Happy Monday, Observers!

Silicon Valley was in panic mode last week due to the launch of the cheap-built Chinese large language model DeepSeek.

The threat of Chinese technology disrupting the AI industry wiped off $1 trillion of the US stock market, leading the crypto markets too to start the week in the red.

$1T Wiped off US Stocks After Release of DeepSeek. Crypto Markets Followed
Nasdaq was hit hardest, alongside Nvidia, which plummeted by around 17%. Alpha lost $100 billion, and Microsoft lost $7 billion. Crypto markets reacted similarly, even foreshadowing the effect.
Experts in Digital Assets and Web3Rebecca Denton

With Trump mostly busy imposing tariffs, there was space and time this week to focus on technology, and there were a couple of major launches.

Last Monday, the digital collectibles marketplace OpenSea launched a new platform in beta, and on Friday, the largest decentralized crypto exchange, Uniswap, released its updated version.

Uniswap’s Long-Awaited V4 Upgrade is Finally Here
Originally slated for Q3 2024, Uniswap teased the imminent release of its V4 version this week. The new DEX decreases transaction costs for the users and brings advanced tools for developers. The previous versions of the protocol still contribute to Uniswap’s market share
Experts in Digital Assets and Web3Rebecca Denton

There were also some failed launches this week.

Coinbase saw the price of the newly launched Venice Token (VVV), from Erik Voorhees's privacy-focused AI project Venice, crash a couple of hours after it added support for it.

Venmo’s founder Sam Lessin launched the $JELLY coin associated with his new SoFi project, Jelly Jelly. Traders picked it up as one more meme coin to play with, sending it from 0 to $250 million and nuking it shortly after.

Perception is everything, which is why the decentralized autonomous organization ai16z announced this week that it was changing its name to ElizaOS, avoiding confusion with it and VC firm Andreessen Horowitz (a16z) while also strengthening its connection with Solana’s Eliza agent framework.

🔥 Highlights Of The Week

📈 Crypto Markets

Digital Share or Governance Tokens?

Crypto projects call their tokens "governance tokens" to avoid the legal consequences of issuing unregistered securities. There is no contractual promise to share any profits or offer redemption. Yet, holders still get excited when their project signs a major partnership or unveils a new product.

Protocols such as Uniswap, Aave, Lido, and Ethena have discussed and some already implemented mechanisms to share the revenue from fees generated in the protocol’s activity between the treasury and their loyal token holders. Will tokens and stocks merge into a new form of a digital share?

Money, Stock, or Maybe... Nothing. What Is the Value of a Governance Token?
DeFi projects are increasingly planning to share revenue with token holders, making these tokens similar to traditional dividend-paying shares. This trend suggests that DeFi may begin to resemble traditional finance systems while maintaining its decentralized nature.
Experts in Digital Assets and Web3Alexander Mardar

🥸 Identity Matters

The incursion of artificial intelligence into everyday online life begets platforms developing some kind of identity verification mechanism that can distinguish bots from humans.

Blockchain offers the best way of doing so, and Web3 projects dealing with the matter have been proliferating.

Contrary to other market segments, the identity verification business is booming with public initiatives from countries all around the world looking to maintain their monopoly on handling, managing, and protecting their citizens’ identities.

Biometrical Data Too Sensitive To Be Handled By Private Companies
While private firms push their human and identity verification projects forward, governments are taking advantage of their positions to control and get ahead of the trend.
Experts in Digital Assets and Web3Eva Senzaj Pauram

Despite the interest of public institutions, there are significant private initiatives that have already gained some ground.

World (former Worldcoin) has launched in several countries across four different continents. While it has mostly met with problems on its journey to become a global identity network, it continues to launch new features to its blockchain and establish essential partnerships.

Humanity Protocol reached $1 billion valuation this week, despite being still in beta phase.

Centralized Exchanges Under Fire

DeFi mindshare is growing by the week now that the improvements in tech and new products and platforms made decentralized apps more accessible and easier to interact with.

With users' options increasing, they are becoming much more ferocious in their criticism of centralized players and less tolerable with their failures.

Coinbase has been constantly under scrutiny since the year started. The exchange, which has most of its users in the United States, has been criticized for poor customer support and for stopping customers’ withdraws without due reason.

This week, the failure of the VVV launch prompted Justin Sun to join the chorus of criticism by pointing out that the exchange hasn’t listed TRON (TRX), which has been under review for the past seven years despite being one of the most relevant tokens in the industry.

Sun said that Coinbase lost “the most basic fairness and industry judgment in new listings.”

War of Words Heating Up Between Justin Sun and Coinbase
In a snide exchange with Coinbase CEO Brian Armstrong, Sun called out the exchange for not listing TRX. Coinbase has previously questioned Sun’s transparency and history of evasive behavior.
Experts in Digital Assets and Web3Rebecca Denton

Binance, in its turn, continues to face regulatory scrutiny. To the long list of legal problems the exchange has had since its inception France added this week an investigation into how the company implemented KYC and AML protocols. Allegations, which, as per usual, Binance denied.

France To Investigate Binance Over Money Laundering
The exchange is once again under fire for compliance failures, a charge the company strenuously denies.
Experts in Digital Assets and Web3Rebecca Denton

KuCoin is exiting the United States market after its founders signed an almost $300 million settlement in which they pled guilty to operating an unlicensed money-transmitting business.

Under new management, the exchange will continue operations as usual outside U.S. borders.

KuCoin Founders Step Down as Exchange Exits U.S.
A $300 million dollar settlement will see KuCoin cease operations in the United States for two years.
Experts in Digital Assets and Web3Rebecca Denton

🔫 Tweet Of The Week

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