After the MtGox hack, Tokyo put in place tough rules that later protected FTX customers. Now, from that secure base, it’s moving to allow blockchain technologies to flourish.



More than a million investors around the world were left stranded when FTX suddenly collapsed in November with an astonishing hole, estimated at $8.7 billion, in its balance sheet. The cryptocurrency exchange and its 130-plus affiliates have been operating in bankruptcy for five months, and a new management team claims to have recovered $7.3 billion of the missing cash and tokens. Yet only one component of the company has returned money to clients.



FTX’s Japanese unit allowed all verified accounts to resume withdrawals on February 21. As of April 25, nearly 10,000 individual and corporate clients had withdrawn crypto and cash worth approximately 23.4 billion yen ($175.4 million),&nbsp;<a href="https://blog.liquid.com/ja/%E5%87%BA%E9%87%91-%E5%87%BA%E5%BA%AB%E3%82%B5%E3%83%BC%E3%83%93%E3%82%B9%E3%81%AE%E9%80%B2%E6%8D%97%E7%8A%B6%E6%B3%81%E3%81%AB%E3%81%A4%E3%81%84%E3%81%A6-1682390331847?_ga=2.70873552.1915823815.1682596738-1460639900.1681400607&amp;_gl=1*1be4ztb*_ga*MTQ2MDYzOTkwMC4xNjgxNDAwNjA3*_ga_KM66WLZ8WM*MTY4MjU5NjczOC4yLjEuMTY4MjU5Njc4Mi4xNi4wLjA." target="_blank" rel="noreferrer noopener">according to</a>&nbsp;the company.



Count this as a victory for Japan’s financial regulators and the strict rules they’ve put in place to protect consumers in the wild and wooly world of crypto.



Japan cracked down with safety and soundness rules from a unified regulator after two big exchange hacks. But now, from that stable (and some in the industry would say overly restrictive) base, it’s seeking to come up with a strategy to become a leader in the collection of mostly decentralized, blockchain-based technologies known as web 3. The U.S., by contrast, has arguably been open to more innovation, but its dueling oversight agencies and lack of rules have created gaps in oversight and a culture of regulation by enforcement that makes strategic planning perilous.



Japan, an early adopter of digital assets, learned the value of regulation early and the hard way, through what remains arguably the most notorious crypto hack ever–the 2014 plunder of 800,000 bitcoins from MtGox, which had been the world’s largest bitcoin exchange. Four years later, Coincheck, another cryptocurrency exchange based in Tokyo, was robbed of $500 million worth of NEM blockchain’s xem coins.



“The drama and shakeup that the U.S. is experiencing around Sam Bankman-Fried, FTX, the Bahamas situation is not relevant in Japan,” says Sheila Warren, CEO of the Crypto Council for Innovation, a Washington, D.C.-based group that advocates for the industry worldwide. That’s because Japan has already been there and done that.



After the MtGox and Coincheck shocks, Japan’s primary financial regulator, the Financial Services Agency (FSA), tightened rules on crypto exchanges, notes Ananya Kumar, associate director of digital currencies at the Atlantic Council’s GeoEconomics Center, the think tank’s unit addressing foreign policy, finance, and economics.



The FSA’s rules include:



<ul>
<li>Customer and company assets must be held separately, with holdings verified in annual audits.</li>



<li>Investors can&#8217;t borrow more than twice their investments for leveraged trades on exchanges. (Many cryptocurrency exchanges, including Binance, allow trading at 100x leverage.)</li>



<li>Exchanges must hold at least 95% of customer funds in cold wallets, which are not connected to the internet.</li>
</ul>



The measures proved instrumental in enabling clients of the Japanese subsidiary of FTX to withdraw their assets after its parent filed for bankruptcy in November. It remains unclear when other FTX clients will be able to get their money back, and how much of it they’ll get.



Japan has thus become a customer-friendly crypto haven but at the expense of stringent supervision of the freewheeling digital assets industry.



Now, Japan is building on that secure base, with a national economic strategy and a bid to lead its allies in creating rules that will effectively govern the industry.



“The FSA contributes to international policy discussion, including the one at the Financial Stability Board—an international organization that monitors and makes recommendations about the global financial system—on crypto-assets by leveraging its experience as a global forerunner in the regulation and monitoring of crypto-asset activities and markets,” the agency told&nbsp;Forbes&nbsp;in written comments.



On April 6, the ruling Liberal Democratic Party’s web3 project team, tasked with drafting crypto-focused policy proposals, released a&nbsp;<a href="https://note.com/akihisa_shiozaki/n/n669dee962b15" target="_blank" rel="noreferrer noopener">white paper</a>&nbsp;outlining several recommendations, including a call for Tokyo to take the lead.



“After crypto winter, Japan may be the first to welcome spring,” the 35-page document predicts. “As a country that has overcome many hardships in the cryptocurrency industry, we are in a position to persuade the world about the immeasurable potential of web3.”



Suggestions in the paper cover tax reform, improved accounting standards, and regulation of blockchain-based finance. There’s even a recommendation for the government to drive the conversation about digital assets at the next Group of Seven (G7) summit, scheduled to be held in Hiroshima later this month.



“While Western financial regulators appear to be single-mindedly focused on tightening regulations in the midst of what is being called a crypto winter, I assess that Japanese financial regulators correctly understand the potential of blockchain and other technologies and are working to design regulations in a forward-looking manner,” Masaaki Taira, the team’s leader and a member of the House of Representatives, said in written comments to&nbsp;Forbes.



In February, Prime Minister Fumio Kishida told&nbsp;<a href="https://www.youtube.com/watch?v=okslrifMl4M" target="_blank" rel="noreferrer noopener">the Budget Committee of Japan’s House of Representatives</a>&nbsp;that there are “various possibilities for using web3” in Japan. He said that the Japanese government could employ blockchain-based mechanisms like&nbsp;<a href="https://www.forbes.com/sites/digital-assets/article/what-are-nfts/?sh=609abead296f">non-fungible tokens</a>&nbsp;and&nbsp;<a href="https://www.forbes.com/sites/jeffkauflin/2022/02/03/daos-arent-a-fad-theyre-a-platform/?sh=210b8c1719d0">decentralized autonomous organizations</a>&nbsp;to revitalize regions and promote “Cool Japan” — a national strategy aimed at promoting the country’s innovations and culture to the rest of the world that dates back to the early 2000s and echoes the U.K.’s “Cool Britannia” policies of the 1990s.



According to Taira, his team–including about 10 members of the Diet (Japan’s national legislature), six lawyers from the private sector with expertise in web3 and 10 leading Japanese digital influencers acting as advisors–works directly with Kishida and several government bodies. “The policy proposals compiled by the project team are adopted almost directly by the LDP, and a significant portion is adopted into government policy. It is an extremely powerful team,” he says.



“The way they talk about crypto is very crypto-native in terms of what the technology enables and what aspects of current regulation are just not workable,” says the Crypto Council’s Warren. “They are saying analogue regulation doesn&#8217;t work in digital environments.”



Japan does not have a long history of being hospitable to blockchain entrepreneurs. In addition to its heavy-handed regulation, Japan&#8217;s tax code is particularly hostile to the industry. It&#8217;s also hard to get new cryptocurrencies approved. After founding their gaming company Murasaki on home shores last year, Shinnosuke Murata and Shunsuke Sasaki recently decided to move their business to the Netherlands. “Why would two Japanese entrepreneurs with considerable experience starting companies in their own country go halfway around the world to set up a new business? wrote Murata in a&nbsp;<a href="https://asia.nikkei.com/Opinion/Why-I-had-to-leave-Japan-to-launch-my-gaming-company" target="_blank" rel="noreferrer noopener">Nikkei op-ed</a>&nbsp;in October. “Simply because it just was not feasible to do so in Japan.”



With a corporate tax rate set around 30% on unrealized gains from cryptocurrency holdings, it is a real struggle to get a new blockchain-based business off the ground, Murata tells&nbsp;Forbes. “Suppose you issue 100 tokens each worth $1 million. Even if you don’t realize gains, you will need to pay $30 million next year. Practically no startup founders can issue a token,” Murata explains.



Major U.S. crypto exchanges like Kraken and Coinbase have recently shut their subsidiaries in Japan,&nbsp;<a href="https://www.coinbase.com/blog/halting-operations-in-japan" target="_blank" rel="noreferrer noopener">citing</a>&nbsp;“market conditions”. Overall, there are&nbsp;<a href="https://www.fsa.go.jp/en/regulated/licensed/en_kasoutuka.xlsx" target="_blank" rel="noreferrer noopener">37</a>&nbsp;crypto exchanges registered in the country, according to the FSA.



Additionally, the agency can take months to review proposals to list new tokens, which results in Japan&#8217;s trading market growing much slower at lower levels of liquidity than those of other countries, says Murata.



“Japan loses entrepreneurs that could build $100 million businesses because of those barriers,” he laments.



The existing framework makes it difficult for local entrepreneurs, agrees Roi Hirata, head of a new Japanese subsidiary of the Avalanche blockchain’s main developer company, New York-based Ava Labs. Avalanche’s brand recognition in Japan is exploding, Hirata says, which has prompted Ava Labs to start building a presence in the island nation. As a first step, his team has partnered with Japanese media giant GREE on a new blockchain game.



“I see a huge opportunity for both intellectual property providers and traditional businesses in Japan to adopt a blockchain like Avalanche, providing both decentralization and compliant service,” Hirata noted in an email to&nbsp;Forbes.



For now, its deep-pocketed tech giants that are leading the blockchain push in Japan.&nbsp;<a href="https://www.forbes.com/sites/ninabambysheva/2023/02/07/forbes-blockchain-50-2023/?sh=577ea334319d">This year’s&nbsp;Forbes&nbsp;Blockchain 50</a>, an annual list highlighting the best enterprise applications of the distributed-database technology, features three Japanese companies, Fujitsu, LINE and NTT.



Social media giant LINE helps create NFTs for 26 big customers including SoftBank, South Korea’s Naver search engine and Visa. According to the company, more than two million wallets have registered on its DOSI NFT platform since September. NTT Docomo, the country’s dominant mobile-phone service provider,&nbsp;has&nbsp;<a href="https://asia.nikkei.com/Business/Technology/NTT-Docomo-to-invest-4bn-in-Web3-using-mobile-infrastructure" target="_blank" rel="noreferrer noopener">pledged&nbsp;</a>to invest up to $4 billion in web3 infrastructure.



Electronics powerhouse Fujitsu teamed up with financial-services giants including Mitsubishi UFJ Mizuho and Sumitomo Mitsui to build the “Ryugukoku,” or the “Japanese Metaverse Economic Zone.” The initiative,&nbsp;<a href="https://www.fujitsu.com/global/about/resources/news/press-releases/2023/0227-02.html" target="_blank" rel="noreferrer noopener">announced</a>&nbsp;in February, seeks to build a shared metaverse infrastructure for large enterprises.



