Russian Appellate Court Cancels Decision to Block Tor Project’s Website – Bitcoin News
A court of appeals in Russia has overturned a ruling by a regional court which allowed the blocking of the Tor Project’s website in the country. Due to violations during the initial proceedings, the case has been returned to the court of the first instance for another review.
Roskomsvoboda Helps Cancel the Blocking of Tor Project’s Website in Russia
Procedural violations, mainly the failure to summon the owner, have led to the canceling of the regional court’s decision to block torproject.org, Roskomsvoboda announced this week. The lawyers of the non-governmental organization working to protect the rights of internet users in Russia played a role in the case which has been sent back to the first instance court in Saratov region.
The Tor Project’s website was blocked in December last year on the basis of a decision of the Saratov District Court from Dec. 18, 2017. The hearing in the appellate court, held online, was attended by Ekaterina Abashina from Roskomsvoboda’s legal team. Since the ruling of the district court has been canceled, torproject.org should be unblocked, she said.
Abashina explained that the defense had two main arguments to challenge the initial decision. First of all, the absence of a representative of the platform at the hearings affected the rights and obligations of the owner. Then, Russian law does not currently prohibit the dissemination of information related to VPN technologies and anonymizers.
The prosecutor did not file a written response to the lawyers’ complaint but made only a verbal objection. Roskomnadzor, Russia’s media watchdog which had blocked the website, filed a written response claiming the court had unlimited powers to recognize any information as prohibited, Abashina detailed. The legal expert told Forklog that Russian authorities want to restrict access to the website because of the published instructions on how to download the privacy-oriented Tor browser.
Ekaterina Abashina expects the new proceedings to begin within a month and hopes that the court of first instance considers Roskomsvoboda’s second point, that the spread of information about technologies such as Tor is not banned in the Russian Federation, and also attempts to summon the affected website’s owner as required by law.
Sites disseminating useful information and providing services to the crypto community have been targeted by Russian authorities in the past few years. Last June, a court in Russia’s Perm region decided to block a number of platforms describing how to exchange cryptocurrency for fiat cash. In December, Roskomnadzor took steps to restrict access to six VPN providers for helping Russians reach “banned” information. Some operators have successfully challenged these measures in Russian courts.
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What are your thoughts on the case with the blocking of the Tor Project’s website in Russia? Tell us in the comments section below.
Lubomir Tassev
Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
So-Called ‘Pharma Bro’ Martin Shkreli Turns ‘Crypto Bro’ — ‘I Started Using Uniswap in Prison’ – Bitcoin News
Following his release from prison, the former hedge fund manager and convicted felon, Martin Shkreli, discussed cryptocurrencies and using the decentralized exchange (dex) platform Uniswap from a federal penitentiary. The so-called ‘Pharma Bro’ further explained that eventually, a crypto entity could dethrone some of the largest banking giants.
Martin Shkreli Talks Defi and Cryptocurrencies
Martin Shkreli has been released from prison early and is now located at a halfway house located in New York. Shkreli’s federal custody will end in September, and as soon as he got out of prison he took to his social media accounts to speak. On Facebook, Shkreli jokingly said that getting out of jail was “easier than getting out of Twitter prison.”
Shkreli is a former hedge fund manager and he’s infamous for purchasing the license to a pharmaceutical drug called Daraprim. It wasn’t the fact that Shkreli’s firm Turing bought the drug, but that the company raised the drug’s price from $13.50 to $750 per pill in 2015.
Shkreli also has an interesting persona and is known for being very cocky. The so-called ‘Pharma Bro’ was eventually convicted of securities fraud in a case completely unrelated to the Daraprim price increase. Shkreli also is known for purchasing an unreleased Wu-Tang Clan album, which was seized from his estate after being convicted of securities fraud.
A non-fungible token (NFT) art collective ended up purchasing the unreleased Wu-Tang Clan record for $4 million. Shkreli was sentenced to seven years for his crime but got out early by completing shortened-sentence or good behavior programs.
