The growth of TON price coincided with the public expansion of the messenger. Our experts assessed the prospects for a cryptocurrency ecosystem with its support

The cryptocurrency Toncoin (TON) has secured its place in the top ten largest crypto assets by capitalization. And at the same time taking the ninth line of the CoinMarketCap rating between Dogecoin and Cardano. The price of the coin has grown two and a half times in the past month. The growth of its rate was greatly accelerated after the release of an interview of the founder and owner of Telegram Pavel Durov to the Financial Times. And in which he said that the messenger received a preliminary valuation of $ 30 billion before a possible IPO.

In the sensational interview with Tucker Carlson, Durov mentioned that he had “several hundred million in dollars and bitcoins” 10 years ago. And he “didn’t do anything with them” because Telegram was “never about money” for him. Earlier, Durov said that of all cryptocurrencies he only holds Bitcoin and Toncoin.

Cryptocurrencies in Telegram

Formally, Telegram has nothing to do with projects in the TON ecosystem. And for which Toncoin serves as the main currency. But the messenger team is obviously supporting the developers. The messenger interface includes a cryptocurrency wallet that supports only bitcoin, USDT stablecoin and Toncoin itself. In it, you can also activate an additional Ton Space wallet. And which serves to interact with online projects operating on the TON blockchain. And tokens and NFTs issued on this blockchain.

On April 19, Durov is scheduled to make an announcement at the Token2049 cryptocurrency conference in Dubai together with Paolo Ardoino, the head of Tether, a USDT steiblcoin issuing company. Officially, the topic of the speech was not advertised. But in thematic Telegram channels and chats, the probable launch of USDT in the TON network is widely discussed.

Possible difficulties for the growth of the Ton ecosystem

The main difficulty that awaits TON is related to the market’s transition into the inevitable phase of correction. The bulk of the audience today are “newcomers looking for an easy profit”. And the cryptozyme crisis will hit such people the hardest, our experts believe. Indirectly, there are also risks from the U.S. Department of Justice, which may provoke new proceedings against Telegram. Especially since the precedent already exists in the legal field of the country and transferring it to a new token will be easier from the point of view of the law.

Possible difficulties may be related to excessive attention of regulators, primarily the US and the EU. Formally, Toncoin may fit the definition of an investment contract. And be considered as a security by the US SEC. In Europe, MiCA legislation comes into full force this year, and how European regulators will classify Toncoin is still unclear.

Another potential problem is abuse by criminal elements. This point will be especially relevant if the TON blockchain is used to issue stablecoins. For example, the Tron network (the most popular of those on which USDT operates) has already been accused of aiding and abetting terrorists. According to the U.S. authorities, Tron is used by them even more than bitcoin – it is the stablecoins that are used first and foremost.

The Uniswap proposal involves distributing a portion of the commissions. And which it charges from exchange pool liquidity providers to the UNI token holders involved in managing the protocol

The management token of leading decentralized exchange Uniswap (UNI) rose 70% in just an hour and a half on February 24. And reaching the maximum since April 2022. This happened after the developers suggested sharing the service’s revenue with token holders.

The UNI token is the management token of Uniswap, the largest decentralized cryptocurrency exchange by capitalization. Its holders can participate in the management of the protocol through voting on various community proposals. Right now, the UNI token is trading at $10. But trading volumes dropped by more than 50% a day after the initiative appeared. The total value of blockchain assets on Uniswap exceeds $5 billion.

Uniswap Foundation announced a new motivational strategy for UNI token holders. The company plans to distribute commissions from protocol transactions to UNI token holders. And actively participating in the protocol management process. Key parameters related to commissions will continue to be controlled by the Uniswap Foundation itself.

Devin Walsh, executive director of the Uniswap Foundation, said the proposal aims to incentivize active delegation (of votes). And which will lead to the long-term success and sustainability of the protocol.

This isn’t the first time the idea itself has been brought up for discussion, but this is the time when it could actually be implemented. According to Blockworks analyst Matt Feibach, it is unlikely that the Uniswap Foundation would have taken such a step without carefully assessing the sentiments of the largest token holders.

