This week Cryptocurrency Story We look at the traffic jams caused by the boom in cryptocurrency trading, new funding for blockchain payment networks in developing countries, and a pair of new cryptocurrency-friendly alums demoed at FinovateEurope last month.
Basic backup due to Bitcoin boom
Bitcoin’s new boom is not without complaints. surge in network activity Coinbase’s Layer 2 blockchain infrastructure has resulted in service disruptions ranging from increased transaction fees to the inability to cancel transactions due to transaction interruptions.
Why is this important? Launched in August 2023 for cryptocurrency traders and investors, Base offers a low-cost way to trade on Ethereum, among other attractive features. But more importantly, Ethereum’s third-largest layer 2 network has also seen its trading volume triple in the past few weeks due to “default season.” This happens when cryptocurrency influencers and traders promote various native tokens to their followers.
Although most of these tokens are meme coins, the volume was large enough to act as a “stress test” for many of these systems, with users complaining that transaction fees were five times normal levels. It should be pointed out that Base is not the only network that has felt the impact of increased trading volume for all forms of cryptocurrency, including the current meme coin mania. Layer-1 blockchain Solana also experienced service issues.
The company noted that traffic disruptions are likely to be temporary. We also encouraged users to cancel and resubmit transactions when possible, and wait until traffic subsides if cancellation is not possible. Most importantly, Coinbase has assured its customers that their funds are safe. The saying goes that if you’re sitting in your car complaining about traffic, it’s worth remembering that you, too, are experiencing traffic. A new round of cryptocurrency traders and investors are learning these lessons as cryptocurrency winter turns into cryptocurrency spring.
In other Coinbase news, the company announced the launch of its prime sweeper Solution this week. Prime Sweeper is a reference app that automates the transfer of digital assets between Coinbase Prime’s trading balances and vault wallets. The no-code solution is designed for institutional customers and provides robust logging and status updates at every step of the transfer process.
African blockchain payment network raises seed funding
In an oversubscribed seed funding round, African blockchain payments network Zone has secured $8.5 million. Venture capital firms Flourish Ventures and TLcom Capital led the investment. Other companies that participated in the fundraising included blockchain-focused companies Digital Current Group, Verod-Kepple Africa Ventures, and Alter Global.
Zone is the first regulated blockchain network for payments in Africa. The company has already signed deals with 15 of the continent’s largest banks and fintech companies, and Zone CEO and co-founder Obi Emetarom said the funding would boost the expansion of the company’s domestic network. The Zone will also leverage the new capital to support a cross-border payments pilot program scheduled for 2025.
“As we enter this new phase in the Zone, we are reinvigorated and renew our commitment to transforming Africa’s payments infrastructure,” Emetarom said. He praised the company’s new and existing investors for their “deep expertise” as well as their financial support. Flourish Ventures, for example, leverages both its global perspective as well as its network of industry influencers and African fintech expertise to help Zone enter new markets. TLcom Capital will bring “vital local credibility” and “understanding of the African technology space.”
Founded in 2022, Zone is headquartered in Lagos, Nigeria.
FinovateEurope: Bringing Compliance to Cryptocurrency and Web3 Gamification
FinovateEurope featured both companies last month. FRNZX (pronounced “forensic”) and TradeRight SolutionsWe are innovating in the cryptocurrency space.
Headquartered in Tel Aviv, Israel and founded by cryptocurrency, AML and intelligence experts, FRNZX provides a way for cryptocurrency trading to achieve AML compliance. The company offers a holistic AML navigator that makes it easier to integrate cryptocurrency transactions into a bank’s existing AML framework. At FinovateEurope, FRNZX co-founder and CEO Nevo Lapidot demonstrated how this technology can streamline AML operations, from onboarding to monitoring and suspicious activity reporting, and help financial institutions meet regulatory requirements. FRNZX was founded in 2022.
Other cryptocurrency-friendly demo companies on FinovateEurope this year include: TradeRight Solutions. To promote financial inclusion, Tradelite Solutions offers a web3 financial education game called Mogaland. In addition to gamification, Mogaland leverages token economics and data-driven financial behavioral ID to make financial literacy accessible, enjoyable, and monetizable to everyone. Founded in 2020 by Tracy Chang (CEO) and Matthias Kröner (CFO), Tradelite Solutions is headquartered in Munich, Germany.
ARK Invest’s Cathie Wood on Cryptocurrencies in 2024
One of the biggest advocates of cryptocurrencies in mainstream finance is ARK Invest CEO and CIO Cathie Wood. In addition to her advocacy for new and disruptive technologies, Wood has also been advocating on behalf of cryptocurrencies. Just six months ago, she explained why she believes Bitcoin is the currency of AI.
Above is a recent interview with Cathie Wood conducted by Oliver Renick of the Schwab Network. In this conversation, Wood discusses her recent Bitcoin price rise, the launch of a spot Bitcoin ETF, and more.
Figure Technologies launches cryptocurrency exchange
“All markets”? Is it the only platform where traders and investors can buy and sell various blockchain-based assets, including cryptocurrencies, alternative investments, and stocks? Figure Technologies is on it.
This week, the San Francisco, California-based company announced the launch of Figure Markets. The new company will introduce a new decentralized custodial cryptocurrency exchange and blockchain-based security marketplace. Importantly, the market is incorporating Multi-Party Computation (MPC) technology. The company said in a statement that using MPC-based wallets will help avoid single-point-of-failure risks that are common in centralized exchanges. MPC wallets use private keys distributed across a decentralized network and require multi-party approval for each movement.
Figure Markets also announced that it has raised more than $60 million in Series A funding. Jump Crypto, Pantera Capital, and Lightspeed Faction led the oversubscription round. Distributed Global, Ribbit Capital, CMT Digital, etc. also participated.
“This funding demonstrates our vision to redefine capital markets with blockchain technology,” said Figure Markets CEO Mike Cagney. “Figure Technologies is seeing real benefits from using blockchain for its lending and capital markets operations. Our goal is to extend the benefits of blockchain to a wider range of assets, including cryptocurrencies and securities. It’s ironic that the largest cryptocurrency exchanges are not based on blockchain. We aim to change that.”
photo by fabio on Unsplash