Katherine Ross

One big raise led the pack of this week’s funding announcements: Morpho. The crypto lending firm said it raised $50 million in a round led by Ribbit Capital.&nbsp;



A16z Crypto, Coinbase Ventures, Brevan Howard, Kraken Ventures and Pantera were among a long list of participants in the raise.&nbsp;



“The potential impact of Morpho extends far beyond current DeFi markets, as the protocol is capable of becoming decentralized infrastructure to underpin a truly global, internet-native financial system,” the firm <a href="https://morpho.mirror.xyz/bgUB21hQoy-w7T9je7sEpgTp4EsMMkwbO3sFJmWAwGw">wrote</a>.



Read more: <a href="https://blockworks.co/news/gauntlet-leaves-aave-risk-curator-morpho">Gauntlet will become a Morpho Labs Risk Curator days after its fallout with Aave</a>



Morpho Blue, the lender said, has surpassed $1.7 billion in total deposits in the six months following its Ethereum launch and hit $120 million in deposits roughly a month after it launched on Base.&nbsp;



Another notable raise this week comes from Hyperbolic, a Web3 AI cloud firm, which raised $7 million in seed funding.&nbsp;



Polychain Capital and Lightspeed Faction led the round, while Bankless Ventures and Nomad Ventures were among participants.



Read more: <a href="https://blockworks.co/news/crypto-vs-ai-zero-sum-competition">Empire Newsletter: Is crypto vs AI a zero-sum game?</a>



Hyperbolic previously raised a little under $1 million in pre-seed funding. It currently offers an AI inference service that allows “builders and researchers to access powerful open source <a href="https://blockworks.co/tag/artificial-intelligence">AI</a> models through a simple API call, achieving performance comparable to well-known centralized solutions,” according to a <a href="https://hyperbolic.xyz/blog/hyperbolic-secures-7-25-million-seed-funding-round?utm_source=press&amp;utm_campaign=seed">press release</a>.



“Hyperbolic&#8217;s dual focus on GPU accessibility and open-access AI services sets it apart in the industry, promising a collaborative future for AI development. As they expand their GPU Marketplace and develop AI services for developers and researchers worldwide, the team is just scratching the surface of what’s possible,” Hyperbolic CEO Jasper Zhang said.&nbsp;



<h2 class="wp-block-heading">Other notable raises:</h2>



<ul class="wp-block-list">
<li>DePIN project Daylight <a href="https://x.com/daylightenergy_/status/1818678077930848578">raised</a> $9 million in a Series A round led by a16z Crypto. Lattice Fund and Framework Ventures were among participants.</li>



<li>Icebreaker, an “open professional network,” <a href="https://www.prnewswire.com/news-releases/icebreaker-the-worlds-first-open-professional-network-secures-5m-seed-round-led-by-coinfund-302210777.html">announced</a> a $5 million seed round led by CoinShares. Legion Capital and Accomplice also participated in the round. </li>



<li>Pichi Finance <a href="https://pichifinance.medium.com/pichi-finance-raises-2-5m-2eb56a940f3a">said</a> it raised $2.5 million in a seed round led by UOB Venture Management, Signum Capital and Mantle Network.</li>



<li>Lava <a href="https://x.com/lava_xyz/status/1818622568288387498">said</a> it raised an undisclosed amount from investors including Susquehanna, HashKey Capital and Hivemind Ventures.</li>



<li>OKX Ventures and Aptos Foundation <a href="https://www.okx.com/learn/okx-ventures-aptos-foundation">announced</a> a $10 million growth fund aimed at growing the Aptos ecosystem and further supporting Web3 adoption.</li>
</ul>



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Funding Wrap: Morpho announces $50M raise

Darren Kleine

The cloud.



It’s a fabric that connects people in ways that were impossible just a few years ago — and we all pay for it.



“All of us pay a ‘cloud tax,’” Greg Osuri says. “We just don&#8217;t realize it.” According to Osuri, 50% of online subscription fees, for example, end up in the pockets of cloud providers.



