Tag: NFTs

A Closer Look at the Crypto Regulation Proposed in the UK

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The UK is considering introducing crypto regulation with the aim of protecting its consumers and promoting the growth of its economy. As the country strives to become a leading hub in the crypto industry, regulation is deemed necessary. Incidents such as the collapse of FTX have highlighted the urgency of regulation in this area. A clear and transparent regulatory framework will reduce the risks associated with crypto investments for consumers. The proposed regulation is still in the consultation stage and is expected to be finalized by the end of April.

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Objectives of UK crypto regulation

The main policy objectives of doing the regulation include:

  • To encourage crypto regulation
  • Educate consumers about the risks associated with crypto investments
  • Preserve financial stability of the UK
  • Preserve market integrity of the UK

The proposed crypto regulations will be rolled out in two phases when they become law. Stablecoins will be addressed in the second phase, which will happen later in the year or early next year. At the moment, NFTs are not part of crypto regulation.

The UK has categorized crypto into different categories: Exchange cryptos, algorithmic tokens, governance tokens and fan tokens. Bitcoin and Ethereum fall under exchange tokens.

Initial governance method used

Crypto activities are currently not regulated by the Financial Conduct Authority (FCA). Decentralized finance makes it even harder to regulate, given its decentralized nature. Despite this, the UK introduced KYC and AML requirements for crypto exchanges in January 2020, requiring all exchanges to register with the FCA and subjecting violators to two years imprisonment. Many companies found the process lengthy and cumbersome, leading to some companies leaving the UK.

 Brief summary of the proposed  regulation

Crypto assets activities

They were the main target of the regulation. There is, however, one rule for all cryptos. This may be ridiculous as the crypto options are many. It would also be better if the regulation would be tailored according to risk. It is hard to tell the crypto activities occurring within Britain’s borders.

Crypto regulation will apply to crypto assets occurring within the UK. There is still the risk of UK citizens acquiring crypto from less regulated areas outside the UK.

As mentioned earlier, regulation of crypto assets will take place in two phases. The activities under phase two will include ICOs, crypto borrowing and lending, crypto custody services.

Decentralized coins such as Dai will not be subject to regulation. They will be treated as unbanked assets like BTC and ETH since they are unbanked. Dai may be affected since it is backed by USDC since it is a stablecoin requiring regulation. The UK is not planning to ban algorithmic stablecoins. Decentralized, algorithmic and NFTs are favored as the regulation only applies to cryptos not crypto coins and tokens. Regulations will come later.

Regulations related to new crypto

New crypto includes coins and tokens listed on exchanges and not necessarily creation of coins and tokens. According to the new requirements:

  • Investors are given accurate info
  • Investors are compensated if misled
  • Forging crypto offerings should be banned
  • Exchanges to do a due diligence on all cryptos they list and give detailed info to users
  • Exchanges act as issuers of crypto with no issuers such as BTC.

Cryptos already listed have not been addressed. It is unclear if they will be subject to the same disclosure rules.

 Regulations on Exchanges

Exchanges will be required to:

  • Be More liquid and be resilient
  • Be More transparent
  • Have Accurate on and off chain data

Exchanges will also need to do detailed data reporting, and establish a bankruptcy process.

Regulation on other crypto intermediaries such as market makers

They will need to address conflict of interest, sufficient liquidity, and detecting market manipulation. Generally, market makers have the same requirements as exchanges.

General market abuse requirements

In crypto there are many market abuse incidents that are not covered under financial regulation. The new regulation will control market abuse such as pump and dump schemes and market manipulation. Defaulters will face punitive action. The public will also be taught how to identify market manipulation.

Regulation of crypto borrowing and lending

Some exchanges such as FTX were using customer funds and illiquid tokens as collateral for loans because crypto lending and borrowing is not regulated. The new regulation will ensure risk disclosure, balance sheet disclosure, and clear user contracts.

Conclusion

The United Kingdom is currently undergoing the consultation phase for the proposed crypto regulation aimed at protecting consumers, boosting the economy, and maintaining the financial stability and market integrity of the country. The regulation will aim to educate consumers about the risks associated with crypto, provide accurate information to investors, and control market abuse. The new regulation will bring clarity to the crypto industry and enhance the UK’s position as a crypto hub. Overall, the proposed crypto regulation is a significant step forward for the UK in establishing a fair, transparent, and secure environment for the growth and development of the crypto industry.