Meanwhile, the FSA is planning to lift its ban on the domestic distribution of stablecoins later this year. The exact date and the coins that will be allowed have not been determined, but decisions are scheduled for June.



“This does not mean that all foreign issued stablecoins will be allowed without any restriction,” the agency told&nbsp;Forbes&nbsp;via written comments. “We will allow stablecoins to be handled after individual examination, if there are no problems from the viewpoint of user protection, etc. Examples include: foreign issuers in their countries being subject to the equivalent regulations as in Japan, and underlying assets being preserved appropriately.”



Late last year, the ruling party’s tax committee approved a proposal to exempt crypto startups that issue their own tokens from paying corporate taxes on unrealized gains. New proposals introduced in the white paper include tax exclusions for companies holding tokens issued by other companies that aren&#8217;t going to be traded short term and to limit taxable events only to instances when the assets are exchanged for traditional currencies.



“I think it is not only really exciting, but it&#8217;s actually paving the way to demonstrate to the rest of the world here is how you create forward-thinking flexible regulation that can navigate this tricky balance of preserving a wide space for innovation while also protecting consumers,” says Warren.



The overarching <a href="https://note.com/akihisa_shiozaki/n/n669dee962b15" target="_blank" rel="noreferrer noopener">message</a> is “Japan is back, Again.”\<a href="https://www.forbes.com/sites/ninabambysheva/"></a>



By Nina Bambysheva, Forbes staff

financial technology flowchart and basic income mining cryptocurrency with blockchain startup unicorn crypto money virtual diagram.businessman hand working with new modern computer.

What Japan Could Teach The U.S.—And The World—About Regulating Crypto

Untitled design (2)

30 Under 30 Tomorrow’s Titans: Heart And Hustle

<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



The already stuffed wallets of several billionaire insiders at Alphabet grew even fatter Thursday as shares of Google’s parent company rallied, after the company’s Wednesday&nbsp;<a href="https://www.forbes.com/sites/richardnieva/2023/05/10/google-io-2023-ai/?sh=448f91e95704">announcement</a>&nbsp;of various new artificial intelligence features—capped by integrating AI into Google’s search engine——largely cooled investors’ fears about a wide gap in the AI space between Google and rival Microsoft.



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



Alphabet’s stock surged more than 4% Thursday, bringing its two-day gain to 9% following CEO Sundar Pichai’s&nbsp;<a href="https://www.forbes.com/sites/mollybohannon/2023/05/10/google-adding-ai-to-search-engine-for-some-users-closing-in-on-microsofts-ai-push/?sh=73fba5123502">presentation</a>&nbsp;introducing a variety of ways the company plans to utilize AI in its search engine and beyond.



Shares of the Silicon Valley stalwart are now at their highest level since August.



Google demonstrated “AI powered search can still be the gateway” to online activity and drive advertising revenue growth, according to Bank of America analysts Justin Post and Joanna Zhao, deeming Wednesday’s presentation “a positive step in changing the AI narrative” that Microsoft and its ChatGPT-powered Bing search engine are&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/04/17/google-stock-loses-57-billion-amid-microsofts-ai-lead-and-reports-it-could-be-replaced-by-bing-on-some-smartphones/?sh=7943e0145b07">better-positioned</a>&nbsp;to cash in on the AI craze.



Alphabet’s market capitalization swelled by nearly $120 billion over the last two trading sessions, solidifying its place as the fourth-most valuable public company in the world.



Largely reaping the benefits of the stock surge are Google’s billionaire current and former executives who added a total of more than $9 billion, including cofounders and board members Larry Page and Sergey Brin, who added $4.1 billion and $3.9 billion to their fortunes Thursday, respectively.



Fellow Alphabet board members Ravitark Ram Shriram and John Doerr added about $330 million to their combined fortunes Thursday, while early Google investor David Cheriton and former Google CEO Eric Schmidt grew more than $900 million richer.



<h2 class="wp-block-heading" id="h-forbes-valuations">FORBES VALUATIONS</h2>



Page (worth $99.6 billion) and Brin ($95.3 billion) are the seventh- and 10th-richest people in the world, according to&nbsp;Forbes’ real-time billionaire&nbsp;<a href="https://www.forbes.com/real-time-billionaires/#5ce0a38e3d78">tracker</a>. Page’s fortune surpassed that of Microsoft mogul Steve Ballmer and Mexican media magnate Carlos Slim Helu on Thursday, while Brin’s wealth pile surged past those of L’Oreal heiress Francoise Bettencourt Meyers and financial data king Michael Bloomberg.



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<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



Alphabet has the “leading collection of AI/machine learning-driven businesses” of any technology company, Goldman Sachs analysts led by Eric Sheridan wrote in a Wednesday note to clients, adding the latest rollout caused the bank to become “increasingly constructive” on Alphabet’s long-term business strategy.



<h2 class="wp-block-heading" id="h-chief-critic">CHIEF CRITIC</h2>



The freshly announced generative AI improvements are a “positive [step] in the AI battle” against Microsoft, but Alphabet continues to operate in “major catchup mode,” according to Wedbush analyst Dan Ives. Microsoft’s early investment in ChatGPT parent OpenAI gave it a “key head start” in the field that could prove challenging for Alphabet to overcome in the struggle for market share, Ives added.



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



OpenAI’s ChatGPT launched in November to significant fanfare and was integrated into Bing in February, shortly after Microsoft&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/01/23/chatgpt-parent-open-ai-gets-game-changing-multibillion-dollar-boost-from-microsoft/">announced</a>&nbsp;it made a multibillion-dollar equity investment in OpenAI. Many&nbsp;<a href="https://www.forbes.com/sites/richardnieva/2023/03/10/google-peacetime-ceo-sundar-pichai/?sh=359f71584ab1">considered</a>&nbsp;Google’s early response to the AI-fueled stiffer search competition to be subpar, with Alphabet shares&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/04/17/google-stock-loses-57-billion-amid-microsofts-ai-lead-and-reports-it-could-be-replaced-by-bing-on-some-smartphones/?sh=7943e0145b07">sliding</a>&nbsp;as much as 10% in the months following ChatGPT’s rollout.



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<a href="https://www.forbes.com/sites/richardnieva/2023/05/10/google-io-2023-ai/?sh=448f91e95704">Google Tries To Straddle Being &#8216;Bold&#8217; And &#8216;Responsible&#8217; In AI Product Blitz</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/mollybohannon/2023/05/10/google-adding-ai-to-search-engine-for-some-users-closing-in-on-microsofts-ai-push/?sh=73fba5123502">Google Adding AI To Search Engine For Some Users—Closing In On Microsoft&#8217;s AI Push</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/richardnieva/2023/03/10/google-peacetime-ceo-sundar-pichai/?sh=359f71584ab1">Google’s ‘Peacetime’ CEO Sundar Pichai Faces Criticism As The AI War Heats Up</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/dereksaul/2023/04/17/google-stock-loses-57-billion-amid-microsofts-ai-lead-and-reports-it-could-be-replaced-by-bing-on-some-smartphones/?sh=7943e0145b07">Google Stock Loses $57 Billion Amid Microsoft’s AI ‘Lead’—And Reports It Could Be Replaced By Bing On Some Smartphones</a> (Forbes)



<a href="https://www.forbes.com/sites/dereksaul/"></a>By Derek Saul, Forbes Staff

FRANCE-ECONOMY-TECHNOLOGY-VIVATECH

Google Insiders Are $9 Billion Richer After AI-Fueled Stock Rally

The United States (US) has accused the South African government of supplying ammunition to the Russian Federation through a ship that docked at a naval base in Simon&#8217;s Town in South Africa’s Western Cape province late last year. This shock allegation highlights the increasingly strained relations between the US and South Africa and places billions of Rand worth of preferential trade between the countries at risk.



&#8220;We are confident that weapons were loaded onto that vessel,&#8221; said US Ambassador to South Africa, Reuben Brigety, during a press briefing in the country yesterday, May 11, adding, &#8220;I would bet my life on the accuracy of that assertion.&#8221;



The accusations are in stark contrast to the South African government’s denial of supplying any arms to Russia since the beginning of the conflict in Ukraine, asserted in January 2023.



South African President Cyril Ramaphosa, in response to Brigety’s allegations, announced that a retired judge would be appointed to probe the vessel&#8217;s visit, and his spokesperson slammed the comments by the United States Ambassador as against the cooperative spirit of the relationship between the two countries.



&#8220;In recent engagements between the South African delegation and US officials, the Lady R matter was discussed…&#8221; said Ramaphosa&#8217;s spokesperson Vincent Magwenya, &#8220;It is therefore disappointing that the US ambassador has adopted a counter-productive public posture that undermines the understanding reached on the matter and the very positive and constructive engagements between the two delegations.&#8221;



Relations between the US and South Africa have already reportedly been tense, with Ambassador Brigety writing to Defence Minister Thandi Modise to criticize the docking of the vessel last December, questioning South Africa&#8217;s alleged non-aligned status. The Lady R, a Russian registered vessel, sailed into Simon&#8217;s Town naval base and loaded cargo with its transponder beacon switched off.



South Africa&#8217;s participation in naval military exercises with Russia and China this year, as well as the public confusion surrounding the country&#8217;s attempt to withdraw from the International Criminal Court (ICC) in an apparent attempt to avoid having to enforce an arrest warrant against Russian President Vladimir Putin should he visit, have further burdened relations.



This led to US Chairman of the House Foreign Affairs panel, John James, introducing legislation condemning the maritime exercises and requesting President Joe Biden to review bilateral relations between the US and South Africa.



The US Ambassador&#8217;s allegations caused the Rand to plummet when markets opened today, with the Rand currently at R19.47 to the USD, a record low. South African markets were already volatile given the country&#8217;s continued electricity woes and recent greylisting, with the weakening trend likely to continue.



Opposition parties as well as representatives of Ukrainian interests in South Africa have also critiqued South Africa&#8217;s position, with leader of the Democratic Alliance (DA), John Steenhuisen, saying in a press statement: &#8220;Confirmation by US intelligence in South Africa that the Lady R vessel departed Simon&#8217;s Town after having been loaded with war materials now brings into question the transparency of the ANC national government with the South African people and our international partners.&#8221;



The apparent continuing deterioration of relations between South Africa and the US puts a highly lucrative trading relationship at risk for South Africa, with deals relating to the African Growth and Opportunity Act (AGOA) valued at more than R50 billion ($2.58 billion) annually. This relationship and the economic benefits to South Africans seem to be precariously placed.



&#8220;South Africa has already made a dangerous compromise of the status of non-alignment,&#8221; said the Ukrainian Association of South Africa in a statement to FORBES AFRICA. &#8220;[We] call on all South Africans, human rights and civil society organizations to stand against the potential move of the South African government towards Russian autocracy.&#8221;



While the appointment of a judge to probe the Lady R’s visit appears to be a step toward mending relations between the two nations, economic fallout has been immediate, with the bulk of the burden to be met by ordinary South Africans.

