Dispatch #95: Reddit Steps Up NFT Game

In this patch of your weekly Dispatch:

• Collectible avatars on one of web2’s biggest platforms
• A 151-year-old bank opens a MakerDAO vault
• Nexo’s proposed Vauld acquisition

The Big Idea

NFTs Come to Reddit

Maybe this shouldn’t be surprising given how historically innovative and essential to social internet history the company is, but Reddit is at it again. Even as the rest of the world starts to dismiss crypto and NFTs, the social platform is getting more involved.

This week, Reddit announced a new marketplace for collectible avatars. Basically, it will allow users to buy blockchain-based profile pictures for a fixed rate. Importantly, the purchasers get rights via a license to use the art on and off Reddit.

The NFTs can be purchased with fiat and have prices between $9.99 and $99.99. Technically, this makes the new Reddit storefront an onramp – you don’t need crypto to buy the collectibles.

The initial ~90 designs were produced in collaboration with independent artists and the underlying blockchain is Polygon. On top of it being a bullish sign, Reddit’s move supports artistic talent as many of the artists the platform worked with for the first series of Collectible Avatars come from popular creative communities like r/Comics, r/ProCreate, and/or r/AdobeIllustrator and artists will get paid for every Collectible Avatar that sells, less any fees.

Reddit is also plugging the avatars into their own blockchain wallet Vault which is already in use on the platform for users to earn community points and spend them on in-app features.

It may be a little more Web 2.5 than pure Web 3.0, but especially in this bear market, this feels like exactly the type of thing that could bring new users, attention, and excitement into the space.

The Latest In…

Stablecoins

One of the interesting wrinkles in Bitcoiner philosophy over the last year has been a growing appreciation – even among staunch maxis – of the relevance of dollar-denominated stablecoins in emerging markets. That relevance was on full display last weekend when, after a surprise resignation from the Argentine economic minister, exchanges saw a massive influx of people buying DAI and USDT and even drove the peg of Tether to break 6% to the upside. With significant capital controls, Argentina’s citizens are taking advantage of crypto rails to protect them from their volatile home currency.

The Latest In…

Global Regulations

Perhaps unsurprisingly, after a slew of institutional collapses, global regulators are eyeing the crypto industry even more closely.

• Singapore is reportedly considering legislation that would restrict cryptocurrency trading further.
• While the EU awaits the finalization of the MiCA approach, Belgium is considering treating crypto as a security.
• The Bank of England is saying the UK is planning on introducing stablecoin legislation by August.
• And, unfortunately, the Chancellor of the Exchequer Rishi Sunak – who had recently led the shift in the UK’s tone on crypto – has resigned amidst a scandal.

The Latest In…

Banks + DeFi?

If you think that all TradFi institutions are abandoning the space, may we interest you in this story of a 151-year-old bank opening a nine-figure MakerDAO vault? MakerDAO this week approved Huntingdon Valley Bank, founded all the way back in 1871, to open a stablecoin vault through which the bank can borrow DAI tokens after depositing off-chain loans from its balance sheet as a form of collateral. The bank will be able to borrow up to $100,000,000, with the intention for the debt ceiling to grow to $1B over the next year. How аbout that?

The Latest In…

Crypto M&A

If you’ve been following us on Twitter you know that over the past few weeks, we’ve been pondering the need for a “consolidation by the fittest” in the crypto space. On Monday, we and Vauld – a Singapore-based crypto lender – signed an indicative term sheet whereby Nexo has a 60-day exclusivity period to explore acquiring up to 100% of Vauld. Everyone from top-tier crypto media to major outlets like The Wall Street Journal, Washington Post, Bloomberg, Reuters, and CNBC was atwitter with the news which shows we must be doing something worthwhile. Should it materialize, the takeover will be a big step for our team, and a small step in the right direction for the industry which is in need of well-capitalized players to lead the charge.

The Week’s Most Interesting Data Story

A Spike in ENS Domains

Honestly, spikes in anything these days are few and far between, so when we saw this major spike in Ethereum Name Service domain registrations we took note. ENS are the .eth addresses that you see all over Twitter (and which can be linked to Ethereum addresses). One of the reasons some think the spike is occurring is excitement after the 000.eth address was bought for over 300 ETH. Is this people making a bet on Ethereum’s future or just a new place to speculate on the future value of crypto while everything else feels dead? Only time will tell.

Hot Topics

What the Community Is Discussing

The Maximalism debate rages on.

Well stated.

Easier said than done?

What to Watch for Next Week:

• Has the worst of the contagion been stemmed?
• Will Bitcoin start to settle at a $20k base?
• Will maximalists go touch some grass?