Chinese investors flock to the Wild West in crypto”

Decentralized finance is gaining momentum in China after Beijing banned cryptocurrency investments.

China's campaign against cryptocurrencies led authorities to shut down Bitcoin mining operations in May. This coincided with the rise of decentralized finance, or DeFi, which allows users to trade with each other without an intermediary like a bank or broker and makes it harder to block.

While the strictest enforcement against cryptocurrencies occurred in September, China first banned crypto exchanges in 2017 and Chinese users are gradually moving towards DeFi. According to Chainalysis, a research firm, China's share of global Bitcoin transactions peaked at 15 percent in November 2019 and had fallen to 5 percent in June 2021.

In the 12 months to June, mainland China saw $256 billion in cryptocurrency activity - the highest in Asia - and 49 percent of the total volume was traded on DeFi platforms. Uniswap, one of the leading DeFi exchanges, is now the second largest exchange in East Asia by transaction volume, Chainalysis said.

While recent restrictions discourage new blood from entering crypto markets, experts say some existing cryptocurrency holders are turning to DeFi to continue trading. DeFi protocols do not have the same “Know Your Customer” obligations as the more regulated conventional exchanges.

Chainanlysis found that countries with historically large institutional investors equipped with large crypto wallets – including the US, China, Vietnam and the UK – played an outsized role in DeFi. Large crypto asset owners are attracted to DeFi because it allows them to earn income from their coins. Users lend their crypto to DeFi protocols to provide liquidity pools for peer-to-peer lending. In return, investors receive a portion of the transaction fee or token rewards.

However, industry insiders warn that there is likely to be stricter regulation of DeFi in the US, which could introduce KYC requirements that make it harder for Chinese users to register new accounts.

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The Internet of (five) things

1. Clean up gaming’s “frat boy” culture
Activision Blizzard, the $60 billion gaming giant behind Call of Duty and Candy Crush, has laid off 20 employees to clean up its culture following allegations of widespread gender discrimination and harassment. In a letter to employees on Tuesday, the company said it had also reprimanded 20 people and would expand its ethics and compliance team, which is charged with creating a "more accountable workplace." In August, hundreds of Activision Blizzard employees walked out in protest after management dismissed a California state lawsuit that called a "pervasive 'frat boy' workplace culture" "irresponsible" and "inaccurate."

2. Facebook chooses a third-party coin for its digital wallet
Facebook has launched a long-awaited pilot of its digital currency wallet Novi in ​​the US and Guatemala, but has opted to use the Paxos dollar stablecoin after its own cryptocurrency Diem failed to receive support from regulators. Users can download the app on iPhones or Android, register with a government-issued ID, and transfer money between wallets for free. Coinbase, the US cryptocurrency exchange, offers custody services for Novi.

3. The Squid Game for Subs
Squid Game's breakthrough success helped Netflix double its new subscribers from last year, beating forecasts and signaling a stronger end to the year as a flood of new films and TV shows are released. Released in September, the hit South Korean drama was the video streaming service's biggest series launch to date, reaching more than 142 million viewers worldwide. Netflix forecast it would add 8.5 million subscribers in the fourth quarter of this year, above the 8.33 million expected by Wall Street, and reach 18.4 million new viewers for the year. The largest increase in new customers came outside the U.S., with the Asia Pacific region contributing 2.2 million net new paid customers.

4. Jack Ma's Spain vacation
Alibaba founder Jack Ma is vacationing in Spain, marking the Chinese internet tycoon's first confirmed trip outside China since he ran afoul of the country's financial regulators late last year. Ma has made only a handful of low-key appearances in China since the initial public offering of his online financial platform Ant Group was blocked by President Xi Jinping in November, shortly after the tycoon publicly criticized Chinese financial regulators in a speech.

5. WeWork goes public
WeWork will finally make its public debut after a $9 billion merger was approved by shareholders of a blank-check company, ending the real estate group's tumultuous two-year path to an IPO. Shareholders of BowX Acquisition, a publicly traded special purpose acquisition company, Spac, voted on Tuesday in favor of the transaction with WeWork, allowing the shared office space provider to trade on the New York Stock Exchange under the ticker WE from Thursday. WeWork becomes a publicly traded company with a much more modest profile than its first attempt in 2019, and its $9 billion valuation is a fraction of the $47 billion that SoftBank valued the company at months before the failed IPO.

Technical tools

The Google Pixel 6 and Pixel 6 Pro smartphones introduced yesterday received positive reviews. The handsets will run on Google's custom Tensor chip, moving away from Qualcomm's SoS (system-on-chip) found in most Android phones. Tensor enables new phone features such as speech recognition and translation powered by artificial intelligence and machine learning.

The Guardian writes that the phone "aims to beat rivals on camera and performance and undercut them on price." Reviewers liked the choice of matte finishes and high-end cameras. The company says its cameras improve on existing photography technology in capturing different skin tones and correct the bias toward lighter skin. Built-in AI tools also allow users to delete unwanted objects from photos and correct blurred faces. The phones have wireless charging and an in-screen fingerprint reader, features typically only found in higher-priced handsets.

The Pixel 6 will retail for £599 / $599, which is at least £170 cheaper than the newly released iPhone 13 and Samsung Galaxy S21 Ultra, while the Pixel Pro will retail for £849 / $899.