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What are the main findings of the Rapid Damage and Needs Assessment 2

The second Rapid Damage and Needs Assessment (RDNA2) carried out by the World Bank in coordination with the EU and the Ukrainian Government covers a full year of the unprovoked and unjustified aggression by Russia against Ukraine, from 24 February 2022 until 24 February 2023. It finds that thepriority needs for 2023 amount to around USD 14 billionandfocus on restoration of energy, housing, critical and social infrastructure, basic services for the most vulnerable, explosive hazard management, and private sector development. It is estimated that the Ukraine's budget already covers up to USD 3 billion of USD14 billion and the funding gap of Government of Ukraine is assessed to be approximately USD 6 billion.

Looking at a 10-year perspective for the reconstruction efforts, as set out by the report, the direct damage in Ukraine has reached overUSD135billion, with housing, transport, energy, and commerce and industry identified as the most affected sectors. Damage is concentrated in the frontline oblasts, particularly Donetska, Kharkivska, Luhanska, Zaporizka, as well as those brought back under government control, such as Kyivska and Khersonska.

Disruptions to economic flows and production losses amount to aroundUSD290 billion. Ukraine's gross domestic product (GDP) shrank by 30.4 percent in 2022, and poverty is expected to have increased from 5.5 percent to 24.2 percent in 2022.

As of February 24, 2023, for the next decade, reconstruction and recovery needs are estimated at aboutUSD411 billion. These needs include critical steps toward becoming a modern, low-carbon, disaster- and climate-resilient country that is aligned with European Union policies and standards, and where the country's vulnerabilities are addressed.

The full report of the RDNA2 will be officially published on the 4thof April 2023.

What are the priority needs for 2023 of theRDNA2?

The priority needs for 2023 take into account strategic priorities set out by the Ukrainian government as well as existing financing and implementation capacity of Ukraine. The five key recovery and reconstruction priorities are:

Critical and social infrastructure(USD 5.7 billion), and basic service delivery to vulnerable populations. This will include renewal of housing utilities, repair and reconstruction of transport infrastructure and repair and reconstruction of schools, health facilities, and other social and administrative infrastructure.

Energy infrastructure(USD3.3 billion ), including restoration and repair of transmission and distribution lines and generation capacity, development of renewables and protecting the power grid.

Housing(USD1.9 billion), including quick repairs and capital reconstruction.

Private sector development(USD 2.7 billion), including grants, credit lines, and risk facilities to support small and medium enterprises (SMEs), microenterprises, the agriculture sector and exports.

Humanitarian demining(USD 0.4 billion)- focusing on building the strategic and operational capacity for demining operations.

What is the EU doing to address the priority needs in Ukraine?

In 2022, EU provided substantial support to Ukraine's short-term recovery. This included EUR 7.2 billion MFA and more than EUR 660 million budget support. EUR 330 million of our emergency support package in grants also largely focused on emergency support for damaged infrastructure needs EU has allocated for instance EUR 100 million for the construction of new social housing for IDPsin Western Ukraine as well as EUR 50 million support to liberated cities for emergency repairs and reconstruction of social and municipal buildings in Kyiv region. In addition, EUR 100 million have also been mobilised to rehabilitate schools damaged by Russia's brutal attacks against Ukraine's education system. EU has also reoriented projects funded with IFIs, including NEF and IFC, to support refurbishment of municipal buildings and provide medium - to long-term housing for IDPs in Western Ukraine.

In 2023, the EU's priority is to support Ukraine to ensure its immediate financial needs, the rehabilitation of critical infrastructure and initial support towards sustainable post-war reconstruction, through the EUR 18 billion MFA+ package. First two instalments in the value of EUR 4.5 billion have already been made and EUR 1.5 billion monthly payments will follow until the end of the year. In addition, in 2023 as part ofthe announcement of President von der Leyen and Commissioner Varhelyi during the College to Government meeting and the EU-Ukraine Summit in Kyiv in February 2023, EUR 1 billion will be mobilisedfrom the NDICI grants and EIB loans for Ukraine's fast recovery. It will contribute to the priority needs including for example in the area of energy, as well as critical and social infrastructure. The updated RDNA will inform the ongoing discussions with Ukraine on what priority sectors this funding will support.

