Market Summary

Bitcoin Price: US$ 17,224.10 (+2.30%)
Ethereum Price: US$ 1,280.18 (+3.98%) 

Axie Core Leads to Spike in Transaction Volume

• Axie transaction volume spiked 1,061% to hit $10.5M on Dec. 5, 2022 as the gaming project revealed “Axie Core.” This includes the value of all dapp transactions for Axie Infinity.
• Axie Core introduces accessories that will allow players to customize the appearance of their Axies. Players will also be able to trade these accessories as NFTs, introducing a new lever to catalyze in-game economy and reduce reliance on power boosts.
• Axie Core also introduces part upgrades which will enable experiences that allow players to upgrade the collectability and personality of their Axies. For example, mystic parts will have unique art for their upgraded paths to further distinguish them.
• Axie Core will begin rolling out various upgrades by the end of the year. Following the announcement, the price of AXS tokens is up 20% since the beginning of the month.

Sam Bankman-Fried ghosts Senate for testimony on FTX collapse

• Former FTX CEO Sam Bankman-Fried and his attorney did not respond to the Senate Banking Committee’s demand that he testify or otherwise cooperate with an investigation into his failed corporate empire. 
• “Sam Bankman-Fried’s counsel did not respond by the stated deadline. We believe it’s important that Bankman-Fried show he is willing to provide transparency and accountability to the American people by providing testimony,” the committee’s leaders, Sens. Sherrod Brown, D-Ohio, and Pat Toomey, R-Pa., said in a statement issued late Thursday. “We will continue to work on having him appear before Congress as detailed in Wednesday’s letter.”
• That letter threatens Bankman-Fried with a congressional subpoena if he doesn’t cooperate, with the pair setting a deadline of 5 p.m. EST today. The Banking Committee scheduled a hearing on the topic for next Wednesday. 

Tensions Erupt Between Magic Eden and Metaplex Over Future of Solana NFTs

• Solana has been ground zero for the ongoing industry debate over enforcing NFT creator royalties, and now long-simmering disputes between major players in the space have spilled out onto social media as builders try to shift the course of the Solana NFT space.
• In a tweet thread on Thursday, Metaplex—the creator of Solana’s NFT standard—alleged that top Solana marketplace Magic Eden was leading a “coordinated pressure campaign” to try and take control of the standard. A standard sets the parameters and functionality of a token, in this case a non-fungible token (NFT) with features unique from other similar tokens. As the creator of the token standard for NFTs on Solana, Metaplex essentially wrote the code and holds the keys for virtually every NFT minted on the network.
• Metaplex in its tweet thread today also mentioned Jordan Prince, who helped develop the original Metaplex protocol when he worked at Solana Labs, as a co-conspirator alongside Magic Eden. Prince went on to found B+J Studios, which raised $10 million in September to develop NFT infrastructure.

Starbucks Launches Beta of Web3 ‘Odyssey’ Loyalty Program

• Starbucks on Thursday launched a beta test of its highly-anticipated Odyssey experience, which combines customer loyalty rewards with non-fungible token (NFT) collecting and other gamified elements.
• The popular coffee chain opened up the Web3 extension to its Starbucks Rewards program to a “small group of waitlist members,” including employees and customers, allowing them to engage in interactive “Journeys” that earn “Journey Stamps” in the form of Polygon-based NFTs. In addition, users also get “Odyssey Points” that will open access to new benefits and experiences in the future, including virtual espresso martini-making classes, exclusive events and trips to Starbucks roasteries and coffee farms.
• “Starbucks Odyssey is an experience, surrounded by a digital community, where members can come together, interact, and share their love of coffee,” the company said in a statement. “Starbucks is using meaningful elements of Web3 technology to reward members in innovative ways.”
• The company says it will send monthly invitations to others on the waitlist beginning in January. Members who were invited to the beta launch will also have access to the Starbucks Odyssey market powered by Nifty Gateway, where users can buy and sell their digital collectible Stamps. Odyssey participants can purchase Stamps directly with a credit card, without the need for a crypto wallet or using cryptocurrency, according to Starbucks.

