a more efficient technology," Thedéen said. The vice-chair called for a blockwide ban on proof-of-work mining as it has become a "national issue" in his native Sweden due to the large amount of renewable energy it uses.

Proof-of-work requires participants to expend large amounts of computational resources and energy to generate new

blocks on the blockchain. It is a more secure method, though it consumes more energy.

The energy needed to collect Bitcoin, among other tokens, through proofof-work mining continues to raise controversy. Last year, Elon Musk said Tesla would stop taking Bitcoin payments, citing the network's energy use.

Tesla will only start accepting Bitcoin as a form of again once mining uses 50% renewable energy, he said, adding that crypto "is a good idea…but this cannot come at great cost to the environment Business Insider

NFT Marketplace OpenSea Acquires DeFi Wallet Firm Dharma Labs

Eli Tan

W

allet provider Dharma Labs has been acquired by non-fungible token (NFT) marketplace OpenSea, the company announced on Tuesday.

Initially reported by Axios on Jan. 4, the acquisition comes just weeks after OpenSea was valued at $13.3 billion in its latest funding round. Nadav Hollander, co-founder of Dharma, will

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become OpenSea's chief technology officer as part of the deal. Previously, co-founder Alex Atallah served as OpenSea's chief technology officer.

According to the company blog post, Atallah will now oversee "NFT ecosystem development efforts."

"Co-founder Devin Finzer, Alex, and the entire OpenSea team have shown incredible tenacity and grit over the past four years in taking their original idea for an NFT exchange to where it is today," Hollander said in a statement.

"I'm excited to focus on scaling OpenSea's tech to meet the reliability, performance and uptime benchmarks its users expect and deserve."Like Dharma,

OpenSea serves assets on the Ethereum mainnet and Polygon's Matic network, perhaps explaining why the firm was an acquisition fit. Dharma also boasts key integrations with many U.S. banks.

Dharma launched in 2019 as a crypto lending startup before pivoting to stablecoin savings accounts later that year. More recently, it positioned itself as a mainstream-friendly gateway into the world of decentralized finance.

OpenSea, which launched in 2017 as an eBay for NFTs, has already seen recordbreaking sales volume to start off January as it is on pace to break its $3.4 billion monthly high set last August.

Coindesk

January 2022 | Volume 11

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NEWS Crypto Weekly

Microsoft: All Eyes on the Metaverse Arena

By Marty Shtrubel

M

etasoft? Microverse? Both have a pretty nice ring to it. The company is not likely to change its name either, but Piper Sandler's Brent Bracelin thinks the move represents Microsoft's entry into the "consumer metaverse arms race." It is simply too big an opportunity to ignore. After the announcement of the largest acquisition in the company's history, it seems that the company is fully aware of the potential.

On Tuesday, Wall Street was taken aback with the news Microsoft will buy mired in controversy gaming giant Activision Blizzard for a cool $68.7 billion in cash.

Not only does the deal position Microsoft

right at the center of this newfangled industry, but Bracelin believes it has the potential to "elevate its footprint in gaming and advertising into a $40B+ combined segment by CY23." Microsoft has a smaller product portfolio within the consumer technology sector, and as such, Bracelin thinks the acquisition will "strengthen its foothold" in the segment.

ATVI brings with its 10K+ workforce 400 million monthly active users and a leading gaming franchise that is nearing annual revenue of $10 billion, all providing Microsoft with "attractive strategic value."

Strategic benefits aside, Braclein notes

that ATVI's estimated free cash flows of over 3 billion amount to a "higher cash yield than it would otherwise attain by holding this outsized cash position on the balance sheet." But it's not only the gaming opportunity here. There are also a "variety of monetization channels" involved, including subscriptions, inapp purchasing, and advertising. Those are the most important. "Considering the advertising industry is 3-4x bigger than gaming," the 5-star analyst said, "we are equally bullish on the opportunity for share gains in both advertising and gaming as Activision Blizzard-King content is repurposed across cloud, mobile, AR/VR, and the metaverse."

Although Bracelin notes the "increasing integration and execution risk," the analyst views the transaction as a positive one and "would look to add to positions on weakness." Bracelin rates MSFT an Overweight (i.e. Buy) along with a $352 price target based on the above.

The implication for investors? Overall, there are 26 analyst reviews on record, and barring one skeptic, all the rest say Buy, providing MSFT stock with a Strong Buy consensus rating. The forecast calls for 12-month gains of 22%, considering the average target clocks in at $375.12.  Tip Ranks

January 2022 | Volume 11

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This Gem Won't Stay Hidden For Long

dexioprotocol.com

dexiochat

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FEATURE Crypto Weekly

Downloads of China's Digital Yuan Top Apple and Xiaomi App Stores Before Lunar New Year e-CNY wallet was most downloaded last week, but the rollout is limited to selected cities

Digital yuan can be used on mobile payment apps such as Alipay and WeChat Pay, but the dedicated app has maintained momentum.

Coco Feng in Beijing and Che Pan in Beijing

payment market dominated by Alipay and WeChat Pay.

A resident of Suzhou used the e-CNY smartphone app in a trial on December 14, 2020. One of Kyodo China's most downloaded apps is its digital yuan wallet, disrupting the consumer

App Annie reports that e-CNY surpassed WeChat, a super app from Tencent Holdings that features mobile payments, to become the most downloaded app on Apple's iOS on Wednesday, a day after

January 2022 | Volume 11

arriving in app stores. It remained in the first place through Saturday before falling to second place behind Kuaishou.

By Monday, the app was the second most downloaded financial app in Xiaomi's app store, after topping the list last Wednesday, according to market

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Crypto Weekly

researcher Qimai. However, it ranked just 43rd in Huawei's store on Monday, ten spots higher than the previous day.

Both stores are popular options for Android users in mainland China, where Google Play is blocked.

The e-CNY app's popularity could be a positive sign for efforts from the People's Bank of China to promote its central bank digital currency (CBDC), officially called the Digital Currency and Electronic Payment (DCEP), ahead of the 2022 Winter Olympics next month.

The central bank's Digital Currency Research Institute, which developed the app, has been studying the implementation of a digital yuan for years. Trials of the digital yuan started in 2020. The institute has partnered with local authorities to hand out e-yuan red packets to citizens in ten pilot cities, including Shanghai, Shenzhen, Xiongan, Chengdu, Suzhou, and Winter Olympics venues in Beijing. While the app is broadly available for download, it is only usable in designated cities.

The digital yuan's payment turnover and user base are still tiny compared with the mobile payment titans WeChat Pay and Alipay, which is owned by Ant Group, the fintech affiliate of Alibaba Group Holding, owner of the South China Morning Post. Together, the two entrenched tech giants make up 90 percent of China's mobile payments market.

Red packets, a digital version of a traditional holiday gift in the form of an envelope of cash, along with other incentives, have so far helped drive interest in trying out the new app.

Chengdu resident Robin Deng said he downloaded the app last year and has been using it frequently since October to get discounts on public transport and shared bikes from Meituan.

"I get 50 percent off when using digital yuan to take the subway," he said.

"Paying with e-CNY is similar to WeChat Pay and Alipay."

Last September, Beijing resident Lily Zhang tried it at the China International

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Fair for Trade in Services, where she used digital currency to buy drinks and ice cream.

"It was very convenient, as one can use it even without an internet connection," Zhang said. She added that if it were accepted widely across Beijing, she would use it more because "it is relatively safe.

"However, Alipay and WeChat Pay allow users to pay offline, and most mobile users in China already have these apps.

That could make it hard for e-CNY to maintain momentum when the discounts and other incentives dry up.

Howard Qian, another Chengdu resident, removed the app from his phone days ago over lack of use. "The money I topped up in the e-CNY wallet won't turn out any deposit interest," he said. "I'd rather store it in the money market funds in WeChat or Alipay," Qian added that he would only use the e-CNY app again to keep getting subsidies.

