ETH’s on a pendulum

In today’s edition, BTC’s many ATMs, who owns web3, and blockchain games.

Author

Sabyasaachi K
December 20, 2022

Good morning! Welcome to The Daily Moon. People are lonely and they’re making their way to the metaverse. According to a study, ~30% of the people polled were ready to find love on the metaverse. It’s a good idea, but a study revealed that the metaverse has a sexual abuse problem and there are not enough guardrails to prevent that. God bless all the single people on the metaverse.

The markets recovered. Bitcoin was at ~$16,800 and Ethereum moved to $1,210 levels. Nasdaq fell in early trade. Back home, Sensex and Nifty ended slightly lower.

ETH’s Stuck To A Pendulum

Ethereum’s supply has fluctuated way too much. After the Merge, there was a deflation, meaning more tokens were destroyed than created. Then came inflation, where the issuance rate was higher than the burn. This swing continues.

Where’s it headed?You cannot predict which direction Ethereum’s supply will take. There was a two-week deflation from November 10. It turned inflationary until last week. Now, there is a deficit of around ~11,000 tokens. Periods of oversupply are longer than the undersupply phases.

  1. The blockchain isn’t as busy as expected. The busier the network, the higher the burn rate.

  2. Only 13% of the ETH supply is staked on the blockchain. In comparison, 71.6% of ADA supply and 68.6% of SOL supply is staked.

Whales awakenETH liked the boredom. But it’s now spooked by whale activity. Two dormant whales transferred $27 million-worth ETH to unknown wallets. But at least the ETH hasn’t been moved to the exchanges yet. And now with Visa teasing a future payment collab with Ethereum, the adoption excitement is climbing.

There’s more comingEthereum co-founder Vitalik Buterin believes that the best is yet to come. These are his market movers for 2023:

  • Mass wallet adoption.

  • Inflation-resistant stablecoins.

  • Ethereum-powered website logins.

He didn’t offer any insights on how to make it work. That’s for the developers to figure out.

39K And Counting…

It started alongside a Vancouver coffee shop in 2013. Eight years later, there are 39,678 of them. Bitcoin ATMs have opened in 84 countries, with the US at the lead. Yes, El Salvador is also part of the top five.

What are BTC ATMs?Bitcoin ATMs are used to buy and sell BTC. Some of these ATMs exclusively allow you to buy BTC, while the rest allow both. But unlike bank ATMs, transactions take longer to complete.

Where can I find them?In a lot of places, if you are in North America. The US has 34,224 Bitcoin ATMs while Canada has 2,716. Here are a few others:

  • El Salvador: 212

  • Hong Kong: 145

  • Mexico: 45

Are the numbers stable?Just like cash ATMs, there has been a drop in crypto ATM installations in 2022. A total of 6,100 ATMs were installed. That’s a 3X decline over the previous year.

Removing The MetaMask

That is the question at the heart of a legal battle playing out in Switzerland. It’s a fight between billionaire Joe Lubin, the founder of ConsenSys, and a group of former employees at the same firm. Lubin is also the co-founder of Ethereum.

What’s the issue?These former employees are saying Lubin transferred assets improperly from ConsenSys. They now belong to an entity owned by Lubin, JP Morgan, Microsoft, Softbank, and Singapore’s state-owned Temasek. The assets include the popular crypto wallet MetaMask. At a simpler level, the former employees are saying the sale of assets was a conflict of interest and that the $50 million sale value was too low.

The larger issueThis fight is about whether the involvement of big tech and banks bodes well for crypto. The purists believe the ownership of crypto by big corporations will threaten the decentralised nature of the ecosystem. The pragmatic camp believes that such involvement will lead to mass adoption of crypto. There are a few who believe this is a marketing stunt to force a settlement, which will have just one winner—Lubin.

It’s In The Game

It may be crypto winter for the world, but VCs aren’t shying away from making investments in the sector.

What’s the bet on?Blockchain gaming. This is interesting because VC investments are a good indicator of future trends.

  • In 2022, VCs and angel investors invested over $3.4 billion in GameFi.

  • Of this, a $534 million investment was made in October and November alone.

  • In 2021, GameFi and the metaverse accounted for about 11.54% of overall blockchain-based funding. In 2022, that number is 17.64%.

The winnersNone of the big players in the gaming space make it to the top lists anymore. It is the gaming marketplaces and infrastructure such as Gameflip and GameStop that are raking in the money.

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