The idea of sharing profits with token holders immediately resonated with other projects. Following Uniswap, the Frax Finance protocol team is going to put a proposal to the community to vote on the distribution of the protocol’s revenues among the holders of the project’s derivative tokens. Following the publication that Frax plans to follow Uniswap’s lead, the FXS token reacted with a short-term rise of 16%.

Our experts also note that the founder of the largest NFT platform Blur and the new blockchain ecosystem Blast under the pseudonym Pacman is also interested in the implementation of a user reward mechanism. And like Uniswap: he stated that the Blur community should follow their lead. The Blur token reacted to the publication by growing by more than 10%.

In July, two venture capital funds raised more than $350 million to invest in cryptocurrency and blockchain startups.

The volume of investments in crypto startups has fallen for five consecutive quarters. But some venture capitalists are still making multi-million dollar bets on blockchain projects.

Fortune’s source said Polychain Capital, one of the most prominent venture capital firms in the cryptocurrency space. And has raised about $200 million in its fourth fund. This fundraising can be considered a positive signal for the industry. The event indicates continued investor interest, despite a period when the volume of funding has decreased for both startups and venture capital firms.

The event indicates the continuing interest of investors. And despite the period when the volume of funding has decreased for both startups. As well as for venture capital firms.

Founded in 2016 by Olaf Carlson-Wee – one of the first employees of the Coinbase exchange – Polychain Capital has quickly joined the list of leaders in the cryptocurrency venture capital market. The firm has invested in Coinbase, Uniswap, CoilnList, dYdX, Matrixport, Scroll and dozens of others.

According to Pitchbook, Polychain has raised three funds with $2.6 billion in assets under management, and while this amount is volatile due to the fact that some of the Polychain funds are held directly in a few liquid crypto stocks. Several services, such as CoinMarketCap or Messari, separately highlight Polychain’s portfolio. According to them, the company invests in bitcoin (BTC), Ethereum (ETH), Polkadot (DOT), Avalanche (AVAX), Cosmos (ATOM), Filecoin (FIL), Maker (MKR), Tezos (XTZ), Compound (COMP) and other assets.

Polychain has deployed most of the previously raised capital in 2022 and 2023, according to a Fortune interviewee.

And before starting to raise a fourth $400 million fund, which reporters have now learned about. As for the $200 million already raised, Polychain has signed new agreements with investors or partners to begin placing those funds. At the same time, the company will continue to attract new investors in order to raise the full amount.

The attraction of new financing was accompanied by a reorganization of Polychain’s team of about 25 people, about 15 of whom are engaged in market research. According to the interlocutor of the publication, three employees from the research group were dismissed. And another with a background in data science was hired. One of the general partners also left the company to start his own project.

According to Fortune’s source, Polychain will primarily consider Ethereum-based “second-tier” infrastructure solutions for investment. And such as Arbitrum or Scroll, as well as in projects such as EigenLayer.

According to Pitchbook, global cryptocurrency VCs raised just $1.7 billion in 12 funds in the first half of 2023.

In comparison, they raised $22.5 billion in 91 funds over the course of 2022. On the same day as the new fund raising from Polychain was announced. And Bloomberg reported that another cryptocurrency venture capital firm, CoinFund, raised $158 million to support early-stage crypto startups.

According to the company’s CEO Jake Bruchman. That for the new fund managed to attract more funds than originally planned. Investor interest in the fund was higher than expected.

The last year and a half in the cryptoindustry was held in the crisis. But during this time CoinFund managed to raise $550 million, Brukhman told reporters. The year 2022 was “extremely challenging,” he said. Part of the problem was that major players in the market became interested in cryptocurrencies at the stage of their growth. But they changed their minds about investing when they saw prices fall sharply.

The new investment fund CoinFund is also the fourth for the company. Under the previous funds, the company supported startups such as, for example, Dapper Labs (creators of the FLOW blockchain). Or the blockchain infrastructure service Blockdaemon. Funds from the new fund have already been partially invested in the startup Giza. And which deals with the implementation of artificial intelligence in smart contracts. And in the company Superstate, which plans to combine decentralized finance (DeFi) with mutual funds.