May Lu, a resident of Beijing, said she was not impressed by e-CNY and that installing another payment app on her phone felt unnecessary.

"I don't think e-yuan offers huge advantages to users currently, especially for those in the big cities where third-party e-payment services are ubiquitous," said Wang Leilei, an analyst at Shanghai-based financial industry consultancy Kapronasia. "In the lowertier markets in small cities … it might stand a chance."

Can China handle the risks of cryptocurrency?

As the Chinese government conducts research and development of a CBDC, it has become increasingly hostile towards cryptocurrencies such as Bitcoin. It has stepped up its crackdown on Bitcoin mining, pushing most of it out of the country, and issued a blanket ban on cryptocurrency exchanges.

The government has stated that the digital yuan is designed to replace coins and notes in circulation, but the push to digitize cash has also fanned enhanced state surveillance on transactions.

The e-CNY app's popularity could be a positive sign for efforts from the People's Bank of China to promote its central bank digital currency (CBDC), officially called the Digital Currency and Electronic Payment (DCEP), ahead of the 2022 Winter Olympics next month.

The digital yuan is not just limited to the e-CNY app. It can be used across many mobile payment apps in China, including Alipay, WeChat Pay, and the apps of seven Chinese banks – the Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of China, Bank of Communications, Postal Savings Bank of China and China Merchants Bank.

The Chinese government's increased efforts to promote DCEP comes just weeks before the Lunar New Year, a week-long holiday in mainland China that begins on February 1 and is a popular time to exchange red packets. In addition, it occurs just before the Winter Olympics, which start on February 4.

Mu Changchun, the head of the Digital Currency Research Institute, said in November that 140 million Chinese had opened a digital yuan account as of October 2021, with accumulated transactions reaching 62 billion yuan (US $9.7 billion) since launch.

A formal launch date for DCEP has yet to be announced, but the central bank has stated that foreign visitors to the Olympics will use digital yuan without a Chinese bank account.  South China Morning Post

January 2022 | Volume 11

14

EDITORIAL Crypto Weekly

Bank of England Tells Ministers to Intervene on Digital currency 'Programming' T

he Bank of England has called on ministers to decide whether a central bank's digital currency should be programmable, allowing the issuer to control how the recipient spends it.

On Monday, a director at the Bank of England said that programming could be a vital feature of any future central bank digital currency, which would release money only when certain conditions are met. "You could introduce Programmability - what happens if one of the participants in a transaction restricts the use of money in the future?"

"There could be some socially beneficial outcomes from that, preventing activity which is seen to be socially harmful in some way. But at the same time, it could be a restriction on people's freedoms."

He warned that the Government would be required to intervene and make the final decision.

Mr Mutton said: "That is a really delicate

January 2022 | Volume 11

debate that needs to be had. It is not something we can settle ourselves, that is for the Government to lead on."

commercial or social purposes, even down to the way children spend pocket money.

A digital currency could make payments faster, cheaper, and safer and open up new technological possibilities, including programming: effectively allowing a party in a transaction, such as a state or an employer, to control how the recipient spends the money.

"One potential use could be control over benefits payments," said Sandra Ro, chief executive of the Global Blockchain Business Council.

He told Sky News: "You could think of smart contracts in which the money would be programmed to be released only if something happened."

"You could think of giving your children pocket money, but programming the money so that it couldn't be used for sweets. There is a whole range of things that money could do, programmable money, which we cannot do with the current technology."

She compared a programmed digital currency to the US system of paying benefits in vouchers. It could have a similar goal of restricting the recipient to buying only essentials such as food with the money.

A Treasury spokesman said: "Programmability is a potential feature of a Central Bank Digital Currency (CBDC). The Taskforce is coordinating the exploration of a potential CBDC, and no decisions have been taken on whether to introduce a CBDC in the UK or its design." 

Earlier this month, Sir Jon Cunliffe, a deputy governor at the Bank, said digital currencies could be programmed for

Telegraph

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16

FEATURE Crypto Weekly

The Ethereum community will need to offer layer two technologies capable of handling transactions from billions of users to achieve scalability. 2021 proved to be the first step in experimentation with both optimistic and zero-knowledge proof rollups comparing usage on layer 1s and 2s, but it does provide insight into how eager users were to access DeFi, NFTs, and DAOs. On basically every metric, Ethereum showed adoption: total value locked in DeFi, active addresses on the network, OpenSea volume, and application developer activity all grew exponentially.

More importantly, the report highlighted that Ethereum is no longer a one-chain ecosystem. The Ethereum community will need to offer layer two technologies capable of handling transactions from billions of users to achieve scalability.

2021 proved to be the first step in experimentation with both optimistic and zero-knowledge proof rollups. The two finally began to take significant market share in daily transactions away from Ethereum.

Ethereum Is No Longer

a One-Chain Ecosystem Edward Oosterbaan

R

ecently, Evan Van Ness of Starbloom Ventures and Josh Stark of the Ethereum Foundation released a report on the Ethereum network's activity in 2021, The Year in Ethereum 2021. Some of the most promising developments and trends within the current Ethereum ecosystem are highlighted in the report.

January 2022 | Volume 11

Adoption from all angles Demand for blockspace on Ethereum skyrocketed during 2021, with $9.9 billion in transaction fees being paid throughout the year. Since fee per transaction is vastly different chain to chain, the metric is not great for

As a technology, Ethereum and other smart contract chains have proved to be an exciting and profitable platform for creators and developers to build and share their work. DeFi developers have created billions of dollars in value by building financial products open and accessible to the world. Artists have found fantastic success with creating digital, liquid art in the form of NFTs. That being said, Ethereum's "creator economy" is competing with top platforms like YouTube, Spotify, and OnlyFans, delivering $3.5 billion in earnings to those building on top of the network. The report also focused on the technical state of the network, diving deep into the pending transition to proof-of-stake, EIP 1559's effect on the network, and the issue of client diversity on the Beacon Chain.  Coindesk

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FEATURE

17

Crypto Weekly

Bitcoin, Ether, and Altcoins Suffer Losses as Market Slips Below $2 Trillion Adam Morgan McCarthy

O

n Wednesday, the overall market fell more than 2% in value, pushing the total capitalization below $2 trillion as a wave of risk aversion swept across the investment landscape in light of surging bond yields and rising inflation expectations. Currently, the global crypto market stands at $1.95 trillion, down from a peak of close to $3 trillion in mid-November, according to CoinMarketCap. This dip comes after US Treasury yields hit two-year highs, which also caused stocks to sink. This has been a common theme so far in 2022, as the Federal Reserve repeatedly signals that it could hike US rates several times throughout the year. Higher rates tend to weigh on more speculative assets, as investors are more likely to put their cash into market areas that they perceive to be less risky.

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"Currently, the S&P 500 seems to dictate the direction of Bitcoin and the overall crypto market, evident by correlations reaching new highs. Bitcoin's 90-day correlation to the S&P 500 is currently at its highest since October 2020," the company said in a note. Arcane Research supports this correlation reports linking the S&P 500 to bitcoin.

Bitcoin fell more than 1% to $41,471, while Ethereum's Ether token suffered heavier losses of more than 3%, falling to $3,070 and threatening to dip below that $3,000 mark for the first time since September. Altcoins suffered more severely as Cardano dropped 8% to $1.38 and Avalanche dropped 5%, seeing it sit at $82.31 at the time of writing. Several altcoins had logged significant gains last week as capital flooded into NFT and DeFi projects built on alternative smart-

contract platforms to Ethereum. The so-called 'Ethereum killers' have made impressive gains over the past year.

JPMorgan reported that Ethereum's dominance in the NFT space had gone from 95% at the beginning of 2021 to around 80%. In particular, Cardano's ADA token had seen significant gains over the past ten days, as it was up over 30% at one point, according to data from CoinMarketCap. The altcoin founded by Ethereum cofounder Charles Hoskinson is one of 4 cryptocurrencies considered by some analysts to be a significant threat to Ethereum as it is "more scalable."

