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Coinbase Makes Play For Decentralisation with New L2 'BASE'
Welcome to this week’s edition of Myth of Money, a weekly newsletter on all things crypto, macro, and tech, read by 13,000+ investors. If you enjoy this newsletter, follow us for a daily dose of market news on Twitter 👇
This week's biggest story in crypto is that Coinbase, a major US-based cryptocurrency exchange, introduced its Ethereum (ETH) layer 2 blockchain called "Base".
It seems that Coinbase is seeking a bit of a decentralized makeover to its old centralized ways. This new platform is marketed as a secure, developer-friendly, and cost-effective way to construct decentralized applications (dApps), and will serve as a hub for Coinbase's own on-chain products, as well as an open ecosystem for developers.
Credit to Cointelegraph for the above cartoon.
Base is already open for developers on a testnet. The exchange aims to onboard more than one billion users into the crypto-economy by making Base interoperable with other popular Layer 1 blockchains such as Solana (SOL), Ethereum's base layer, and other Ethereum second-layer networks.
***BASE is NOT a token and is unrelated to the currently trading BASE token.***
According to the announcement, Coinbase is currently developing the new network, but they intend to gradually make it more decentralized in the future. The announcement also clarified that there are no intentions of introducing a native token for the chain, which contradicts the common assumption that new tokens are required for ensuring the security of a decentralized network or protocol.
The COIN 0.00%↑ stock rallied briefly on the news.
What I’m Reading This Week 📚
How to Write a Book Using ChatGPT, by Michael King
This Week By the Numbers 📈
Last month, the Federal Reserve's preferred inflation gauge increased at its highest rate since June, indicating that price pressures are firmly established in the U.S. economy. This could lead to the Fed continuing to raise interest rates throughout this year. The Commerce Department's report on Friday showed that consumer prices rose by 0.6% from December to January, a significant increase from the 0.2% rise from November to December. Year-over-year, prices increased by 5.4%, up from 5.3% in December. Excluding food and energy prices, core inflation rose by 0.6% from December, up from the previous month's 0.4% rise. On a year-over-year basis, core inflation rose by 4.7% in January, compared to a 4.6% increase in December. The report also showed that consumer spending rose by 1.8% last month after falling the previous month. The January price data exceeded forecasters' expectations and dashed hopes that inflation was slowing down steadily, leading the Fed to continue its campaign of rate hikes. Despite the Fed's strenuous efforts to control inflation, recent data suggest that the economy is still affected by it.
Top Stories 🗞️
OpenSea has been the leading marketplace for both creators and traders. Now a new rival, Blur.io, is challenging the company’s dominance. After raising $11 million in a seed round led by venture capital firm Paradigm, Blur launched its marketplace in October. Initially, it sought to attract customers by distributing “care packages” and promising loyal users future rewards in the form of its cryptocurrency, BLUR. Earlier this month, it followed through on its promise, distributing massive amounts of “airdropped” tokens in three waves meant to incentivize members of its target market—professional traders—to switch over from other marketplaces.
A new challenger has appeared in the user-facing AI game. Mark Zuckerberg's Meta has officially stepped into the fray with the Large-Language Model AI, charmingly known as "LLaMA." On paper, LLaMA doesn't seem to be positioned as an outright competitor for ChatGPT, Microsoft's conversational AI, or Google's own talkative algorithm, Bard. Per Meta's press release, the company forecasts that LLaMA's main role will be as an AI that improves AI. In Meta's own words, LLaMA "requires far less computing power and resources to test new approaches, validate others' work, and explore new use cases." LLaMA is designed to be a comparatively low-demand, efficient tool best suited to focused tasks.
According to data from Nansen, nonfungible token (NFT) whale Jeffrey Hwang — known colloquially as Machi Big Brother — dumped 1,010 tokens for 11,680 Ether or $18.6 million, in the space of 48 hours. In a Feb. 25 Twitter thread, Nansen’s simian psychometric enhancement technician, Andrew Thurman, highlighted the trading activity over the previous two days and noted that it’s “likely the largest NFT dump ever.” The major selling event included 90 Bored Ape Yacht Club (BAYC) NFTs, 191 Mutant Ape Yacht Club (MAYC) NFTs and 308 Otherdeed NFTs, to name a few.
“We think the wallet is the new cookie,” said Mathieu. “It’s gonna be embedded in all the brand’s websites, connecting your wallet. That’s a new data layer.” Salesforce builds software to help automate the customer service process for their business clients, using the cloud platform Hyperforce. Mathieu is part of the firm's Web3 studio team, comprised of over 100 ambassadors spanning various industries and geographies across the globe. The company launched the pilot for an NFT minting and sales platform last June, designed to help engage online communities and collect valuable data. At the time, a spokesperson for Salesforce told Bloomberg that brands could likely use NFTs for creating loyalty initiatives and accessing private web communities.
China appears to have had a change of heart about artificial intelligence. It now wants to integrate the tech into daily life, just days after reports emerged that it had blocked its citizens from accessing viral AI chatbot ChatGPT. On Friday, officials from China's science and technology ministry said their government attaches "great importance" to the development of artificial intelligence, and will be promoting its integration into the economy and society. Such technology "has wide application potential in many industries," Chen Jiachang, the director of the high-tech department at China's science and technology ministry, said at a press briefing on Friday, according to a report by media outlet National Business Daily.
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Until next week,
About the Author: Tatiana Koffman
Hi there and thanks for reading! If you stumble upon my newsletter, you will notice that I write about money, economics, and technology. I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital, and Cryptocurrencies. I write to make financial topics more accessible and create equal opportunity for the next generation of investors. I have personally invested in 20+ companies and funds (👉 my portfolio).
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