On Saturday, during a Twitter Spaces post, the former hedge fund manager seemed to go from a so-called ‘Pharma Bro’ to a ‘Crypto Bro.’ Shkreli also said he leveraged the decentralized exchange (dex) platform Uniswap from behind bars.
“Uniswap is really cool. I started using Uniswap in prison,” Shkreli told his Twitter Spaces’ attendees. Shkreli seems to wholeheartedly believe in the crypto ecosystem and decentralized finance (defi). The convicted felon said:
I don’t think [defi’s] at the limit of where it can go. I think we’ll see more and more financial products that end up in defi… eventually, we’ll see some crypto entity be bigger than the banking behemoths.
Shkreli said that BTC dominance may get “eaten away,” and the entrepreneur also commented that companies like Apple and Tesla should have their own coins. “There are so many ways we can do things with [decentralized finance],” Shkreli remarked. “There should clearly be an Apple coin and a Tesla coin,” he added.
Shkreli also talked about blockchain networks like Solana and Algorand. Ethereum is one competitor that could flip BTC dominance, Shkreli highlighted during the conversation. “It’s hard for that not to happen given the use cases of ether,” Shkreli explained.
The former hedge fund manager likes to tell people about what he’s doing and had no problem with telling his fans he used Uniswap in prison. Uniswap’s founder Hayden Adams discussed Shkreli after the Twitter Spaces topic started to trend on social media. “Will Shkreli still like Uniswap when he learns I listened to that [Wu-Tang Clan] album he bought more recently than him?” Adams said.
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What do you think about Shkreli saying he used Uniswap in prison? Let us know what you think about this subject in the comments section below.
Jamie Redman
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Russian law enforcement officials are investigating a crypto mining operation at Butyrka, Russia’s oldest prison. A deputy warden has been accused of stealing electricity to mint digital coins with the help of unidentified accomplices.
Deputy Warden Suspected of Mining Cryptocurrency in Moscow Prison
A high-ranking representative of the management of Butyrskaya prison, in the Tverskoy District of central Moscow, is under investigation for setting up a crypto mining farm. Also known as Butyrka, this is the oldest prison in Russia, built in the distant 1771.
The coin minting hardware was found in the premises of a psychiatric clinic run by the Federal Penitentiary Service at the prison. The Investigative Committee of the Russian Federation is currently checking one of the deputy wardens for possible abuse of power, the business daily Kommersant reported this week.
The investigators have so far established that the official, together with his accomplices who are yet to be identified, installed the mining equipment in November 2021. The rigs were extracting cryptocurrency until February of this year.
During that period, the machines consumed almost 8,400 kW of electricity paid by the government at a total cost of more than 62,000 rubles (close to $1,000). For this, the deputy warden is accused of “actions that clearly go beyond his powers, thereby significantly violating the legally protected interests of the society or the state.”
Crypto mining with subsidized and sometimes stolen electricity has become an attractive source of additional income for many Russians. Regions such as Krasnoyarsk Krai and Irkutsk Oblast, which have historically maintained low electricity rates for the population and public institutions, have become hotspots of the unauthorized activity.
Illegal miners have been blamed for frequent breakdowns and blackouts, particularly in residential areas where electrical grids are unable to handle the excessive loads. To deal with the phenomenon, Russia’s anti-monopoly agency recently proposed the introduction of higher electricity rates for home crypto miners.
Raids have been carried out against underground mining operations across the country, with law enforcement agencies recently seizing over 1,500 mining rigs from two illegal cryptocurrency farms in Dagestan. One of them was minting cryptocurrency at a pumping station of the Russian republic’s water supply utility.
What do you think will happen with the Russian prison official accused of illegal crypto mining? Tell us in the comments section below.
