What the numbers say: Venture capital (VC) funding into Web3 startups declined to $1.7B in Q1, with an 82% decrease from $9.1B in the same quarter last year. The figure marked the lowest funding amount since Q4 of 2020, which saw only $1.1B in funding among Web3 startups. The number of deals also fell to 333 over the first three-month period of the year, down from 369 in the previous quarter and 500 in Q1 of last year. Relevance: Crunchbase data has shown that venture funding into the Web3 startups declined sharply after Q2 of last year, which saw the collapses of several high-profile crypto companies. The drop in financing was mainly triggered by the multi-billion-dollar Terra ecosystem’s collapse in May 2022, which wiped over $60B of money off the crypto market. The bankruptcy of FTX, the previously third-largest crypto exchange, in November 2022 similarly caused a decline in venture funding by leading to the loss of investor confidence in the industry. Brands that should care: Canadian digital asset infrastructure company Blockstream and France-based crypto hardware wallet manufacturer Ledger became the only two firms raising nine-figure investments in Q1. Blockstream secured $125M in funding in January, while Ledger raised $108M in its Series C funding round in March. The third company with one of the biggest financing rounds of Q1 was the Israeli blockchain-focused semiconductor startup Chain Reaction, which raised $70M in a Series C funding round.
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The U.S.-based crypto exchange Gemini has announced its plans to launch a new crypto derivatives platform dubbed Gemini Foundation that would only cater to users outside the U.S. The platform’s first product will be a perpetual Bitcoin (BTC) contract pegged to the Gemini dollars (GUSD). More: - The first contract will be followed by a perpetual Ether (ETH) contract similarly linked to the GUSD.
- The firm said it would share details about the meaning of the platform’s name at a later date.
- The new derivatives platform will be available in many countries, including Singapore, Hong Kong, India, Argentina, Bahamas, Bermuda, Brazil, El Salvador, Israel, Nigeria, South Africa, South Korea, Switzerland, Thailand, and Turkey.
Zoom Out: - Gemini also recently announced that it would establish a new engineering hub in India as part of its plans for international growth this year in the Asia Pacific (APAC) region.
- The moves came amid a time when the regulatory environment became increasingly strict in the U.S.
- Several other crypto exchanges, including Kraken, Coinbase, and Binance, faced scrutiny and enforcement actions by U.S. regulatory authorities such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over the last months.
- Coinbase CEO Brian Armstrong recently said the company could move its headquarters outside the U.S. if the regulatory environment does not change in the country.
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The Reserve Bank of Zimbabwe (RBZ), the southern African country's central bank, has announced that it would issue a gold-backed digital currency to serve as legal tender in the country. The move will aim to stabilize the local currency from continued value decrease against the U.S. dollar (USD). More: - The new digital currency will allow Zimbabweans with low amounts of local currency to buy gold units to protect themselves from volatility by exchanging their Zimbabwean dollars for the digital gold token.
- The country has been struggling with the volatility in the local currency and high inflation rates for over a decade.
- In March, Zimbabwe's annual consumer price index (CPI) was announced as 87.6%, down from 92% in the previous month.
- The economic volatility in the country even caused some businesses to print their own money with handwritten papers that allow holders to use as a payment method for future purchases.
- RBZ Governor John Mangudya said they expect the exchange rate to stabilize after tobacco farmers receive their USD payments in the upcoming weeks.
Zoom Out: - Zimbabwe abandoned its currency by adopting the dollar in 2009 to fight against hyperinflation.
- The Zimbabwean dollar (ZWL) currently trades at 1,001 ZWL against $1, though it is generally exchanged for 1,750 ZWL on the streets.
- Several Texas lawmakers in the U.S. also recently proposed two bills to create a state digital currency backed by gold instead of the USD.