Chinese, Russian and South African Vessels ahead of Naval Exercise

US Allegations That South Africa Supplied Arms To Russia Puts AGOA At Risk, Rand In Freefall

Recently, there has been a surge of interest in cold plunges. Here are the benefits and latest research on their effectiveness.



By Peter Engelbrecht



You begin the descent.



As your feet and legs go into a rapid shiver, all you can think about is the wave of freezing cold climbing up your stomach.



Finally you are up to your neck in ice. We are of course talking about cold plunges or Ice Baths.



Ice baths have been used for decades by athletes, particularly those involved in endurance sports, as a way to promote recovery and reduce muscle soreness after intense exercise. Recently, there has been a surge of interest in ice baths, not just among elite athletes, but among fitness enthusiasts and the general population as well. Let’s explore the benefits of ice baths and look at the latest research on their effectiveness.



What are Ice baths?



Ice baths, also known as cold water immersion, involve submerging the body in cold water for a set amount of time. The water temperature is typically around 50°F (10°C) or lower, and the duration of the bath can range from a few minutes to 20 minutes or more. Some people also add ice to the water to make it even colder.



Reduces Inflammation



One of the main benefits of ice baths is their ability to reduce inflammation. During intense exercise, the body produces a lot of waste products, including lactic acid, which can build up in the muscles and cause soreness. Cold water immersion helps to constrict blood vessels and reduce blood flow to the affected area, which can help to reduce inflammation and promote healing.



Speeds Up Recovery



Ice baths can also help to speed up recovery after exercise. When you immerse your body in cold water, your blood vessels constrict, which helps to flush out metabolic waste products and reduce inflammation. This, in turn, helps to promote healing and reduce muscle soreness, allowing you to recover more quickly from your workouts.



Enhances Immune Function



Research has also shown that cold water immersion can enhance the immune function. Exposure to cold water can stimulate the production of white blood cells, which are responsible for fighting off infections and diseases. This means that regular ice baths could help to boost your immune system and make you less susceptible to illness.



Improves Mood



In addition to its physical benefits, cold water immersion can also have a positive effect on your mood. When you immerse your body in cold water, your body releases endorphins, which are natural mood enhancers. This can help to reduce stress and improve your overall sense of wellbeing.



Latest Research



While the benefits of ice baths have been known for some time, there is still ongoing research into their effectiveness. Some of the latest research has been done by Andrew D. Huberman, an American neuroscientist and tenured associate professor in the Department of Neurobiology, Psychiatry and Behavioral Sciences at Stanford University School of Medicine, who has made contributions to the fields of brain development, brain plasticity, neural regeneration and repair.



During an interview with the podcaster Joe Rogan, Huberman recalls a study done by the European Journal of Physiology which was the first study of its kind that probed the effects of cold plunges and the neurochemical impacts on the brain. Huberman states: “When you go into the cold for one to two minutes and it is shockingly cold where you have to catch your breath and stabilize your mind, that invokes a dopamine, epinephrine and nor-epinephrine release.”



These three neurotransmitters collectively are referred to as catecholamines. There is a huge spike and dopamine levels that are present in the brain after cold exposure remain for up to four hours later.



Ice Baths vs. Active Recovery



A recent study compared the effects of ice baths to those of active recovery (light exercise) on muscle soreness and recovery in elite athletes. The study found that while both ice baths and active recovery were effective at reducing muscle soreness, active recovery was more effective at promoting recovery and reducing inflammation.



Frequency of Ice Baths



Another study looked at the frequency of ice baths and its effect on recovery in athletes. The study found that while daily ice baths did help to reduce muscle soreness and improve recovery, there was no significant difference between daily ice baths and ice baths taken every other day.



Timing of Ice Baths



Timing may also be an important factor when it comes to the effectiveness of ice baths. A study published in the Journal of Physiology found that taking an ice bath immediately after exercise was less effective at reducing inflammation and promoting recovery than waiting a few hours to take an ice bath.



Duration of Ice Baths



Finally, the duration of the ice bath may also play a role in its effectiveness. A study published in the Scandinavian Journal of Medicine &amp; Science in Sports found that longer and warmer ice baths (20 minutes) were more effective at reducing muscle soreness and promoting recovery than shorter and colder ice baths (two minutes).

Woman enjoying cold baths in a ice hole, Lapland

Cool Fad: Why Ice Baths Are Getting Popular

Despite the public roasting Levi’s took for flirting with AI, smaller clothing sellers who model their own products online maintain a growing interest in replacing themselves with the computer-generated kind.



On Tracy Porter’s&nbsp;clothing site, it’s all Tracy Porter.



Thin, blonde and 5-foot-10, the 55-year-old entrepreneur poses in each and every one of her designs. Her husband uses his iPhone to snap pictures, which they often take on the wildflower-strewn bluffs overlooking the beach 15 minutes from their home in California’s Santa Ynez Valley, before uploading them to their e-commerce site, The Porter Collective. There, you can see Porter in her striped midi dress, in her multicolor crocheted cardigan and in her black-and-white rattan visor.



Porter said she’s been searching for ways to replace herself as a model, not only to lighten the load but to bring some diversity to the site. Humans, however, are prohibitively expensive. So she’s been testing a new artificial-intelligence service from Israeli startup&nbsp;<a href="https://botika.io/" target="_blank" rel="noreferrer noopener">Botika</a>. She said the images look so realistic that when she showed her sons, they told her she was out of a job.



“I’m actually excited about that. I don’t want to be our model anymore,” Porter said with a laugh.



After Levi’s endured a scorching backlash in March for&nbsp;<a href="https://www.levistrauss.com/2023/03/22/lsco-partners-with-lalaland-ai/" target="_blank" rel="noreferrer noopener">its plan</a>&nbsp;to bring more diversity to the site with AI-generated models – critics flayed the company, which had 2022 sales of $6.2 billion, for not simply hiring more humans – it would be no surprise if big clothing retailers have gotten skittish about using, or admitting they use, nonhuman models. That same public disapproval hasn’t yet extended to the many mom-and-pop clothing shops, whose budgets, like Tracy Porter’s, would collapse under the costs of professional hair, makeup and photography – even without inflation, rising borrowing costs and a recession that feels as if it’s been looming forever.



Services like Botika let brands easily display their clothing on various (computer-generated) fashion models. However, they are still working to add more ages, body shapes and ethnicities.BOTIKA



“In the current economy, customers are mostly looking to optimize costs,” said Eran Dagan, cofounder and CEO of Botika, which caters to small businesses and plans to start subscriptions for its AI model service at just $15 a month. It’s preparing to launch on Shopify and has a waiting list of over 1,000 customers. Dagan said Botika has gotten interest from sellers on resale platforms like Poshmark and Depop, where entrepreneurs typically photograph clothing on themselves and crop out their heads.



Another company in the space,&nbsp;<a href="https://lalaland.ai/" target="_blank" rel="noreferrer noopener">Lalaland</a>&nbsp;— which is still set to power Levi’s attempt to go AI — said its recent growth has been driven mainly by small and medium-sized businesses. While the company declined to disclose revenue figures, cofounder and CEO Michael Musandu said business has picked up significantly over the last eight months and sales have grown by eight- or nine-fold.



“We’re helping emerging brands that are just starting out and have zero budgets, or low budgets, to actually plan photoshoots,” said Musandu. “We really help level the playing field by representing the underdog.”



The fact remains that for everyone, photoshoots are pricey, and while shoppers are increasingly demanding that clothes be shown on a variety of models, no brand has an unlimited budget to do that. Tracy Porter used to hire outside photographers, models and hair and makeup stylists to shoot her products, but it would cost $5,500 every time she brought them out. If she outsourced photography for her multimillion-dollar business today, she estimates it would set her back $500,000 a year. “It’s just too much money,” she said.



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“What I’d like to do is take an image and see it on different sizes. Small, medium and large. But I don’t want to have to hire all the people to do that.”Tracy Porter, small business owner
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Which is how Porter landed on modeling the clothes herself. However, that makes it difficult for shoppers with a different body shape or ethnicity to get a sense for how her products would look on them. “What I’d like to do is take an image and see it on different sizes. Small, medium and large. But I don’t want to have to hire all the people to do that,” said Porter. “Because there will be no profit left in our company and we’ll have to close.”



Another small business owner, Jacob Flores, is looking forward to more easily finding models that reflect his customer base. The 50-year-old former web designer from San Antonio, whose online store Blissfully Brand sells skintight dresses, skater skirts and bell bottoms in colorful prints inspired by fashion from the 1960s and 1970s, has a lot of customers in their 40s and 50s. But many models for hire tend to be much younger.



Flores recently started using Lalaland, where he can hand-select digital models from a library, dress them in his products and upload the images to his site without leaving the house. For $300 a month, he gets 50 images, enabling him to display more of his clothing on models much faster. He was previously limited to doing photoshoots four times a year, where he would pay $900 to get as many shots of a few models in 20 outfits as he could in two hours.



Now he plans to do photoshoots just once or twice a year on location so he can show his clothing at the beach or on a city street. He also sees AI being helpful with social media ads, allowing him to target certain audiences with tailored images.



Richard Evans, founder of wellness startup Juro Miru, also opted to include some shots on AI models to launch his new e-commerce site, in addition to images of clothing laid on a flat surface.



Startup Juro Miru displays some of its products on AI models.SCREENSHOT OF JURO MIRU WEBSITE



As for shoppers, it can be impossible for them to tell whether they’re looking at a real or fake model. There are no clear rules for disclosure, although companies are beginning to think about it. TikTok is reportedly working on a tool that will give creators a way to say whether they’ve used generative AI.



“When you’re presenting an image that could easily be mistaken for an actual person, I think you should disclose that it’s a computer-generated image,” said David Danks, a professor at the University of California, San Diego whose research explores the ethical issues around artificial intelligence.



Porter is wrestling with this question, among others. “How would you even know? Do we have to say? Are we supposed to say? There are a lot of questions,” she said. Her friends seem afraid of AI and have told her they think it will put models out of work. “It’s a constant dinner table conversation for us.”



<a href="https://www.forbes.com/sites/laurendebter/"></a>By Lauren Debter, Forbes Staff

Pacific Islander woman wearing artificial technology mask

Clothing Entrepreneurs Can’t Wait To Fire Themselves As Models And Hire The AI Kind Instead

Very rarely do we receive 30 Under 30 nominations from Lesotho, and even more rarely, finalists from the small landlocked southern African country.



Monaheng is passionate about the energy space and doles out numbers easily.



According to an African Development Bank report, “over 640 million Africans have no access to energy, corresponding to an electricity access rate for African countries at just over 40%, the lowest in the world”.



In West Africa and Central Africa, the situation is dire as only three countries are on track to give every one of their people access to electricity by 2030, reports the World Bank.