More investments

CoinFund plans to invest the raised funds in startups. Which are at the intersection of cryptocurrencies and artificial intelligence. Previously popular areas such as NFT are now not interesting to investors due to the market lull and capitalization decline of the largest projects.

Our experts note that CoinFund will also continue to invest directly in cryptocurrencies and tokens. And the company has an advantage here. When it comes to crypto market regulation in the US, there is uncertainty over whether cryptocurrency tokens are considered securities. And that was vividly demonstrated in the recent ruling by a judge in the US Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs. However, CoinFund is a registered investment adviser. And can make investments in securities, so even equating their portfolio crypto assets with securities shouldn’t pose a problem.

According to Alex Felix, CoinFund’s chief investment officer. That now about 90% of the company’s transactions are directly related to the purchase of cryptocurrencies and tokens. According to him, the company still believes that this industry can coexist with traditional finance in a regulated manner.

Our experts tell us how the record rise in Nvidia stocks and hype around AI affected prices of cryptoassets

Nvidia has become the first graphics processor manufacturer whose market capitalization has approached $1 trillion. Its devices have recently been used by cryptocurrency miners. But now the growth of the company’s shares is due to the growth of artificial intelligence technology.

On Tuesday, May 30, price of Nvidia stocks skyrocketed to a historic high. In its quarterly report, the company said that the proliferation of artificial intelligence technology is translating into record sales. And its net income for the quarter was markedly higher than what analysts had predicted.

Nvidia’s developments have spread in the video game industry, the field of professional visualization. As well as in the field of high-performance computing and the automotive industry. In this case, Nvidia’s onboard computers are used as the basis for unmanned cars. The company supplies technology to major market players such as Apple, Microsoft, Alibaba and Amazon.

In late 2006, Nvidia allowed third-party developers to use the processing power of its graphics processing units (GPUs) not only for graphics optimization but also for other purposes. Nvidia processors are good at a lot of simultaneous calculations. And in this they noticeably lose to central processors, the leading manufacturer of which is Intel.

Notable success of Nvidia outside of the video game industry has brought the company mining cryptocurrencies. And where the GPU has also proven its effectiveness. In 2020, amid rising prices for Bitcoin and other cryptocurrencies, Nvidia surpassed Intel in market value. And its quotes continued to rise, reaching a record high of almost $330 per stock at the end of 2021.

Demand for Nvidia graphics cards was supported by miners. Who assembled cryptocurrency mining farms based on the Proof-of-Work (PoW) algorithm from the devices. The most profitable of these has always been Ethereum (ETH). But last September, developers planned to move it to Proof-of-Stake (PoS). After that, the need for mining to issue new coins disappeared. And miners were forced to switch to much less profitable coins or refused to mine cryptocurrencies using GPUs in principle.

The fall in excitement around video card mining, as well as the collapse of the crypto market last year, brought down Nvidia’s stocks. But now the wave of AI has reawakened investor enthusiasm. Since the beginning of the year, the company has increased its market share by $220 billion. By comparison, Ethereum has a market capitalization of $228.3 billion. Nvidia stock is up 165% in 2023 alone. Nvidia’s capitalization now stands at $939.3 billion, which brings it closer to the $1 trillion mark.

AI and cryptocurrencies

On May 28, Nvidia unveiled several technologies related to artificial intelligence at Computex 2023. Among them is the Avatar Cloud Engine service. Which allows you to give the intelligence of side characters in video games. As well as the DGX GH200 supercomputer for generative AI, the Spectrum-X platform for cloud providers. And the MGX architecture for creating metaverse and a few others.

The flow of news around Nvidia has also affected the cryptocurrency market. Project tokens, which aggregators categorize as “artificial intelligence,” rose in value in less than a week. And some of them showed up to 60% growth. An example of such an asset was the AKT token of the Akash Network project. The developers position it as an open network for trading computing power.

The most capitalized assets in the category also benefited from positive news from Nvidia. The token of the SingularityNET project (AGIX), “the first decentralized artificial intelligence marketplace.” Which runs on the Cardano blockchain, rose in value by 10%. Fetch.ai (FET), a coin platform with machine learning algorithms, gained more than 6% in less than a week. And the OCEAN token used by the Ocean Protocol data economy project rose nearly 9%.