On the 0xResearch podcast (<a href="https://open.spotify.com/episode/0Yp0lVKgctwNLopL2hvlYh?si=za4xuSQ-TS-SCglvw4_1nQ&amp;nd=1">Spotify</a>/<a href="https://podcasts.apple.com/us/podcast/how-akash-network-is-democratizing-access-to-cloud/id1651683074?i=1000632688427">Apple</a>), the founder and CEO of Overclock Labs and core contributor to Akash says that the cloud “keeps a modern society together.”



Cloud technology brings incredible value by enabling “amazing services for us and storing our data” but users have little to no control over this “invisible layer” of society, he says.



Osuri explains that this lack of individual control results in “uncontrollable costs, selective innovation, sometimes extremely anti-competitive practices and essentially, an oligopoly” that persists behind the scenes.



“That&#8217;s the current state of the cloud — an extremely important layer that is extremely opaque.”



<h2 class="wp-block-heading">A computing power marketplace</h2>



The goal of Akash, a decentralized computing network built on <a href="https://blockworks.co/tag/cosmos">Cosmos</a>, is to “reverse that opacity,” Osuri says. It seeks to create an “open, transparent, permissionless layer [so] that all of us have a degree of ownership and a degree of sovereignty.”



Akash acts as a marketplace that matches users with providers who might otherwise be sitting on idle computing power. Osuri explains that, at its core, it is a “super cloud,” that aggregates computing resources across a range of public and private providers and offers “a federated access point.”



Users get access to providers by leasing services in an “open setting,” he says, typically using a reverse auction mechanism. “You specify your needs and you specify what you&#8217;re willing to pay and providers bid on it.”



One key advantage of Akash, Osuri points out, is that “you have a degree of concentration of computational power where [it] has been traditionally hyper-fragmented.”



As of now, Akash is experiencing “near 100% <a href="https://blockworks.co/news/hive-anticipates-100m-revenue-gpu-computing">utilization for high density GPUs</a>,” Osuri says, “and about 50% utilization cumulative for all resources, all types of GPUs, including the low end GPUs.”&nbsp;



That’s quite a bit higher utilization than pretty much anything else out there in crypto, Osuri says. “Traditionally, crypto has been good at oversupply and less demand. Here, we have the opposite problem: high demand and less supply, or supply that&#8217;s not yet on the market.”



Most demand for computing power right now is for high-end H100 chips and “data center grade homogenous hardware,” Osuri says — equipment that powers <a href="https://blockworks.co/tag/artificial-intelligence">AI</a> apps like ChatGPT.&nbsp;



“Every time you hit a prompt in <a href="https://blockworks.co/news/ai-web3-decentralization">ChatGPT</a>, the time it takes to come back, it requires one H100 per concurrent user for that time,” Osuri explains. “Now, do the math. 100 million users. All of them at the same time.”



“That&#8217;s impossible,” he says. “They have to prioritize the H100 time based on how many concurrent users they want to support and that dictates how fast the application works.”



“More users, less chips means slower. More chips, less users means faster.”



<h2 class="wp-block-heading">Mixing things up</h2>



Osuri mentions one team that is working with a broader mix of chipsets for “heterogeneous” computing power. “You can train on a 4090 and H100 at the same time, leveraging the compute power from each of those chips,” he says.



“There are lots of teams working on it,” he says, adding that at some point in time in the near future, idle home gaming PCs and consoles might even be able to provide computing power to the marketplace.



As of now, Osuri says that most demand for the Akash service comes from machine learning developers looking for on-demand A100, H100 or A6000 chipsets.&nbsp;



“There is no place right now on the cloud where you can get on-demand access to 100’s,” he says. “Amazon, Google, Microsoft do not have A100s or H100s.”



Read more: <a href="https://blockworks.co/news/big-tech-data-depin">Don’t give your life to Big Tech for free</a>



Osuri reiterates that the Akash marketplace operates as a free market, with low demand resources costing around 80% less than they would via traditional services like AWS. On the flip side, high demand services like H100s are more expensive than what one would normally expect to pay.