Billion-dollar Aptos Labs lawsuit resolved, Glazer says

• Shari Glazer, who sued Aptos Lab CEO Mo Shaikh and claimed she had been cheated out of of an equity stake in the new firm, now says the case is resolved. 
• “I am happy to resolve this matter and am delighted to devote my time to new web3 projects and charitable endeavors moving forward,” Glazer said in a statement. She is both an entrepreneur and CEO of Kalos Labs, a web3 company.
• Glazer’s announcement comes roughly two months after a judge denied Shaikh’s motion to dismiss the lawsuit. In October, the court did, however, dismiss four legal claims, including fraud while allowing the case to proceed on the merits of determining if there had been a breach of agreement, unjust enrichment, or if Glazer was entitled to a 50% stake in Matonee, also known as Aptos Labs.
• An Aptos spokesperson said by email the company “is pleased this case has been dismissed…[and wishes] Ms. Glazer well in her future endeavors.”

Ethereum Developers Target March 2023 for Release of Staked Ether

• Ethereum developers determined on Thursday that the network’s next hard fork, called “Shanghai,” will have a target release time frame of March 2023. This upgrade will include code known as EIP 4895 that will allow Beacon Chain staked ether (ETH) withdrawals.
• Developers also agreed to address the implementation of the “EVM Object Format” (EOF) in Shanghai, which is a collection of EIPs that essentially upgrade the Ethereum Virtual Machine, the environment where Ethereum is able to execute smart contracts. Those Ethereum Improvement Proposals (EIPs) are EIP 3540, EIP 3670, EIP 4200, EIP 4570, EIP 5450.
• If EOF seems too complicated to implement by the next All Core Developers call planned for Jan. 5, developers agreed they will push back EOF to the fall, so they don’t delay staked ETH withdrawals.
• Developers also agreed to a second hard fork sometime in the fall of 2023 that would address another significant scaling upgrade – proto-danksharding, also known as EIP 4844. EIP 4844 would make Ethereum more scalable through sharding, a method that splits up the network into “shards” as a way to increase its capacity and bring down gas fees.

New US bill would require crypto miners to report greenhouse gas emissions

• Three U.S. lawmakers introduced a bill that would ask the Environmental Protection Agency to study crypto mining activity and require that miners that use more than 5 megawatts of power submit information on their greenhouse gas emissions. 
• Sens. Ed Markey, D-Mass., and Jeff Merkley, D-Ore., and Rep. Jared Huffman, D-Calif., sponsored the legislation, dubbed the “Crypto-Asset Environmental Transparency Act.” The lawmakers say the oversight is needed for the U.S. to achieve its sustainability targets by the end of the decade, and it’s been endorsed by the Sierra Club, Earthjustice, Environmental Working Group and Seneca Lake Guardian.
• “This bill is an important step to understanding the full environmental impacts of these operations, as well as holding crypto mining operations accountable for the damage they cause,” Merkley said in a statement.

How Confident Are Institutional Investors About Bitcoin? COT Report May Offer Clues

• Friday’s Commitment of Traders report will show whether recent increased longs are an aberration or sign of increasing confidence.
• The most recent COT, which measures weekly trading trends among institutional investors, showed such organizations increasing their exposure to bitcoin last week, even as overall markets remained quiet.
• The current report, reflecting data for the week ending Nov. 29, came as BTC was trading 1.4% higher than the prior week. Following three successive weeks of reduced BTC exposure on the Chicago Mercantile Exchange, institutional investors reversed course, adding 147 new long positions. They currently account for 33% of all long open interest on the CME, and are 80% long as a collective.