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Foodverse: Eating in Web 3.0

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Eating entails more than fulfilling our nutritional needs-it goes deeper than that. It is communal, enhances friendships and builds bonds.

Chinua Achebe, an African literary icon, said:

” When people gather together to eat, it is not because they do not have food in their houses. They gather to eat because it is good for kinsmen to eat together. “

This underscores the deep impact food has in building relationships and society at large. With the advent of the metaverse, it is inevitable that food will find its way into web 3.0. Large brands have already started experimenting with this. This primer will look at how we can consume food in the metaverse and what food brands are currently doing as they get into web 3.0.

FoodVerse:  What It Entails.

The foodverse can be defined as bringing food into the metaverse. Basically, it is having an experience of eating, whether real or virtual food, while experiencing the metaverse.

Firstly, brands can use the metaverse to enhance client-experience when ordering food. People are used to getting menus when ordering meals. The metaverse can help project these menus in ‘real life’ and help a client have a visual experience of the food they would like to order, how it will look like and even feel it before they make an order.

Secondly, friends can also meet together in a room and say have a drink or even share a meal while enjoying the immersive experience of the metaverse. For example, they can meet and have a meal while on a cruise ship, in the middle of a forest or attending a live session of their favorite band. This digital immersion enhances their relationship and creates an experience that is similar to real world events.

Thirdly, food brands can use NFTs to create rare products, such as wine, and produce them in limited quantities. They can then mint NFTs for these products and sell them to their consumers. These NFTs are a mark of genuine ownership and enhance the brand value of their companies. Collectors would love this. Consumers have the option of selling these NFTs on secondary markets or even create communities around them in the metaverse. Tokenizing food products also helps communities to feel ownership of the companies and their brands.

Finally, users of Metaverse platforms such as Sandbox can  also buy land , build their homes and invite friends over for meals. This will be a game changer as a user can invite multiple friends over from across the world and share virtual meals or drinks with them. Of course, there is still a long way to go before we bridge the divide between virtual and physical food especially when such diverse geographies are involved, but this would be a step in the right direction.

Notable Brands in the Foodverse

At the moment, virtual food may look like it has little value, however, in the long term, merging both the virtual and physical world is the direction to take. Companies are experimenting with instances where you order your food on the metaverse, get it delivered to you and you eat without necessarily leaving the experience. One notable brand doing this is Chipotle. They have partnered with Roblox to allow customers have an experience of virtual food. When customers make orders on the metaverse, they earn credits which they can later redeem for free food delivered to their houses. This shows how the physical and digital world can merge.

Other companies like Onerare are tokenizing the food experience by bringing food lovers and linking them up with celebrity chefs. They then create NFTs from the experience they get from preparing and sharing meals. All of this is done on the metaverse in a gamified manner.

McDonald’s is also planning to open restaurants in the metaverse. The company has already patented ten trademarks on the metaverse. It intends to leverage virtual experiences and enable customers order food from the metaverse and get them delivered to their houses. Customers can also get digital food for their avatars. Other food companies that have filed for trademarks as they seek to launch products in the metaverse are: Kraft Foods Group, In- N- Out Burger and Del Monte Foods.

Restaurants and food brands stand to benefit from getting into the foodverse. Firstly, getting into the foodverse helps these companies build customer relationship and engagement. Secondly, it also enhances brand awareness and can drive more consumers to their products. Finally, it offers an opportunity for restaurants to create multiple income streams.

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Not Left Behind: The Fashion Industry Grand Entry into the Metaverse

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From buying prime pieces of land, developing them and selling them for profit, playing games and earning income, to trading with digital cash and making money from the NFT market, endless possibilities abound in the Metaverse. Doubtlessly, the Metaverse will change multiple aspects of our lives, although it might take time to fully actualize the project.

The fashion industry hasn’t been left behind. In March this year, Tommy Hilfiger, Roberto Cavalli, and Etro hosted the world’s first runaway show on Decentraland. The four-day event also included virtual panel discussions, besides allowing fashion enthusiasts to shop around.

Notable Fashion Brands in the Metaverse

Like tech and gaming brands, there has been a surge in the number of fashion brands entering the Metaverse. Among them is Gucci, a leading luxury brand. The company teamed up with Roblox, a leader in the igaming space, to exhibit items like sunglasses, hats, and handbags in the form of avatars.

The 2-week exhibition was hosted on ‘Gucci Garden’, Gucci’s space on the Metaverse, enabling fashion and NFT enthusiasts to grab the brand’s virtual collectibles.