“We don&#8217;t have any control over price,” he says. “It is a free market that sets the price.”&nbsp;



Osuri explains that Overclock Labs might provide guidance regarding pricing, “but we don&#8217;t dictate what the price should be. And we never will. And that&#8217;s critical for the protocol to function.”



<iframe loading="lazy" frameborder="0" height="200" scrolling="no" src="https://playlist.megaphone.fm/?e=BWG7401400450" width="100%"></iframe>







“We need to learn how to deploy these models on a decentralized network versus a centralized network,” he says. “It&#8217;s always been centralized because <a href="https://blockworks.co/news/ai-should-be-decentralized">that was the only option</a>.”



“For the first time, we actually have a viable decentralized option.”



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Cloud computing is operated by an anti-competitive oligopoly, says Osuri

Bessie Liu

Chorus One, one of the largest institutional staking providers, has launched Red Horizon — software designed to streamline developers&#8217; interaction with the Urbit server.



Urbit is an architectural framework that is blockchain adjacent. It is not a traditional blockchain, but rather a different approach to programming and design, Gary Lieberman, Urbit lead at Chorus One, told Blockworks.



The architecture is designed to be a peer-to-peer network of personal servers, where each person has their own “urbit” — or a computer that runs in the cloud.



“It’s a computer that’s always on, always connected, it’s always sending and receiving messages, and running programs that tell it what to do when it sends and receives a message,” Lieberman said.



Traditionally, when a user sends messages through encrypted messaging platforms, the information is still passed through a cloud server — usually run by a large corporation or centralized entity, such as AWS.&nbsp;



Although there may be very legitimate reasons for people to want to run their own server— such as censorship resistance, interoperability and privacy — the process as it exists is rather tedious.&nbsp;



Urbit simplifies this and rethinks programming by making personal servers more accessible.&nbsp;



“You have a web page that looks vaguely similar to the iOS homepage, and you have different apps you can install,” Lieberman said. “The apps are then installed on your urbit, your personal server that lives in the cloud.”



Each urbit is secure and private, entirely under the control of the user. When connecting with others to send a message, a user can connect to a different user&#8217;s urbit directly, without ever having to rely on a centralized service provider.



<h2 class="wp-block-heading">Red Horizon is simplifying on and offboarding to Urbit&nbsp;</h2>



Red Horizon is designed to simplify the onboarding and offboarding process to Urbit — removing all necessary technical skills to use the protocol — making it more accessible to non-technical users.



“You can sign up to be onboarded through us, then should you choose that your ideals are more sovereign than running your personal server in the cloud, then you can click a button and export this urbit, download your personal server as a file and run it at home,” Lieberman said.



The opposite is also possible. Any user that no longer wishes to run their own server or chooses to move from a different provider can opt into Red Horizon, which will run a user’s server in its cloud.&nbsp;



According to Urbit’s <a href="https://network.urbit.org/">network explorer</a>, over 4,000 personal servers are running on Urbit.&nbsp;&nbsp;



“I would expect the number of active users to be quite a bit lower than this, because Urbit’s job is to sit there and stay connected, which means even if someone is not using it, there might be a hosting provider that is holding it there, or someone who set it up and forgot about it,” Lieberman explains.



Despite this, there is still a clear interest in the Urbit mission — the number of servers on Urbit have doubled over the past six months.



“I still don’t think there are powerful products on Urbit the way people imagine them to be, but we’re so much closer to that vision and people are starting to take it more seriously,” he said.



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New Chorus One architecture simplifies Urbit use

Nick Ducoff

Everyone’s been busy predicting the death of crypto and Web3 recently — and to that I say, fair enough.&nbsp;



But as we all know from history, a burst bubble isn’t the end of the story. It’s often the start of a new one.



The future of the blockchain is one in which the next billion crypto users won’t hold bitcoin, ether or any other fungible tokens. They’ll use fiat to purchase goods and services, and that fiat might be exchanged for tokens somewhere on the back end.