“At this slow pace, 263 million people in the region will be left without electricity in ten years,” the report highlights.



Monaheng is trying to ensure that people know about these staggering numbers through Khantša Energy, which tackles the issues of energy access in Lesotho.



He also wants to do so for Africa.



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“I found it very interesting to say ‘how can we use adaptation from a subordinate level to combat some of these issues’ and these are also colonial powers. Because fundamentally what we are speaking about is how do we view Africa and as Africans how can we make a difference in this sector.”



The Lesotho-based Khantša Energy provides mobile solar power to rural communities in Lesotho and has been operating in the districts of Roma, Thaba-Tseka, Qacha and Mokhotlong since 2018.



“Our work was born out of connecting with the villagers and hearing about their everyday stories regarding their dire need for electrification,” Monaheng says.



Khantša spent its initial investment of about $8,000 on two years of research and development, learning about the communities in his country whilst also traveling the world to find appropriate solutions that were affordable and accessible in the “pursuit of equality, dignity, and equal opportunity to achieve a better life for all Basotho”.



“We imagined what the realties on the ground look like, having to structure entire days and orientate activities on the availability of light&#8230; Khantša which means ‘light up’ was a very symbolic name, as we looked to tackle the issue of energy access in Lesotho.”

instagram daily (21)

#FORBESAFRICA30Under30: Meet COVER STAR Koaile Monaheng: ‘How Do We View Africa and as Africans How Can We Make a Difference in This Sector’

The world’s most valuable startup does more than any other investment to put VCs on the Forbes Midas List, including its No. 1. But tens of billions in paper profits remain blocked by regulatory standoff without resolution in sight.



It’s the biggest venture capital profit haul that no one wants to talk about.



ByteDance – the Chinese parent company of social media app TikTok – is the world’s most valuable startup. Even at a valuation of $220 billion, down from a peak of&nbsp;<a href="https://www.bloomberg.com/news/articles/2021-08-02/china-specter-jolts-bytedance-s-backers-to-try-trimming-stakes?leadSource=uverify%20wall" target="_blank" rel="noreferrer noopener">$500 billion</a>&nbsp;in the secondary market in 2021, it’s not even close. (SpaceX, Elon Musk’s rocket company, slots in second at $140 billion.)



For its investors, some of whom backed the company when it was still valued in the millions, an eventual ByteDance public offering would mean billions, and even tens of billions of dollars, in profits, instantly vaulting their investments into the ranks of the top VC bets of all time. The company already does more to put investors on the Midas List of top venture capitalists than any other, even though the list prioritizes exits over unrealized returns in the rankings.



And in a rarity for venture capital, ByteDance’s investors are currently keeping very, very quiet with such a historic outcome still glimmering just out of reach. Forbes reached out to every 2023 Midas List member invested in ByteDance, including new list No. 1 Neil Shen of Sequoia China, a ByteDance board director, and No. 71 Anton Levy of General Atlantic, whose firm also holds a board seat. None agreed to speak on the record about the investment or the company’s prospects.



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<figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://cms.forbesafrica.com/wp-content/uploads/2023/05/aa-1024x436.png" alt="" class="wp-image-58176" width="330" height="140" srcset="https://cms.forbesafrica.com/wp-content/uploads/2023/05/aa-1024x436.png 1024w, https://cms.forbesafrica.com/wp-content/uploads/2023/05/aa-300x128.png 300w, https://cms.forbesafrica.com/wp-content/uploads/2023/05/aa-768x327.png 768w, https://cms.forbesafrica.com/wp-content/uploads/2023/05/aa-1536x653.png 1536w, https://cms.forbesafrica.com/wp-content/uploads/2023/05/aa.png 1561w" sizes="(max-width: 330px) 100vw, 330px" /><figcaption class="wp-element-caption">(L-R) Adeyemi Ajao, Lauren Kolodny, and Steve Jang. CODY PICKENS FOR FORBES</figcaption></figure></div>


<a href="https://www.forbes.com/lists/midas/" target="_blank" rel="noreferrer noopener">The Midas List 2023</a>



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The reason, Forbes heard in several conversations with investors who asked to remain anonymous, as well as secondary market experts and analysts, is simple: TikTok. The social media app is hugely popular in the U.S., with 150 million users, including five million businesses, but outsized in controversy, too. In March, Forbes reported that the FBI and Department of Justice<a href="https://www.forbes.com/sites/emilybaker-white/2023/03/16/fbi-doj-investigating-bytedance-tiktok-surveillance-journalists/?sh=3c0efb77a6fc"> were investigating</a> ByteDance’s use of the TikTok app to surveil American journalists, including Forbes reporters. Other features, from a “heating” button that can<a href="https://www.forbes.com/sites/emilybaker-white/2023/01/20/tiktoks-secret-heating-button-can-make-anyone-go-viral/?sh=184f212e6bfd"> make posts go viral</a>, a library of “sensitive words” ByteDance<a href="https://www.forbes.com/sites/alexandralevine/2023/05/01/tiktok-bytedance-suppression-tool-trump-china-uyghurs/?sh=17df0706434c"> tracks on its apps</a>, to user data<a href="https://www.forbes.com/sites/alexandralevine/2023/03/21/tiktok-india-ban-bytedance-data-access/?sh=6ef55be62eca"> still accessible</a> in China years after its deletion, have helped make TikTok a political hot potato.



Several years after federal courts blocked the Trump administration from banning TikTok, some lawmakers and the Biden White House have resumed that call, with the government indicating that if ByteDance does not sell TikTok, the app will be banned. That uncertainty – and the looming role of the Chinese government, which has indicated that a sale is a non-starter – means that for TikTok’s venture capital investors, it’s best not to poke the bear. While some investors have unloaded smaller stakes and may continue to do so,&nbsp;Forbes&nbsp;has learned, Midas-making, billion-dollar-plus positions remain idling on the runway. And the secondary market – where ByteDance’s reduced $220 billion price tag has largely held up in recent weeks even as TikTok CEO Shou Zi Chew took a beating in a heated Congressional hearing – has ground mostly to a halt.



Board seat holders Sequoia and General Atlantic declined to comment. ByteDance did not immediately respond to a request for comment.



“With rising China-U.S. tensions, do ByteDance shares become an issue?” mused one ByteDance investor who asked not to be named. “That’s what we’re trying to figure out.”



Several years after federal courts blocked the Trump administration from banning TikTok, some lawmakers and the Biden White House have resumed that call, with the government indicating that if ByteDance does not sell TikTok, the app will be banned. That uncertainty – and the looming role of the Chinese government, which has indicated that a sale is a non-starter – means that for TikTok’s venture capital investors, it’s best not to poke the bear. While some investors have unloaded smaller stakes and may continue to do so,&nbsp;Forbes&nbsp;has learned, Midas-making, billion-dollar-plus positions remain idling on the runway. And the secondary market – where ByteDance’s reduced $220 billion price tag has largely held up in recent weeks even as TikTok CEO Shou Zi Chew took a beating in a heated Congressional hearing – has ground mostly to a halt.



Board seat holders Sequoia and General Atlantic declined to comment. ByteDance did not immediately respond to a request for comment.



“With rising China-U.S. tensions, do ByteDance shares become an issue?” mused one ByteDance investor who asked not to be named. “That’s what we’re trying to figure out.”



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<h2 class="wp-block-heading" id="h-from-early-bets-to-billions">From early bets to billions</h2>



If it weren’t for the politics, another ByteDance investor recently told Forbes, investors would be happy to talk about a “monster” business primed for the public markets. The company took in about $80 billion in revenue and $25 billion in gross operating profit, numbers separately reported by<a href="https://www.theinformation.com/articles/revenue-at-tiktok-owner-bytedance-rose-more-than-30-in-2022-topped-80-billion?rc=viwsit" target="_blank" rel="noreferrer noopener"> The Information</a> and<a href="https://www.economist.com/business/2023/04/13/bytedance-tiktoks-chinese-parent-reports-a-record-profit" target="_blank" rel="noreferrer noopener"> The Economist</a> in recent weeks and confirmed to Forbes by two sources. That would put it at roughly the same scale as Tencent, the public Chinese tech holding company that recently carried a market cap of about $470 billion. And it means that were ByteDance to go public, it would likely supplant Alibaba’s public offering, which raised $25 billion at a market cap of $231 billion in 2014, as the largest tech IPO ever.


<div class="wp-block-image">
<figure class="aligncenter size-full is-resized"><img loading="lazy" decoding="async" src="https://cms.forbesafrica.com/wp-content/uploads/2023/05/GettyImages-1244812372.jpg" alt="" class="wp-image-58177" width="490" height="327" srcset="https://cms.forbesafrica.com/wp-content/uploads/2023/05/GettyImages-1244812372.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2023/05/GettyImages-1244812372-300x200.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2023/05/GettyImages-1244812372-768x512.jpg 768w" sizes="(max-width: 490px) 100vw, 490px" /><figcaption class="wp-element-caption">Neil Shen. Photographer: Bryan van der Beek/Bloomberg via Getty Images</figcaption></figure></div>


When Shen first invested in ByteDance’s 2014 Series C funding round, his firm Sequoia China, the China-based fund manager for the global Sequoia brand, amassed a position of 10% of the company at a $465 million valuation. Shen could’ve gotten in for even cheaper a year before at a $60 million price tag,&nbsp;<a href="https://www.theinformation.com/articles/how-sequoias-neil-shen-built-a-china-powerhouse?rc=viwsit" target="_blank" rel="noreferrer noopener">but balked</a>. He’s since put more money into the company in most subsequent funding rounds, excluding one led by SoftBank in 2018.



Sequoia’s global growth funds also invested later into ByteDance; the firm purchased additional shares through secondary sales in 2020. Add it all up, and today Sequoia holds just over 10% of ByteDance still, per a source with knowledge – a position valued on paper at more than $22 billion. Shen and Sequoia declined to comment.



Another firm, Susquehanna International Group, reportedly holds an even bigger stake. SIG first backed ByteDance in 2012, and invested alongside Midas List No. 54 Yi Cao of Source Code Capital in two subsequent rounds before Shen. SIG holds about 15% of ByteDance,<a href="https://www.theinformation.com/articles/the-tiktok-investors-with-the-most-to-lose-from-a-u-s-ban?rc=viwsit" target="_blank" rel="noreferrer noopener"> per the report</a>. SIG isn’t considered for the Midas List because it’s not strictly a venture firm. It didn’t respond to a request for comment.



Among VCs, other Midas List investors with ByteDance stakes include No. 10 Hans Tung of GGV Capital, No. 20 Scott Shleifer of Tiger Global, No. 37 Marc Stad of Dragoneer Investment Group and No. 71 Anton Levy of General Atlantic.