However, the budding crypto is still some way off all-time highs of $3.10 from September 2021.  Business Insider

January 2022 | Volume 11

18

Crypto Weekly

of the

week NFT

Compounding Assets, Adoption Rising, and the Brilliant Mind Pushing This Daily, FOR US ALL...

January 2022 | Volume 11

www.cryptoweeklymag.com

agromatic

agromatic

agromatic

agromatic

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FEATURE Crypto Weekly

'Fatwa' Issued Against Bitcoin As Crypto Gets Declared Haram in Indonesia Aaryamann Shrivastava

ha·ram ha·ram /'herəm/ adjective forbidden or proscribed

by Islamic law

by the fatwa when used for investment and payment.

As the Muhammadiyah Tarjih Assembly stated, "The Tarjih Fatwa stipulates that the legal cryptocurrency is haram as an investment tool and as a medium of exchange." The reasons for the fatwa are similar to the reasons why cryptocurrencies are being regulated.

Albeit these reasons are more religiously motivated than legally.

Does the Indonesian government oppose Bitcoin?

As per the Islamic Sharia, cryptocurrencies' speculative nature is a huge shortcoming. The volatility of currencies such as Bitcoin and such makes it haram. Since any physical asset does not back cryptocurrencies, it becomes gharar. Secondly, using such volatile assets is obscure, according to the fatwa.

Muhammadiyah, in conjunction with the Tarjih Assembly, issued a fatwa today against cryptocurrencies. Bitcoin and other such coins are considered haram

Majelis Tarjih and Tajdid PP Muhammadiyah further added that, "This speculative and gharar nature is forbidden by sharia as the Word of Allah

R

ecently, the country announced that it would accept Bitcoin and other cryptocurrencies. If not legally, can this become a method of obstruction now?

January 2022 | Volume 11

"The Tarjih Fatwa stipulates that the legal cryptocurrency is haram as an investment tool and as a medium of exchange." and the Hadith of the Prophet (peace be upon him) and does not meet the values and benchmarks of Business Ethics according to Muhammadiyah, especially these two points, namely: there should be no gharar (HR). Muslim) and there should be no maisir (QS. Al Maidah: 90)" This is the first time that the objections arise out of religious stipulations.

And although this isn't an established pattern, many Islam-dominated countries such as Algeria, Bangladesh, Egypt, Iraq, Morocco, Nepal, Qatar, and Tunisia previously absolutely banned cryptocurrency.

Most recently, Pakistan's central bank too proposed a ban on all forms of cryptocurrency citing risks surrounding volatility.

As it is, regulations are already becoming a massive roadblock for crypto adoption.

And the use of crypto might further reduce if such objections come from religious provenance as people are more obedient to spiritual laws.

The 'Volatile' Nature of Bitcoin Ironically, over the past two weeks, Bitcoin hasn't been volatile at all. The king coin has kept its movement sideways bound and continues to head in that direction. Although it is maintaining a strong green presence, having risen by 3.72% at the time of this report, it might remain consolidated for a while.  FX Empire.

www.cryptoweeklymag.com

Income Island Phase 1.5 METAVERSE January 2022

FORGET THE ROCKET, DON’T MISS THE BOAT!

incomeisland

incomeisland

incomeisland

22

FEATURE Crypto Weekly

How NFTs Work: A Simple Explainer A

s tokens representing ownership of unique items, NFTs can be used for this purpose. We can tokenize things like art, collectibles, and even real estate. The blockchain encrypts them, which means that no one can change the ownership record or create new NFTs. The world of art and gaming has been captivated by NFTs. They continue to make headlines when they sell for millions of dollars, regardless of whether you think they're a speculative fad or a great new potential for artists. NFTs: what are they all about?

January 2022 | Volume 11

NFTs are tokens that we can use to represent ownership of unique items.

They let us tokenize things like art, collectibles, even real estate. They can only have one official owner at a time, and the blockchain secures them – This means no one can modify the record of ownership or copy/paste a new NFT into existence.

What Makes NFTs Valuable?

NFT stands for non-fungible token.

Non-fungible is an economic term that you could use to describe your furniture, a song file, or your computer. These things are not interchangeable with other items because they have unique

NFTS are important because they help solve some of the problems on the internet today. As everything becomes more digital, there's a need to replicate the properties of physical items like scarcity, uniqueness, and proof of

properties. On the other hand, Fungible items can be exchanged because their value defines them rather than their unique properties. For example, ETH or dollars are fungible because 1 ETH / USD 1 is exchangeable for another 1 ETH / USD 1

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FEATURE

23

Crypto Weekly

The world of art and gaming has been captivated by NFTs. They continue to make headlines when they sell for millions of dollars, regardless of whether you think they're a speculative fad or a great new potential for artists

ownership. Here's how the internet of NFTs looks today compared to the internet most of us use.

A Comparison Today's internet is an NFT. Digitally unique, no two NFTs are the same.

Copying a file (.mp3 or .jpg) is the same as the original. Every NFT must have an owner - whose name is public and can be verified anytime. Ownership records of digital items are stored on servers controlled by institutions you must take their word for it. NFTs are compatible with anything built

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using Ethereum. An NFT ticket for an event can be traded on every Ethereum marketplace for an entirely different NFT. You could trade a piece of art for a ticket! Companies with digital items must build their own infrastructure.

For example, an app that issues digital tickets for events would have to develop its ticket exchange.

Content creators can sell their work anywhere and can access a global market Creators rely on the infrastructure and distribution of the platforms they use. Creators can retain ownership rights over their work and claim resale royalties directly from media, such as music streaming services, that maintain the majority of profits from sales Items can be used in surprising ways. For

example, you can use digital artwork as collateral for a decentralized loan.

The most extensive use of NFTs today is in the digital content realm. This sector faces a significant problem whereby content creators see their profits and earning potential swallowed by platforms. An artist publishing work on a social network makes money for the platform that sells ads to the artists' followers.

As a result, they gain exposure, but exposure doesn't pay the bills. With NFTs, creators do not hand over ownership of their content to the platforms they use to promote it. The creator owns the content.

When they sell their content, funds go directly to them. If the new owner then sells the NFT, the original creator can even automatically receive royalties.

This is guaranteed every time that content is resold because the creator's address is part of the token's metadata – metadata that can't be modified.

Overall, NFTs are a new way for people to take advantage of the benefits of blockchain technology, especially the honesty it lends to any information. There is still some time for NFTs to become mainstream, but in the meantime, if you want to buy some digital art, then NFTs are a fun way to go.  Bitke

January 2022 | Volume 11

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FEATURE Crypto Weekly

China’s digital currency nearly doubles user base in two months to 261 million ahead of Winter Olympics Coco Feng in Beijing

The e-CNY app had been used in transactions totaling US$13.8 billion by the end of December as the central bank pushed the adoption of its digital currency.

January 2022 | Volume 11

The currency has no official nationwide launch date but is trialed in several cities and at Winter Olympics venues.

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FEATURE

25

Crypto Weekly

T

he e-CNY app was seen in Apple’s App Store atop a yuan banknote on January 6, 2022. EPA-EFE China’s official digital yuan app, e-CNY, had 261 million unique users at the end of 2021, nearly twice what it had in October, even before it was released in app stores this month, according to a central bank official.

The digital yuan, officially known as the Digital Currency Electronic Payment, was also being accepted by more than 8 million merchants by the end of December and had been used in transactions totaling 87.6 billion yuan (US$13.8 billion), Zou Lan, head of financial markets at the People’s Bank of China (PBOC), said at a press conference on Tuesday.

