Dispatch #44: ShapeShift, Well... Shapeshifted

In this patch of your weekly Dispatch:

• ShapeShift goes fully decentralized
• Nexo launches referral program, educational series
• TikTok bans influencers from shilling crypto

The Big Idea

ShapeShift Decentralizes Itself Out of Existence

ShapeShift will go down in history as one of the most emblematic crypto exchanges when it comes to the changing tides of both regulation and technology. Started in 2014, ShapeShift originally differentiated itself by allowing people to trade without registering for accounts. In 2018, however, regulatory pressure mounted and the company instituted a KYC regime (ultimately costing them 95% of their users). At the beginning of this year, the company made a pretty significant change in order to allow them to move away again from KYC. They closed all trading and market making activities and moved to fulfill all trades via decentralized exchanges.

Now, they’re taking an even more dramatic step and moving to a fully decentralized model, in which ShapeShift will exist as a company no more. They will have no employees, no bank accounts and no CEO and plan to wind down over the next 4-12 months. In its place, a DAO with holders of the FOX token will arise. The company airdropped about 340 million FOX tokens this week to ShapeShift users, employees, and users of other prominent DeFi platforms.

Whatever shape ShapeShift takes, this will be seen as a key moment in the history of decentralized organizations.

The Latest In…

Inflation Hedging & Institutions

Inflation beat expectations and is up 0.9% in June and 5.4% year over year. The Fed continues to say it’s simply transitory – due to demand coming back online and dislocations in supply chains – yet skepticism about this reasoning is on the rise. In hearings this week, Fed Chair Jerome Powell was barraged by questions about how transitory it really was, and whether or not constituents should be concerned. Yet, for all that, cryptoassets that position themselves as an alternative to fiat money (and the potential for inflation that comes with it) aren’t necessarily benefitting. We don’t have to tell you what the prices look like, but it still was interesting to note that BlackRock CEO Larry Fink strongly diminished any interest in crypto that he was seeing. Are those facts? Or just a nice diversion while Blackrock accumulates? You be the judge!

The Latest In…

CBDCs and Stablecoins

It has been a pretty interesting time in the world of CBDCs and stablecoins. Europe this week announced that it was moving into its next phase of CBDC development – a 24-month “investigation” period focused on determining legal and market implications of a digital euro. Meanwhile, in the US, the Fed is throwing seriously mixed signals. In a speech from a few weeks ago Fed Vice Chair Randal Quarles wrote that the bank should not fear stablecoins and indeed, that they could make CBDCs redundant. Then in testimony before Congress, Jerome Powell said the same thing in reverse – that a CBDC will make stablecoins irrelevant. Lots to unpack here folks, lots to unpack.

The Latest In…

Exchanges

Honestly, this might be one of the strangest weeks in exchanges in some time. First of all, Binance just keeps getting dragged through it. One of their payment partners in Europe has suspended payments in the wake of the recent FCA announcement. They’ve also had to suspend Sterling withdrawals after the end of another partnership for the same reason. Visa and Mastercard, however, are standing by the embattled exchange giant. Meanwhile, back in the US another crypto exchange is being SPAC’d with a planned valuation of around $9B. If you’re scratching your head, you’re not the only one. It’s a spinoff project of Block.One, the company once behind EOS, and no one in crypto is sure what to make of it.

P.S. Speaking of exchanges, we are serving more NEXO Token listing news next week.🔥

The Latest In…

Nexo

The long, lazy days of summer are a myth over here at Nexo. In a single week, we’ve launched our highly coveted referral program and have laid the foundation of our educational resource centre on nexo.com. The Nexo Referral Program gives both you as a Nexo user and each of the up to 100 people you can refer $10 in BTC when they sign up. That’s right, you can get as much as $1,000 in Bitcoin by copy-pasting a few links.

Doing Your Own Research about Nexo just got much simpler. We’ve launched the Nexo Brainer – our brand new educational video series – hosted by our very own George from BizDev and focused on explaining everything Nexo. In this video series, we’ll be shedding light on Nexo’s features and utilities as well as sharing tips on how to use them to your best advantage. We have dedicated the Brainer’s first episode (watch below) to the first NEXO Governance Vote and earning on our native token. Enjoy!

The Latest In…

Mainstreaming

The semi-regular “mainstreaming” bullet here at the Dispatch has been pretty busy and pretty positive lately. Well, we’re sad to report at least one big road bump. TikTok has banned all influencers from shilling crypto in their videos. Given how large TikTok looms with Gen Z, this is a pretty big deal. Interestingly, however, we’ve seen more than a few crypto voices on TikTok itself say its probably for the best, as the platform has become overrun with people shilling scams and dubious coins. The endless fight between disruptive, world-changing crypto and scammy, get rich quickism continues.

The Week’s Most Interesting Data Story

The DOGE story

Q2 was a rough one in crypto land. Bitcoin was down nearly 39%; DeFi coins were all down 30-40%. But not Doge. Nope, Doge not only had a positive quarter. It had an INSANE quarter. 391.96% gain. What was the reason? Lots of possible explanations. Lindy effect for surviving so long. Breath of fresh fun air when every other crypto takes itself so seriously. And, of course, there’s Elon. Still, the most impressive thing to us isn’t the price – it is how many new holders there are. 2021 has seen nearly a million new Good Doges join the party. Maybe all of Elon’s bluster about this being the future of currency isn’t as insane as it seems?

Hot Topics

What the Community Is Discussing

Meanwhile, an epic rant from one of the original founders of Dogecoin has the whole industry steaming.

Also, literally everyone is talking about breakout crypto/NFT game Axie.

Last but not least – a thread on Bank of England’s latest crypto takes.

What to Watch for Next Week:

• Where is NEXO getting listed next?
• Will inflation keep trending up and when will Bitcoin catch up?
• Will any more crypto companies announce SPACs?