Translated by elcreto

Xangle’s Take on the Market This Week

• Last week’s strong rally continued into this week. The gains across the crypto market have come as a continued uptrend in the price of Bitcoin (+11%) propped up investor sentiment, giving major assets, e.g., Ethereum (+9%) and Solana (+31%), upward momentum.
• Like last week, highest-performing sectors continued to be games/metaverse (+15%) and NFT (+12%).
• On the 19th, sluggish retail sales figures and subsequent fears over shrinking demand in the U.S. coupled with Fed’s hawkish remarks and possible further tightening trumped the market sentiment at one point, bringing the prices down 5%-10% across the market. The assets turned positive though and are now trading flat after dip buyers came in.

Top Stories & Takeaways

South Korea’s Financial Watchdog Permits Issuance and Distribution of Security Tokens

• On Jan 19, the Financial Services Commission (FSC) of South Korea approved issuance and distribution of security tokens at its 6th meeting on capital markets regulatory improvements.
• The key agenda included measures to: 1) allow securities to be digitized with distributed ledger technology, 2) permit security tokens to be issued without intermediation of a securities firm when certain requirements are met, and 3) institutionalize OTC platforms for security tokens.
• A more detailed guideline will be released in early Feb.

Xangle’s Take: South Korea’s greenlight for security token offerings (STO) will likely allow for fractional share investing in real-world assets, such as real estate and works of art, and make crypto a safer investment. Speculations are growing over whether the approval for STO signals the beginning of institutionalization of the crypto space and eventually leads to a boost in the crypto market.  

Link: Brokerage Houses Heat Up Race in Securities Token Market

Genesis Files for Bankruptcy

• On Jan 19, crypto lender Genesis filed for Chapter 11 bankruptcy in Southern District of New York. The debtors in these Chapter 11 cases are: Genesis Global Holdco LLC, and its lending arms, Genesis Global Capital LLC and Genesis Asia Pacific Pte Ltd.
• The company’s spot trading, derivatives trading, and custody units are not included in this filing and will stay in business.
• There are over 100,000 creditors of Genesis Global Capital, and the debt is estimated to be around $1B-$10B.

Xangle’s Take: The unraveling of Genesis’ bankruptcy filing suggests that negotiations for debt adjustment plans between debtors and creditors like Gemini might have gone sour, unlike the possible prepackaged bankruptcy previously reported. The bankruptcy proceedings may take longer than expected. Given such a wide range of debts Genesis included in the filing, it is difficult at this point to fathom the magnitude of a possible chain reaction it may trigger (e.g., Grayscale’s sale of GBTC and subsequent sell-off of BTC stash). Yet the prices of related assets, i.e., Bitcoin, Decentraland, and Stellar Lumens, will likely see some fluctuations for a while. (Check out Genesis & DCG Caught Up in FTX Contagion for more details).

Link: Genesis Initiates Process to Achieve Global Resolution to Maximize Value for All Clients and Stakeholders and Strengthen Its Business for the Future

Mainnet

Polygon, PoS Chain Hard Fork & Final Upgrade to Nightfall

Polygon has completed a hard fork and final Nightfall update to enhance performance of its PoS chain.

Link: Hardfork Incoming: Upgrading Polygon PoS Chain to Boost Performance | The EY and Polygon organizations update source code for blockchain privacy-based protocol Nightfall

Klaytn Discloses 4Q22 KGF/KIR Grants and Investments

Klaytn keeps a tighter control of the expenditure of the Klaytn Improvement Reserve (KIR) while HaechiLabs Audit Fund ($750K) topped the list.

DeFi

USDC Issuer Circle Will Have Its Reserve Audited by Deloitte

Circle, the issuer of USD Coin (USDC) appointed accounting firm Deloitte to conduct an audit of its USDC reserve.

Link: State of the USDC Economy

NFT

Azuki Announces Partnership with Bilibili International

NFT project Azuki has entered a partnership with Chinese video streaming platform Bilibili.

Link: Azuki’s Tweet on Partnership with Bilibili

NFT Platform DOSI Allows Link Coin Payment for NFTs

Starting Jan 19, 2023, Line’s NFT platform DOSI will allow NFT purchases to be paid with Line Link Coin, LN.

Link: [Notice] DOSI Launched the LINE's Digital Asset LINK (LN) Payment (Beta)

BAYC’s Mini-Game Dookey Dash Is Now Open

BAYC has launched Dookey Dash, an NFT-gated mini-game exclusively available for Sewer Pass holders.

Link: BAYC’s Tweet on Dookey Dash Release

Macro/Industry/Corporate

S. Korean City Busan Will Set up Digital Commodities Exchange, Instead of Digital Assets Exchange

Busan city government’s plan to set up an exchange has switched from a digital assets exchange handling cryptocurrencies and STOs, to a digital commodities exchange offering tokenized assets, such as ships, real estate, and IPs.

Link: S. Korean city Busan to launch digital commodities exchange, shelves crypto | Busan City Wishes To Launch The World’s First Decentralized Digital Commodity Exchange

Hyper Oracle Closes $3M Pre-Seed Funding Round

Hyper Oracle, an early-stage startup that develops zkMiddleware, received a $3M investment from Sequoia China.

Link: Hyper Oracle Closes $3M Pre-Seed Round Led by dao5 and Sequoia China Seed Fund | Announcing Hyper Oracle, the ultimate Web3 zkMiddleware

Research

From Dutch Auctions to Open Editions: A Deep Dive into NFT Distribution Models - Delphi Digital

The author of this research article writes that the token distribution model of an NFT project at its initial stage can make or break the project, stressing that distribution models should be carefully geared towards the objectives and needs of the project.

Link: From Dutch Auctions to Open Editions: A Deep Dive Into NFT Distribution Models - Delphi Digital

Previous Weekly Reports

• [Weekly Xangle] Ethereum Shanghai Upgrade, Avalanche AWS Partnership, Gala’s Meteoric Rise, Marblex MBX 3.0, and More
• [NFT Weekly] Your Weekly Roundup of Latest NFT News: Azuki Hilumia, Metaverse Seoul, and On-chain Analysis
• [On-chain Weekly] Ethereum Node Distribution by ISP, Market Share of Lending Platforms
• [On-chain Weekly] MC and FDV, Uniswap NFTs, APE Staking