Similar trends took place in the market at the beginning of the year amid the mass spread of chatbots with artificial intelligence ChatGPT. Which still enjoys notable popularity, including in the cryptocurrency community.

Largest crypto asset in AI category

The largest crypto-asset in the AI category is the Render token (RNDR) of the Render Network project from OTOY. Its capitalization exceeds $900 million and it is traded on leading cryptocurrency exchanges. And its price has risen almost seven-fold since the beginning of the year.

OTOY provides cloud-based graphics rendering solutions. These are used by visual effects creators, artists, animators, designers, architects and engineers, according to the company’s website. Its products, which also involve AI. The company Meta also uses them.

As part of the Render Network project, OTOY developers have modified the code of their cloud computing platform for GPU rendering. And they did it so that RNDR tokens could be used to pay for the service, thus creating demand for the asset.

In 2021, OTOY released the Octane X Classic rendering app on the App Store. And which also uses Render Network technology. Also getting the project into Apple’s app store was a successful marketing move for RNDR. The token has risen more than 60 percent since May 13. This happened when The Wall Street Journal’s sources reported. That Apple would unveil a mixed reality headset at the WWDC 2023 event in early June. This was largely contributed to by a number of speculations that. That the device could, in theory, also use some of the Render Network’s developments.

Our experts note that in general, the coins of blockchain projects, which in one way or another involve artificial intelligence. Since the beginning of the year proved to be the group of the most successful in terms of crypto-assets investment. Along with tokens of the management of liquid stacking services.

Our experts tell us what you need to know about the cryptocurrency division of venture capital firm Andreessen Horowitz. And what startups and technologies the company is allocating more than $7 billion to

The a16z crypto portfolio has dozens of crypto projects. And among them are both established players and startups that are still building infrastructure. The company’s early bet on Coinbase, the second largest crypto exchange, turned out to be one of the best in the history of venture capital funds. Though it came with very specific allegations of insider trading. The fund invested in leading decentralized exchange Uniswap, NFT marketplace OpenSea and large infrastructure blockchain project Alchemy.

This year, the company has led several multimillion-dollar investment rounds for various crypto projects. Among them, for example, is a $25 million round by Here Not There Labs. Which is developing the Towns protocol for group chat rooms. And which are blockchain-based and use end-to-end message encryption.

A recent nearly $30 million investment round closed the Story Protocol project from the developers of the Radish Fiction app, which was bought out by Korea’s Kakao. Andreessen Horowitz’s cryptocurrency division also led the round. Although it had previously invested $10 million in the project. A $40 million round led by the fund was also completed by blockchain game developer CCP Games.

Probably the main crypto-investment of the company this year was the project LayerZero.

Its developers, led by a16z, closed a $120 million round, after which the valuation of the company behind it, LayerZero Labs, jumped to $3 billion. The total amount of venture capital investment in the project. Which creates an infrastructure for exchanging data between ecosystems that are isolated from each other. And built on different blockchains, exceeds $250 million.

Other projects in the fund’s portfolio with more than $100 million in investments include Optimism, Aleo, Matter Labs (developer of the zkSync solution) and several others. From the last two, as well as from LayerZero, the cryptocurrency community expects to launch tokens. And to conduct airdrops following the example of Arbitrum. Or the same Optimism, but none of the companies have yet announced plans to issue their own assets.

Problems and failures

Despite its scale and strong market position, a16z faced problems in 2022, as did the entire cryptosphere. In October, The Wall Street Journal sources reported that the value of the company’s cryptocurrency fund fell 40%. And that’s noticeably more than other avenues. This was recorded even before the general collapse of the crypto market. Which was triggered by the bankruptcy of the FTX exchange.

Some of the fund’s biggest investments probably didn’t justify themselves. Among them is Helium, a mobile WiFi hotspot startup. In April, the company announced it was moving its infrastructure from its own blockchain to the Solana network. And the HT token trades only on second-tier crypto exchanges. And judging by the price movement, it’s not much in demand.