Lubomir Tassev
Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Nox Bitcoin To Refund UST At $1 To Their Customers
Nox Bitcoin, a cryptocurrency exchange in Brazil, has taken the unprecedented step of using its own funds to refund customers for their TerraUSD coins at the full rate.
Following local media’s report on May 20, the Nox Bitcoin exchange has refunded all UST holders at a $1 rate with Tether’s USDT.
The report stated that the crypto brokerage firm paid620,000 Reais ($127,000). The exchange paid the amount to compensate all its customers who lost money due to the Terra ecosystem collapse.
Related Reading | Ripple Price Falls Below $0.43 As Bears Take Control Of The Market
“FatMan” of the Terra research forum commented in a tweet on May 20 that the decision might set a global precedent for other crypto exchanges.
The tweet stated;
This is fairly significant. A Brazilian cryptocurrency exchange has refunded all UST holders at a 1:1 rate with USDT. Likewise, this case may be used as key precedent to argue that exchanges are liable for UST losses. If tortious misrepresentations were made.
UST Back At $1 For Those Lucky Ones
The exchange stated that it would refund the customers the amount of the difference between the present rate for UST and the dollar peg it collapsed from. This implies that a holder of 100 UST at $0.06 will receive a refund of 94 USDT.
UST is currently trading at $0.066 with a green line | Source: UST/USD price chart from Tradingview.com
According to Nox Bitcoin CEO Joo Paulo Oliveira, the firm is not responsible for bearing clients’ losses from investing in certain currencies on its platform. Yet, they decided to intervene to ensure their customer’s trust.
He continued;
Clients have trusted us with staking and we understand that their trust is much more valuable than anything else. As a result, we’re going to reimburse these users minus the expenses we’d have elsewhere, like marketing.
The news came as a relief and brought positiveness to the cryptocurrency space. However, the decision by the Nox Bitcoin exchange reflects the Brazilian customer protection regulations.
The exchange also offers staking services, such as Anchor Protocol, which UST heavily uses. The DeFi protocol offered up to20% APY on UST staking and was primarily seen as being instrumental in its collapse due to these unsustainable yields.
People are now waiting to see what happens next regarding listing UST and LUNA. “It is possible that this will no longer exist in the near future,” stated Oliveira before adding, “but you never know what can happen in an unpredictable crypto market.”
Related Reading | Cosmos (ATOM) Skyrockets 12% Following Bitcoin And Ethereum Recovery
According to Tradingview, UST is trading at $0.067 with a 1% increase at the time of writing. The “unstablecoin” has withdrawn 93% from its peg. And it is unlikely to get back to it without major intervention such as a TerraForm Labs hard fork.
Also, TerraForm’s LUNA has dumped a similar amount. As a result, the coin is trading at $0.00020 with a market cap of $1.35 billion and 6.5 trillion tokens in circulation.
Featured image from Flickr, and chart from Tradingview.com
Bitcoin Held on Trading Platforms Continues to Drop Lower, Over 68% of the Total Held by 5 Exchanges – Bitcoin News
Amid the market carnage tied to Terra’s recent fallout, bitcoin sent to exchanges saw a brief spike on May 7, jumping more than 2% higher from 2.481 million to 2.532 million bitcoin. Despite the recent increase of bitcoin sent to trading platforms, the number of bitcoins on exchanges today remains lower than ever before.
Bitcoin Continues to be Taken Off Exchanges
Bitcoin (BTC) continues to be removed from centralized cryptocurrency exchanges as the number is much lower than the lows that were recorded on November 15, 2020. 248 days earlier, on March 12, 2020, the day after the infamous ‘Black Thursday,’ there were just over 3 million bitcoin held on centralized digital currency trading platforms.
During the course of that time frame, the number of BTC held on exchanges dropped 15.86% on March 12 from 3 million BTC to 2.524 BTC on November 15, 2020. In more recent times, the number of BTC held on exchanges has been lower and in May the metric hit two significant lows.