Blockchain has already been through two epochs, the Crypto Era and the Web3 Era, and we’re on the cusp of a third: the Abstraction Era.&nbsp;



Put simply, the blockchain is going to become infrastructure. Just as no one really talks about “the cloud” anymore, we won’t talk about “the blockchain” either. We won’t need to know or care which blockchain our purchases are stored on.&nbsp;



Going forward, most people who use crypto to buy something may not even know it.&nbsp;



<h2 class="wp-block-heading">Blockchain, not Bitcoin</h2>



If I’m going to Italy, I don’t start gathering up a bunch of euros ahead of my trip. When I get there and sit down in a restaurant, all I care about is eating my pasta and drinking my wine. I’ll pay with a credit card and my dollars will get converted to euros. If the back-end technology uses the Solana blockchain to do the conversion and it converts my fiat to USDC and then to EUROC, saving the merchant foreign exchange fees, fantastic.&nbsp;



I don’t need to know how the technology works: I’m still paying with dollars, and the restaurant is still getting paid in euros. The <a href="https://blockworks.co/tag/blockchain" target="_blank" rel="noreferrer noopener">blockchain</a> technology that enables this seamless transaction doesn’t need my attention.



In this new epoch, the exciting thing won’t be currency; it will be the underlying technology: The blockchain itself.&nbsp;



And it’s already happening: On OpenSea, you can now buy an NFT with dollars. In fact, that’s becoming their primary call to action.&nbsp;&nbsp;



Starbucks also <a href="https://stories.starbucks.com/stories/2022/the-starbucks-odyssey-begins/">announced</a> they will begin issuing customers &#8220;stamps&#8221; in their Odyssey loyalty program on Polygon, yet no one ordering a pumpkin spice latte will ever need MATIC or care.



Reddit’s “Collectible Avatars” (notably not called NFTs) have been downloaded by 4.3 million people since September 2022, more than the entire number of wallets with any NFTs at all (2.5 million) prior to September, according to <a href="https://www.nansen.ai/guides/nft-statistics-2022">Nansen</a>. These avatars can be purchased with your local fiat currency.



These are all precedents for how to cut all those clunky steps from our current, declining Web3 era so that the end user can make their purchase with a single click, rather than laboring through the whole complex process themselves.&nbsp;



That’s the abstraction era in action.&nbsp;



<h2 class="wp-block-heading">Predicting the future</h2>



With the mobile evolution, users could only benefit if they had access to a mobile device, some level of technical skill, and a willingness to make behavioral changes. Hardcore crypto types might then say that so far, the crypto movement has only progressed to the same point as the original mobile revolution.



The process we put up with to use crypto is amazing and faintly ridiculous when you break it down — signing up for an exchange, connecting your bank account, buying tokens, installing browser wallets, connecting your wallet. And if you ever need to convert that token into currency, you have to reverse this whole process: sending the token back to the exchange, selling it, eating the fees, and then withdrawing the money — which could take days (if the exchange was allowing withdrawals at all!)



This — unwieldy, error-prone process — this was what we all got so excited about?&nbsp;



The cloud revolution, on the other hand, is a natural evolution of technology and the internet: Everyone’s on the cloud now, often without even realizing it. The end user doesn’t know or care how the cloud works, and you don’t need a new device, new technical skills, or new behavior to use the cloud. The cloud simply operates in the background, streamlining your experience.&nbsp;



Think of it this way: No provider boasts to their prospective end user about the cloud. The end user doesn’t care where information is stored or what the technological underpinning looks like. They just want a great UI and the knowledge that their information is stored securely.&nbsp;



We’re seeing the same type of evolution with blockchain technology.&nbsp;



In the abstraction era, we’ll be investing in great businesses and technologies —&nbsp;and most of those will just happen to be built on the blockchain. Many funds used to call themselves “cloud” funds or invest in “mobile,” but not anymore: Those distinctions would sound ridiculous.



Similarly, in five years or so, there won’t be a distinction that a fund is a “Web3” fund. Where the technologies or philosophies of cryptocurrency or <a href="https://blockworks.co/tag/web3" target="_blank" rel="noreferrer noopener">Web3</a> make sense, they will be simply used by the best businesses, and everyone will benefit.