Another example from our experts is Dfinity. It’s a project that was rebranded as Internet Computer. Which raised $100 million from a16z in 2017. But it did not actually produce any product. And investor funds were invested mainly in a marketing campaign. However, given the success of other projects in the fund’s portfolio. And the financial return from investing in them will surely be able to outweigh the losses from unsuccessful investments.

The hacker who took control of Tornado Cash gave up control of this protocol. But used it to disguise the funds withdrawn in the attack

The hacker who seized control of cryptomixer Tornado Cash gave up control of the service. But he used the protocol to launder digital tokens from the attack. That’s what Bloomberg writes, citing data from research firm Nansen.

The Tornado Cash project was attacked on the morning of May 20. The attacker was able to gain full control of the cryptomixer’s control. He issued 483,000 native tokens of the TORN protocol. And that gave him a majority vote in the control system.

On May 26, the hacker offered to call off his attack and return control to the Tornado Cash community. But while the protocol was under his control, he exchanged most of his tokens for Ethereum coins. And then laundered about $900,000 in them through Tornado Cash.

Our experts note that the price of TORN was around $6.4 before the hack. By May 29, it was down to $4. According to CoinMarketCap, the token has fallen in price by 37% since the hack, and by 10% in the last 24 hours.

Scammers took advantage of market participants’ interest in meme cryptocurrencies on “bitcoin pizza day”

Scammers earned tens of thousands of dollars on “bitcoin pizza day. In doing so, taking advantage of market participants’ interest in meme-based cryptocurrencies. The creators of several holiday-themed tokens absconded with the assets of gullible investors.

On May 22, the cryptocurrency community celebrated the 13th anniversary of the first purchase for bitcoins. It happened in 2010, when computer developer Laszlo Heinitz bought two mushroom pizzas for 10 thousand BTC.

According to Dextools, the capitalization of tokens BTCPizza, BPizza, PizzaDay and EthPizza. Which were created during the last week, at their peak reached about $150 thousand.

The creators of BPizza, after the token reached a capitalization of $100k, imposed a 100% sales tax on the coins. This was done to prevent investors from selling them. Issuer EthPizza disabled token sales when the asset’s capitalization reached nearly $40k.

BTCPizza is now labeled as a Honeypot – where fraudsters prescribe in the token’s smart contract the ability to withdraw coins only to certain wallets. PizzaDay plummeted in value to zero after a spike in value followed by a rapid series of sales.

Our experts noted that the desire of investors to buy tokens with no fundamental value. And all this followed a rapid and significant rise in the market capitalization of the meme cryptocurrency Pepe in just a few weeks. Investors are hoping to get lucky, buying tokens that could collapse in value at any moment. And then they complain that they were scammed and media didn’t warn them that it was dangerous. So once again we warn you that you can lose 100% of your investment in such projects.

The FBI warns that scammers attract people to work overseas, promising high salaries. Upon arrival, they take away passports and force them to participate in scams related to digital currencies.

The U.S. Federal Bureau of Investigation (FBI) has warned of false job postings. Which are offered by scammers to lure people to work abroad and force them to participate in cryptocurrency scams.

According to the FBI, scammers post false job ads on social media. As well as on Internet job sites, inviting people to work in Southeast Asia. Jobs related to tech support, call centers or beauty salons are offered. Applicants are offered good wages, various benefits, travel, lodging, and meals.

Upon arrival, passports are taken away from people. And then they are forcibly held, intimidated and forced to participate in international cryptocurrency fraud schemes. Thus effectively holding them in slavery.

At the same time, victims are told that they must pay mounting debt for travel. As well as accommodation and food, and sometimes sell people to other criminal groups. People are also intimidated by threats to turn them in to local law enforcement.

Our experts point out that those looking for work abroad are advised by the FBI to be wary of strange wording in job postings. As well as offers with unusually high salaries and benefits. Also, when moving to another country, tell relatives and friends the details of the new place of work.