Several of those firms got into ByteDance indirectly through Musical.ly, a lip-syncing app acquired by ByteDance in 2017. Qiming Venture Partners, whose former partner JP Gan made the 2022 Midas List, sold its position in 2019 at a $95 billion valuation, according to data from startup tracker PitchBook, pocketing $113 million. GGV, another Musical.ly backer, sold much of its stake along the way, according to a source. Qiming and GGV didn’t respond to requests for comment. (The U.S. government began investigating the sale in 2019; in 2020, President Donald Trump declared the sale invalid by executive order, but the order was overturned in court.)



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“People have sold quite a bit, and they’re debating selling more,” said one investor with knowledge of the thinking inside several ByteDance-holding firms. Firms with the largest stakes, or recent ones, including SIG, Sequoia, General Atlantic and Coatue, which invested in 2021, have mostly stood pat, according to three sources; Sequoia, in particular, hasn’t ever sold a single ByteDance share. “For the major shareholders, it would be hard for them to sell,” added one of the sources. All of the firms declined to comment.



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<h2 class="wp-block-heading">ByteDance shares feel the chill</h2>



ByteDance shareholders&nbsp;who do look to sell face a secondary market also spooked by Washington’s saber-rattling. Some deals are happening – SIG and SoftBank reportedly sold a $100 million-plus block of shares in March, per PitchBook – but not at the billion-dollar scale that would move the needle for ByteDance’s larger shareholders.



One point of debate is ByteDance’s fair price. Mutual funds AIG, Fidelity, BlackRock and T. Rowe Price still mark the company at share prices that imply a valuation range of $260 billion to $320 billion. Notice, a data provider that tracks bids and offers for secondary shares, estimates a real-time price of about $180 billion, similar to ByteDance’s December 2020 funding round. Notice shows a number of open buy and sell orders for ByteDance, with an order book totaling more than $3 billion in potential trade interest. But Notice has no record of any of those bids leading to trades, unusual for a big company with such interest, said Chuck Taylor, a Notice senior vice president. “It’s safe to say that many of the older indications of interest are not active,” he added.



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“Relative to other tech companies, it seems to be trading pretty cheaply, but there are these dark clouds.”
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Glen Anderson, a broker-dealer of ByteDance shares at Rainmaker Securities, said that investors continue to express interest in ByteDance at a $220 billion to $225 billion market cap price range, while sellers express a willingness to unload at a $235 billion to $240 billion range. “Pretty much all” of those bids and offers are in the ballpark of $50 million to $100 million positions, Anderson said. But the sellers are typically bundling a bunch of smaller stakes together, he added, not offering shares from one shareholder on ByteDance’s cap table.



“We’ve been surprised that, with all the noise in Washington, that marketplace hasn’t moved much in price,” Anderson said. Still, he pointed out that these numbers are half the value of 2021 transactions that implied a $400 billion-plus market cap, with the drop already factoring in regulatory uncertainty of a potential TikTok ban. ByteDance holders would hope to avoid the fate of investors in Juul, Anderson noted, the e-cigarette company that was ultimately whacked by regulators and saw its valuation written down 98% by acquirer Altria.



“If there were no regulatory risks for ByteDance, you would see a rally,” Anderson added. “Relative to other tech companies, it seems to be trading pretty cheaply, but there are these dark clouds.”



For Midas ByteDance backers, a brisk secondary market wouldn’t do more than alleviate pressure from potential limited partners looking for the funds they backed to return some cash. The big outcome remains an IPO, with or without the sale of TikTok. One ByteDance investor argued the ideal outcome would be for U.S. politicians to, having made noise on the issue and earned talking points, quietly move on from a potential ban. Then, ByteDance could consider a dual listing in the U.S. and Hong Kong, for maximum shareholder profits.



Failing that, the next best option for investors would be a sale of TikTok’s global business, opening the way for them to hold stakes in ByteDance and TikTok as separate entities — which could mean separate domestic IPOs. “Quite a few elements” of Congress would be sympathetic to a divestiture if it was done in the right way to address various national security concerns, said Jacob Helberg, an investor author who was appointed the commissioner of the United States-China Economic and Security Review Commission by House Speaker Kevin McCarthy in 2022. (He added he’s skeptical of it doing so.)



Such a sale would have to clear China’s own laws around the export of technologies, Helberg said. One ByteDance investor agreed such a sale appeared unlikely at present for that reason. “I think it would be best for them to sell, but the Chinese government isn’t allowing them to do that,” the source said. “TikTok has access to models and algorithms they wouldn’t want shared.”



If no deal or truce can be brokered, investors would face a worse scenario: TikTok banned in the U.S. and other countries, and ByteDance’s business entrenched around China. Even then, regulatory clarity could set a path for a public offering in China, another path to an exit. “A ban would likely catalyze going public in Hong Kong in our opinion,” Wedbush analyst Dan Ives said in an email.



That speaks to the real worst outcome for investors: no outcome at all. So long as TikTok remains in regulatory limbo, so do the exit scenarios for VCs. Their paper billions are enough to help with Midas status. But they can’t be banked yet.



“The investors I know are more nervous not about whether their investments will be liquid, but whether they’ll be able to repatriate those funds back to the U.S.,” said Helberg. “In the event of a geopolitical standoff over Taiwan, for example, you’d have to be completely delusional to assume that you’re going to be able to repatriate large amounts of funds in either direction. Capital flows would lock down.”



That’s why, despite ByteDance’s already outsized role in their portfolios, one investor laughed when asked why their peers wouldn’t talk about their investment on record. “That would be a great way to raise your hand for attention from the Chinese government, or a random U.S. lawmaker,” they said. “If not for the politics, we’d be shouting this deal from the rooftops.”



By Alex Konrad, Forbes Staff

In this photo illustration, a ByteDance logo is seen on a

For Top VCs, ByteDance’s Historic Windfall Remains A $220 Billion Mirage

That South Africa has just a single player featuring in Europe’s top five leagues is a telling indictment of the country’s football, which has seemingly been left behind by the rest of the world.



By Nick Said



England, Germany and France had seen a steady stream of South Africans since readmission to international football in 1992, Spain and Italy perhaps less so, but now that flow has dried up to almost nothing. 



Strasbourg forward Lebo Mothiba is the only player in any of Europe’s elite leagues, cutting a lone path for Bafana Bafana at a level all players should aspire to. And he is hardly setting the world alight, with a single start in his team’s first 23 Ligue 1 games this season. Bafana Bafana forward Lyle Foster should win promotion to the Premier League with Burnley at the end of this season, which will at least take that number to two… if Mothiba is retained.



The question, therefore, is why this should be. There are multiple issues at play and perhaps the biggest being the fact that the domestic Premier Soccer League (PSL) now pays on a par with many European leagues, while the reported low standard of the national team means foreign scouts are not looking towards South Africa and there is a lack of desire from players at home to put in the hard yards.



While moves directly from South Africa to English, French and German clubs have been relatively common in the past, they are now a rarity with players needing to prove themselves in ‘lesser leagues’ in Belgium, Netherlands or Sweden first. And with no real cash incentive to do so, there is a reluctance to take the risk when the comforts of home are as well paid.



“In the years leading up to 1996, our domestic league was basically semi-professional. Guys had jobs in the day and then went to training in the evening,” former Bafana Bafana coach Eric Tinkler tells FORBES AFRICA.



“If you wanted to make it as a professional, the only chance you had was to go abroad, and that meant you had to work unbelievably hard.



“That hunger, that desire to go overseas… it is now not the same as it was for our generation. I see it. For many players it is just about the money. And they are well paid in the PSL, so where is their motivation to really push themselves to the next level in their careers?” the current Cape Town City coach says.



“Money comes before performance these days. For us, it was the other way around. We really needed to perform to start earning anything decent from the game and to start making a living from it. That drove a lot of us.”



Tinkler played in Italy, England and Portugal, and understands fully well how competing at that much higher level inevitably improves players, which in turn is beneficial for the national team.



Among the side that played in the victorious 1996 Africa Cup of Nations final, all but one either was playing abroad at the time or would go on to do so. Captain Neil Tovey was the odd man out, likely only because readmission to international football came very late in his career and the ship had sailed. 



But he recognizes that the strength of that team was their leadership and football intelligence built by expanding their boundaries and playing abroad.



“When that [1996] side needed to dig deep, we were very intense in our thought and our process,” he says. “Since then, there have been some very good (Bafana) teams with some very good players. But I think, mentally, we were all like captains on the field.



“We all knew our responsibilities and we didn’t have to look to the (coach on the) bench. When things went a little awry on the pitch, we could take care of it and identify problems a lot quicker than teams can now.”



The rise of West Africa as a key source of players from the continent has also hampered South Africans’ chances.



While it is generally accepted that South Africa players are more technically proficient, they largely lack the physical stature of players from Nigeria, Senegal and Ivory Coast… and that real burning desire to test themselves in Europe. For players from those countries, it is everything to them.



For South Africans, it seems more of a ‘nice to have’. All the while the national team suffers as those countries rise.



“We are definitely not where we should be… or could be,” Tinkler adds. “We do OK until about the age of 13, we can compete on a global level until then. But where other countries start to ramp it up from there, we have not managed to do so. “In fact, we start to go backwards and the growth of many players becomes stunted. I wish I could give you a good reason why, but there are probably multiple factors on and off the pitch.”

AS Saint-Etienne v ESTAC Troyes – Ligue 1 Uber Eats

South African Football: What Has Changed For Players

These coins are designed to protect stablecoin holders from inflation. But they are complicated and it’s not clear whether they will actually work.



Stablecoins are digital tokens created to mirror the value of hard currencies like the U.S. dollar. They are critical for liquidity in the $1.2 trillion crypto market because investors need a steady, predictable place to park cash, in part because bitcoin, which will swing as much as 10% in a single day, has largely failed as a store of value. There are $120 billion in stablecoins outstanding. Unfortunately, their history is anything but stable.



In May 2022, TerraUSD, a stablecoin dreamed up by a Stanford-educated South Korean programmer named Do Kwon, famously collapsed because its value was based on an algorithm that proved to be unreliable in the face of an asset run. More than $45 billion in market value evaporated in a single day setting off a crypto market plunge. After being on the lam for nearly a year, Do Kwon was recently arrested in Montenegro. Then, there is the world’s largest stablecoin issuer Tether, which has $80 billion outstanding, but has long avoided even the most basic disclosures (like where it is located) and has been in trouble with regulators numerous times. On several occasions Tether’s U.S. dollar coin (USDC) has “broken the buck” and dipped below $1.00 in value.



Even the most regulatory compliant and transparent stablecoin, Circle’s USD Coin (USDC), which has $30 billion outstanding, has disappointed investors. When Silicon Valley Bank collapsed on March 10, USDC’s Boston-based issuer Circle admitted to having $3.3 billion on deposit at the bank, mostly uninsured. The price of USDC lost its peg, nosediving to $0.88 cents on March 11.



