In this issue
- Myanmar: Tether as a lifeline
- Nike and the metaverse: Just do it
- Animoca Brands: Monkey business
From the Editor’s Desk
Dear Reader,
Since the U.S. and other nations announced a diplomatic boycott of the upcoming Beijing Winter Olympics last week, there has been much talk of the “politicization” of sports, commerce and other aspects of human endeavor that some — for often the most self-serving reasons — seek to characterize as apolitical.
Declarations that finance is politically agnostic might ring a little hollow for some members of the cryptocurrency community, who see the entire crypto phenomenon as being rooted in a distinctly political desire to break free of central banks’ control of money.
The embrace of stablecoin USDT this week by the civilian shadow government of military-controlled Myanmar shows how easy breaking from central authority’s grip can be. And it reinforces a potential “threat” to entrenched systems everywhere.
As those putting their lives on the line against Myanmar’s repressive rulers seek to fund their struggle, it should come as no surprise that they have chosen to do so via a channel that skirts traditional financial institutions compromised by the army-state. The interplay between digital money and politics is on full display for the world to see… from Myanmar to China. The story is only just unfolding, and it’s a critical one to watch.
Until the next time,
Angie Lau,
Founder and Editor-in-Chief
Forkast.News
1. Funding a freedom fight
Image: Lauren DeCicca/Getty Images
By the numbers: Myanmar — over 5,000% increase in Google search volume.
Myanmar’s National Unity Government (NUG) — a pro-democracy shadow government of the Southeast Asian nation that called for a people’s defensive war against the ruling military junta earlier this year — has officially adopted the stablecoin USDT for domestic use. The NUG’s recognition of the U.S. dollar-pegged cryptocurrency goes directly against warnings and prohibitions by the central bank against digital asset services and use.
Last week, Myanmar’s controversial former state counselor and National League for Democracy leader Aung San Suu Kyi was sentenced to four years in prison for apparently violating Covid-19 protocols and inciting dissent, later reduced to two years. She faces numerous other charges, including corruption, with potential prison sentences totaling more than 100 years.
- Suu Kyi — daughter of Burmese independence leader Aung San — came to prominence around the time of the “8888 Uprising” in 1988, which saw protests against the military regime and a push for democracy to overturn the dictatorship of Ne Win, who had ruled the country since 1962. She was placed under house arrest in 1989 and received the Nobel Peace Prize in 1991.
- Suu Kyi was released from house arrest in 2010, and her political party boycotted a general election held the following year. In a general election held in 2015, Suu Kyi’s National League for Democracy (NLD) party won a landslide victory, seeing her take a role akin to that of a prime minister and subsequently draw criticism over her government’s inaction amid a genocide against the country’s Rohingya population.
- The NLD party won another landslide in a general election in 2020, but the results were rejected by the military, and in February 2021, General Min Aung Hlaing seized power in a coup and Suu Kyi and NLD leaders were arrested.
- USDT is the world’s largest stablecoin by market capitalization, with more than 77 billion coins in circulation.
- Tether, USDT’s issuer, stands accused in a new class-action lawsuit in New York of making false representations that USDT is backed on a 1:1 ratio by U.S. dollars. Tether settled a New York investigation involving similar allegations in February, paying a US$18.5 million penalty.
Forkast.Insights | What does it mean?
The adoption of cryptocurrency by a political party isn’t anything new: El Salvador’s ruling party brought in Bitcoin as legal tender not only for itself but for everyone in the country just a few months ago.
It’s also not the first time crypto has been used for fundraising: Islamist organizations have been known to favor it as a way of funnelling cash to their adherents, and even U.S. senators have solicited crypto donations from followers.
What makes Myanmar an interesting case is how the NUG’s move will be viewed by less-than-popular authorities in neighboring and nearby countries. In nations such as Myanmar, it may be relatively straightforward for the military junta to block cash flows inbound through traditional financial channels. Blocking crypto money flows is more challenging.
The NUG raised US$9.5 million from the Myanmese diaspora in little more than 24 hours last week, and has set a goal of raising a further US$1 billion to help topple the country’s violently repressive rulers. The suppression of private cryptocurrencies in authoritarian countries such as China has been interpreted largely as a move to protect existing financial systems. Could there be more to it than meets the eye?