May 22, 2022, exchange reserves stemming from cryptoquant.com data sets.
First on May 2, 2022, cryptoquant.com data shows there was 2.481 million BTC held on exchanges. The 2.481 million bitcoin was 1.70% lower than the number of BTC held on November 15, 2020. However, amid the Terra blockchain fallout and the terrausd (UST) de-pegging event, there was a brief spike of BTC deposits sent to exchanges.
After the low on May 2, there was a 2% increase in BTC deposits sent to centralized crypto exchanges. But that metric changed real quick as the 2.532 million bitcoin high on May 7, dropped over the course of the following week down 2.21% lower to 2.476 million BTC.
Out of $73 Billion in Bitcoin Held on Trading Platforms, 5 Exchanges Hold Over $50 Billion
At the time of writing, there’s 2.503 million bitcoin worth $73.7 billion held on digital currency trading platforms. Data provided by Bituniverse’s Exchange Transparent Balance Rank (ETBR) indicates Coinbase holds roughly 34% of the bitcoin held on exchanges. The ETBR list shows that Coinbase holds 853,530 bitcoin on the trading platform which is valued at roughly $25.14 billion using current BTC exchange rates.
13.58% of the 2.503 million bitcoin kept on exchanges is held by Binance. Binance is the second-largest exchange, in terms of BTC holdings, as it currently controls a stash of 340,410 BTC worth roughly $10 billion.
Okex commands the third-largest position, in terms of BTC holdings, as the company currently holds 266,530 BTC, or 10.62% of the aggregate total. Huobi Global commands the fourth largest position today, with 160,950 bitcoin held on the platform. Huobi’s BTC stash equates to 6.39% of the entire 2.503 million bitcoin held by exchanges.
The crypto exchange Kraken is the fifth largest BTC holder with 102,900 bitcoin held or 4.07%. Between the top five exchanges, as far as BTC reserves held is concerned, the group of trading platforms holds 68.66% of the 2.503 million bitcoin.
The five exchanges command 1.724 million BTC worth $50.7 billion out of the aggregate of 2.503 million worth $73.7 billion. While there’s a lot less BTC held on exchanges, the number of bitcoin held by these trading platforms is largely concentrated on Coinbase, Binance, Okex, Huobi, and Kraken.
What do you think about the amount of BTC kept on centralized exchanges? What do you think about the 68% held on five crypto trading platforms? Let us know what you think about this subject in the comments section below.
Jamie Redman
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
Image Credits: Shutterstock, Pixabay, Wiki Commons, cryptoquant.com data,
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Cardano (ADA) Grapples At $0.524; Bullish Trajectory Coming
Cardano (ADA) prices show that the bulls are trying to overpower the market to diminish the bearish trend. ADA prices have been lingering steadily at $0.5, and a rejection strung at $0.628.
More so, there has been a marked price decline of 7% in the market seen the previous days as the bearish trend takes over. The current market trading level is now at $0.524, which is pivotal as there seems to be a power struggle between the bulls and the bears.
Suggested Reading | Avalanche Crumbles More Than 16% As Crypto Landslide Continues
Support At $0.50; Bulls Try To Up Market Prices
Support has been capped at $0.50, and the bulls are trying to get the prices to skyrocket. Meanwhile, the bears are not the type to throw in the towel as they are currently selling at steep prices.
With these price movements, the market is perceived to see more volatility, especially since the bears and bulls are trying to outpace and outperform each other.
Everyone should keep an eye on the critical level set at $0.5, wherein a break right below that trajectory would see prices plunging to as low as $0.45 levels. However, once it breaks above the price of $0.628, prices would go to as much as $0.70 levels.
Cardano Power Struggle: Bulls Vs. Bears
A 24-hour price analysis of Cardano (ADA) reveals a robust price battle as the bulls try to take over the market, which is being met by intense bearish pressure. These opposing forces can elicit volatile activity seen in the near term as the bulls and bears get friction to work.