But stablecoins are still essential for serious players in the digital asset world, and hope springs eternal in crypto, so a new product has hit the market called promising an inflation-adjusted version of stablecoins. Dubbed “flatcoins” these new tokens are designed to to maintain purchasing power parity with a basket of goods by keeping up with inflation.



So far only about $100 million in flatcoins have been minted but with inflation stubbornly stuck at 4.6%, demand for these novel tokens is growing. Already Coinbase is actively looking to seed flatcoins on its new Ethereum Layer 2 blockchain Base.



“We are fascinated by the deep thought we’re seeing in decentralized stablecoin design and are particularly interested in ‘flatcoins’ – stablecoins that track the rate of inflation, enabling users to have stability in purchasing power while also having resiliency from the economic uncertainty caused by the legacy financial system,” wrote Coinbase in a recent post.



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Flatcoins are the brainchild of former Coinbase Chief Technology Officer Balaji Srinivasan and an Iranian born programer Sam Kazemian, who came up with a stablecoin protocol named Frax in 2021, and an inflation tracking index called Frax Price Index (FPI).



“The term flatcoin was basically meant to signify by me and Balaji that it stays flat to a standard of living, &#8221; says Kazemian who notes that his new flatcoin would be partially backed by collateral like USDC, and partially “stabilized” algorithmically.



Here are the basics mechanics of the new inflation-protected stablecoins. The first thing the Frax programmers set out to do is identify a targeted standard of living to track. Kazemian built a feed with a blockchain data provider called Chainlink to publish each month’s CPI from the Federal Reserve’s Bureau of Labor and Statistics (BLS) onto the Ethereum blockchain. With the current 12-month trailing inflation rate at 5%, Frax has a set of smart contracts programmed to automatically conduct algorithmic trading with a goal of profiting enough to match the monthly inflation print sent from Chainlink.



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In theory, this would mean that if a single tether or USDC is still worth $1.00, in a 5% inflation world an FPI would be redeemable for $1.05 of collateral. In order to earn the necessary amounts to cover the inflation premium, Kazemian’s team invests collateral in DeFi lending protocols such as Aave and Convex, which primarily focus on stablecoin markets. These DeFi protocols earn yield for letting borrowers access their tokens. These returns then become available for FPI minters to withdraw. However, FPI is run by a Decentralized Autonomous Organization, which could make changes to its risk parameters in the future.



If this sounds complicated and risky, it is, especially relative to simply owning a stablecoin like USDC and simultaneously hedging with something like a gold ETF or even Treasury Inflation Protected Securities (TIPS), where the U.S. government effectively covers the inflation risk.



Even more complicated is another flatcoin called Nuon. Rather than simply matching the BLS’ inflation reading, it joined up with a sister company called Trustflation to produce real-time inflation data based on a proprietary methodology. For instance, while the BLS inflation has eight main categories: food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services, Trustflation has 12. Additions include clothing/footwear and alcohol/tobacco. The company also weights categories differently than the BLS and pulls in data real-time through service agreements with various providers instead of just relying on monthly updates.



“When we studied inflation we realized that it was calculated by 477 people on a monthly basis in a nebulous fashion,” says Trustflation and Nuon CEO Stefan Rust. “We decided to use a developer approach, take the same metrics, pull it from API&#8217;s, and have it updated in real time.”



While no one would argue that the collection and indexing of official inflation data doesn’t have numerous flaws, including an antiquated monthly production schedule, Trustflation’s Moneyball-esque approach to calculating real time inflation data does not come without drawbacks.



“When inflation is between 1.5%, and 2.5% per annum, it&#8217;s probably a bit of overkill, but when topline inflation is 8% to 9% those numbers may be meaningful on a day-to-day basis,” says Peter C. Earle, an economist at the American Institute for Economic Research. “I think it&#8217;s interesting to capture daily or intraday inflation data, but I also think there&#8217;s a lot of statistical noise.”



That noise could become deafening if the data feeds which determine prices and return targets , known in the crypto world as oracles, become corrupted. Crypto forensics firms report that so called oracle manipulation attacks cost investors $362 million last year. It is not impossible to foresee a scenario where an oracle gets manipulated to force one of these platforms to employ a riskier trading strategy than anticipated.



But data collection is not the only worry flatcoin buyers need to worry about. Behind Nuon’s inflation-protection guarantee is a complicated and potentially risky proposition. When an individual “mints” Nuon, he must deposit ether in its protocol, which then automatically buys the same amount of Nuon on the open market and deposits it in a DeFi protocol such as Uniswap or Pancakeswap. Income generated from this deposit, known as “yield farming,” is added to a user’s collateral position (which is the original ether) essentially as an “insurance.” Thus unlike FPI, nuon positions are overcollateralized &#8211; for instance a user must deposit $1.30 worth of ether to mint $1 of nuon.



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So far both FPI and nuon are having trouble tracking inflation (see charts). According to CoinGecko, FPI is currently priced at $1.08, but in its almost 12 months in existence it has traded as high as $1.18 and as low as $0.92, which would imply that in the last 12 months, inflation has spiked as high as 18% and below 1%. Nuon has dramatically outperformed inflation in its short existence; it only launched in March. Right now it is priced at $1.24, but it has been as high as $1.44.



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Ifflatcoins are meant to be the next evolution of digital “safe money&#8221;, stablecoin’s biggest player’s have yet to sign on. Circle, which issues USDC, has no plans to issue a flatcoin. Circle already has more than $25 billion in short Treasury bills backing its USDC tokens, but it is precluded from buying TIPS, because they are not issued in durations shorter than five years. Tether did not respond to requests for comment.



Flatcoins are so new they do not yet appear in any of the current stablecoin regulation bills circulating around Capitol Hill. The bi-partisan draft introduced in April proposed a ban on new algorithmically derived stablecoins such as TerraUSD/LUNA, where the stablecoin was backed by a sister token. Flatcoins use computer algorithms to derive their valuations, however, in their current incarnation do not fit neatly into the bill’s specific description. Still, any new stablecoins would have to be issued by a licensed entity at the state or federal level, so these products would need a bank backer if they expect to ever go mainstream.



Rust says that there are no restrictions on users in the U.S. from minting Nuon right now. “I guess, they are in a bit of a gray zone [with regards to how flatcoins fall under securities regulation]&#8230;At the moment, all the indications are that stablecoins pegged to the dollar or euro will fall under some regulation.”



Forbes called various legislators and regulators involved with the recently proposed stablecoin legislation to ask about flatcoins but most hadn’t even heard of them yet. Said Representative Brad Sherman (D-CA), a noted crypto critic, “We already have something like that. They’re called TIPS.”



By Steven Ehrlich, Forbes Staff

Mid-section of young Asian woman using smartphone in city at night, against illuminated street lights bokeh, working with Bitcoin technologies, investing or trading Bitcoin on cryptocurrency. Business on the go

Beware Of Flatcoins, Crypto’s Inflation Busting Fad

Kenya is among several African countries that have experienced a decline in the local value of currencies.



By Terryanne Chebet



Kenya has had a tough few months: ballooning debt, an enormous wage bill, and a depreciating shilling exacerbated by global conditions. Now, the government is unable to pay its salaries. An increased import bill, investment portfolio outflows, and servicing of existing foreign debt have also resulted in the reserves falling below the statutory minimum of four months of imports, with the Kenya shilling depreciating to an all-time low of KES130 to the US dollar.



So, how did Kenya get here?&nbsp;



“It was a matter of &#8216;when&#8217; and not &#8216;if&#8217; KES would weaken to reflect its fundamentals. There have been successive external shocks since 2020, but the currency remained relatively stable relative to its peers. In this light, it is not surprising the sharp adjustment we have seen this year and which we see bringing it closer to its fundamental value,” explains Churchill Ogutu, an economist with IC Africa.&nbsp;



Kenya is among several African countries that have experienced a decline in the local value of currencies, with a 25% decline in value since 2020, to a large extent caused by the rising interest rate environment in the United States (US), which has witnessed a very aggressive rate tightening by the US Federal Reserve.&nbsp;



&nbsp;Kenya’s borrowing for the financial year 2022-2023 is also substantially behind target.



“Given the continued uncertainty in the global financial markets, it appears that [the government] will have no choice but to borrow at higher rates from the domestic markets,” adds Sunil Sanger, CEO of Orion Advisory.&nbsp;



Kenya is also looking to offload its parastatals to reduce pressure on funding and to raise capital.



Despite fears that Kenya could default on its external loans, experts say it is unlikely.&nbsp;



Ogutu notes that Kenya’s position may be fragile, but a default seems remote. “With FX reserves at multi-year low levels, it is higher than upcoming short-term external debt servicing costs. Thus, I see a muddling through regarding external debt servicing costs.”



He adds that a default on&nbsp;domestic borrowing seems to be more likely due to its outsized domestic debt servicing costs compared to external debt servicing costs.&nbsp;



The outflow of portfolio investments in equity and bond markets and higher import prices for commodities, particularly petroleum products has seen Kenya’s government importing petroleum products on a deferred payment basis. The government is pursuing the government-to-government oil importation deal with Gulf countries to alleviate pressure on the&nbsp;shilling.&nbsp;



The reduction in oil demand will also help to reduce the depreciation of the shilling though analysts argue that Kenya could have used the opportunity to build reserves and maybe even consider using those to start buying back its 2023 eurobond maturity, an action that could help to calm down the market nerves.



Ogutu argues that is short-term thinking. “At some point in time, the supply and demand in the FX market will still reflect the mandated OMC coming to the market sourcing dollars. Kenya may get a bit of reprieve in the short-term but ultimately, the supply-demand dynamics will come to play.”



Both analysts agree that the revival of the interbank market in the last few weeks is a positive sign and has helped to reduce some of the uncertainty in the exchange rate. However, given the economic environment both locally and internationally, it is difficult to see circumstances under which the Kenya shilling would appreciate from current levels. &nbsp;



However, Ogutu holds that the shilling isn’t out of the woods yet.



“I have the sense that the initial sugar rush in the FX interbank market has ebbed away, and the next FX guidance will be delivered with the imminent changes at the helm of CBK. That said, my base case is a continued further weakness with 140 on sight.”

African business

Kenya Currency Woes: How Did It Get There?

Words and Curation: Chanel Retief Art Director: Lucy Nkosi Additional Research &amp; Reporting: Lillian Roberts Photography: Katlego Mokubyane Photography Assistant: Sbusiso Sigidi Studio: NewKatz Studio, Johannesburg Videographer: Astro @astro.vsn Videographer: Thabo Mathebula Video Editor: Chanel Retief Styling: Bontlefeela Mogoye | Outfits supplied by: Wanda Wear; Markhams; Kworks_design; BailebyB Hair &amp; Makeup: SnehhOnline Beauty



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<iframe loading="lazy" title="#FORBESAFRICA30Under30 Class of 2023: Meet COVER STAR Khethokuhle ‘Kay Yarms’ Ngonyama" width="500" height="281" src="https://www.youtube.com/embed/ySHPXs2yFqw?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
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She has unmistakable style as she struts into the studio in Johannesburg for the FORBES AFRICA 30 Under 30 cover shoot.



