1. Fed announces rate hikes

The Facts:

• During the Federal Open Market Committee (FOMC), the Fed raised key interest rate by 0.25%.
• The FOMC approved the decision by 8 : 1 vote.
• The median projection for an appropriate level of the federal funds rate is 1.9% by the end of 2022, hence, the Fed expects 6 more rate hikes in 2022.
• Furthermore, the FED plans to reduce its balance sheet moving forward.

Why it’s important:

• As inflationary pressure (CPI at 7.9%) is significantly above the FED’s last projection from December, it announces a more aggressive path towards the inflation target of 2%.
• The sustained inflation is mainly induced by persistent supply chain disruptions, high energy prices and the war in Ukraine.
• Since the economic implications of the situation in Ukraine are highly uncertain, Powell indicates that the FED could speed up inflation countermeasures if more aggressive monetary tightening is needed.
• Despite the FED being hawkish to curb inflation, markets reacted rather calm.

2. ConsenSys Raises $450M Series D

The Facts:

• In a series D funding led by ParaFi Capital, ConsenSys raised $450 million backed by i.a. Microsoft, SoftBank and Temasek.
• The series more than doubles ConsenSys’ previous valuation to $7 billion.
• The new valuation comes with MetaMask, ConsenSys’ flagship wallet, hitting 30 million monthly active users, a 42% increase within four months; and Infura, an infrastructure tool by ConsenSys, now leveraged by 430,000 developers.

Why it’s important:

• With this step, Consensys manifests itself as a single, powerful player in the Ethereum ecosystem, having a significant impact on user experience and decentralization by controlling MetaMask and Infura.
• However, in order to pursue decentralization more progressively, ConsenSys further announced that MetaMask will launch a DAO along a token.
• An important move, after mistakenly blocking users in certain jurisdictions.
• As ConsenSys commits to their web3 ethos, all proceeds from the round will be converted to ETH, therefore creating more confidence and buy pressure.
• Moreover, ConsenSys plans on pushing adoption of NFTs and Infura’s tool suite.
• Seeing new investors such as Microsoft, implies growing interest in web3, from the world’s largest tech firms.

3. Committee on Economic and Monetary Affairs to vote against a possible PoW-ban

The Facts:

• The Committee on Economic and Monetary Affairs (ECON) of the European Parliament voted on Monday on the proposed Markets in Crypto Assets (MiCA)
• The MiCA draft aims for regulation around digital assets by licensing and streamlining a uniform rule set.
• A controversial line towards the minimum environmental sustainability of mining reentered the bill over the weekend.
• The EU Comission rejected the proposed rule that might have banned PoW, 32 to 24 votes.

Why it’s important:

• The vote signals a tech-neutral and innovation-friendly crypto regulation.
• While PoW currencies will probably no longer be addressed within this MICA draft, MEPs proposed to include mining in the EU taxonomy, a classification system for sustainable economic activities, which is likely more suitable in addressing concerns around the sustainability of mining.
• With increased crypto adoption, mining sustainability especially regarding emerging PoS DLTs could play a major role in the taxonomy and the upcoming data center regulation.

4. Ethereum successfully merged on Kiln testnet

The Facts:

• Two days after launch, the final public testnet Kiln merged on March 15, 2022 and transitioned successfully from running PoW to PoS.
• Similar to the Ethereum mainnet, Kiln was initially launched with PoW in parallel to a Beacon Chain running PoS.
• For a smooth mainnet merge, developers, node operators, infrastructure providers and stakers should be highly incentivized to test on Kiln.
• Next step is finalizing implementation details of the clients (Lighthouse, Nimbus, Prysm, and Teku) and running the merge on other testnets like Goerli or Ropsten

Why it’s important:

• Shortly after the merge, Prysm nodes started to propose bad blocks.
• The bug was found and fixed in the meantime, yet showcased the importance of client diversity, since the chain kept finalizing even without Prysm nodes.
• As the most difficult items are completed and the Merge Mainnet Readiness Checklist nears completion, the mainnet merge inches closer.
• Alongside the merge, an increase in staking activity occured as the pending validator queue started to become longer again.
• As the PoW mining rewards will end after the merge, the transition to PoS is expected to increase the staking APR.

In other news

• FTX receives crypto license in Dubai (via PR Newswire)
• NFT-focused Fount Token Economy ETF filed (via SEC)
• Zelensky signs bill to legalize crypto (via TechCrunch)
• Yuga labs acquires CryptoPunks IP and launches ApeCoin (via The Coin Republic)
• NFTs soon integrated into Instagram (via CoinDesk)