The future is all about abstraction, and this new era will usher in the next billion users…who will actually be the first billion, seeing as neither our “crypto” era nor our “Web3” era was able to bring in more than 100 million people.



<hr class="wp-block-separator has-alpha-channel-opacity"/>


<div class="wp-block-post-author-biography">Nick Ducoff is a partner at G20 Ventures, co-founder of ON_Discourse and founding member of OurNextDAO, and was previously a 2x founder and securities attorney. </div>


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It’s Going To Be Blockchain, Not Crypto

Ornella Hernandez

<div id="highlights-block_62a222e3952db" class="highlights">
 <ul>
 <li>Dubbed NFT Cloud, the software is designed to help companies make and manage NFTs</li>
 <li>The announcement marks Salesforce’s entrance into the Web3 market</li>
 </ul>
 
</div>



Cloud software company Salesforce <a href="https://www.salesforce.com/products/web3/nft/" target="_blank" rel="noreferrer noopener">launched</a> a pilot program for its corporate clients to create and trade NFTs.



Launched during the Salesforce Connections Conference in Chicago on Wednesday, the first version of NFT Cloud is available in a closed pilot. It will be available to the public later this year.



This product is Salesforce&#8217;s first foray into blockchain technology and is part of the company&#8217;s <a href="https://www.prnewswire.com/news-releases/salesforce-announces-new-customer-360-innovations-across-commerce-and-marketing-clouds-for-building-trusted-relationships-at-scale-301563604.html" target="_blank" rel="noreferrer noopener">Commerce Cloud</a> suite, which enables customers to sell NFTs (non-fungible tokens) on the Salesforce Customer 360 Platform.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Mint NFTs on Salesforce’s Platform: INTRODUCING SALESFORCE NFT CLOUD. Mint &amp; Sell NFTs on a trusted, sustainable platform. Launch your brand into new digital worlds. Link data, communities, and wallets. Deploy from secure, sustainable technology. ❤️🤖 <a href="https://t.co/wA7amzw55l">https://t.co/wA7amzw55l</a>&mdash; Marc Benioff (@Benioff) <a href="https://twitter.com/Benioff/status/1534543006660972547?ref_src=twsrc%5Etfw">June 8, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The service targets consumer brands that want to offer their customers exclusive event access via NFTs, Adam Caplan, Salesforce’s senior vice president of emerging technology, <a href="https://www.bloomberg.com/news/articles/2022-06-08/salesforce-pilots-nft-marketplace-as-token-trading-is-down-90" target="_blank" rel="noreferrer noopener">told Bloomberg</a>.



News of this service first surfaced in mid-February when around 400 Salesforce employees signed an internal petition raising concerns about the environmental impact and speculative nature of NFTs, Thomson Reuters Foundation News <a href="https://news.trust.org/item/20220218170402-ug6bk" target="_blank" rel="noreferrer noopener">reported</a>.



The company now touts its commitment to sustainability on its website. NFT Cloud will automatically calculate carbon emissions of blockchain options, support only proof-of-stake <a href="https://cms.blockworks.co/proof-of-work-vs-proof-of-stake-whats-the-difference/" target="_blank" rel="noreferrer noopener">as opposed to</a> proof-of-work blockchains, and make it easy for users to offset their emissions through carbon credits.



Salesforce is also collaborating with organizations such as the Crypto Climate Accord, an environmental initiative that seeks to eliminate carbon emissions from the crypto industry by 2030.



As for security, the company stated that the pilot will offer audited smart contract templates for sellers and buyers, as well as fraud prevention tools, such as the ability to pause assets and wallets.



In an effort to provide a more secure checkout experience, customers can host branded marketplaces on their own site while Salesforce handles the backend and authentication.



Cybersecurity, scams and fraud in crypto were concerns brought up by Salesforce employees in February. The Federal Trade Commission has reported more than <a href="https://cms.blockworks.co/frauds-and-scams-top-1b-since-2021-ftc-says/" target="_blank" rel="noreferrer noopener">$1 billion in losses in crypto-related scams</a> since 2021.