“What’s it like to trend every week on Twitter?” we ask.



Khethokuhle Ngonyama, popularly known as ‘Kay Yarms’, laughs: “You know, I mostly trend for my work. So, it is really affirming. I have never really been good at anything, or rather I have never considered myself good at anything, just good enough. But when people speak about it and speak about how good I am at it, I am actually emotional. It just makes me feel like ‘wow I never thought I would be good at anything’.”



Originally from the idyllic city of Durban in South Africa’s KwaZulu-Natal province, Ngonyama says she has always found herself in major cities; she has lived in Johannesburg and now is based in Mother City, Cape Town.



“I think moving around has allowed me to really get to know and connect with my audience as well as the country I reside in.”



Unlike a number of brands and businesses where the need for capital is essential for launch, Ngonyama says she did not have that problem as her business was providing a service.



“I started out as a makeup artist providing services for everyone and sharing tutorials, tips and tricks on my online platform,” she adds. “I found that I reached a wider audience and so I eventually stopped doing private makeup and moved into teaching to do makeup in the form of tutorials, both online and offline.”



And although power on social media means social capital these days, there is also the dark side to it.



“The biggest challenge is probably having to grow a thick skin; sometimes, social media isn’t pleasant and sometimes the negativity can affect you. Also becoming a public figure – I&#8217;ve always been pretty reserved and introverted and coming out of my shell has been a bit challenging for me.”



But she is convinced her popularity and growth will keep going upwards.



“I think we are just growing, especially in Africa,” Ngonyama says. “I didn’t know about [other influencers] in other African countries but the power of social media has allowed me to feel more connected to them and to know them.”

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#FORBESAFRICA30Under30: Meet COVER STAR Khethokuhle Ngonyama- ‘I’ve always been pretty reserved and introverted and coming out of my shell has been a bit challenging for me’

Coinbase, Binance and other exchanges hold at least $2.25 billion of shadow ether, as the latest lucrative innovation in digital assets ramps up.



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Cryptocurrency exchange&nbsp;<a href="https://www.forbes.com/sites/stevenehrlich/2023/03/01/coinbase-blockchain-plan-gets-warm-reception-success-hinges-on-converting-crypto-diehards/?sh=2113589f1fab">Coinbase</a>&nbsp;is sitting on a $1.5 billion pile of phantom cryptocurrency pegged to the price of ether. Binance has a similar $750 million stash. These tokens, created to be used in what are essentially lending programs, are just entries in the exchanges’ computers, but to outside observers they appear as assets sitting in their corporate crypto wallets.



Binance’s 400,000 tokens would suddenly come to life if investors decide to use the exchange as an intermediary in posting ether (ETH) collateral to the Ethereum blockchain through a process called liquid staking. But until they do, anybody seeking to determine the amount of Binance’s assets would have to subtract the value of the spectral crypto from the visible total, now $2.77 billion, according to data from Arkham Intelligence. Things might be clearer if Binance actually published its balance sheet, which would be expected to show a corresponding liability. However, despite 70 million customers worldwide, it doesn&#8217;t share financial details with the public.



“Those [tokens] not in circulation are held in a specific reserve account with strict controls and multi-party approval,” says a Binance spokesperson.



Coinbase–which declined to comment for this story and is&nbsp;<a href="https://www.forbes.com/sites/nicholasreimann/2023/03/22/coinbase-crypto-exchange-faces-possible-sec-charges-company-says/?sh=659b5b0912fc">facing a likely enforcement action</a>&nbsp;from the Securities and Exchange Commission related to its staking offerings–does not count its unreleased assets on its balance sheet, but does disclose them in its SEC filings.



Welcome to the fast-growing world of liquid staking. Staking in crypto parlance involves posting a digital asset like ether to a blockchain as collateral in exchange for the right to process transactions and earn in-kind rewards like tokens. Staked tokens are normally locked up for a period of time so they can&#8217;t be immediately withdrawn and cause a run on the platform. Liquid staking, by contrast, allows holders of tokens like ether the opportunity to use a tracking token of sorts for trading while the underlying token is still sitting “staked” on the blockchain, continuing to earn yield. In some ways it allows crypto investors the chance to have their cake, or “stake,” and eat it too.



There is already more than $18 billion committed to platforms that offer the service, according to&nbsp;<a href="https://dune.com/hildobby/eth2-staking" target="_blank" rel="noreferrer noopener">data</a>&nbsp;from Dune. Investors can earn annual returns of 2% to 12% depending on the platform, according to&nbsp;<a href="https://www.stakingrewards.com/staking/?page=1" target="_blank" rel="noreferrer noopener">Staking Rewards</a>, and they keep control of their crypto. But they have to trust the integrity of the intermediaries and the security of the platforms to safeguard their assets.



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In December of 2020 Binance minted an astounding 100 million Binance ETH, known as “beths”, each representing one ether at a time when there were only 120 million ETH in existence. Until June 2022, if counted, that hoard would have added about $483 billion to Binance’s visible wallet assets, multiplying them fivefold. However last year it started destroying these phantom tokens and now only 1.5 million remain according to Binance’s own BNB Smart Contract (BSC) Chain&nbsp;<a href="https://bscscan.com/token/0x250632378e573c6be1ac2f97fcdf00515d0aa91b" target="_blank" rel="noreferrer noopener">explorer</a>.



It’s almost as if Charles Schwab manufactured a massive amount of an ETF like Invesco’s QQQ Trust and simply held the shares on its books without acquiring the corresponding stocks in the Nasdaq 100 index and putting them in a trust, the way ETF shares are normally created. And since there is no SEC or regulator involved, no one would care if those ETF shares fluctuated in value or amount or were simply discarded. This is effectively what Binance and Coinbase have been doing with the special staking ether they have created since 2020.



A Binance spokesman would not say exactly why so many tokens were minted in 2020, other than it was cheaper to manufacture them in bulk.



“There are no accounting standards that speak to any of this stuff specifically, and even the related standards are not specific,” says Francine McKenna an accounting lecturer at the University of Pennsylvania’s Wharton School of Business. Staking can take many forms, she adds, and existing rules do not contemplate “all the details of all these different variations on all these products.”



Creating billions worth of staking tokens out of thin air and then destroying them, is just the latest example of a crypto company playing by its own rules. Disgraced former crypto exchange FTX, played fast and loose with disclosure rules, and more recently Binance has come under scrutiny. A&nbsp;<a href="https://www.courtlistener.com/docket/67092867/1/commodity-futures-trading-commission-v-zhao/" target="_blank" rel="noreferrer noopener">civil complaint</a>&nbsp;by the U.S. Commodity Futures Trading Commission in March claimed that Binance consists of “an opaque web of corporate entities.” Last February, a&nbsp;Forbes&nbsp;<a href="https://www.forbes.com/sites/javierpaz/2023/02/27/binances-asset-shuffling-eerily-similar-to-maneuvers-by-ftx/?sh=7e80d91bccd4">investigation</a>&nbsp;showed that the exchange appropriated more than $1 billion of collateral meant to back stablecoins in August, shifting the assets to other uses without alerting the customers who were affected.



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Liquid staking joins&nbsp;a long list of dubious crypto industry innovations that have included initial coin offerings, algorithmic stablecoins and decentralized finance. Like its predecessors, liquid staking is a creative solution to a key pain point: the illiquidity that comes with staking ether.



Although digital assets–like traditional currencies–do not generate income by themselves, there are ways that investors can earn passive revenue from their holdings, similar to making a loan. Posting assets to blockchains such as Ethereum, Solana, Algorand and Polkadot as collateral, give lenders (known as stakers) the right to earn fees by processing blockchain transactions. Ethereum for example, currently brings about 4.8% of annual return, and there is always the chance that a digital asset you have staked appreciates, magnifying your return. But this process has drawbacks.



Depending on the platform, it could take weeks to withdraw crypto once it has been staked. The situation has been even more extreme with Ethereum. Although staking was enabled for the blockchain in December 2020, withdrawals were not permitted until a major upgrade, known as the “Shapella update”, was completed on April 12, 2023.



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<h4 class="wp-block-heading" id="h-binance-asset-balance-history">BINANCE-ASSET BALANCE HISTORY</h4>



<h4 class="wp-block-heading" id="h-in-billions-ethereum-and-bnb-chains">In $billions, Ethereum and BNB Chains</h4>



This chart erroneously shows the value of Binance&#8217;s digital assets, which were inflated by BETH tokens despite little actual ETH staking &#8211; only 2% of the value claimed.&nbsp;SOURCE: ARKHAM INTELLIGENCE



This illiquidity has been a major impediment for many would-be stakers and in response, a cottage industry of service providers, including Coinbase and Binance, have surfaced, willing to exchange an investor’s staked ether for a different tracking crypto token (such as beth). The ether is locked on the blockchain, while the new token is available for use in applications such as decentralized finance; it also can be sold. The blockchains available for liquid staking vary by geography and provider, with some like U.S. regulated Coinbase accepting Cardano, Cosmos, Ethereum, Solana and Tezos, while international investors using exchanges like OKX exchange and Huobi exchange can stake dozens of tokens.



Exchanges like Coinbase profit by taking a cut of the fees earned by staking customers. This has been a lucrative and growing business for Coinbase. In its quarterly filings, it includes staking fees within “blockchain rewards.” In 2022 these fees amounted to $275 million, or nearly 9% of revenue, up from $223 million or 3% of 2021’s top line.



While the idea seems simple, the reality is more complex, which can create risks for investors. For one, stakers have to trust centralized exchanges not to use these pools of new tokens themselves, effectively adding duplicative cryptocurrency to the market.



Then there is the issue of exchanges making up new rules as they go along. Until April 24, Binance limited the use of beths to deposits on its Binance Launchpool, essentially an initial public offering platform that allowed users to participate in unproven crypto-related projects that the global cryptocurrency exchange was endorsing. Now Binance offers a way for users to use beths for a wider variety of investments on the Binance Smart Chain and Ethereum, bringing the currency more in line with other liquid-staking tokens but in a unilateral action that can create additional security risks.



Coinbase has been&nbsp;<a href="https://www.forbes.com/sites/nicholasreimann/2023/03/22/coinbase-crypto-exchange-faces-possible-sec-charges-company-says/?sh=15acd57712fc">told</a>&nbsp;it is likely to face enforcement action by the U.S. SEC that may involve its staking service. Like Binance, it minted a token for staking, this one called Coinbase wrapped staked ETH (CBETH). But in contrast to Binance, it began with a modest 500,000 units.



Some of the spare tokens minted are essential for an exchange’s liquidity. Exchanges need to keep a reserve available to satisfy regular daily staking volume. There are minor costs involved in minting tokens, and without a supply on hand it might not be possible to immediately provide liquidity to potential stakers. But having too many can create questions for customers and regulators.



