Yesterday in Crypto - Issue #7

Read time: ~8 minutes

Here’s what you missed yesterday, 7/24/23

Elon Musk is once again shaking up the crypto world. This time, it's about the potential integration of Dogecoin (DOGE) into the newly rebranded social media platform, X, formerly known as Twitter. Musk's vision for X is to transform it into an "everything app," a platform that not only hosts social media and messaging but also facilitates the ability to make purchases and send money. Given Musk's history with digital assets, it's not surprising that cryptocurrencies, especially Dogecoin, are speculated to be a part of this vision.

Musk's affinity for Dogecoin is well-known. He's frequently mentioned it, and his tweets have often led to significant price movements for the meme coin. The recent rebranding of Twitter to X sparked a surge in Dogecoin's price, with the token jumping 10% as traders speculated about its potential role in the new platform.

The speculation is fueled by the potential for X to accept Dogecoin as a form of payment for ads and other services. This wouldn't be the first time Musk's ventures have embraced Dogecoin. His car company, Tesla, already accepts Dogecoin for merchandise purchases. If X does integrate Dogecoin, it could significantly broaden the coin's use and potentially boost its value.

However, it's important to note that these are still speculations. While Musk's interest in crypto is clear, the specifics of how cryptocurrencies will be integrated into X's platform are yet to be revealed. Proceed with caution.

The launch of Worldcoin, a blockchain-based digital passport platform, has stirred up a mix of reactions within the cryptocurrency community. The project, which was founded by OpenAI co-founder Sam Altman, released its native token, WLD, on July 24th. The token's value skyrocketed shortly after its release, despite a wave of criticism from various corners of the crypto sector.

Worldcoin's unique proposition involves a "proof-of-personhood" system, where users provide a scan of their eye through a specialized hardware device known as the Orb. This scan is used to create a World ID, a privacy-preserving digital identity. The World ID is stored locally on users' mobile devices and can be used to prove their identity online while maintaining privacy.

However, the project's approach has raised concerns about centralization, privacy, and security. Ethereum co-founder Vitalik Buterin, among others, has voiced his thoughts on the matter. He acknowledged the potential benefits of proof-of-personhood protocols, such as the possibility of distributing universal basic income in the future. However, he also pointed out the risks, including privacy leaks, the erosion of internet anonymity, coercion by authoritarian governments, and the potential for security issues in a decentralized system.

Despite these concerns, Worldcoin's launch has been successful in terms of token performance. The WLD token soared to $3.58 shortly after launching and currently trades at $2.22.

Worldcoin brands itself as being a universal income project, providing income and identity to everyone. However, the founders allocated 25% of the coins for themselves. There’s nothing inherently wrong with that - but don’t brand yourself as even and fair when you’re not.

Only 1% of the total supply is circulating at launch. This means there is artificial scarcity. The price is being propped up because 99% of the coins are yet to exist. To me, the projects tokenomics look perfectly crafted to enrich the founders and VCs. I’m steering clear of this one.

While the Worldcoin project has sparked a lively debate within the crypto community, its launch represents another step in the ongoing exploration of blockchain technology's potential applications. The project's success or failure could provide valuable insights for future initiatives in the space.

The Avalanche Foundation, the organization behind the Avalanche (AVAX) blockchain, has announced a significant commitment to the tokenization of assets. The foundation is set to purchase $50 million worth of tokenized assets created on its network. This initiative, known as Avalanche Vista, aims to bring more digital versions of traditional investment products, including equities, credit, real estate, and commodities, to the layer 1 blockchain.

Tokenization, the process of creating a digital representation of a real-world asset on a blockchain, is one of the hottest trends in the crypto world. It allows for a more efficient and transparent way of issuing and transferring assets. The Avalanche Foundation's commitment to this trend is a clear indication of its belief in the potential of tokenization.

The Avalanche blockchain is an Ethereum competitor that offers faster transactions and scaling capabilities. It consists of smaller sovereign networks called subnets. The tokenization fund follows the blockchain’s initiative for financial institutions to test and deploy blockchain-based services on one of its subnets. Asset management companies WisdomTree and T. Rowe Price were among the firms who joined the testing.

The Avalanche Foundation's commitment to tokenization is not its first step into this space. Last September, investment giant KKR tokenized a part of its private equity fund with Securitize using the Avalanche network.

With this move, the Avalanche Foundation is not only showcasing its commitment to the tokenization trend but also its belief in the potential of its own blockchain. By purchasing $50 million worth of tokenized assets, the foundation is effectively betting on the success of its own technology.

The Real World Asset tokenization space is surely one to watch, and yes, it is still early.

That’s all for today. We’ll see you on tomorrow.

“Just as it got easier to use email, it will be easier to use Bitcoin as people invest in it and become more familiar with it.”

Gavin Andresen - Bitcoin Developer