This week Ethereum underwent its next round of updates since launching just over 6 years ago.
Implemented via the ‘London’ hard fork — a backward-incompatible upgrade which forces miners to run new software — the update housed the next series of Ethereum Improvement Proposals (EIPs) which aim to improve Ethereum.
EIP-1559, one of five EIPs implemented via London, has become one of the most widely anticipated updates to Ethereum to date. The proposal changes how users will pay to use the network and introduces a ‘token burn model’ where a large portion of transaction fees going forward (which are paid in the native token ETH) will be permanently removed from the total supply of Ether (somewhat akin to a stock buyback).
While EIP-1559 won't necessarily make Ethereum cheaper to use, it should make the costs to transact on the network more predictable and streamlined. That’s because the update overhauls what was known as a ‘first-price auction’ to pay transaction fees — where users set bids for transactions to be included in a block, with the highest bids included until the block is filled — to a ‘base fee’ model that is priced deterministically based on network utilization. Notably, all base fees now paid will be the fees that are burned and removed from circulation. While still early, over 4,000 ETH was burned in the first 30 hours of implementation — worth more than $10 million dollars worth of ETH as of Friday’s prices. For context, a little over 13,000 ETH are created and rewarded to miners each day.
Beyond the clubby confines of the crypto community, the EIP-1559 proposal illustrates to a wider audience how digital currencies can improve and upgrade over time despite their decentralized nature. As ETH 2.0 struts out on the scene, we hear a familiar tune in the air: Burn Baby Burn.
Burn Baby Burn
Ethereum just activated a major change called the ‘London hard fork’ — here’s why it’s a big deal - The changes to the code are designed to fix many of the most prevalent issues by destroying or “burning” ether coins and changing the way transaction fees work so that they are more predictable. If you think of ethereum like a highway, London is adding a few lanes to tamp down traffic and is standardizing toll prices. Read more
Ethereum hard fork sends price jumping as fees start to burn - Crypto traders had been hotly anticipating the upgrade while monitoring the deployment for signs of how the changes might affect the pace of new issuance of ether by the blockchain – a key factor in determining the balance between supply and demand. Analysts had also noted the risk that something might go amiss as the new technology is implemented. Read more
Square leads $29b buyout of lending pioneer Afterpay - The takeover underscores the popularity of a business model that has upended consumer credit by charging merchants a fee to offer small point-of-sale loans which their shoppers repay in interest-free installments, bypassing credit checks. Read more
FCA probes UK bank Monzo over potential money laundering breaches - Monzo revealed the investigation in its latest annual report, which also showed the six-year-old bank kept losses stable in its last financial year despite taking a heavy hit at the start of the pandemic. Read more
Moody's to acquire RMS, leader in climate & natural disaster risk - Moody's Corporation and RMS announced today that they have entered into a definitive agreement for Moody’s to acquire RMS for approximately $2.0b from Daily Mail and General Trust. The acquisition will immediately increase Moody’s insurance data and analytics business to nearly $500m in revenue and will accelerate the development of the Company’s global integrated risk capabilities to address the next generation of risk assessment. Read more
Senators file crypto broker amendment to infrastructure bill after industry backlash - If included in the final bill, the amendment would be a win for the crypto industry, whose advocates have said was at risk of losing innovators and investors interested in doing crypto business in the U.S. The original language could also force some companies to shut down if they can’t comply or move offshore, these advocates said. Read more
Figure to merge with mortgage lender Homebridge - The blockchain revolution may soon be coming to mortgage lending. And it could take the form of a very old-school lender – Homebridge Financial Services. The Mike Cagney-led fintech lender Figure Technologies, most recently valued at $3.2b, announced that it intends to merge with Homebridge. Read more
Starling Bank leads in latest account switching service statement - UK based neobank Starling net gained 17,769 accounts via the national account switching service in the period April and June 2021. In contrast, Santander net lost 10,965 accounts. Of note, some of the leading winners offered strong incentives during the period, and these deals can change over time. Read more.
