Dispatch #86: Apes Crush Ethereum, Starbucks Wants In

5 6·3 min read
Dispatch
Dispatch #86: Apes Crush Ethereum, Starbucks Wants In

In this patch of your weekly Dispatch:

  • Otherside NFT sale sets some good & some bad records
  • Nexo issues third-largest NFT loan to date
  • Bitcoin mining heats up as a political issue

The Big Idea

Welcome to the Otherside, Grab a Starbucks

It was an NFT week all the way.

Of course, the most anticipated event was Yuga Labs’ sale of 55,000 “Otherdeed” NFTs, aka land plots for Yuga’s forthcoming Otherside metaverse. The BAYC community was on fire.

After a ditched Dutch action, the price ended up being 305 Apecoin to mint – around $5,800. In total, the $317M sale was the largest NFT mint. Still, the big chatter was about how the mint pushed ETH gas to extreme levels, creating a gas war that led to millions being spent in transaction fees (see the Data Story for more on that or a nice overview of the event here).

After the mint, Yuga took to Twitter to apologize for “turning off the lights on Ethereum” and to say that they would be moving off Ethereum, causing some in the community to accuse them of purposefully botching the mint to justify starting their own chain. What’s clear is that Yuga has built one of the most intense, excited, and passionate communities in the entire crypto space, and doesn’t seem to have an interest in slowing down.

What’s also clear is that the NFT space is going to continue to get new participants excited. The other big NFT news of this week is that Starbucks is planning to launch its first NFT collection, membership, and community later this year based on coffee art and storytelling.

The company is even exploring a full-scale “Starbucks Digital Community Web3 platform” in an attempt to create a “digital third place.”

Welcome to the future!

The Latest In…

Nexo & NFT Lending

This week, we didn’t rest on our NFT laurels either. In a unique four-way set-up, we issued the third-largest NFT-backed loan to date, worth 1,200 ETH, against two rare Zombie Cryptopunks.What is so unique about it? It’s a prime example of the synergy between different parties in the space – Nexo as the issuer, Arcade as the DeFi marketplace, and Meta4 as the risk hedging partner. One thing is clear – the probabilities of NFT loans proliferating the space have never been higher.

The Latest In…

Bitcoin Mining

The conversation around mining and energy remains a hot political item. Last month, Representative Jared Huffman and 22 members of Congress sent the US Environmental Protection Agency a letter sharing their concerns about Bitcoin mining. This week, the Bitcoin Mining Council issued a point-by-point refutation of their claims and more broadly brought up the question of whether the government should be able to decide what use of energy is or isn’t valuable. These questions have a practical impact: New York State for example is currently debating a 2-year moratorium on new Bitcoin mining, while Fort Worth is getting involved in mining directly!

The Latest In…

Institutions

Last week we told you about Fidelity adding Bitcoin to 401(k) plans. This week, Bitcoin’s political opponents bit back as Senators Elizabeth Warren and Tina Smith sent a letter to Fidelity’s CEO Abigail Johnson expressing their concern. At the Berkshire Hathaway meeting, Warren Buffet and Charlie Munger made clear that they still don’t like Bitcoin. Buffet said he wouldn’t buy all the Bitcoin in the world for $25! Guess what our co-founder Antoni’s iconic response on CNBC was, followed by hedge fund legend Paul Tudor Jones who discussed why the influx of talent into crypto makes it, in his words, “hard to not want to be long.”

The Latest In…

Elon

Okay, maybe some week there won’t be news on Elon-Twitter, but this is not that week. On Thursday we learned that Binance would be contributing $500M toward the takeover bid. CZ said, “We're excited to be able to help Elon realize a new vision for Twitter." 🤨

According to a filing, Oracle co-founder and Tesla investor Larry Ellison delivered the largest check at $1B, while other backers included Sequoia, VyCapital, and Andreessen Horowitz. No investor has contributed more than $1B.

The Latest In…

Nexo Ventures

Just a quick recap of our venture fund’s investments this week:

  • We backed Amberdata.io in their $30M Series B round, alongside Knollwood Investment Advisory, Nasdaq, Coinbase, and Citi, among others.
  • Now, we’re also a strategic partner in Decrypt after their $10M raise.
  • We took part in T.E.A.M DAO’s $5M Series A, led by Krust Universe and Animoca Brands.

The Week’s Most Interesting Data Story

The Wreckage of the Otherside Gas War

The gas war on Ethereum around the Otherdeed sale didn’t just set records for transaction fees – it obliterated them. In total, $227M was spent on fees on Ethereum on the day of the sale. The previous all-time high was last year in May and was only $112M. For many, this brings up a very core question about the functionality of blockchains as they get more popular. Is this a problem that needs to be solved? Is it an inherent challenge of a decentralized system? And if it is, is that decentralization worth the cost? Fascinating questions in this brave new world.

Hot Topics

What the Community Is Discussing

Preach.

Will this spill over into crypto?

Not the most shocking reaction we’ve seen.

What to Watch for Next Week:

  • Will any other exchanges join the Elon Twitter takeover effort?
  • Will Yuga follow through on creating its own chain?
  • Can Bitcoin break out of macro correlation?
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