GizmoLab Report: Cutting-Edge Developments in Web3📈

A Quick TL;DR:

- Bitcoin breaks $77,000, VanEck CEO forecasts $300,000

- Norway supports MiCA, considers CBDC for stability

- Pharos raises $8M for fintech-oriented blockchain

- California permanently revoked BlockFi's license over bad practices

- Binance Labs invests in DeSci platform BIO Protocol

- Tether finalizes first Middle East crude oil transaction

Bitcoin Surges Above $77,000 as VanEck CEO Jan Van Eck Predicts Future Highs, Sets $300,000 Target 

Bitcoin's price broke the $77,000 mark for the first time, driven by positive investor sentiment and strong predictions from VanEck CEO Jan Van Eck. Van Eck, appearing on CNBC, projected that bitcoin could eventually reach $300,000, citing a potential valuation equating to half of the total gold market value as a “reasonable base assumption.” This historic price increase aligns with his statement that bitcoin’s value may reach new highs due to the growing interest in bitcoin ETFs, particularly from retail investors. The spot bitcoin ETF offered by VanEck has seen increased investor inflow, aligning with bitcoin’s recent upward trend. This rally also follows the recent U.S. presidential election, where a win for Donald Trump has positively impacted the digital asset market. Trump, seen by many as supportive of crypto, has led to speculation that his administration could foster a favorable environment for digital currencies.

JPMorgan analysts suggest that a potential weakening of the U.S. dollar under Trump could drive investors to stores of value like bitcoin and gold, pushing up demand. Bitcoin has risen nearly $10,000 since the election, reflecting an approximate 15% increase. On Friday afternoon, bitcoin briefly reached $77,200 before retreating to around $76,761.63, according to The Block Price Page. BlackRock’s spot bitcoin ETF, the largest in terms of market cap, has also witnessed strong trading volumes following Trump’s victory. As market interest surges, experts are closely watching whether these trends will continue under the new political landscape and if bitcoin will approach the ambitious $300,000 target in the near future.

Norway Backs EU's MiCA Regulation, Explores CBDC to Enhance Financial Stability and Cross-Border Payments

Norges Bank, Norway’s central bank, has publicly endorsed the European Union’s Markets in Crypto-Assets Regulation (MiCA) as it evaluates launching a central bank digital currency (CBDC). Kjetil Watne, project director for Norges Bank's CBDC initiative, shared that Norway, as part of the European Economic Area (EEA), aligns with MiCA’s framework while assessing if additional regulations are required to strengthen financial stability. He stated that the bank is “still considering” a CBDC issuance and exploring ways to address regulatory gaps related to decentralized finance. A potential CBDC could support cross-border payments and enhance financial stability, though Norges Bank has yet to finalize a decision. In 2023, the bank participated in "Project Icebreaker," an initiative testing new models for international retail CBDC transactions.

Watne explained that if a CBDC is introduced, it will likely supplement rather than replace cash and coexist with other digital currencies. Addressing privacy, Watne assured that Norges Bank will not monitor individual CBDC transactions, emphasizing privacy safeguards that align with anti-money laundering laws. Norway’s CBDC considerations also come amid broader EU regulatory shifts, with MiCA set to take effect on December 30. However, some concerns remain, as Tether CEO Paolo Ardoino highlighted potential systemic risks to banking if stablecoin issuers are mandated to hold significant reserves in European banks under MiCA, potentially impacting loans and financial stability if a bank becomes insolvent.

Pharos Raises $8 Million in Seed Funding to Develop Fintech-Focused Layer 1 Blockchain for Real-Time Payments and Real-World Assets

Layer 1 blockchain developer Pharos has secured $8 million in seed funding to build a blockchain network optimized for fintech applications, including real-time payments and real-world asset (RWA) integrations. The funding round was co-led by Lightspeed Faction and Hack VC, with SNZ Capital as a strategic anchor investor. Additional investors included Reforge, Dispersion Capital, Hash Global, Generative Ventures, MH Ventures, Zion, and Chorus One. The round, which concluded in September, was structured as a simple agreement for future equity (SAFE) with token warrants. Pharos aims to address scalability limitations in current Layer 1 and Layer 2 networks, positioning itself as a “payment-grade web3 infrastructure” capable of supporting billions of user accounts with a user experience comparable to traditional fintech systems.