Worldcoin has not yet been launched, but scammers have already figured out how to cheat the identification system

The Worldcoin token was supposed to launch within the next few weeks. But fraudsters have already figured out how to cheat the system, The Block reports. The project from ChatGPT creator Sam Altman is being forced to change security measures.

According to the developers’ plans, the Worldcoin token will be issued to users. Who have been identified by iris scanning. The technology scans the eye and creates a digital World ID for the user based on that. Which can be used “in a wide range of everyday applications without revealing identity,” the company said. More than 1.7 million people have already signed up for the project.

On May 18, the Chinese publication BlockBeats, reported that the residents of China, where people can not register. to get Worldcoin tokens, buy iris scans made in Cambodia and Africa for as little as $30. A Worldcoin spokesman acknowledged the incidents. But stressed that the problem was limited to “a few hundred cases.”

“Through continuous threat monitoring and awareness, the Worldcoin team uncovered suspicious activity where people were encouraged to create a World ID, which was then sent to a third party,” they said.

Worldcoin has taken a number of steps to try to address the problem. And including “adjusting the initial in-person registration process” and implementing dynamic and static QR codes.

The illegal sale of IDs will also be able to prevent them from being returned to the user via a repeat eye scan, the developers believe. However, earlier Worldcoin claimed. About not storing iris scans to exclude the risks of losing confidential data.

The company admitted that despite all these precautions. They don’t fully protect the system from fraudsters’ attempts to circumvent the “one person, one proof” principle.

Our experts note that solving these problems will require innovative ideas in the development of mechanisms and attribution of social relationships.

Ledger, a company that makes hardware cryptocurrencies, said it had always been able to install firmware on the devices that would allow customer passwords to be extracted. This message was later removed

Protecting its new product, hardware cryptocurrency wallet maker Ledger caused a scandal in the cryptocurrency community. With its statement that it has technically always been able to get users’ keys giving access to their crypto-assets.

“Don’t worry about us holding a gun to your head the whole time. And see? It’s not like you’re dead, so there’s no problem with us continuing to hold a gun to your head,” Ledger commented on Ledger’s social media statements.

The company soon deleted its message. But it had already made its way around the web. Ledger later wrote that her words were misunderstood. And there are layers of protection and control in the firmware of its devices to ensure that no hacker (even internal) can introduce malicious firmware.

In response to this, one user noted that when he bought a Ledger device, he was not buying “layers of control”. He was simply buying a cold wallet in which the seed phrase could not leave under any circumstances. Never before has a real-time company ruined its reputation like this, another commenter stated.

Protection from critics

Ledger tried to protect its new lost key recovery tool Ledger Recovery, announced on May 16, from criticism from the cryptocurrency community with its firmware statements. The tool allows you to create a backup copy of a seed phrase. And that will help restore access to the Nano X cryptocurrency wallet in the event that a secret phrase is lost.

The new service breaks the seed phrase into three fragments. Which in encrypted form store three different sides. As Wired reported in February. Those firms would be crypto company Coincover, Ledger itself. And backup service provider EscrowTech.

If a key is lost, the owner of the wallet will have access to its backup by authenticating themselves. The Ledger Recover service will be paid for and voluntary.

The Ledger tool has been very badly received by the cryptocurrency community. The main complaint of users is that the company positioned its cold wallet as a way to autonomously store cryptocurrencies. That is, access keys could only reside on it and not be allowed to leave it.

By adding the ability to upload keys, albeit in encrypted form, Ledger set a precedent. Which completely contradicts its initial claims. According to critics, the new tool reduces the security of the device, making it vulnerable to scammers.

“This is a terrible idea, do not enable this feature,” wrote Polygon Labs Director of Information Security Mudit Gupta.

Also Ledger says this backup option will be popular. That’s because the possibility that assets could become inaccessible simply because a key is lost is a deterrent to investing in cryptocurrencies.

“That’s what future customers want. It’s a way for the next hundreds of millions of people to really move to cryptocurrencies,” Ledger CEO Pascal Gauthier was quoted by CoinDesk.

Our experts point out that at the end of March it became known that Ledger attracted funding of up to $100 million. Gauthier said that the company will use the funds received to develop its business, expand its network of distributors. As well as increasing production and improving products.