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The Chinese city of Changshu said its public sector employees, including doctors, teachers, and journalists, will be paid their salaries in the country's central bank digital currency (CBDC), or the digital yuan, as of May. The attempt will be the latest move to push for CBDC adoption in the city after several use cases like payments for public transport, medical expenses, groceries, gas, and water. More: - Currently, more than 1.5 million residents live within the borders of Changshu.
- The city is located less than 100 miles from China's biggest city, Shanghai, and falls within the jurisdiction of the country's Suzhou, Jiangsu province.
- Suzhou gave away $3M worth of digital yuan to 10,000 residents in December last year.
- Taicang became China's first city to distribute salaries fully in digital yuan in July 2022.
- China is currently piloting its CBDC in 26 regions in 17 of its 23 provinces.
Zoom Out: - CBDCs are issued and controlled by a country's government or central bank and backed by the local currency.
- The Chinese Communist Party, the ruling political party of the country, pushes for CBDC adoption mainly because it is subject to the direct control of the state.
- Cryptocurrencies, any kind of crypto transactions, and all crypto mining activities have been forbidden in China since 2021.
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The Solana Foundation, the organization behind the popular Solana blockchain, has launched a new dashboard where users can track carbon emissions on Solana in real time. The dashboard measures the network's carbon footprint by monitoring the carbon emissions of computer servers that power the blockchain. More: - The foundation has collaborated with the data platform Trycarbonara to release the dashboard.
- The move marked the first attempt from a major smart-contract blockchain to measure the carbon emissions on its network in real time.
- Users can access the dashboard on the Solana Climate website.
- The dashboard displays various indicators, including the total node count, megawatt-hours, and total carbon emissions.
- The dashboard's data can be found in open-source.
- According to the dashboard, Solana's servers emitted 10,651 metric tons of carbon dioxide in the 12 months before April 1, 2023, an amount roughly equivalent to eight flights from London to New York.
- The Solana Foundation said they hope the move paves the way for a trend toward carbon emission transparency in the blockchain ecosystem.
Zoom Out: - Solana's move came amid increased criticism of the adverse effects of blockchains on the environment.
- In September 2022, the Ethereum blockchain switched to proof-of-stake (PoS) from the proof-of-work (PoW) model with the historical Merge upgrade, reducing the network's energy consumption by 99.95% and, hence, its carbon footprint.
- There are currently two networks still using the PoW model: Bitcoin and Dogecoin.
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Binance, the largest crypto exchange by trading volume, has launched a new AI-driven tool dubbed Binance Sensei, powered by OpenAI's famous AI-powered chatbot, ChatGPT. The company has integrated the new chatbot into its Web3 education platform, Binance Academy. More: - Binance Sensei was trained on more than 1,000 articles and courses on Binance Academy.
- The company has underlined that the chatbot only answers user questions on various topics using content from Binance Academy and is not designed to provide investment advice.
- The company also said Sensei only includes publicly available third-party information, views, and opinions from the internet.
- The tool provides an answer in the form of an approximately 150-word summary for each user.
- Binance Sensei users will be subject to all terms and conditions of ChatGPT.
Zoom Out: - Binance Academy aims to educate users about crypto- and blockchain-related topics by providing free resources and articles.
- The Web3 academy is the latest platform benefiting from the massive popularity of ChatGPT, which became the fastest-growing consumer app in history, reaching 100 million users in two months.
- AI, in general, has become a rising trend in the crypto industry as rival crypto exchanges, including Bybit and OKX, integrated AI-powered tools into their platforms.
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- Investment firms Susquehanna International Group, DRW, and Nascent have all declined the claims that they became an investor in the crypto exchange OPNX founded by the bankrupt crypto hedge fund Three Arrow Capital's (3AC) founders.
- A South Korean District Court has rejected the prosecution's claims that the collapsed Terra ecosystem's native token, LUNA, is security.
- Do Kwon, the founder of the collapsed Terra ecosystem, has requested a U.S. court to dismiss the Securities and Exchange Commission's (SEC) charges against him.
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 |  | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. |  | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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