How many is enough?



“If I’m an exchange with $1 billion in staked ether and I’m minting my internal tokens in $10,000 batches that&#8217;s not material,” says Paul Brody, principal and global blockchain leader at Ernst &amp; Young. “I would want to know, are they sitting on $1 billion in undistributed tokens or $10,000, $50,000?”



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An alternate approach&nbsp;to liquid staking does away with the temptation to misdirect spare tokens, but creates problems of its own. Smart contracts–agreements that are automatically executed under specified conditions–address the problem of too many tokens on hand. There are decentralized liquid-staking providers such as Liquid Collective, Lido, Stakewise and RocketPool that exist almost entirely as sets of smart contracts. Lido is the world’s largest liquid staker, with $11 billion in deposited assets.



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<h4 class="wp-block-heading" id="h-liquid-staking-total-value-locked">LIQUID STAKING TOTAL VALUE LOCKED</h4>



<h4 class="wp-block-heading" id="h-tvl-in-eth-staked-may-1-2023">TVL in ETH staked, May 1, 2023</h4>



Select firms providing staking services ranked by total value locked, measured in ETHs, May 1, 2023SOURCE: FORBES, DUNE



Smart contracts can automate the process, staking the original token on the appropriate blockchain, then minting the liquid version for the customer. “The transparency that is associated with more decentralized staking protocols is definitely a plus because users can verify for themselves that the protocol has a corresponding amount of ether for its liquid token supply,” says Christine Kim, vice president of research at Galaxy Digital, a New York-based investment management and technology firm. Among the drawbacks is that the immediate minting of staking tokens is that the process is more expensive than minting the tokens in advance the way “centralized” exchanges Binance and Coinbase have.



An even larger issue is that decentralized finance protocols are more susceptible to hacks. According to Chainalysis, DeFi hacks accounted for 82% of all stolen digital assets last year, totaling $3.1 billion. Of this sum, 64% was taken from software programs known as cross-chain bridges, which allow users to move assets between decentralized-finance&nbsp;protocols. They work by having owners lock up tokens in smart contracts in exchange for a new corresponding token replica. Although there are key differences between bridges and liquid-staking protocols–such as the locked up tokens sitting in a blockchain rather than crypto wallets–this type of arrangement can expose liquid staking holders to more risks. This is especially true when tokens are moved from Ethereum validators into other wallets for distribution.



With the Shapella update to Ethereum complete, the metaphorical stakes are going to rise. The ability to withdraw funds is bound to make the market more attractive to institutional investors. Nikos Panigirtzoglou, managing director for global market strategy at JPMorgan told&nbsp;Forbes&nbsp;that “Over the medium to longer term we expect Ethereum staking to grow and converge with that of other blockchains.” Cardano, Solana, Algorand and Polkadot have 35-70% of their tokens staked. Ethereum is at 15%, so even just doubling this percentage would add $35 billion in staked tokens at current prices. A good portion of those funds would likely be liquid staking protocols because of the ability to put these tokens to other uses while the underlying asset is staked.



Buyer beware.



<a href="https://www.forbes.com/sites/javierpaz/"></a>By Javier Paz, Forbes Staff

Cryptocurrency Mining In Africa As Poor Sheperdherder Proves A Point

Liquid Staking: Crypto’s New Phantom Money Machine

<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



The Food and Drug Administration approved a first-of-its-kind RSV vaccine by pharmaceutical company GlaxoSmithKline for older adults on Wednesday, in time to help the U.S. combat RSV infections and deaths this year after a severe 2022 season.



<h2 class="wp-block-heading">Key Facts</h2>



GlaxoSmithKline’s Arexvy is now approved for people ages 60 and older to prevent lower respiratory tract disease caused by respiratory syncytial virus (RSV).



RSV is a common respiratory infection that typically causes mild, cold-like symptoms, but can lead to serious lung infections for those most <a href="https://www.forbes.com/sites/ariannajohnson/2023/04/06/first-fda-approved-rsv-vaccines-expected-later-this-year-the-top-vaccines-and-their-effectiveness/?sh=63e8e1185f81">vulnerable</a>, like children, older adults and those with underlying health conditions.



Each year in the U.S., RSV leads to between 60,000 to 120,000 hospitalizations and 6,000 to 10,000 deaths among adults 65 and older, the FDA said in a <a href="https://www.fda.gov/news-events/press-announcements/fda-approves-first-respiratory-syncytial-virus-rsv-vaccine" target="_blank" rel="noreferrer noopener">release</a>.



The study that led to Arexvy’s approval found that the vaccine reduced the risk of developing RSV-associated lower respiratory tract disease by 82.6% and reduced the risk of developing a severe RSV-associated respiratory disease by 94.1%.



The most common side effects among those in the trial were injection-site pain, fatigue, muscle pain, headache and joint stiffness or pain, the FDA said.



The Centers for Disease Control and Prevention is expected to provide specific recommendations for GlaxoSmithKline and its vaccine in June, according to an ABC <a href="https://abcnews.go.com/Health/1st-rsv-vaccine-older-adults-us-cleared-fda/story?id=99049816" target="_blank" rel="noreferrer noopener">report</a>, but the company expects it will have enough vaccines to meet demand ahead of RSV season in the fall and winter.



<h2 class="wp-block-heading">Tangent</h2>



Last year, the U.S. had an alarmingly bad RSV season, which some are attributing to lapsed Covid-19 pandemic health measures that had helped keep the public generally healthier and safe from RSV and the common cold. Between October and November in 2021, the CDC recorded 42,000 cases of RSV; in the same period in 2022, that number had swelled to 126,000, according to <a href="https://www.contemporarypediatrics.com/view/rsv-surges-early-in-2022-but-appears-to-make-early-retreat" target="_blank" rel="noreferrer noopener">Contemporary Pediatrics</a>.



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



The FDA is ahead of its time line, as it was expected to approve at least one RSV vaccine this year by the fall. The first attempt to create an RSV vaccine was in the 1960s, though it was&nbsp;<a href="https://www.forbes.com/sites/ariannajohnson/2023/04/06/first-fda-approved-rsv-vaccines-expected-later-this-year-the-top-vaccines-and-their-effectiveness/?sh=63e8e1185f81">unsuccessful</a>&nbsp;and led to severe and lethal cases of lung inflammatory response in infants.&nbsp;Forbes&nbsp;previously reported 11 potential RSV vaccines were being studied in trials—4 for infants and 7 for adults. GSK, whose vaccine was approved, was racing drugmakers Pfizer and Moderna to get the first-approved RSV vaccine. CNBC&nbsp;<a href="https://www.cnbc.com/2023/05/03/rsv-vaccine-fda-approves-gsk-shot-for-older-adults.html" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;that Moderna is still planning to file an application for FDA approval in the first half of this year.



<h2 class="wp-block-heading">CRUCIAL QUOTE</h2>



“Today marks a turning point in our effort to reduce the significant burden of RSV. . . . Our focus now is to ensure eligible older adults in the U.S. can access the vaccine as quickly as possible and to progress regulatory review in other countries,” said Tony Wood, chief scientific officer at GSK, in a press&nbsp;<a href="https://www.gsk.com/en-gb/media/press-releases/us-fda-approves-gsk-s-arexvy-the-world-s-first-respiratory-syncytial-virus-rsv-vaccine-for-older-adults/#:~:text=GSK%20plc%20(LSE%2FNYSE%3A,years%20of%20age%20and%20older." target="_blank" rel="noreferrer noopener">release</a>.



<h2 class="wp-block-heading">FURTHER READING</h2>



<a href="https://www.fda.gov/news-events/press-announcements/fda-approves-first-respiratory-syncytial-virus-rsv-vaccine" target="_blank" rel="noreferrer noopener">FDA Approves First Respiratory Syncytial Virus (RSV) Vaccine</a>&nbsp;(FDA)



<a href="https://www.forbes.com/sites/ariannajohnson/2023/04/06/first-fda-approved-rsv-vaccines-expected-later-this-year-the-top-vaccines-and-their-effectiveness/?sh=63e8e1185f81">First FDA-Approved RSV Vaccines Expected Later This Year: The Top Vaccines And Their Effectiveness</a>&nbsp;(Forbes)



<a href="https://www.cnbc.com/2023/05/03/rsv-vaccine-fda-approves-gsk-shot-for-older-adults.html" target="_blank" rel="noreferrer noopener">FDA approves GSK&#8217;s RSV vaccine for older adults, world&#8217;s first shot against virus</a> (CNBC)



By Molly Bohannon, Forbes Staff

Vaccinations at Egoli Township as Omicron Cases Spread

FDA Approves First-Ever RSV Vaccine After Brutal 2022 Season

By Godfrey Mutizwa



The World Bank says the climate change fight demands a focus on long-neglected structural challenges that are worsening the impact of natural disasters in Africa and other developing countries.



“Some of those structural challenges span from years of environmental degradation,’’ Anna Bjerde, the bank’s Managing Director for Operations told CNBC Africa last week after seeing villages devastated by Cyclone Freddy in Malawi in February and March.



The World Meteorological Organization says the cyclone may have been the longest in history. Over five weeks, it destroyed roads and other vital infrastructure in Madagascar, Malawi and Mozambique. Officials estimate about two million people were displaced while more than a thousand died.



According to the United Nations, changing rainfall patterns and more extreme weather threaten Africans’ food, water and socio economic development and more needs to be done to help the continent cope better.



Bjerde, back in the region for the first time since taking up the operations role last month, says she was enthused by the energy of the Malawian people and the government’s response in helping rebuild communities.



“I saw an incredibly resilient population where a lot of people want to make a change, and a lot of innovation around sustainable solutions like renewable energy, like more climate-smart solutions in agriculture and solutions for the most vulnerable and poor to have access to clean water,” she said.



But countries like Malawi will need more help from the World Bank and other development institutions to help build climate resistant economies by improving their infrastructure, Bjerde said.



The bank has a twin approach to this, she said, outlining short-term measures such as providing extra resources to governments, and identifying long-term priority projects to build inclusive economies.



“The broader development community’s role is to continue to support with technical solutions, with financing, with building capacity and perhaps most importantly making sure that these solutions are really inclusive.’’



Developing countries also need to involve their private sectors, she said, addressing challenges such as access to markets and finance, providing basic infrastructure and rebuilding value chains as part of an overall effort to improve business environments, especially given rising public debt levels.



“I am very worried by the increased level of debt that we are seeing and actually… we are seeing right now that about of 60 percent of low income countries in the world either at risk of debt distress or already at debt distress levels,” she added.



The bank was playing its part in its new operating model which was discussed at this year’s Spring meetings in Washington DC. The model among other things seeks to boost the bank’s capital and address borderless global challenges at the country level.

Tag: Coronavirus

FORBES AFRICA SOCIAL MEDIA