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Salesforce Pilots Cloud-based NFT Service

Sebastian Sinclair

<div id="highlights-block_61f34342f4b25" class="highlights">
 <ul>
 <li>Google&#8217;s cloud division has formed a new business unit that will seek to support its new and existing customers developing on the blockchain</li>
 <li>The Digital Asset Team will provide dedicated node hosting for developers through to on-chain governance </li>
 </ul>
 
</div>





Google&#8217;s cloud computing division is hunting down blockchain experts as part of a new business unit aimed at supporting the tech giant&#8217;s existing customers.



The unit, known as the Digital Assets Team, will focus on the retail and healthcare sectors as Google attempts to expand its offerings beyond advertising.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“We’re seeing [interest in the blockchain space] across every industry vertical we interact with — from financial services and capital markets to retail, sports and gaming,” Richard Widmann, Google Cloud&#8217;s head of strategy for digital assets, told Blockworks.</blockquote>



”Digital asset and blockchains technology is already having a profound impact on our customers and their users across nearly every major vertical, and perhaps most prominently in the financial services space,&#8221; he said. 



Decentralization is a major component of the crypto-industry. Decentralized finance, or DeFi, has sprung up in recent years based on the philosophy of cutting out the middleman, including banks and lenders, to transact peer-to-peer via the use of smart contracts. Google is hoping to capitalize on the movement as finance continues to evolve.



”We see the evolution of blockchain technology and decentralized networks today as analogous to the rise of open source and the internet 10-15 years ago,” Widmann said.



The new unit will support customers seeking to build, transact, store value and deploy new products via blockchain-based platforms, said Yolande Piazza, vice president of financial services at Google Cloud in a <a href="https://cloud.google.com/blog/topics/financial-services/google-cloud-launches-dedicated-digital-asset-team" target="_blank" rel="noreferrer noopener">blog post</a> on Thursday.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;This new team will enable our customers to accelerate their efforts in this emerging space and help underpin the blockchain ecosystems of tomorrow,&#8221; said Piazza.</blockquote>



Specifically, Google Cloud’s Digital Assets Team will provide dedicated node hosting for developers, take part in node validation and on-chain governance and support on-chain governance via participation from Google Cloud executives and senior engineers, per the post.



The team will also help drive co-development and integrations into Google&#8217;s partner ecosystem as well as advancing go-to-market initiatives with its ecosystem partners in the hope that Google Cloud becomes &#8220;the connective tissue between traditional enterprise and blockchain technologies.&#8221;



Several large blockchain and crypto companies utilize Google&#8217;s Cloud Platform including <a href="https://cloud.google.com/blog/topics/public-datasets/working-with-hedera-hashgraph-to-support-the-next-generation-of-distributed-ledger-technology" target="_blank" rel="noreferrer noopener">Hedera</a>, <a href="https://cloud.google.com/blog/products/data-analytics/how-theta-labs-reached-the-outer-limits-of-video-streaming" target="_blank" rel="noreferrer noopener">Theta Labs</a>, and <a href="https://cloud.google.com/blog/topics/startups/scaling-blockchain-and-nfts-with-google-cloud">Dapper Labs</a> which recently signed on in a bid to leverage the tech giant&#8217;s &#8220;performance, reliability and security.&#8221;



This story was updated on Jan. 28, 2022, at 2:25 pm ET to include commentary from Google.



Additional reporting by Casey Wagner



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Google Cloud Hiring Blockchain Specialists in Bid to ‘Drive Decentralization’ Efforts

Jacquelyn Melinek

<div id="highlights-block_61841f3e50245" class="highlights">
 <ul>
 <li>The whole crypto ecosystem is just scratching the surface of what NFTs’ are, Rhodes noted</li>
 <li>Growth in crypto comes through understanding, especially for executives at traditional financial institutions, Nate McKervey, head of blockchain and DLT at Splunk said during the panel</li>
 </ul>
 
</div>



The crypto industry has passed the stage of early adoption, according to Yorke Rhodes, director of digital transformation, blockchain and cloud supply chain at Microsoft.&nbsp;