Founded in 1919, Balenciaga is known for revolutionizing the fashion space, particularly the women’s fashion industry. From high-end handbags to the popular Balenciaga crocs, the firm has frequently created a stir, drawing criticism and praise in equal measure.

The fashion house’s recent partnership with Fortnite, an online game, revealed its interest in Metaverse. The agreement will see Balenciaga-labeled items used as avatars across the game.

Also, Balenciaga promised to refashion three Fortnite avatars, which will see them clad in the Balenciaga creations. Meanwhile, the game allows for trading Balenciagas digital assets across the platform.

Pomp and circumstance marked Lois Vuitton’s 200th birthday. The unique event included the company kick-starting its metaverse journey and launching LOUIS THE GAME, a mobile game embedded with 30 NFTs.

The artwork, estimated at USD 69.3 million, was created in conjunction with Beeple (Michael Joseph Winkelmann), an esteemed NFT artist. However, the collage is solely for gaming purposes and, therefore, not available for trading in the NFT market.

Seizing the Moment

While critics cite different reasons for not buying into the Metaverse idea, the innovation is a voice to reckon with. After all, figures don’t lie. For instance, D&G NFT is said to have accrued $6 million. Similarly, Gucci, Nike, and Adidas, Nike have collectively amassed $137.5 million in the NFT market. It means that the entry of fashion into Metaverse is something whales as well as retail investors, have their eyes on. Rightfully so, this is an unstoppable wave.

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Hail, NFTs! 3 Ways NFTs are Changing the World

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NFTs are not just jpegs uploaded and minted on the Blockchain. Industry players are finding new ways to harness this technology and create game changing products that are shaping the way we interact. True, the recent crypto market slump may have dampened the spirits of the general market. However, industry leaders opine this is part of the market cycle and soon we will be out of the woods. This article is a primer on NFTs, their use cases and where the world is headed with regard to this technology.

As an art form.

This is the most notable way through which NFTs have gained prominence.

This technology has democratized art, enabling previously unknown artists to be at the vanguard of artistic development- enabling designers, artists and graphic experts across the world to earn passive income. Some digital artworks have turned artists into instant millionaires and much-vaunted celebrities in the art world . There are exclusive clubs created around some of these artworks, attracting celebrities and sports stars.  NFTs have enabled artists to earn royalties even in perpetuity every time their artworks are resold. In some instances, sovereign countries are adopting them and finding ways to use them to boost economic output. Countries,

such as Japan, recently adopted  NFTs as gifts for the civil service.

Government employees who perform well are gifted with NFTs; they use them for commemoration.

In Supply chain

NFTs have found notable use cases in supply chain management .

Manufacturers can use them to create unique tags for their products  for provenance.

Consumers can easily scan these NFTs and help them get detailed understanding of the products they consume. Businesses can use NFTs to enhance transparency and boost efficiency as they can track products on real time . With one scan all supplier information can be brought to the fore.

This form of transparency can be, especially, helpful for perishable goods, medical supplies and fragile industrial products. Businesses can also use NFTs to enhance collaboration across

the supply chain – enabling them have one permanent track of records of the goods they procure. This ultimately helps businesses maintain a competitive advantage, cut costs, and build better inter- business relations.

As digital Identities

NFTs can also be used as digital identifiers. Their unique identifiers and qualities enable them to be potential tech candidates for a global registry. This is still controversial and industry players are still unsettled on how best to go about this.However, traction has been gained in the gaming industry where players can use NFTs to create unique personalities, ammunition or gaming accessories and even trade them. For sure , this is slowly gaining real-world adoption.

Some companies have developed NFT based KYC identifiers that automate the KYC process wile at the same time maintaining anonymity. What these do is that a user creates a single NFT with attributes  such as age, address, location and gender. These can then be used across multiple platforms anonymously in the event that one needs to pass KYC. The details can not be accessed publicly and can only be shared with express permission from the owner. In the UAE,

the government has established a digital presence(consulate) on the metaverse using web 3.0 technologies that also encompass NFTs. This metaverse is meant to offer a digitally immersive experience where the country can promote their services and  educate people about

the investment potential in this region. Visitors to the country’s digital platform will have a chance to interact with a customer representative and can be issued with a ticket where they’ll get their issues resolved.

These are tech  development that  can be directly  attributed to NFTs and their uses as this industry matures, more products and services will be developed anchored on this technology.

Hail, NFTs.This is the new norm.