What assistance has the EU already been providing to Ukraine, since the beginning of the war, to support recovery and reconstruction?

In response to Russia's war of aggression, the EU's economic, humanitarian and military support pledged to Ukraine and the EU Member States supporting Ukraine is around67 billion. It is composed of 50 billion that have been made available by the EU, Member States and the European Financial Institutions as well as 17 billion that have been made available from the EU budget for Members States, which are hosting around 4 million people under temporary protection. The 50 million package includes among other 18 billion macro-financial support package for 2023 (MFA+), accompanied by reforms, to keep the Ukrainian state afloat; 12 billion of military support(3.6 billion via the European Peace Facility and EU Member States bilateral contributions) and an additional 17 billion have been made available to help cater for the needs of Ukrainians forced to flee the war in Member States.

Regardingenergy, the EU is providing vital support to Ukraine's energy sector damaged by Russia's continuous strikes on civilian infrastructure. This includes an additional 2.400 generators on top of 3.000 already delivered; EUR 157,5 million from the Energy Support Fund, as well as a total of 35 million LED light bulbs already contracted (15 million delivered) to help Ukraine significantly reduce energy consumption). Upon the invitation of the EU, Ukraine will take part in the Jointgas purchasing platformof the EU set up in April 2022 to secure gas supplies for the coming winter. In addition, the European and Ukrainian electricity grids have been synchronized in March 2022, allowing for electricity trade. The EU is committed to increase electricity exports to Ukraine to two GW (from 700 MW all hours currently).

EU also supports building back better in line with EU standards and core principles, in order to facilitate progressive integration of Ukraine into the EU single market.

What are the overall principles to guide the recovery and reconstruction process in Ukraine?

The key principles to guide the recovery and reconstruction process in Ukraine as set out by both RDNAs are:

Balancing urgent needs and medium- to long-term goals -strategic prioritization of reconstruction across all sectors and locally driven reconstruction efforts

Differentiated approaches that prioritize impact and needs and that promote decentralization. Investments should reflect the specific needs of communities, oblasts, regions, and stakeholders.

Resilience and building back better for amore sustainable future.Investments should be made to avoid stranded assets and to reduce depletion of natural resources, cut emissions and waste, and protect people and the environment. They should go hand in hand with reforms that will allow Ukraine to support harmonization of its legislation and policies with EU law and to meet European Union standards and theacquis communautaire.

Durable solutions for return of refugees and integration of displaced people, prioritizing their needs for housing, access to basic services, social protection, and livelihoods.These could include housing, access to basic services, social protection, mental health and psychosocial support, livelihoods and business financing and facilitation of return and integration of refugees and IDPs.

Continuous data collectionas it's important to receive feedback and data on damage, loss and impacts of the war as well on ongoing, completed and planned repairs and reconstruction efforts to help identify needs for future years.

These main principles build on and complement the existing principles, outlined in many documents, including the July 2022 Lugano Declaration for the Reconstruction of Ukraine and the Government's Recovery Plan. The first document includes the principle of partnership, reform focus, transparency, accountability, and rule of law; democratic participation; multi-stakeholder engagement; gender equality and inclusion; and sustainability. The latter reflect the need to start now and ramp up gradually; grow prosperity in an equitable way; integrate into the EU and be consistent with and supportive of the accession path; build back better for the future; and enable private investment and entrepreneurship.

Is it possible to start reconstruction while the war is ongoing?

The reconstruction process of Ukraine needs to commence now, to help restarting the country's economy and help the people of Ukraine. It will build on the five priority areas: critical and social infrastructure, energy infrastructure, housing, support to private sector and humanitarian demining.

The EU and other key Ukraine's international partners are already helping to both keep the country running and support Ukrainian economy, while preparing for rebuilding the country. To address Ukraine's most urgent needs, the EU is providing regular and predictable financing under the new macro-financial assistance plus (MFA+) programme.

The EU is also providing emergency and humanitarian support, focusing its economic assistance on rapid rehabilitation and recovery. The main focus is on housing solutions and measures for integration of Internally Displaced Persons, support to the host communities, rehabilitation of some critical infrastructure, including energy, social infrastructure (schools, kindergartens, and hospitals), cybersecurity and media. This fast recovery measures are already being implemented, including in liberated areas. The EU is working with partners such as the G7, international financial institutions and in close coordination with Ukraine itself.