The trading volume seen in the ADA/USD pair is now set at $$398,204,651.10, with the total market capitalization at roughly $17.69 billion. The pair is currently at position 8 and overshadowing 1.41 of the other digital assets.
Suggested Reading | Cosmos (ATOM) Skyrockets 12% Following Bitcoin And Ethereum Recovery
ADA/USD Pair Can Perform Better This Week
Moreover, the ADA/USD pair is seen to command and conquer with better-performing figures this week, considering the consolidation period at which the bulls are getting ready to dominate the market.
The bulls and bears are trying to grip the rope tighter as they struggle to lead the market.
The bulls are back once you see the prices at the $0.628 resistance level. The prices would need to find the proper grip or support, likely at the $0.5 level, to prevent further downturns.
Bitcoin price is still struggling to hold onto support at $30,000 on high timeframes after smashing through it more than a week ago now.
With buyers stepping in after the plunge, there is a chance for bulls to stop the downside with a bullish reversal candlestick setup. Learn more about the potential setup and find out if it’s “hammer time”.
A Bullish Hammer Could Put A Stop To The Bear Market
You wouldn’t necessarily know it by the ultra bearish sentiment or the recent plunge and resulting panic across the crypto market.
But if you look at medium timeframe price charts, Bitcoin bulls could be preparing out a stop to the bleeding and stage a bullish hammer reversal.
Related Reading | This Expanding Triangle Pattern Could Be The Last Hope For Bitcoin Bulls
Japanese candlesticks are said to be developed by the so-called “God of Markets,” Honma Munehisa. Homna was a rice trader and wrote the first ever book in market psychology.
Candlesticks are comprised of a body and shadow, often called a wick. They are typically depicted as red and green, or white and black (open and closed). Each candle includes information on the open, close, low, and high of the trading session it represents.
How the candle opens, closes, and the highs and lows set during the session will shape the candle, and often provide information about what might be going on in the market — and what might come next.
The Technicals Supporting A Bitcoin Reversal Setup
On BTCUSD weekly and 2-week timeframe charts, the top cryptocurrency is working on a bullish hammer. A bullish hammer is a characterized as having a long lower wick acting as the handle, a small upper body, and little to no upper shadow.
Although the bullish signal only takes one candlestick to suggest a bottom is in, it is only confirmed with a strong follow through back to the upside.
Hammers are most effective when they follow a string of at least three down candles, and are supported by bullish technicals.
The bullish hammer is happening at what could be the end of a wave 4 expanding triangle correction, according to Elliott Wave Principle. The MACD is retesting the zero line, much as it did during the wave 1 Black Thursday correction. Each bottom, also coincidentally touched the lower Bollinger Band before reversing to the upside.
Related Reading | Bitcoin Bear Market Comparison Says It Is Almost Time For Bull Season
Will this bullish hammer confirm, and stop the bloodbath from continuing?
Here is a 🧵 on my full Elliott Wave analysis on #Bitcoin and why I don’t believe there is a bear market – and why I expect the last leg up any day now.
— Tony “The Bull” Spilotro (@tonyspilotroBTC) May 15, 2022
Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.
Featured image from iStockPhoto, Charts from TradingView.com
Circle to Issue Weekly USDC Reserve Reports — Tether Publishes May 2022 Assurance Report – Altcoins Bitcoin News
The co-founder and CEO of Circle, Jeremy Allaire, has announced the cryptocurrency firm that issues the stablecoin usd coin plans to provide the public with weekly stablecoin reserve reports. Additionally, the company Tether has also released an assurance report on its stablecoin reserves via the Cayman Islands auditing company MHA Cayman.
Circle CEO Says Firm’s Stablecoin Is a ‘Very Efficient Pipe Between Legacy Electronic Dollars and Digital Currency Dollars’
The two largest stablecoin providers, Tether and Circle, want the public to be assured that tether (USDT) and usd coin (USDC) are fully backed by reserves. The latest assurances follow the recent terrausd (UST) de-pegging event, which saw UST drop from its once-stable $1 parity to today’s $0.06 per UST.