The rapid growth of e-CNY is part of the central bank’s aggressive push to boost the adoption of the country’s central bank digital currency (CBDC), which is being trialed in at least 11 cities. The app had just 140 million individual digital yuan accounts and 10 million corporate accounts in October. In November, Mu Changchun, head of the PBOC’s Digital Currency Research Institute, the unit in charge of the digital yuan, said.

The proliferation of the sovereign digital currency in China, which strictly bans cryptocurrencies such as Bitcoin, comes ahead of the 2022 Beijing Winter Olympics and the Lunar New Year holiday, which both start the first week of February. It also comes as Ant Group’s Alipay and Tencent Holdings’ WeChat

Pay, the country’s two dominant mobile payment services, which face increased regulatory oversight. Ant is the fintech affiliate of Alibaba Group Holding, the owner of South China Morning Post.

Both these apps also offer payments in digital yuan, but users must first have the e-CNY app to transfer the currency into their digital wallets for Ant’s MyBank or Tencent’s WeBank. Many governments worldwide are exploring their own CBDCs, but China is the first to roll one out on such a large scale. It could prove to be a trailblazing decision.

Agustín Carstens, general manager at the Bank for International Settlements, said in a speech this week that central banks, not technology companies, are the best institutions to provide trust in money in the digital age.

The State Council, China’s cabinet, said in a policy blueprint earlier this month that it would encourage digital yuan.

At the Tuesday press conference, Zou said the PBOC would promote its use in retail transactions, utility payments, and administrative services.

Since launching in Apple’s App Store and multiple Chinese app stores for Android on January 4, e-CNY has become one of the most downloaded apps in the country. It topped Apple’s and Xiaomi’s app stores within the first week. Signage for the digital yuan at a self-checkout counter inside a supermarket in Shenzhen on November 20, 2020. For now, though, the use of the digital

The app had just 140 million individual digital yuan accounts and 10 million corporate accounts in October

currency is limited to designated cities, including Shenzhen, Suzhou, Xiongan, Chengdu, Shanghai, Hainan, Changsha, Xian, Qingdao, Dalian, and Beijing, which includes Winter Olympics venues.

The 2022 Winter Olympics is scheduled to begin February 4 in China’s capital, where foreign visitors will also use e-CNY without a domestic bank account, the central bank said last year.

An increasing number of places in the city now support e-CNY payments, including buses, subway stations, the Wumart supermarket chain, and specific merchants at tourist spots such as the Forbidden City, Old Summer Palace, and Badaling, the most-visited portion of the Great Wall.

At the same time, the use of e-CNY lags far behind Alipay and WeChat Pay, which together control over 90 percent of the mobile payments market.

Two cashiers at a Wumart store in eastern Beijing told the Post on Wednesday that “not many” customers have chosen to pay with digital yuan. Those who use e-CNY often do so because they have vouchers given as subsidies by banks and merchants to encourage the use of digital yuan.

China has not announced a formal launch date for its digital fiat money.

Shenzhen issued 50,000 digital red packets of 200 yuan each in October 2020. In two months, Suzhou offered 20 million digital yuan to 100,000 residents.

South China Morning Post

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January 2022 | Volume 11

26

FEATURE Crypto Weekly

Shiba Inu and CoinMarketCap Settle Dispute over Wormhole Addresses Oluwapelumi Adejumo Shiba Inu developers and the CoinMarketCap team have reached an amicable settlement on the wormhole contracts dispute. The official Twitter page of the meme coin announced that discussions are ongoing between the parties. It also included a detailed statement on the incident.

A Background to the Story Like we earlier reported, the Shiba Inu community had called attention to three contract addresses. It claimed that these addresses were fake while warning users not to send any funds to them.

But CoinMarketCap later clarified the situation. It pointed out that the addresses were wormhole bridges to enable cross-chain transactions. Thus, they were not malicious and would improve users’ experience.

In its official statement at the time, the Shiba Inu community accused the CoinMarketCap team of being unresponsive.

Members of the community also claimed that the move

January 2022 | Volume 11

created FUD that negatively affects SHIB price. Then, the ShibArmy alleged that CoinMarketCap is working against Shiba Inu.

Shiba Inu and CoinMarketCap Open Channel of Communication However, the two teams are now communicating with each other.

Shiba Inu’s response clarified that discussions are ongoing to ensure the wormhole contracts are not from malicious sources.

Furthermore, the dev team recognized the importance of cross-chain interoperability. But pointed out that there are risks and security vulnerabilities for these bridges.

However, it believes this shouldn’t stop cross-chain innovation. The statement also reiterates the general concerns among community members on CoinMarketCap actions. Shiba Inu, which prides itself on decentralization, pointed out that CoinMarketCap centralized the decision to include wormhole addresses.

As one of the most visited crypto sites, information on CoinMarketCap holds a lot of sway in the market. It criticized the low level of transparency and willingness of the CoinMarketCap team to work with Shiba Inu initially.

Pointing out that initial responses from the website were limited or nonexistent.

Shiba Inu Drops by 2% in 24 Hours Despite the news, the Shiba Inu token continues to drop in value. The meme coin has lost almost 2% of its value in the past 24 hours and currently trades at $0.00002755.

This is a far cry from its ATH of $0.00008, but it remains 13th on the top crypto list. Shiba Inu, which describes itself as a Dogecoin killer, has been on the downslope for the past 30 days losing over 10% of its value.  This article was originally posted on FX Empire

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NEWS

27

Crypto Weekly

Spain Sets New Rules for Influencers Who Promote Cryptocurrency

I

nfluencers, sponsors, and others are prohibited from promoting cryptocurrencies in Spain. Influencers and other advertisers in the country with more than 100,000 followers must notify the National Securities Market Commission (CNMV) at least ten days in advance of promoting crypto assets.

They'll face fines of up to €300,000 (around $342,000) for breaching the rules, which come into force on February 17th.

Influencers must disclose if they receive payment to promote cryptocurrencies. If that's the case, they should provide clear and impartial warnings about the risks of crypto, including that investments aren't regulated. The rules also cover

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companies that promote crypto assets and PR companies they hire.

CNMV chief Rodrigo Buenaventura told the Financial Times that there would be a backdoor to avoid regulation if influencers weren't covered. "This is new terrain, for them and for us, and there will be moments of friction, but that always happens when you bring in rules for something that wasn't regulated before."

It's believed to be the first time a European Union country has brought in such directives. EU members have yet to agree on regulating crypto across the bloc. In the meantime, Buenaventura

notes, member states are tackling some crypto-related matters, including how they're advertised.

Some influencers who have plugged crypto-assets and related products have found themselves in hot water. In July, French authorities fined a reality TV star €20,000 ($22,800) for "misleading commercial practices" over a Bitcoin trading site ad on Snapchat. This month, Kim Kardashian and Floyd Mayweather were named as defendants in a classaction lawsuit that accuses them of taking part in a "pump and dump" scheme.  Endgadget

January 2022 | Volume 11

28

HIDDEN GEMS Crypto Weekly

PROJECT 1

FuddoxxToken

FudDoxx Token (FDOX)

FudDoxx

FudDoxx

Building on security, FudDoxx offers a wide range of services to benefit the entire crypto space. The team has compiled a list of projects that have passed their extensive verification process. FudDoxx offers doxxing services to bridge the gap between investors and developers. The doxxing info received by the team is securely stored for use in the event that a project scams, and is proven as far as possible, then that information would be released to the public and authorities. FudDoxx Audit service goes beyond the detailed analysis of solidity code. Not only tearing apart the smart contracts, but their risk assessment factors in the audited projects vision, team, maturity, funding, and community.

name a few. The simple navigation process streamlines buying and selling digital art.

The FudDoxx team has also incorporated a beautiful, userfriendly NFT marketplace in their ecosystem, (see for yourself, FudCoinNFT.com), where you will find everything from pixelated images, audio, video, and unique sports memorabilia NFT's, to

FudDoxx Token (FDOX) launched on Binance Smart Chain with a total supply of 100 trillion and has 328 holders at the time of writing. A 12% tax is attached to every transaction which breaks down to 7% LP, 3% marketing in BNB, and 2% native reflections.

