MetaMask Teams Up with PayPal for Seamless Ethereum Transactions

01.03.2023

MARKET OVERVIEW

Liquid Staking Derivatives: A Beacon of Hope in a Volatile Crypto Market

The Ethereum Shanghai Upgrade, set to be released in March, is poised to have a significant impact on the world of liquid staking protocols in the DeFi space. Currently, staked ETH withdrawals are not available, leading to a relatively low percentage of the ETH supply being staked. However, the ability to withdraw staked ETH is expected to change this dynamic, potentially leading to an increase in the number of people choosing to stake their ETH.

In this scenario, it seems likely that a growing number of individuals will opt for liquid staking derivatives as a means of earning staking yields without giving up their staked ETH. We believe this trend could potentially lead to a significant boost in the revenue of liquid staking providers, and could have a corresponding effect on the value of certain tokens.

Based on our analysis, three such tokens that may potentially benefit from this trend are Lido Finance’s LDO, Rocket Pool’s RPL, and Frax’s frxETH. Lido Finance, the largest ETH liquid staking provider, collects a 10% fee on staking rewards, with a portion of this fee being sent to the DAO treasury. Lido is currently the market leader in its segment and is the fifth most undervalued protocol based on the price-to-fees ratio. However, it should be noted that LDO does not offer revenue sharing to its holders.

Rocket Pool, the second largest liquid staking protocol, prioritizes decentralization, allowing anyone to run a node. Additionally, RPL has low inflation and the potential for higher staking rewards. However, it also does not offer revenue sharing to its holders.

Frax’s frxETH has seen rapid growth in its total value locked and offers attractive yields for providing frxETH on Curve. Additionally, 8% of the ETH staking yield is shared with veFXS holders. However, frxETH is relatively new and less popular than other liquid staking derivatives, and its current inflation rate is 24%.

It is still too early to determine which of these protocols will see the greatest benefit from the Ethereum Shanghai Upgrade. However, the release of the upgrade is likely to drive a new narrative around liquid staking in the DeFi space and could lead to significant changes in the market.

NFT MARKET NEWS

MetaMask Partners with PayPal

ConsenSys has announced the integration of a new feature that allows users to purchase ether (ETH) via PayPal on MetaMask’s mobile app. The feature is currently available only to a select group of US customers and will allow Web3 users to transfer ETH held on PayPal or purchase the cryptocurrency using PayPal-linked bank accounts. The feature is expected to be available to all US customers in the coming weeks, and MetaMask will charge a 1% service fee on purchases. This new addition to the MetaMask app offers users an additional on-ramp to Ethereum joining options such as instant bank transfer, Apple Pay, and debit or credit card. Regarding the new PayPal partnership, MetaMask’s product manager Lorenzo Santos told Blockworks that “MetaMask never collects or processes KYC [know-your-customer] data or payment details.” He views the integration as an opportunity to onboard hundreds of millions of users to Web3 who have already entrusted their payment details to PayPal. This is designed to also help to bring NFT’s to the mainstream as MetaMask is the most popular used to purchase NFT’s.

Gaming Platform Forte Partners With SuperLayer to Advance Web3 Gaming

Forte, a blockchain platform that allows game publishers to integrate blockchain technology into their games, has announced a partnership with startup venture studio SuperLayer. The partnership will see Forte serve as SuperLayer’s preferred crypto payment and liquidity services provider, while SuperLayer will provide the infrastructure support to expand Forte’s verticals beyond just gaming. Forte received a valuation of over $1 billion and $910 million raised in two funding rounds last year. The company’s platform is designed to enable game developers to easily incorporate blockchain features such as token wallets and non-fungible token (NFT) transactions into their games.

In addition to the partnership, Forte has also invested $5 million in SuperLayer’s recent $25 million funding round, which was led by Polygon. The funds will be used to support companies in SuperLayer’s second incubation round, which is expected to include between eight and ten companies. The capital will be used to provide pre-seed investments for each company. Forte’s Chief Development Officer, Linda Chew, commented on the partnership, stating that “the core tenets of blockchain are applicable much more broadly than just games, whether it’s e-commerce or loyalty systems or social. There’s really a number of different verticals where we see enormous potential.”

LATEST NEWS

Hundreds of institutions and prominent individuals have invested directly in crypto, adopted the value thesis, or started building technology to support digital assets since Wave started tracking this metric in late 2020. Now the rise of the Metaverse, Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and Decentralized Autonomous Organizations (DAOs) is driving mainstream adoption of blockchain technologies everywhere we look. We’re continuing to keep track of it every week here:

• China will be launching its first regulated NFT marketplace. The China Digital Asset Trading Platform, a collaboration between state owned enterprises and private firm Huban Digital, will be going live on new year’s day.
• The Central Bank of Turkey (CBRT) has conducted the first tests of its Turkish digital lira. The CBRT successfully carried out the first payment transactions on its central bank digital currency (CBDC) network as part of an initial test phase.
• BMW plans to integrate blockchain technology into its daily operations and create a blockchain loyalty program for its customers in Thailand. The popular carmaker has onboarded blockchain infrastructure firm Coinweb as its decentralized architecture provider and BNB Chain for settling transactions.
• Indonesia plans to launch a national crypto exchange. The launch will occur amidst regulatory reforms which shift oversight of the industry from the Commodity Futures Trading Regulatory Agency of Indonesia to the Financial Services Authority.
• Ukrainian pharmacy chain ANC Pharmacy has partnered with Binance Ukraine to accept payments in cryptocurrency. Customers of ANC and ANC operated stores can now purchase goods via Binance Pay.

REGULATORY ROUNDUP

We’re living through the era of regulatory recognition of digital assets. The legislation, litigation, and regulation happening today will dictate the entire future of our industry, and we have a historic chance to shape those changes by staying informed and exerting political influence.

• Japan’s Financial Service Agency (FSA) will lift the ban on the local distribution of foreign stablecoins like USD Coin (USDC) in 2023.
• Italy’s Senate approved its budget for 2023 last week, which included an increase in taxation for crypto investors — a 26% tax on capital gains on crypto-asset trading over 2,000 euros. As an incentive for declaring crypto profits, the new bill also sets a “substitute income tax” for investors at 14% of the value of the assets held as of Jan. 1, 2023, instead of the cost at the time of purchase. Also included in the new rules, losses from crypto investments can be deducted from profits and be carried forward.

Disclaimer: The views and opinions expressed herein are those of the author alone and do not represent Wave Digital Assets LLC or any of its affiliates (collectively, “Wave”). The author and/or Wave may hold investment positions in some of the assets discussed. Nothing in this material or linked information should be interpreted as an offer or recommendation to buy, sell or hold any security or other financial product. This material is not intended to provide accounting, legal or tax advice. Certain information contained herein has been obtained from third-party sources, has not been independently verified and should not be viewed as being endorsed by Wave. Such information is believed to be accurate as of the date of its publication. No representation or warranty is made, express or implied, with respect to the accuracy or completeness, and readers should not place undue reliance on the information contained or linked to herein. Certain statements in this material provide predictions and there is no guarantee that such predictions are currently accurate or will ultimately be realized. Past performance is not indicative of future results.

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