Following the event, Circle published a blog post on May 13, called “How to Be Stable,” which explained Circle’s USDC reserves are backed entirely in cash and short-dated U.S. Treasuries. After the blog post, a week later the co-founder and CEO of Circle, Jeremy Allaire, explained that the company will now provide weekly USDC attestations concerning the stablecoin’s reserves and liquidity.
“As promised a week ago, we are now providing weekly reports on USDC reserves and liquidity operations,” Allaire tweeted. Allaire also shared the USDC assurance report and further said: “Over the past week, we saw 8.6 billion USDC issued, and 6.3 billion USDC redeemed, with a net weekly increase in circulation of 2.3 billion USDC.” The Circle CEO added:
What makes USDC such a great product is that it’s easy to create and redeem, with seamless integration with the existing global banking system. As a result, customers are able to use it as a very efficient pipe between legacy electronic dollars and digital currency dollars.
Per the report, the usd coin (USDC) in circulation is 52.9 billion while Circle’s reserve backing count is $53 billion as of May 20, 2022. $12.8 billion of the USDC backing is in cash, while $40.2 billion is held in short-duration U.S. Treasuries.
Out of the entire $1.3 trillion crypto economy, USDC represents 3.95% and during the past 24 hours, USDC has seen $3 billion in global trade volume. Circle’s stablecoin is the second-largest fiat-pegged crypto token that’s tied to the value of the U.S. dollar.
Tether Publishes May 2022 Assurance Report Authored by MHA Cayman
This month, Tether published an assurance report written by the firm MHA Cayman, an auditor formally known as Moore Cayman. The report says Tether’s “consolidated total assets amount to at least USD 82,424,821,101 and the asset breakdown set out in the CRR is materially accurate.” MHA Cayman says it conducted attestation methods such as an ISAE 3000, an ISQC 1, and accountant responsibilities in accordance with the IESBA Code.
Tether is the largest stablecoin crypto asset today, as coingecko.com data shows there’s currently 73.2 billion USDT in circulation. The company’s transparency page indicates that the firm holds $78.4 billion in total assets on blockchains like Omni, Ethereum, Tron, EOS, Algorand, and more.
Tether’s market capitalization today equates to 5.44% of the $1.3 trillion crypto economy, and USDT has seen $31 billion in global trade volume over the last day. In fact, 47.71% of bitcoin’s (BTC) past 24 hours of trades were all paired with USDT, and 48.77% of all ethereum’s (ETH) swaps were paired with tether this weekend.
What do you think about Circle’s and Tether’s reserve backing assurance reports? Let us know what you think about this subject in the comments section below.
Jamie Redman
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Blockchain, crypto set to take sports industry beyond NFT collectibles
Bitcoin (BTC) has been attributed as the most prominent blockchain use case, showing the technology’s prowess in successfully delivering an immutable and truly decentralized ledger over the past 13 years. Adding to the years of innovations since then— that saw the introduction of altcoins, nonfungible tokens (NFT), decentralized finance (DeFi) and more, a study conducted by fintech giant Deloitte highlighted the untapped potential of the crypto ecosystem to open up newer markets for the sports industry.
Fan tokens and NFTs were first introduced to the sports industry to increase fan engagement via collectibles and voting mechanisms. However, Deloitte, one of the Big 4 accounting firms, envisions the industry further embracing crypto and blockchain technology over the coming years:
“A nexus will form around sports collectibles, ticketing, betting, and gaming. We are just beginning to see its [cryptocurrency’s] potential, as well as the new markets it could lead to.”
Highlighting incoming trends in the sports industry, Deloitte’s 2022 sports industry outlook report expects an eventual rise in blockchain-enabled innovations, as a result of which “The use of NFTs, crypto, fan tokens, and ticket innovations will grow and evolve.”