PROJECT 2

dexioprotocol.com

Swap platform: Complete (Swap.FudDoxx.com) Staking and Farming platform: In development ICO launchpad: In development

With so many avenues for continual success in crypto, FudDoxx truly covers every base with their comprehensive suite of revenue-generating, and security, features.

Dexio Protocol (DEXI)

dexiochat

It’s estimated between 3-4% of the world population is engaged with cryptocurrencies or blockchain technology in some way, and that number continues to grow. Dexioprotocol plans to help that growth through a medium most of the world is familiar with: Gaming. With a complete ecosystem of play-toearn games, Dexioprotocol wants to introduce the world to the possibilities of blockchain technology. Their aim is to become the industry standard in Augmented Reality (AR) application development, in addition to revolutionizing blockchain-based gaming, launching the most user-friendly NFT platform found

January 2022 | Volume 11

Fuddoxx doesn't stop there!

dexioprotocol to-date, and developing their own blockchain network and swap exchange.

This isn’t a new project trying to build hype before delivering.

Dexioprotocol has been quietly shaking up the blockchain space and setting itself apart from the rest since May 2021. In seven short months, they have successfully released: Dexi Wallet, its digital wallet available now on the Apple App Store and Google Play

www.cryptoweeklymag.com

HIDDEN GEMS

29

Crypto Weekly

PROJECT 3

incomeisland.org

Income Island

incomeisland

Income Island Token is a one-of-a-kind concept, developed to make anyone generous stable profits on a daily basis. The integrated gaming system uses blockchain technology which will allow anyone to earn a passive income whilst having fun at the same time. In addition, you may buy and own a personal mining plot and even more than one to generate an income. You may rent out your plots to other players and earn NFT’s offering extra Island Tokens every time someone sells, meaning you earn an income while you sleep.

As Warren Buffet famously said “If you don’t find a way to earn money while you sleep, you will work until you die!"

PROJECT 4

agromatic.io

Through the ongoing development, Income Island will strive to make sure that the ecosystem is a safe and friendly environment to earn a passive income for the long term. Income Island Token, is not just all about the great rewards, it also has a great, doxxed, and highly dedicated team that is supported by a steadfast and strong community. The fundamentals for the ecosystem were created through Income Island`s global team and consists of both volunteers and working professionals from all over the world with skillsets ranging from web development, marketing, Dapp creation, and many other entrepreneurs willing to deliver a stellar financial product to the Income Island community. The Income Island Token is a revolutionary coin, created to be a safe.

Agro-Matic (AMT)

agromatic

Agro-Matic is a decentralized system that aims to accelerate the adoption of cryptocurrencies in Africa while connecting the world to the various natural resources on the continent and helping generate passive income streams through Defi, Lending, Staking, and Yield Farming.

Agro-Matic is built on the Polygon (Matic) Blockchain. Polygon

www.cryptoweeklymag.com

incomeisland

agro_matic?s=09l is one of the fastest chains. Through investment in crop and livestock farming, a charity for farmers, and lots more, Agro-Matic intends to use technology to create massive job opportunities and accelerate the ease of investing in agriculture through investment in ease of access. Agro-Matic tokenomics, is made of provision for charity, development, and marketing, which work in tandem to achieve company goals.

January 2022 | Volume 10

30

NEWS Crypto Weekly

A Polygon-backed Esports Metaverse Platform Raises $2.25 Million

Y

esports – the world's first eSports engagement platform – has closed an oversubscribed seed round of $2.25m from investors such as Polygon Studios, Alphabit, Kernel Ventures, and Cosmos.

Yesports – the world's first eSports engagement platform – has closed an oversubscribed seed round of $2.25m from investors such as Polygon Studios, Alphabit, Kernel Ventures, and Cosmos.

Yesports represents the first crosschain metaverse engagement platform (MEP) to enable more than 500 million eSports fans worldwide to engage fully with their favorite teams in custom-built metaverse experiences. The Yesports platform will access exclusive content, community initiatives, merchandise, and more by acquiring or holding NFTs. The raise follows an initial grant from the $100m gaming-centered NFT fund Polygon Studios founded in July. Via the Yesports marketplace, fans can

January 2022 | Volume 11

"Yesports is the Web3 upgrade the eSports sector has been waiting for and will serve as a portal for eSports fans to participate in this new paradigm,"

trade eSports NFTs across various ecosystems, including Moonbeam, Ethereum, Polygon, Binance Smart Chain (BSC), and other EVM compatible layer-1 blockchains. Yesports will also collaborate with teams to provide fans with a private metaverse experience, allowing them to vote using DAO tokens and access clubhouses and private team NFT marketplaces.

CEO and Founder of Yesports, Sebastian Quinn, explained Web3 and the emerging metaverse allow greater fan participation, engagement, and ownership. "Yesports is the Web3 upgrade the eSports sector has been waiting for and will serve as a portal for eSports fans to participate in this new paradigm," he said. "We can't wait to get building with teams all over qthe world."

"The team at Yesports is building something that is extremely valuable in the rapidly evolving Web3 landscape," said Steven Bryson-Haynes, VP of Business Development, NFT & Gaming at Polygon Studios. eSports' fan base and viewing figures are growing all the time and Yesports will facilitate this by providing an outlet for fans to engage with each other," he said.  Coin Rivet

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32

BEGINNERS GUIDE Crypto Weekly

Proof of stake vs. proof of work: key differences between these methods of verifying cryptocurrency transactions Simon Chandler Proof of work has been around since Bitcoin became the first cryptocurrency in 2009. Proof of work and proof of stake are the two main ways cryptocurrency transactions are verified. Proof of stake requires participants to put cryptocurrency as collateral for the opportunity to approve transactions successfully. Proof of work is more secure than proof of stake, but it's slower and consumes more energy.

A

defining characteristic of most of the largest cryptocurrencies is decentralized. Proponents point to this as one of their main benefits. But the lack of a central authority responsible for verifying transactions also presents a challenge. Bitcoin overcomes it by using an approach known as proof of work, as do several other major cryptocurrencies, including Ethereum, Bitcoin Cash, and Litecoin. However, a growing number of platforms, such as Solana, Avalanche, and Cardano, are

January 2022 | Volume 11

now using an alternative known as proof of stake, which consumes much less energy.

Proof of stake vs. proof of work: at a glance Proof of work and proof of stake are similar in that they're both mechanisms through which a distributed network of participants can agree on which new block of transactions is added to a cryptocurrency's digital ledger, known

as a blockchain. But they differ in how they reach this endpoint.

For its part, proof of work enables agreement on which block to add by requiring network participants to expend large amounts of computational resources and energy on generating new valid blocks. Proof of stake requires network participants to stake cryptocurrency as collateral in favor of the new block they believe should be added to the chain.

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BEGINNERS GUIDE

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Catherine Mulligan, a professor of computer science at the University of Lisbon's Instituto Superior Técnico.

Proof of stake also promises greater scalability and throughput than proof of work since transactions and blocks can be approved more quickly, without the need for complex equations to be solved.

"A key disadvantage is that in some systems, you are only selecting validators that have the most money. This means that proof of stake is likely to be significantly less democratic in many cases than Bitcoin," says Mulligan

What is proof of stake?

Proof of stake revolves around a process known as staking. This is a bit like voting, although with most proof-of-stake cryptocurrencies, the process doesn't involve "one person, one vote." Instead, participants — known as validators — stake a certain amount of crypto behind the block they want to be added to the chain. Different blockchains set different limits for this amount.

"In proof of stake, the cryptocurrency holders 'vote' to approve legitimate

transactions. As a reward for voting on legitimate transactions, 'stakers' are paid in newly created cryptocurrency over time," says Garrick Hileman, the head of research at Blockchain.com.

