Web3 Wrap-Up: Crypto regulation is having a moment – is it time?

Hey everyone 👋, thanks for coming back to Web3 Wrap-Up, where I take the week’s biggest events and try to get under the skin of what’s happening across Crypto, Web3, DeFi, NFTs and the Metaverse. If you’re new – a huge WELCOME from me!

So…we are finally seeing “some” recovery on the crypto markets with Bitcoin slowly regaining strength with many saying this period has purged “market tourists” leaving only seasoned HOLDers or investors transacting with crypto assets. There was also a lot of action that took place in the policy and regulation space!

Let’s dive into this week’s Web3 Wrap-Up!

• U.S. bank will connect with Ethereum’s MakerDAO to borrow $100 million – The MakerDAO community has passed a proposal to integrate a U.S. bank into its collateral system. MakerDAO will now be able to loan up to $100 million worth of DAI to Huntingdon Valley Bank when it posts collateral to an off-chain account. It’s the first time a U.S. bank has connected to the DeFi ecosystem. Five other real-world assets have been integrated to MakerDAO, with more suggestions in discussion on the governance board. The protocol recently voted to allocate $500 million in DAI into bonds. Of course, some members of MakerDAO were not thrilled about the marriage of the decentralised finance mainstay to a traditional bank, but crypto users aren’t the only ones who need to consider diversification. Five more real-world assets have been included in MakerDAO, and the governance board is now discussing further suggestions. Recently, the protocol decided to invest $500 million in DAI bonds.
• EU agrees on MiCA regulation to crack down on crypto and stablecoins – European Union (EU) policymakers have struck a deal on landmark legislation to regulate crypto assets and service providers throughout the bloc’s 27 member nations. Known as the Markets in Crypto-Assets (MiCA) framework, the provisional agreement includes rules that will cover issuers of unbacked crypto assets, stablecoins, trading platforms and wallets in which crypto assets are held, according to the European Council. The policymakers, who represent the world’s third-largest economy, have been haggling for nearly two years over the Markets in Crypto Assets (MiCA) framework. The latest update to the Markets in Crypto Assets (MiCA) bill will seek the implementation of supervisory provisions, consumer protections and environmental safeguards. MiCA is the first regulation of its scale in the EU. DeFi and NFTs have been excluded from MiCA. 
• RTFKT, owned by Nike, permits commercial rights to NFTs for CloneX holders – RTFKT’s latest move follows other NFT projects, such as Bored Ape Yacht Club, allowing NFT holders to hold commercial rights over their NFT. Holding commercial rights would permit NFT holders to download and customise their NFT’s avatar. The download would be token-gated and only allow CloneX NFT holders to access the file. The project launched in 2019, and was directly acquired by Nike in December 2021. This was regarded as a huge step in bringing Web3 applications to the mainstream. Many investors got bullish on this news, and jumped on the metaverse train. This news brings confidence to crypto and blockchain investors, as a lot of NFT projects that popped back in 2021 failed to deliver on their promises.
• Meta begins testing Ethereum and Polygon NFTs on user profiles – With this feature, these creators will be able to show off NFTs on their profiles under a new tab, and the art will have a ‘digital collectibles’ label – just like Instagram. Users can link their crypto wallets to their accounts and turn their NFTs into posts that can be reacted to, liked and even shared. Zuckerberg also added that Meta is exploring the possibility of augmenting reality NFTs and 3D NFTs using their spark AR software platform. Meta sees NFTs as an opportunity to lure creators to its Facebook and Instagram apps by offering them ways to monetise their art or services.
• DappRadar and LayerZero launch cross-chain staking token – The decentralised application exploration platform DappRadar has launched a new RADAR token to enable cross-chain staking across multiple blockchains and Ethereum Virtual Machine (EVM)-compatible networks in partnership with LayerZero. RADAR enables cross-chain staking across multiple blockchains and Ethereum Virtual Machine-compatible networks. This is expected to minimise fees drastically and increase access to staking opportunities. The functionality for the RADAR token is provided through a set of smart contracts. A recent DappRadar report found that the blockchain gaming space is defying the crypto winter trend. The document further notes that macro indicators for games signal a bullish scenario for the blockchain gaming ecosystem, as game dApps now account for an impressive 52 percent of the total dApp industry activity. That was alongside the fresh $1.4 billion pumped into Web3 games and related metaverse infrastructure in May alone. The other noticeable investment was the $725 million raised by Dapper Labs to expand further the Flow ecosystem. The fund is backed by investors with large holdings of the network’s native token, FLOW, as well as equity in Dapper Labs itself; they include Andreessen Horowitz (a16z), Coatue, Union Square Ventures, Greenfield One, Liberty City Ventures and CoinFund.
• Polygon to enable Web3 functionality in smartphones with Nothing collaboration – After Solana, Polygon is gearing up to bring Web3 to a broader audience. Polygon has announced a partnership with Nothing, the creator of Phone (1). The Ethereum scaling protocol’s tech will be integrated into Nothing’s first smartphone for easier mobile access to dApps, games, payments, and more. While Polygon won’t be manufacturing its own smartphone, the partnership aims to bring crypto and NFTs to a larger audience by enabling access to Web3 functionality to such users. The Ethereum scaling platform raised $450 million in the funding round led by Sequoia Capital India.

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