2. Nike laces up for the metaverse
Image: Cindy Ord/Getty Images
By the numbers: RTFKT — over 5,000% increase in Google search volume.
Nike has announced the acquisition of non-fungible token startup RTFKT, taking another step into the metaverse. RTFKT uses blockchain and augmented reality to create digital collectibles, with a particular focus on sneakers. It also holds “forging events,” at which users can receive physical versions of their virtual shoes. A world-leading apparel brand with a market capitalization of US$261.8 billion, Nike generated revenue of more than US$44.5 billion in the latest financial year, of which about 66% came from footwear.
- One of RTFKT’s flagship products is the Punks project, in which buyers can receive one pair of unique virtual sneakers and their physical counterparts based on their CryptoPunk NFTs. In November, RTFKT partnered with artist Takashi Murakami for an NFT auction to sell 20,000 3D avatars as a part of the CloneX collection.
- Nike had explored tokenization before this year’s NFT boom, including a 2019 patent for tokenizing shoes. Last month, it announced a partnership with online game and early metaverse rendition Roblox to create Nikeland, a space in which players dress avatars in Nike products.
Forkast.Insights | What does it mean?
Nike’s entry into the metaverse with the acquisition of RTFKT is a strong signal that the blockchain-powered world is maturing for business and consumers.
In little over a year, NFTs — and, more specifically, digital collectibles — have transitioned from being a niche pursuit to the status of a mainstream mainstay that companies want to stake a claim to. Nike is no exception.
Nike has been quietly filing patents and trademarks in the U.S. involving “downloadable virtual goods” and has formed a number of partnerships with other projects in the space. It is looking to reach new consumers in new ways, and it sees the metaverse as the next big frontier. It’s not difficult to see why.
Covid has gnarled supply chains and left billions of dollars worth of goods floating on ships waiting to be unloaded. The metaverse suffers no such headaches, allowing companies such as Nike to offer designs to paying customers instantly.
Vogue recently asked the question, “Is it time to hire a chief metaverse officer?” For companies such as Nike, the answer is unequivocally “Yes.”
3. Call of the jungle
Image: Pixabay
Animoca Brands and Bored Ape Yacht Club (BAYC) have announced a partnership to develop and publish a blockchain game utilizing Bored Ape non-fungible tokens. The game is expected to be released the second quarter of next year and will feature play-to-earn mechanics. BAYC is a collection of 10,000 ape-themed NFTs whose constituent collectibles now trade at a floor price of 54 ETH (US$) on OpenSea, the world’s biggest NFT marketplace . BAYC is the second-most popular among all the NFTs listed on OpenSea, with an all-time trading volume of 259,204 ETH, trailing only CryptoPunks’ 748,642 ETH.
- Animoca Brands is making big metaverse bets through investments in booming projects such as Axie Infinity, OpenSea and Dapper Labs. It has a corporate digital asset treasure chest valued at US$15.9 billion.
- “There are very few icons that are able to represent the surging world of NFTs as powerfully as Bored Ape Yacht Club, which is why we, as a group and in aggregate, hold a significant number of them,” said Yat Siu |, co-founder and executive chairman of Animoca Brands in a blog post. “We are incredibly excited and proud to collaborate on a game for this cultural milestone.”
- Earlier this month, Animoca Brands and Binance Smart Chain (BSC) launched a $200 million program to invest in blockchain gaming projects built on BSC.
Forkast.Insights | What does it mean?
Although NFTs have captured the public imagination — and their wallets — a more pressing question has arisen for the companies that built them: How to keep consumers coming back?
Animoca Brands has put the bulk of its funds into gaming projects, and more recently the emerging field of play-to-earn — games in which users can earn tokens (and, theoretically, even a living).
The technology underpinning NFTs makes them an ideal vehicle for potential players to create profiles inside gaming worlds. They’re unique and transferable to other projects, which is why many other titles use NFTs in their games.
Animoca deciding to build a game based on NFTs isn’t anything new. What’s interesting is the strategy of building a game for no more than 10,000 players. Holders of Bored Ape Yacht Club NFTs are customers with deep pockets who have already demonstrated their desire to spend big in the metaverse.
What Animoca is trying to do is channel some of the vast sums spent on NFT art into gaming. The average price of an NFT artwork dwarfs that of a gaming NFT. If Animoca can convert Bored Ape HODLers into gamers, blockchain gaming could soar.