One primary advantage of proof of stake is that it avoids the need to invest increasing sums of money in evermore-powerful computing equipment that consumes growing electricity.

Proof of stake was developed "in response to the high computational costs of proof of work protocols," says

"Two major benefits of proof of stake over proof of work are that PoS can be less energy-intensive and have greater transaction throughput (speed) and capacity," says Hileman. However, proof of stake can tend toward centralization.

This is because there isn't any limit on how much crypto a single validator could stake in specific proof-of-stake cryptocurrencies.

"A key disadvantage is that in some systems, you are only selecting validators that have the most money.

This means that proof of stake is likely to be significantly less democratic in many cases than Bitcoin," says Mulligan.

Another problem with proof of stake is that, while its environmental credentials are more impressive because it uses less energy, the approach hasn't been proven on the scale that proof-of-work platforms have.

(Continued)

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"The only blockchains to date which have achieved what can be characterized as a level of mainstream adoption are both proof-of-work blockchains (Ethereum and Bitcoin)," says Hileman. "Proof of work is the only consensus algorithm that has had its security battle-tested at scale and safely stored over $1 trillion in value, in the case of Bitcoin."

"Two major benefits of proof of stake over proof of work are that PoS can be less energy-intensive and have greater transaction throughput (speed) and capacity," —Hileman

While there are questions as to whether proof of stake can prove itself, it benefits from incorporating measures to ensure that validators behave well and approve only valid blocks.

as Bitcoin, "all the computers (nodes) on the network are competing to be the first to solve the problem and 'prove their work,' and they get to add the latest batch of transactions to the blockchain and earn some bitcoin in exchange,"

Note: Bitcoin established the proof-ofwork protocol when it became the first cryptocurrency in 2009.

"A key distinction between [the two consensus mechanisms] is the fact that there is an economic incentive for nodes to participate well in proof of stake. If they 'validate' bad transactions or blocks, they will face something called 'slashing' — which means they are penalized," says Mulligan.

Mulligan explains. The main strength of proof of work is that requiring an increasingly significant investment in energy makes it exponentially more difficult for a would-be bad actor to verify invalid blocks and double-spend cryptocurrency.

Operating costs make it highly secure The network is more open and decentralized Only consensus mechanism to have been proven at scale Requires the use of increasing amounts of electricity Generates a considerable amount of e-waste Slower and less scalable than proof of stake

Note: The cryptocurrencies that use proof of stake, such as Solana and Avalanche, haven't been around long enough to establish their effectiveness fully.

Proof of stake pros and cons Allows for faster transactions and more scalability It has a much smaller environmental impact It gives an economic incentive to approve valid blocks It hasn't yet been thoroughly tested and proven at scale Can tend toward centralization May not be as secure or tamperresistant as proof of work

What is proof of work?

Where proof of stake involves a competition to see which new block has the most crypto staked in its favor, proof of work consists of a contest to see which new block has the most computational work performed in its favor. In a proof-of-work network such

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That said, its consumption of energy has become controversial.

"This is computationally intensive and is one of the reasons that many people are concerned about the environmental impact of the Bitcoin network," says Mulligan. "The more computers that you need to ensure the network is robust and functioning, the more energy that is consumed."

In addition to the electrical power required, the ever-increasing amount of computing power needed to compete on a proof-of-work cryptocurrency network is causing a problem with electronic waste as participants dispose of outdated systems and replace them with more advanced ones.

On the other hand, Mulligan explains that one other strength of proof of work is that it can be viewed as more democratic and decentralized than proof of stake because it's based on open competition between miners. The latter, by contrast, may favor large holders of cryptocurrency, who may often be early adopters and who may ensure that the corresponding blockchain is developed in a certain way.

Proof of work pros and cons

The financial takeaway Proof of work and proof of stake are two different mechanisms used by cryptocurrencies for achieving consensus on which new blocks to add to their blockchains. They each solve the fundamental problem of verifying transactions without using a central authority. Proof of stake achieves consensus by requiring participants to stake crypto behind the new block they want to be added to a cryptocurrency's blockchain. Meanwhile, proof of work achieves consensus by requiring participants to spend computational power and electricity to generate a new valid block. Proof of work has the advantage of making it very expensive to attack a cryptocurrency's network, yet it comes at a growing environmental cost.

While proof of stake avoids the massive energy consumption of proof of work, it hasn't been proven to be as secure and stable as proof of work at scale.  Business Insider

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Manifest Performance indicators, balance sheets and regulator guidelines are not the most appealing things to hear about in crypto, but it's necessary for us to operate correctly. Bouncing off of that, there is a certain appeal to a crypto that has its ducks in a row. Countless projects are removing general quality and value from their project and replacing it with marketing and high spirits. We are happy to get people pumped up about crypto, but it has to be done the correct way. For example, you want to tell people key things of what to look for when considering their vote of confidence in that particular crypto. Who is the team? Previous quality projects completed? Are they purely marketing? Is the use case frantically thought of or flimsy? Does the team have a vision of expansion in the future? Does the project rely on people's addiction?

Of course, this isn’t financial advice, but we feel you should have a checklist that you are checking off when you inspect a project. This can be as vast as you want it to be and ultimately can be tuned to your liking. This can be personal auditing procedures or standardized trading strategies. These steps take time to curate correctly and can benefit the user greatly. A simple checklist. Of course you can bend your own rules, but these rules protect you from overvalued and hollow projects. The goal of most of the projects we currently see is short term, under established and widely false. Crypto is fast, this doesn't mean you can forget the key factors of a trade and fundamentals of crypto. Never mistake a tax on a taxation token as a use case or utility.

All that brewing has ultimately led to the market's sour taste and low level mentality. The key to leveling the playing field is a short and sweet one, actually educating people on crypto. A lot of projects will detest what we have to say about them in a formal audit. We have decided to audit any project or firm that audits us, to help people better understand the process. As we pay for more intense auditing services, we can perform even deeper audits of these projects. Meaning, we will bring you the truth. This is going to make us naturally unpopular, we are crypto veterans, we will be alright. We buy the dip!

In summary, don't trust us, or anyone else until you know their tokenomics and team. This is the most basic level of understanding the project. Please make efforts to learn more about the cryptocurrency space overall. We will be in the telegram often to answer people's questions. We don't allow posting of other projects in the group, but if you bring your checklist to us, we can help refine that with you.

Redutoken.com Redutoken.com

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As the Federal Reserve Ends the Easy-Money Era, a Crypto 'Ice Age' May Come Simon Chandler

A crypto winter is being feared as prices plummet.

The Fed is cutting its support for markets and the economy, possibly leading to a crypto "ice age."

The Bitcoin price plunged to a sixmonth low below $38,000 on Friday.

The outlook is bleak with the Fed hiking interest rates and lingering questions about regulation and technology.

Crypto-land is heading for the cold shoulder. Volumes have plummeted.

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Bitcoin fell to a six-month low of $38,000 Friday after peaking at close to $69,000 in November.

A few investors fear that the market is entering a "crypto winter" - a period when prices fall sharply and fail to recover for more than a year - as the Federal Reserve abruptly tightens monetary policy.

It could be worse, however. Invesco's global head of asset allocation research, Paul Jackson, recently told Insider that cryptocurrency is heading for an "ice

age," where prices remain low for years and many investors lose interest.

It's not just Fed policy. Many potential investors have niggling doubts about the robustness of cryptocurrency technology and regulation that could stifle industry development.

The Fed could put crypto on ice Early last year, "Bond King" Jeff Gundlach said he thought bitcoin was "the stimulus asset" boosted the most by the "torrent" of money from the Fed and US government during the Coronavirus crisis.

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"Central banks and governments have played a role in jacking up these markets, and as those policies reverse, then I think they will have a role in depressing them," he said.

Even bulls such as Galaxy Digital founder Mike Novogratz have said crypto is likely to stay under pressure. "I think it could be an ice age," Jackson said. "I think if you take away those conditions that the Fed has created... it does change the outlook."