Co-founder and CEO Alex Zhang emphasized Pharos’s focus on scalability and plans for the network to handle 50,000 transactions per second (TPS). To further its goals, Pharos has entered into a strategic partnership with ZAN, the web3 brand of Ant Digital Technologies, a subsidiary of Ant Group, to support node services, security, and hardware for RWA use cases. Another partnership with the Worldwide Stablecoin Payment Network (WSPN) aims to enable stablecoin transactions. Pharos envisions an ecosystem of “web3 SuperApps,” powered by an architecture using hyper-parallelism in consensus, execution, and storage. Currently in development, Pharos plans to launch a testnet in Q1 2025 and its mainnet later in the year. While fewer than 10 employees are currently on the team, Zhang anticipates expanding to over 20 members with expertise in cryptography, marketing, and ecosystem growth.

California Revokes BlockFi’s Lending License Permanently Due to Regulatory Violations and Unsafe Lending Practices

The California Department of Financial Protection and Innovation (DFPI) has permanently revoked BlockFi’s lending license, citing unsafe lending practices and regulatory non-compliance. The DFPI's decision follows BlockFi's bankruptcy in 2022, which stemmed partly from its $400 million credit line extended to the now-defunct crypto exchange FTX. FTX’s collapse had a cascading effect, exacerbating BlockFi's financial challenges and contributing to its bankruptcy filing. According to a DFPI press release, which has since been deleted, BlockFi violated California’s Financing Law by failing to assess borrowers’ repayment ability and charging interest before issuing loans.

The DFPI also reported that BlockFi failed to provide necessary credit counseling and inaccurately disclosed loan terms, negatively affecting borrowers’ credit scores and future loan access. BlockFi’s licensing revocation was accompanied by a settlement agreement with the DFPI, where BlockFi pledged to discontinue its unsafe lending practices. Although a $175,000 fine was imposed, the DFPI waived it to allow BlockFi to focus on repaying creditors. This action by California marks one of the strictest regulatory stances against a crypto lending platform in the U.S.

Binance Labs Invests in BIO Protocol to Boost Decentralized Science and Support Early-Stage Research Startups

Binance Labs, the venture arm of crypto giant Binance, has made its first investment in decentralized science (DeSci) by funding BIO Protocol, a platform designed to connect early-stage scientific research startups with decentralized funding sources. Dubbed the "Y Combinator of on-chain science," BIO Protocol offers scientists and investors collaborative funding opportunities through its biotech-focused decentralized autonomous organizations (BioDAOs). Currently, BIO Protocol hosts seven BioDAOs addressing diverse fields, including women’s health, mental health, and cryopreservation.

Binance Labs’ investment will help BIO Protocol expand its network of BioDAOs and provide additional seed funding to support scientific ventures. Andy Chang, Binance Labs' investment director, emphasized that the investment aligns with Binance’s mission to back technology that drives real-world impact. BIO Protocol aims to foster community growth and enhance tokenomics as it scales its presence in DeSci. This investment is part of Binance Labs' broader strategy to diversify its venture portfolio, which also includes recent investments in blockchain projects like Bitcoin staking platform Lombard and Solana protocol Solayer.

Tether Completes First Middle East Crude Oil Transaction, Expanding into Commodities Trading with $45 Million Deal

Tether has completed its inaugural transaction in the Middle Eastern crude oil sector, marking a new direction for the company beyond its digital asset focus. Partnering with a major publicly traded oil company and a leading commodity trader, Tether facilitated the loading and transport of over 670,000 barrels of crude oil valued at approximately $45 million. This October 2024 transaction underscores Tether's growing presence in commodities and international trade finance, a market estimated at $10 trillion.

Paolo Ardoino, Tether's CEO, described this milestone as a starting point for broader industry inclusivity and innovation in global finance. Tether's Trade Finance unit, launched earlier this year, is also pursuing opportunities in artificial intelligence, education, renewable energy, Bitcoin mining, and telecom sectors. The investment in crude oil is separate from USDT reserves, aligning with Tether’s strategic diversification efforts. Tether recently reported $7.7 billion in nine-month profits and $102 billion in U.S. Treasury holdings, with its USDT circulation nearing $120 billion.

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