EU shuns mining ban, Fed hikes rates and BAYC goes APE for ApeCoin drop | Daily News| OKX Academy

Meanwhile, ConsenSys raises $450 million, and Terra cofounder bets big on LUNA’s future price.

From European parliamentarians rejecting a ban on proof-of-work mining to a windfall airdropped to the Bored Ape Yacht Club, the crypto industry delivered on the news front once again this week. Elsewhere, Ethereum infrastructure software firm ConsenSys raised $450 million to reach a valuation of $7 billion, and the Federal Reserve approved its first interest rate hike in three years.   

Here’s everything you need to know about these stories, and more, in this week’s edition of OKX Insights’ News of the Week. 

Fed up with inflation, Fed ups interest rates

Almost two years to the day after slashing interest rates to near-zero levels as an emergency response to the coronavirus pandemic’s effect on global markets, the United States Federal Reserve has finally begun to raise the federal funds rate, beginning with a 25-basis-point increase. 

The Fed had been signaling the impending rate hike for months as inflation levels reached 40-year highs, which may be why both traditional and crypto markets generally reacted positively — though not without some initial volatility.

In addition to the increased federal funds rate, Federal Reserve Chair Jerome Powell stated during a congressional hearing on March 2 that the central bank would begin to reduce its balance sheet “after the process of raising interest rates has begun” and in a “predictable manner.”

Key takeaways

• By gradually raising interest rates and tapering asset purchases, the Fed has pivoted its policy from propping up the economy and fueling growth toward reining in inflation and reducing debt.
• Though the Fed said that it expects these measures to bring inflation back down to its 2% target without disturbing growth in the labor market, higher interest rates disincentivizing borrowing and spending could trigger an economic recession.

Ban on mining BTC in Europe removed from MiCA framework 

The proposed regulatory framework Markets in Crypto Assets, or MiCA, has advanced out of the ECON committee in the European Parliament without the inclusion of a controversial provision that many interpreted to be a ban on mining proof-of-work blockchains — e.g., Bitcoin — within the EU. After industry outcry had delayed the originally scheduled committee vote, even the watered-down wording of the provision, which would have addressed the environmental concerns surrounding PoW blockchains, was ultimately dropped from the version that passed.

Key takeaways

• According to The Block, the Greens/EFA party pulled its support for MiCA due to the removal of the provision, but its opposition was insufficient to halt the regulatory framework from progressing.
• Conversely, the crypto industry’s successful campaign against a possible PoW ban provides evidence of its influence in European politics.

ConsenSys raises $450 million in Series D round

New York-based Ethereum software development company ConsenSys announced the completion of a $450 million raise on March 15. The Series D funding round was led by ParaFi Capital and included investments from previous backers Third Point, Marshall Wace and TRUE Capital Management. Meanwhile, Temasek, SoftBank Vision Fund 2 and Microsoft, along with rappers 21 Savage and Young Thug, invested in the firm for the first time. 

Funding will reportedly go toward staff expansion, Infura development and a MetaMask design overhaul planned for later this year. 

Key takeaways

• The latest funding round more than doubles ConsenSys’s previous valuation, which it received after raising $200 million in a Series C round in November 2021. 
• ConsenSys plans to convert the funds into ETH as per its treasury strategy, noting its involvement in staking on the Ethereum network. 
• The Series D round coincides with ConsenSys’s popular wallet application MetaMask reaching 30 million monthly active users.

BAYC goes bananas for ApeCoin airdrop 

Smash hit NFT collection Bored Ape Yacht Club released its much-anticipated ERC-20 ecosystem token, ApeCoin, on March 17. A total of 150 million APE tokens — 15% of the total supply — were airdropped to Bored Ape and Mutant Ape holders, much to the community’s delight. A few hours after its launch, APE rallied from around 6.36 USDT to a high above 18 USDT on OKX. 

Each BAYC and MAYC holder received 10,000 APE, making the airdrop worth $180,000 at the high — but time will tell if current momentum will stick or if APE beneficiaries will dump their tokens, as has been the case with many major crypto airdrops. 

Key takeaways

• The APE airdrop comes hot on the heels of BAYC creators Yuga Labs acquiring legendary Larva Labs intellectual property CryptoPunks and follow-up collection Meebits for an undisclosed sum. 
• ApeCoin will serve as the APE ecosystem token, facilitating decentralized governance; access to exclusive games, merchandise and events; and incentivizing third-party developers to build features for the wider BAYC community.
• The APE Foundation has been established as a base layer to the ApeCoin DAO and is overseen by key figures in Web 3.0. Its board members are Reddit cofounder Alexis Ohanian; FTX’s head of ventures and gaming, Amy Wu; principal at Sound Ventures, Maaria Bajwa; Animoca Brands chairperson Yat Siu; and president of Horizen Labs, Dean Steinbeck.  

Terra founder bets big on LUNA’s future

Do Kwon, the founder of the public blockchain Terra, accepted two large wagers this week from Twitter users GiganticRebirth and AlgodTrading. The pseudonymous traders bet 10 million and 1 million in USD stablecoins, respectively, on the price of Terra’s native cryptocurrency, LUNA, exactly one year from March 14. If the price is above that observed at the March 14 daily close next year, Kwon will receive the funds currently in an on-chain escrow wallet. 

Key takeaways

• LUNA is one of few crypto assets to hit an all-time high in 2022, having rallied to just over $103 on March 11. 
• AlgodTrading has accused LUNA and its associated UST stablecoin of being a Ponzi and believes current prices are unsustainable. 
• If victorious, Do Kwon will reportedly donate $1 million of the proceeds to the Angel Protocol charity project and use another $1 million to buy back and burn Terra altcoins. 

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