Regulating cryptography and nagging questions about it Of course, many cryptocurrency supporters disagree. Dan Morehead, CEO of investment firm Pantera, said in a note last week the sector should stay strong because the uses for crypto networks have ballooned.

He pointed in particular to the growth in decentralized finance, or DeFi, where financial activities such as trading can be carried out without the need for intermediaries, thanks to crypto technology.

But many investors are less convinced, with regulation a particular worry. This

week, the central bank of Russia, a crypto hub, proposed an outright ban of mining and transactions, adding to Friday's selloff. European regulators could be about to toughen up their rules, and Spain and the UK are cracking down on crypto adverts.

James Malcolm, head of foreignexchange strategy at UBS, told Insider he thinks problems with crypto technology could be one of several factors, alongside stricter regulation, that could drag the crypto world into another winter.

Malcolm cited a blog by the founder of the Signal messaging app, which concluded that blockchain technology is clunky and far from decentralized.

Meanwhile, users of the ethereum crypto network have been infuriated by congestion and high transaction fees, proving very hard to fix.

"A lot of people in the technology space seem to be questioning whether or not [crypto tech] is that effective," Malcolm said. "It begs the question if it was so blatantly next-generation technology, then why aren't a lot of big tech companies all over it? Why isn't Google massively invested?"  Business Insider

But less than a year later, the Fed is turning off its faucet as it tackles soaring inflation. Markets are now expecting four interest rate hikes in 2022.

The resultant jump in bond yields has already whacked unprofitable tech stocks and cryptocurrencies. The two speculative assets look a lot less attractive when returns on risk-free bonds are higher.

According to Invesco's Jackson but more pain is likely, as bond yields have considerably further to rise.

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U.S. regulators are blocking Americans' access to DeFi Jared Blikre

O

ne strategist warns that the DeFi movement faces two existential threats as the push into decentralized finance grows 12-fold after growing 12fold last year.

According to Jim Bianco, president of Bianco Research, during a recent Yahoo Finance Plus webinar, DeFi developers pursued efficiency and lower costs at the expense of remaining genuinely decentralized. The author describes what a "maximalist" is in the context of cryptography.

"There's a phrase that we use in the space called a maximalist, and you've probably heard it associated with Bitcoin maximalist, which quickly means Bitcoin is all you need. It's perfect — or as close

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to perfect — as you can get. Everything else is substandard to Bitcoin. Just invest in Bitcoin and go no further. There's a theory of maximalist [as it pertains to] Ethereum. Ultimately, I do think that either maximalism is a terrible idea. It is a very limiting idea as well, too," said Bianco, who does not consider himself a Bitcoin (BTC-USD) or Ethereum (ETHUSD) maximalist.

Then, Bianco discussed what he describes as "decentralized maximalism" and why it is necessary to achieve its long-term potential in the crypto space. According to him, the DeFi sector is undergoing a trend of centralization that seems counterintuitive but emerged to save money and time. In 2021, Ethereum

became so popular, particularly with non-fungible tokens, that the network was overwhelmed. The gas fees, or transaction costs, skyrocketed," he says. Therefore, developers turned to cheaper alternatives on "layer one" networks like Solana (SOL-USD), Cardano (ADA-USD), and Polkadot (DOT-USD). These networks have been able to drop gas fees drastically, notes Bianco.

"They found very, very low gas fees or transaction costs — in some cases less than a penny. And they've exploded in value. But how did they achieve that?

They achieve that by getting higher throughput transactions per second," he says. "And how do they get the higher throughput? They're centralized?"

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DeFi on dark blue abstract polygonal background. Concept of blockchain, decentralized financial system.

Bianco hammers this point, emphasizing the inherent problem of turning toward centralized blockchains and why it's essential to be decentralized from a regulatory point of view.

"Decentralized means it is an autonomous program that no one controls. No one could come in and stop it or start an alternate without being done in a very, very public way," Bianco explains. "No regulator could come in and tap somebody on the shoulder and say, We don't like this activity, make it go away. I don't control it. In a centralized world, they do — you can control it."

Coinbase Told "no" by the SEC Part of the growing popularity and appeal of DeFi is gaining the ability to pay interest on nearly $2 trillion in crypto assets. While the practice is gaining traction throughout much of the world, U.S. regulators have hit the brakes.

Last year, Coinbase notified the SEC of its intent to offer 4% interest on customer crypto holdings. The SEC said that type of offering constitutes security akin to what traditional brokers provide their

"Decentralized means it is an autonomous program that no one controls. No one could come in and stop it or start an alternate without being done in a very, very public way" clients. Such interest-bearing products, which have to be registered with the SEC in a costly and potentially lengthy approval process, have underwriters like JPMorgan and Goldman Sachs, as well as custodians like Bank of New York Mellon. Inserting traditional Wall Street players into the DeFi mix seems at odds with its mantra of cutting out the middleman and also with the term "decentralized" itself.

An uncompromising and sclerotic SEC is harming U.S. investors as DeFi gains steam around the world, says Bianco, citing crypto research firm Chainanalysis, which gathers statistics on crypto adoption by country — looking at the number of people who have adopted crypto as a percentage of the population and GDP. He notes that the only developed country on the list top 20 in the U.S. That adoption is exploding in the Philippines,

Vietnam, Nigeria, the Middle East, Africa, and Central America. Bianco argues that the juggernaut of decentralized finance is unavoidable, so U.S. regulators shouldn't lock out Americans from the potential benefits while disincentivizing DeFi development in the U.S. "We'll sit that out, and we'll probably lose badly on it. Or we could recognize this is going to happen one way or the other, and get a seat at the table and start helping to create the new financial system," he says.

Keeping our fingers crossed for Ethereum For Bianco, the crux of the matter is the existential question of whether a watered-down version of DeFi is even valuable. "This debate has gotten us into a philosophical debate. If we don't get to decentralization, will we invent anything new, or will we just invent a digital version of what we have now?"

Bianco expects ethereum 2.0 to be released in the first half of this year. This significant change will transition the network from proof of work to proof of stake. If we reach this point, we can see both decentralization and the hope that we will have a new system. "We wouldn't be reinventing the wheel otherwise."  Yahoo Finance

DeFi developers pursued efficiency and lower costs at the expense of remaining genuinely decentralized. The author describes what a "maximalist" is in the context of cryptography.

Jim Bianco President of Bianco Research

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How to Make Money in the Metaverse Daniel Laboe The ostentatious billionaires of today have the resources (and the inventiveness) to realize their favorite science fiction ideas. Through the pandemic, technology accelerated, thrusting us into a futuristic economic environment where anything is possible, even a virtual universe that fits in the palm of your hand. The metaverse is a network of digitally rendered 3D worlds where users can interact virtually.

Those who have seen movies like Ready Player One or Avatar have some idea of this digital technology. The metaverse's implementation is perfectly positioned for the digitally-fueled post-pandemic

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economy where remote and mobile interactions are becoming the norm.

Uses of the metaverse are much more extensive than most people realize, with functionality that ranges from gaming & pure social interactions to a virtual workplace predicated on productive remote collaboration.

The Metaverse's Creator The metaverse was initially coined in 1992 by renowned author Neal Stephenson, known for his work in speculative fiction and making some of his ostensibly visionary speculations

come to fruition.

Stephenson's revolutionary work with futuristic ideas explores mathematics, physics, cryptography, and many other fundamentally sound concepts that have piqued the interest of some very influential Silicon Valley magnates.

Stephenson has influenced some of the most influential technologists of the world, including Bill Gates, Peter Theil, John Carmack (the original developer of the Oculus VR), and Jeff Bezos hired Stephenson to work for Blue Origin seven years in the early 2000s.