SEC wants firms to disclose if they have crypto exposure

• The U.S. Securities and Exchange Commission wants companies to publicly disclose if they have exposure to crypto assets, including whether they do business with any crypto-related companies. 
• The regulatory agency, which oversees disclosures for public companies in the U.S., said the guidance is due to, “Recent bankruptcies and financial distress among crypto asset market participants,” that occurred this year, most recently the high-profile implosion of FTX and its corporate family. “In meeting their disclosure obligations, companies should consider the need to address crypto asset market developments in their filings generally, including in their business descriptions, risk factors, and management’s discussion and analysis,” the agency guidance continues. 
• Firms must disclose if they have direct or indirect relations with companies that have filed for bankruptcy, experienced excessive redemptions or withdrawals of crypto assets, maintain unaccounted crypto assets of customers and experienced corporate compliance failures.
• In addition, companies must describe how the bankruptcies of certain firms affected their businesses and that the company must take safeguards to protect its customers’ crypto assets. 

Grayscale’s GBTC discount to NAV hits all-time low of 47%

• The price of Grayscale Bitcoin Trust (GBTC) versus the bitcoin it actually holds hit an all time low on Wednesday, with the discount ratio reaching 47.3%, according to data from The Block.
• The GBTC discount hit a previous all-time low on Nov. 21, when it reached 45.2%. Concerns over the liquidity profile of Grayscale’s sister firm Genesis have put pressure on the fund. One hedge fund is suing Grayscale to force redemptions from the fund.

EU to Make Crypto Companies Report Tax Details to Authorities

• The European Commission plans to make crypto companies report user holdings to tax authorities, it said Thursday. But the European Union (EU) body says it’s still working on how to enforce the measures on wallet providers or exchanges based outside the bloc.
• As previously reported by CoinDesk, the proposed new tax rules, known as the eighth Directive on Administrative Cooperation, or DAC8, seeks to halt billions of euros in evasion by taxpayers stashing crypto abroad.
• “Anonymity means that many crypto-asset users making significant profits fall under the radar of national tax authorities. This is not acceptable,” Paolo Gentiloni, EU commissioner for tax, said in a statement.
• When asked how the EU will enforce the measures on companies outside the bloc, Gentiloni told reporters, “We will work on that. What counts for us is that EU residents are targeted by these measures,” even if they use crypto providers from elsewhere, he said.
• Gentiloni’s measures would further the EU’s Markets in Crypto Assets Regulation (MiCA), which allows foreign companies to gain EU clients using a procedure called reverse solicitation.

Hong Kong Amends Finance Law to Incorporate Crypto Firms

• Hong Kong is to subject crypto providers to the same anti-money laundering and counter-terrorist financing laws that it does traditional finance firms.
• The territory’s Legislative Council voted to add virtual asset service providers (VASP) to the Anti-Money Laundering and Counter Terrorist Financing Ordinance as of June 1, 2023, according to a Dec. 5 amendment to the law.
• The fallout from the collapse of FTX, which was once based in Hong Kong before departing for Bahamas in September 2021, casts doubt over what crypto-friendly ambitions Hong Kong may now have. Prior to the exchange’s failure early November, the territory showed signs of relaxing its tough regulations and becoming a more crypto-friendly environment. The Financial Services and Treasury Bureau said at the end of October that it was open to allowing retail customers to trade crypto or approving a virtual assets exchange-traded fund (ETF).

Japanese banking giant SMBC trialing soulbound tokens

• One of Japan’s largest financial institutions, Sumitomo Mitsui Financial Group, is planning a trial of soulbound tokens for identity verification via a business partnership with HashPort Group.
• Firstly, SMBC will issue soulbound tokens on a trial basis, according to a release, with technical support from HashPort, through the end of March 2023.
• Secondly, it may look into testing soulbound tokens to prove behavior or claims about careers. Case studies may also be produced with companies interested in creating and marketing “fan communities using tokens.”
• Going beyond soulbound tokens, SMBC and HashPort may also look at NFTs and web3 infrastructure development for domestic and overseas business penetration.
• Today’s announcement has been in the works for months. SMBC and HashPort have been in talks to launch a collaborative business effort to develop a web3 economic zone since July 2022.