“If we look at framing this as an innovative technology and a crossing the chasm moment similar to other innovation waves I think we can learn a lot from those just how long it takes to cross a chasm like this,” Rhodes said during the Bloomberg Financial Innovation Summit Thursday.&nbsp;



“You have the early adopters and once it reaches a tipping point it becomes de facto and when I say we’ve reached an inflection point in 2021 with NFTs, DeFi and crypto, I think we’re at that point where we’ve moved beyond the early adopters,” Rhodes added.&nbsp;



Rhodes said he began the Microsoft blockchain <a href="https://cms.blockworks.co/microsoft-ceo-the-metaverse-will-bring-real-world-into-any-digital-space/" target="_blank" rel="noreferrer noopener">journey</a> in 2015. Over the past six years, he has been working to enable “enterprises to cross the chasm from a tech perspective” at the company.



Globally, the blockchain ecosystem has seen a spike in attention, deals and funding during 2021. The total funding for decentralized finance (DeFi) deals year-to-date in 2021 is over six times the amount raised in 2020 for DeFi deals, according to a CB Insights’ blockchain <a href="https://www.cbinsights.com/research/report/blockchain-trends-q3-2021/" target="_blank" rel="noreferrer noopener">report</a>. Additionally, global blockchain funding hit over $15 billion within the first nine months of the year, up 383% from $3.1 billion in all of 2020, the data showed.



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="512" height="267" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/chart-microsoft.jpg" alt="Global blockchain funding" class="wp-image-10457" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/chart-microsoft.jpg?w=512 512w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/chart-microsoft.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/chart-microsoft.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/chart-microsoft.jpg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/chart-microsoft.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/chart-microsoft.jpg?w=80 80w" sizes="(max-width: 512px) 100vw, 512px" /></figure></div>



The recent growth in crypto can be attributed to a number of factors, but a lot of it comes down to understanding, especially for executives at traditional financial institutions, Nate McKervey, head of blockchain and DLT at Splunk said during the event.&nbsp;



“A lot of it comes down to the high variance of executive understanding. In some conversations we have to explain the technology, remove skepticism as much as possible but you can’t really remove skepticism until you understand the technology,” McKervey said.&nbsp;



“Those executives who have dug in and kind of have started to understand are recognizing this is potential and they’re starting to get ahead of vendors and peers. Really this is something I think everyone goes through, I went through the same thing. I was very skeptical of this technology for years,” McKervey added.&nbsp;



The move from the fear of the unknown happens through education and is a journey Rhodes expects executives to go through.&nbsp;



<h3 class="wp-block-heading">NFTs potential is “just scratching the surface”</h3>



“We’re watching the market carefully with all of the interest in crypto, DeFi and NFTs and I think that we’ve certainly reached that inflection point in the industry,” Rhodes said.&nbsp;



With that said, “NFT is a very interesting programmable digital asset that can represent many things” beyond ownership of digital images, Rhodes said. “It can also represent abstract things like entitlements &#8211; a ticket to a basketball game is an entitlement that gives you access to a specific event,” Rhodes added.&nbsp;



In general, non-fungible token (NFT) adoption has risen tremendously and continues to increase, some even predict that the space will <a href="https://cms.blockworks.co/wave-financial-ceo-institutional-adoption-of-bitcoin-defi-and-nfts-will-increase/" target="_blank" rel="noreferrer noopener">grow 100 times</a> over the next few years. The NFT funding space has exploded to over $2 billion in 2021, up 6,523% from 2020’s annual total, according to CB Insights.&nbsp;



“The ability to digitize physical assets and such even physical contracts and digitize so much more in the form of NFTs is going to make software devour the world. It’s going to make us be able to do the business so much faster,” McKervey said.&nbsp;



The whole crypto ecosystem is just scratching the surface of what NFTs’ are, Rhodes noted.