Stephenson's hypothetical theories

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of digital currencies (Cryptonomicon published in 1999) arose a decade before Bitcoin was created and are widely regarded as the inspiration behind cryptocurrencies.

In His Inauguration Speech, Zuckerberg Lights the Metaverse's Flame Facebook's CEO and founder, Mark Zuckerberg, appears to have been impressed by Stephenson's forwardthinking intellectual work. With an endless cyclone of regulation surrounding his company (the latest being an investigation into its users' emotional/mental "safety"), Zuckerberg decided it was time to shift the company's narrative. Facebook officially rebranded its parent company to "Meta," expressing the firm's total commitment to bringing the metaverse to life. Zuckerberg has had this metaverse vision ever since it purchased Oculus and its leading

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consumer VR operations back in 2014 for $2 billion.

product delays and catalyzing a nearly 50% drawdown in its share price.

Meta announced last fall that it would be pouring $10+ billion into the buildout of its virtual world. Management has stated that some aspects of the metaverse's functionality would be mainstream in as little as five years.

Meta's ubiquitous reach and ownership of the world's #1 VR platform, Oculus, makes its proposed metaverse an incredibly attainable objective. With 3.6 billion humans utilizing one or more of Meta's leading social interfaces (Facebook, Instagram, WhatsApp, & Messenger), roughly 75% of the internet accessing world is connected through this company.

I see this purchase of ATVI as a revitalizing value play that would benefit both enterprises. This merger would solidify Microsoft's domestic gaming leadership and stake its claim in the nascent metaverse. At the same time, this video game giant gains the managerial expertise of this nearly 50-year old tech innovator. Activision Blizzard holds one of the top catalogs of go-to videogames across platforms capturing gamers with various degrees of dedication. Names like Call of Duty, World of Warcraft, and Candy Crush will now be a part of Microsoft's rapidly expanding gaming portfolio.

Microsoft (MSFT) To Acquire Activision Blizzard (ATVI)

Other Plays

This morning, Microsoft MSFT announced that it would be acquiring Activision Blizzard ATVI in a $68.7 billion all-cash deal to competitively position itself for the next generation of gaming in the metaverse. This would position Microsoft as the thirdlargest gaming enterprise on earth (by revenue), behind Tencent TCEHY and Sony Group SNE. Microsoft's deepening pockets have catalyzed a recent spending spree, racking up 14 acquisitions in less than 52-weeks, not even including the eight strategic buy-ups it made in its videogame development segment in 2021 alone. Nonetheless, no prior deal comes close to the magnitude of this nearly $70 billion purchase, marking this corporation's most significant acquisition by leagues.

Microsoft saw a unique value opportunity in ATVI to significantly expand its videogame presence following the stock-crushing allegations of unaddressed workplace misconduct (specifically sexual-misconduct) at Blizzard. These allegations surfaced in July 2021 when legal suits began to flood in claiming the workplace had a female discriminating "Frat Boy" culture.

Blizzard was forced to clean house at the management level, causing critical

There are numerous ways to play this nascent metaverse industry, whether explicitly or implicitly tied to this new virtual world. Roblox (RBLX) is the most apparent explicit play for this developing technology, with Zuckerberg citing this company by name when he initially presented the idea last fall.

This interactive online universe will be ripe with cyber threats, positioning CrowdStrike's CRWD best-in-class AIdriven cybersecurity operations on the top of the implicit metaverse playbook.

NVIDIA's NVDA best-in-class graphics rendering chips will undoubtedly be a core component of Oculus's visual functionality, but the stock is extraordinarily richly valued (to say the least) at 62x P/E. On the other hand, Snap's SNAP visually-powered value proposition has seen its shares pounded in recent months due to its selective youthful user base.

However, the real value of this business doesn't come from its social media profile but rather from its cutting-edge augmented reality filters, which I see as much more consequential. I wouldn't be surprised if SNAP gets snatched up by one of the mega-cap tech outfits if its market value continues to falter lower.  Zacks Investment Research

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Cryptos Are Rising, and Capital Is Flooding In. But a ‘Crypto Winter’ May Be Coming Daren Fonda Venture capital is also flooding into the crypto space.

On Thursday, Bitcoin and other cryptocurrencies rallied as investors snapped up stocks and other “risk assets” after days of selling pressure.

Bitcoin was ahead 2.3% in afternoon trading to $43,000. Ether, Solana, Terra, and other significant tokens were also rallying, pushing the overall market up 2.3% to $2 trillion in market value, according to CoinMarketCap. According to a report in Bloomberg News, Google is developing a new blockchain unit in the latest sign that Big Tech is looking at how to capitalize

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on the crypto economy. Shivakumar Venkataraman, an engineering vice president at Google, is running a unit focused on “blockchain and other next-gen distributed computing and data storage technologies,” Bloomberg reported.

Google, the primary division of Alphabet (ticker: GOOGL), didn’t immediately respond to a request for comment.

Venture capital is also flooding into the crypto space. According to the Financial Times, one of the most significant players—Andreessen Horowitz—aims to raise $4.5 billion for a new fund dedicated to blockchain-based companies. More than $30 billion of venture capital and

other forms of private equity poured into crypto startups in 2021, according to PitchBook, up more than sevenfold from 2020. Yet crypto is experiencing an influx of capital when the industry and tech generally are having a tough time. As the Federal Reserve tightens monetary policy, investors have become nervous about rising interest rates. The price of high-priced tech stocks has plummeted. Cryptos have also suffered; the overall market has lost a third of its value, or $1 trillion, since peaking at $3 trillion last November.

Tighter monetary policies are one of a number of reasons that UBS, in a research note published on Jan. 14, is

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warning of a second “crypto winter.” The last such “winter” in 2018 saw Bitcoin and other cryptos fall more than 75% from previous peaks. They then took about three years to return to earlier highs from 2017.

As UBS sees, cryptos took off in 2021 partly because of abnormal monetary policies that flooded global markets with excess liquidity. But central banks are expected to gradually normalize policies, pressuring alternative currencies like Bitcoin that were boosted by “associated excess liquidity.”

According to UBS, the idea that Bitcoin is a store of value in an inflationary climate is also coming under more scrutiny.

While sovereign “fiat” currencies may lose purchasing power amid high inflation, their supplies are adjustable— able to contract and expand with economic growth and other variables.

That flexibility may help sovereign currencies retain long-term value, contrasting “with the likes of Bitcoin that are supply-limited and constrained by volatility in being able to function as

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units of account or media of exchange,” UBS says.

Another headwind is that blockchain technology may take quite a while to reach mainstream financial markets if it ever does. Blockchain networks like Bitcoin started out as decentralized ledgers, aiming to improve the security, transparency, and accessibility over incumbent payment systems dominated by banks and other institutions. But the Bitcoin network itself is being centralized as miners, who operate the network consolidate.

Many of the newer blockchains are controlled by companies and entities.

Moreover, the industry is shifting to a “proof of stake” model for processing transactions—potentially centralizing the networks in the hands of a few large operators.

“Blockchains don’t scale in practice without turning into the same ‘plutocratic’ systems they were designed to replace,” says UBS. Blockchains are also vulnerable to hacks, fraud, and theft, and they are a long way from

mass adoption due to technological complexity, even to change a password for an account.

Finally, speculative excesses are rising— as blockchain-based apps and services attract more users and economic value, they will inevitably invite more regulatory scrutiny. “High-flying stablecoins and DeFi projects seem almost sure to face bigger setbacks from authorities in the coming months,” UBS says.

The takeaway isn’t necessarily that cryptos will collapse overnight, losing value like Dutch tulips that never had much utility. Venture capital is pouring in because blockchain technology could be revolutionary, opening new venues for trading and borrowing securities—along with entirely new ways to monetize digital collectibles with non-fungible tokens, or NFTs. But the market may be getting pickier about which cryptos and blockchain companies will survive as liquidity dries up, leaving less capital to go around for all.  Barrons

January 2022 | Volume 11

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