“Moving beyond NFTs,” Deloitte expects the sports industry to start soon linking spectators with season tickets over the blockchain. While the initial move toward this goal would mean merely associating game tickets with NFTs as means to reward fans, innovations around smart contracting could potentially open up new use cases:
“We could see fractional ownership of season tickets and suites and a reinvention of the ticket resale process.”
As a result, new revenue streams can be created for sports organizers and teams as smart contracts streamline the processes related to dynamic ticket pricing and resales. However, Deloitte shared four key factors that need to be addressed by the ecosystem: implementing new standards, educating fans and considering compliance and tax implications.
Additionally, Deloitte’s study revealed that NFTs catalyzed the merger between the physical and virtual worlds in sports while predicting over $2 billion in sports-related NFT transactions in 2022 alone.
On an end note, the financial server recommended sports organizations keep an eye on the NFT boom and its impact on other segments such as gaming.
Related: Aussie media company goes all in on NBA fan engagement with NFTs
Supporting Deloitte’s report on the rising NFT trend across the sports industry, Australian media company Basketball Forever recently launched Hoop Hounds, an NFT project aimed to increase National Basketball Association (NBA) fan engagement and provide substantial real-world utility for the tokens.
Basketball Forever founder Alex Sumsky resonated with Deloitte’s findings when he told Cointelegraph that the technology is more than just a token tied to a JPEG and allows organizations to provide innovative ways to increase user engagement and give the fans real utility.
As part of the initiative, Basketball Forever will offer 8,888 different hounds, or various basketball and NBA personalities depicted as animated canines, each with unique traits and differing levels of rarity.
How to incorporate a DAO and issue tokens to be ready to raise money from VCs
What is a DAO?
A DAO, or decentralized autonomous organization, is an online-based organization that exists and operates with no single leader or governing body. DAOs are run by code written on a blockchain like Ethereum (ETH) and are owned and operated by the people who use them.
There are many different types of DAOs, but they all have one thing in common: they are decentralized, meaning that decisions about the organization’s future are decided by the collective group and not a single individual.
This decentralization is what makes DAOs promising, as it theoretically removes the possibility of corruption or manipulation by a single entity. Smart contracts (and not people) execute the terms and conditions of the organization, making them incredibly efficient and resilient to change.
How does a DAO work?
A DAO is a collection of smart contracts that live on the Ethereum blockchain. These contracts interact with each other to form the organization. They are written in such a way that anyone in the world can use them.
The code for a DAO is public, and anyone can view it to see how it works. This transparency is one of the key features of a DAO. Compared to traditional organizations, DAOs are much more efficient because there is no need for a middleman or central authority.
Another key feature of a DAO is that it is autonomous, meaning that it can operate without human intervention. This is made possible by using smart contracts, which can automatically execute tasks according to the programmed rules.
DAOs are self-governing and self-sustaining, meaning they can continue to exist and operate even if the original creators are no longer involved. This is another advantage of using smart contracts. They ensure the DAO continues to follow its original rules even if the people running it changes.
Some of the most well-known DAO tokens and platforms are Uniswap (UNI), Aave (AAVE), Compound (COMP), Maker (MKR) and Curve DAO.
Steps to raise money from VCs after incorporating a DAO
Write a white paper
After incorporating your DAO, you will need to write a white paper. A white paper is an essential document that explains what your DAO is, what it does and how it works. It should be clear, concise and easy to understand.
Your white paper will be used to convince potential investors to support your DAO, so it’s important to ensure it’s well-written and persuasive. To help you get started on writing your DAO’s white paper, check out our detailed guide here.
Create a pitch deck
In addition to a white paper, you will also need to create a pitch deck. A pitch deck is a short presentation that gives an overview of your DAO and its purpose.