Crypto ‘wild west’ needs stronger investor protection, SEC chief says - U.S. financial regulators have struggled to get their arms around the fast-growing world of cryptocurrency and related financial technologies. Unlike in the securities and derivatives markets, no single regulator oversees crypto exchanges or brokers. Read more
Robinhood shares slide 28% after big investors file to unload stakes - The volatility has come as many on Wall Street and Main Street still look to make sense of what some are calling the latest meme stock. Retail investors have recently gobbled up shares, while the likes of Cathie Wood, Ark Invest's prominent CEO, are helping buoy the stock among institutional investors. Read more
Next up on Synapse’s fintech services platform: white-labeled credit products - When Sankaet Pathak co-founded Synapse in 2014, he had a vision of doing more than just building a platform that enables banks and fintech companies to easily develop financial services. Read more
Africa’s appetite for digital currencies is growing - Private cryptocurrency providers are also increasing on the continent and even central banks are making sure they aren't left behind, by exploring better ways to create and own virtual money, inside secure ecosystems. Read more
The Mexico-based fintech that decided to buy a bank - Credijusto’s co-founders wanted to avoid building a lender from scratch — their investors thought they were ‘mad’. Read more
BharatPE - India based payments company raised $370m in Series E funding led by Tiger Global. Read more
Human Interest - San Francisco based SMB 401(k) provider raised $200m in Series D funding led by The Rise Fund. Read more
Jupiter - India based neobank raised $45m in Series B funding led by Nubank, Global Founders Capital, Sequoia Capital and Matrix Partners India. Read more
Kuda - UK and Nigeria based digital bank raised $55m in Series B funding led by Valar Ventures and Target Global. Read more
MakersPlace - San Francisco based NFT marketplace raised $30m in Series A funding led by Bessemer Venture Partners and Pantera Capital. Read more
Matrixport - Singapore based digital assets financial services platform raised $100m in Series C funding led by DST Global, C Ventures, and K3 Ventures. Read more
Mesari - New York based cryptocurrency analytics firm raised $21m in Series A funding led by Point72 Ventures. Read more
Naked - South Africa based insurance technology provider raised $11m in Series A funding led by Naspers. Read more
OfBusiness - India based B2B commerce and financing startup raised $160m in Series E funding led by SoftBank Vision Fund 2. Read more
Prime Trust - San Francisco based maker of fintech infrastructure raised $64m in Series A funding led by Mercato Partners. Read more
Rapyd - London based “fintech-as-a-service” platform provider raised $300m in Series E funding led by Target Global. Read more
SentiLink - San Francisco based identity verification technology startup for financial institutions raised $70m in Series B funding led by Craft Ventures. Read more
Tabby - UAE based “buy now, pay later” company raised $50m in Series B funding led by Global Founders Capital and STV. Read more
TrustToken - San Francisco based operator of decentralized finance lending protocol TrueFi and stablecoin TUSD raised $12.5m in new funding led by BlockTower Capital, a16z and Alameda Research. Read more
VNLife - Vietnam based payments provider raised $250m in Series B funding led by General Atlantic and Dragoneer. Read more
Wildfire Systems - California based financial tech platform that powers reward and loyalty programs raised $15m in Series A funding led by TTV Capital and QED Investors. Read more
Xepelin - Chile based creator of a financial services platform for SMEs in Latin America raised $30m in new funding led by Kaszek Ventures. Read more
Yaydoo - Mexico City based B2B software and payments company raised $20m in Series A funding led by Base10 Partners and monashees. Read more
Zeni - Palo Alto based provider of real-time financial services data to venture-backed startups raised $34m in Series B funding led by Elevation Capital. Read more
ZenLedger - Seattle based cryptocurrency tax software and blockchain analytics startup raised $6m in Series A funding led by Bloccelerate VC. Read more
FinTech Collective Newsletter
Curated News with Context
Delivered every Monday, the weekly newsletter, produced by our team, provides a tightly edited rundown of global fintech news, along with a bit of our original analysis.