#50 The Ethereum Merge Happened. Starbucks Goes Web3
Disclaimer: Everything we write in "The Crypto Insider Report" is an x-ray of the industry as we see it, through the lens of publicly available information. We are not financial advisors.
The Ethereum Merge Happened
The Merge - the event everybody has been talking about for the past few months - finally happened. Successfully. Ethereum switched from being a Proof of Work (PoW) blockchain to a Proof of Stake (PoS) one. You can brush up on what that means right on ethereum.org.
The Web is full of articles on the event so I won’t bore you with the details. Rather, I’ll share a few highlights that caught my eye from CoinDesk’s coverage of the Merge. First, the good stuff:
This was an immense software engineering feat. To transition a live, active blockchain from PoW to PoS is, as some people put it, like changing the engine of a running car. Justin Drake, an Ethereum Foundation researcher puts it as “switching from gasoline to electric”. I think you’ll see why he chose that comparison in the next point.
The expectation is that running Ethereum should use 99.95% less energy than before. This pretty much dispels the environmental arguments people and organizations had against it.
Not only was the upgrade complex from a software engineering standpoint, but it required a great deal of coordination in the open source community. Many people essentially doubted the Merge would ever happen. This shows how much a distributed set of focused people can achieve, something impossible before the Internet.
On the not so good side of things, I want to mention only one point. While PoS as a model should enhance the network’s security, critics highlight that convenience and ease of use will lead people to stake through big players, leading to risky centralization. Indeed, CoinDesk shows that 30% of the ETH staked is in Lido, while 3 of the biggest exchanges - Coinbase, Kraken and Binance - cover another 30% between them.
All in all, this is a huge event for Ethereum and for Crypto in general. To many more!
Mihnea
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Starbucks goes web3
Loyalty programs all around the world are huge - you get “points” for buying your favorite coffee or snacks… which you can use to buy even more! It’s a great deal for recurrent customers and an even greater deal for businesses because they both increase loyalty among customers as well as bring in new ones via deals, so it’s a sure win-win.
Starbucks is the largest coffee chain in the world and it has over 15.000 locations in the US alone and it’s incredibly popular all around the world, even building flagship stores, and becoming landmarks in cities like Chicago. Their loyalty program brings in over 54% of store sales with Starbucks Rewards, coming from over 27M members. And that’s a lot coming from a business with $29.06b yearly revenue.
Starbucks Odyssey, as they call the NFT program in partnership with Polygon, will allow customers to earn NFTs by playing games in the app or buying them and using them for experiences and other benefits such as virtual classes, limited edition merchandise or artist collaborations. The new idea is meant to merge with the currently existing loyalty program to offer a seamless transition between the two while allowing for zero gas fees.
This is a huge opportunity and Starbucks doesn’t mind being among the first big ones to take it. Finally, the right steps towards adoption. Fitting this kind of initiative right into what users are used to will be, I believe, the right switch for people to get more into Web3, just like it was with emails.
Matei
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Shell & Philips part of Blockchain Pilot for Chemicals Sustainability
Netherlands based blockchain sustainability startup Circularise, announced a joint blockchain pilot project with certification scheme ISCC and ten firms. The project aims to use blockchain to complement the sustainability certification, making the audit of sustainability claims more straightforward and reliable. Together with Marubeni, an existing partner, Circularise managed to bring on board ten firms: Asahi Kasei, Borealis, Neste, Trinseo and Shell, appliance brands Arcelik, Philips Domestic Appliances and EVBox, as well as trading companies Marubeni and Itochu.
Logging the ISCC sustainability certificates on a public blockchain creates an immutable record of the sustainability claims associated with materials, enabling them to be tracked as the material moves through the supply chain. Companies “can use blockchain and smart contracts to store balances, record transactions, and apply mass balance rules,” said Mesbah Sabur, Circularise’s Founder. “Every transaction is fully traceable. Auditors can therefore rely on the blockchain for parts of the audit,” said Mesbah Sabur, Circularise’s Founder.
Mass balance is a methodology for determining how much recycled materials are used in a product. It’s particularly relevant for chemicals that might have a proportion of input materials (feedstock) that are recycled and some that are based on fossil fuels but are mixed during production. However, the ratio of inputs that are recycled should be known. It’s seen as a path to transition away from entirely fossil-fuel-based plastics rather than an abrupt shift.If say, half of the inputs are recycled, it’s possible that one item could be 90% recycled and another only 10% recycled. Whether or not the sustainability claims are useful depends in part on how the mass balance bookkeeping is applied, and some have concerns about that.
Shell’s involvement in the pilot doesn’t come as a surprise as the company has been very active in the blockchain space trying to leverage blockchain technology to reimagine current processes, create new value propositions and establish new markets. Back in June, 2022, Shell, Accenture and Amex GBT launched one of the world’s first blockchain powered digital book-and-claim solutions for scaling sustainable aviation fuel (SAF).
Evelyne
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