Your pitch deck should be clear, visually appealing and easy to follow. It should also include information about your team, your progress to date and your plans for the future.
Create a website
The next step in raising money for your DAO is to create a website. Your website should be professional and informative. It should include your white paper as well as any other relevant information about your DAO.
It should also have a way for potential investors to get in touch with you. This could be through a contact form, an email address or a social media account.
Reach out to VCs
Once you have created a white paper, pitch deck and website, you can start reaching out to venture capitalists, or VCs. When contacting VCs, it’s important to be clear about your objectives and what you are looking for.
Some VCs may be interested in investing in your DAO if they believe in its mission. Others may be more interested in the financial return that investing in your DAO would give them.
Related: Venture capital financing: A beginner’s guide to VC funding in the crypto space
It’s also important to remember that VCs are busy people. They receive hundreds of pitches every week, so you need to ensure that your pitch stands out.
Negotiate terms
Once you have found a VC interested in investing in your DAO, you will need to negotiate the terms of the investment. This includes the amount of money the VC will invest, and the equity stake they will receive in return.
It’s important to remember that you are in a strong position when negotiating with VCs. After all, they are the ones who are interested in investing in your DAO. As such, you should aim for terms favorable to you and your team. This includes getting a large equity stake and a high valuation for your DAO.
Close the deal
Closing the deal is an important step in raising money for your DAO. Once you have negotiated the terms of the investment, you will need to close the deal. This involves signing a contract with the VC, as well as receiving the agreed upon amount of money. It’s a good idea to have a lawyer review the contract before you sign it.
Use the funds
Once you have closed the deal and received the investment, you will need to use the money wisely. This means spending it in a way that will help your DAO achieve its objectives. Some of the things you could use the money for include hiring employees, marketing your DAO and developing new features.
It’s also important to remember that you will need to report back to the VCs on how you are using the money. For this reason, ensure that your expenses and progress are all properly tracked.
Pay back the VCs
Eventually, you will need to pay back the VCs. This could be through a sale of your company, an initial public offering (IPO) or another exit strategy. Paying back the VCs is an important step in the life cycle of a DAO. It is also a good way to show them you are committed to your business and have faith in its future.
Related: What is an IPO? A beginner’s guide on how crypto firms can go public
Can DAOs replace VCs?
Are DAOs a viable replacement for venture capitalists? The answer is that it depends. VCs typically invest in early-stage companies and help them grow through the provision of capital, mentorship and connections.
DAOs can provide some of these same services, but they’re not well suited to invest in early-stage companies. This is because DAOs are decentralized and cannot make quick and decisive decisions.
VCs, on the other hand, are centralized and can make quick decisions that help early-stage companies grow. So, while DAOs can provide some of the same services as VCs, they’re not a perfect replacement. A VC is probably a better choice if you’re looking for an organization to invest in early-stage companies.
A hybrid future of DAOs and traditional VCs
DAOs are a new and innovative way of organizing people and resources. While they can’t exactly replace traditional VCs, they can potentially disrupt the industry.
We’ll likely see a future where DAOs and traditional VCs work together to support the growth of early-stage companies. For example, a DAO could provide the capital and resources while a VC provides the mentorship and connections.
Such a hybrid model would allow early-stage companies to get the best of both worlds: the capital and resources they need to grow, and the mentorship and connections they need to succeed.
VC DAOs already exist, proving that such a model is possible. One example is The LAO, a venture capital DAO. It focuses on early-stage blockchain projects based on Ethereum (ETH) and has funded over 30 projects so far. How it works is that governance remains a function of the blockchain while an external service provider takes care of the administrative and legal procedures.
Another good example is MetaCartel Ventures, a private VC DAO and a spin-off of the Ethereum ecosystem grant fund, MetaCartel. The VC DAO arm is managed by a board of “mages,” who conduct functions like presenting investment proposals, due diligence and voting on proposals. They mainly fund early-stage decentralized applications and protocols at the moment.