Microsoft’s Rhodes: Crypto, DeFi and NFTs Have Moved Beyond Early Adoption

Sam Reynolds

<div id="highlights-block_612aa21a4208c" class="highlights">
 <ul>
 <li>Unlike traditional finance exchanges which used large, complex data centers, digital asset exchanges use cloud computing offerings from Amazon and Microsoft </li>
 <li>Institutional investors no longer have a latency race, needing to build their servers as close as possible to markets’ data centers. All they need to do is run code on the same cloud provider as the exchange.</li>
 </ul>
 
</div>



Market accessibility is a big theme for digital assets and it goes beyond allowing retail traders better access to yield. As explained on a <a href="https://events.bizzabo.com/TheAsia-Europe/agenda/session/615883" target="_blank" rel="noreferrer noopener">recent webinar,</a> crypto’s embrace of cloud computing instead of proprietary data centers makes it more accessible to investing firms of any size, not just the world&#8217;s biggest financial institutions.&nbsp;



In the era of the ‘<a href="https://en.wikipedia.org/wiki/Flash_Boys" target="_blank" rel="noreferrer noopener">Flash Boys</a>’, Wall Street’s high frequency traders, trading firms looked for every advantage they could to get their data to the trading center’s servers faster than their competitors.



But in the world of cryptocurrency trading things have changed. Exchanges like Binance, Coinbase, or FTX which <a href="https://www.coingecko.com/en/exchanges" target="_blank" rel="noreferrer noopener">collectively push through tens of billions of dollars</a> in volume every day aren’t hidden away on expensive servers running proprietary software in exclusive data centers. They, like many of the world&#8217;s other web-based applications such as Netflix or Facebook, run on cloud servers such as Amazon’s AWS or Microsoft’s Azure.&nbsp;



“If you look at how traditional trading infrastructure has been made, a bank or institution will co-locate in a data center of a physical exchange and they will buy expensive physical hardware,” explained Gabriel Bassas, vice president of Avelacom, a telecom company that primarily serves the finance industry. “Whereas with crypto exchanges, they are based in cloud environments. From a customer’s [virtual machine] to the cloud, there’s an undetermined variable. That’s something that institutions are unfamiliar with.”



And that unfamiliarity brings an advantage to crypto native funds that didn’t exist years ago when traditional finance (tradfi) funds were building out their expensive physical infrastructure.



Bassas explained on the webinar that all crypto funds need to do is deploy their trading code on the same cloud provider as the exchange — no need to build expensive physical infrastructure at the same data center the exchange is hosted at.&nbsp;



“Before you know it, you’ve built out a smart auto order routing network at very low cost and very. So essentially you&#8217;ve got a cloud network and a proprietary network,” Bassas said.&nbsp;



As both the trading firm’s code and the exchange are based within the same cloud service provider’s infrastructure, the data doesn’t even hit the internet as it stays within the internal network of the cloud provider.&nbsp;



<h3 class="wp-block-heading">Reducing the barrier of entry</h3>



“There used to be a massive barrier of entry for traders in the form of trading infrastructure. You have to spend a lot of money, and invest a lot of time, and have a lot of specialties and in terms of building infrastructure,” Bassas said. “You can access and build trading infrastructure in a matter of three days at the max. The barrier to trading has been removed.”



Cloud providers like AWS or Microsoft’s Azure have different cloud servers around the world to serve customers that span geographic regions. In order to execute a geographic arbitrage strategy, all a trader needs to do is deploy the code on different geographic instances: one on a cloud server in Hong Kong, then in London, and again on the US East Coast. The cost to do so is marginal; all it takes is a few clicks on the cloud provider’s web portal.&nbsp;&nbsp;



As the webinar was sponsored by Avelacom, Bassas’ company, he was quick to point out the significant advantage trading firms can get when using cloud providers — of which Avelacom is optimized for — and his network. He claimed when paired the two can offer a latency advantage of up to 77 milliseconds.



In comparison, tradfi trading firms of yore would spend millions to get an advantage of even a millisecond.



Given the low barriers to entry of crypto and its embrace of cloud computing, the entire financial trading infrastructure industry is getting shaken up. Much like how cloud computing a decade ago disrupted the need for technology companies to have their own servers, something similar is happening in finance thanks to crypto.



Want more investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a>&nbsp;September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.&nbsp;&nbsp;&nbsp;