The Multi-agency Donor Coordination Platform for Ukraine launched on 26 January coordinates the support for Ukraine's immediate financing needs and future economic recovery and reconstruction. Its Steering Committee is co-chaired by the European Commission, the United States and Ukraine. The Platform can help channel the effort of supporting Ukraine in addressing its immediate financing needs, including the 2023 priority needs, and those of the future economic recovery and reconstruction, as identified by the WB RDNA in collaboration with Ukraine.

How does Ukraine's reconstruction relate to the EU enlargement process?

Ukraine was granted the status of an EU candidate country in June 2022. This is a recognition of Ukraine's reform efforts over many years. At the same time, as a candidate country, Ukraine needs to pursue further significant reforms on its EU path. This will likely work as an essential leverage for Ukraine to attract support and investments for its reconstruction It will also ensure that investments do not create stranded assets but are converging towards climate, environmental and digital EU policies and standards, which will help Ukraine emerge stronger and more resilient from the devastation of the Russian invasion.

The reconstruction of Ukraine is to be guided and framed by the EU enlargement process. This means investments need to go hand in hand with the reforms supporting Ukraine in pursuing its European path. They should also be implemented in line with the EU rules including rule of law reforms and fight against corruption as well as core standards and principles, based on the European Green Deal and supporting digital transformation.

Scope of the Rapid Damage and Needs Assessment

The first Rapid Damage and Needs Assessment, launched by the World Bank together with the Government of Ukraine and the European Commission was published in September 2022 The It assessed the war damage sustained between February 24, 2022 and June 1, 2022, analysing short, medium and long-term reconstruction and recovery needs of Ukraine and covered the following sectors: social, productive, infrastructure and cross cutting. It was prepared jointly by the Government of Ukraine, the World Bank, the European Commission, and the United Nations and supported by other partners including Kyiv School of Economics, civil society organizations, and the private sector.

RDNA follows a methodology jointly developed by the European Commission, the World Bank and the United Nations based on the globally accepted UN standard Damage and Loss Assessment (DaLA) that is tailored to the war in Ukraine. The (DaLA) methodology was initially developed by the UN Economic Commission for Latin America and the Caribbean in 1972. It was used so far in many countries like Croatia, Bosnia and Herzegovina, Serbia, and Albania. Following this methodology, RDNA 2 quantifies and validates physical damage to infrastructure, buildings as well as losses such as disrupted services and economic impacts, clearance of debris, mines and support to Internally Displaced People. It will also identify and quantify corresponding recovery and reconstruction needs: overall, by sector, and by oblast, based on the damage and losses.

The goals and scope of RDNA2

RDNA 2 was prepared in a similar way and with similar goals in mind to the first RDNA but with a much longer time span as it takes stock of Ukraine's damage and losses borne over one year until 24 February 2023. It assesses the scale of damage, losses and economic and social needs for Ukraine's survival during the war and after. RDNA2 report is divided into following sectors: 1. social including housing, education, health; 2. productive including agriculture, irrigation, commerce and industry; 3.infrastructure - including energy transport, digital and 4. cross-cutting including environment, emergency response, justice and public administration. Complementary to the standard methodology used for the first report and the estimation of short- and long-term needs, this RDNA 2 report also includes priorities for recovery and reconstruction investments for 2023. The RDNA 2 is based on the same set of concepts and their definitions as the first RDNA, namely:

Damagesare defined as direct costs of destroyed or damaged physical assets and infrastructure valued in monetary terms with costs estimated based on replacing or repairing physical assets and infrastructure, considering the replacement price prevailing before the war.

Lossesreflect changes in economic flows resulting from the war; valued in monetary terms, for example increased operating cost or loss of revenue for authorities/private sector.

Needscorrespond with value associated with the resumption of pre - war normality through activities such as repair and restoration, including a surcharge linked to building back better principles (e.g. improved energy efficiency, modernization efforts and sustainability standards), as well as factors such as global inflation and higher insurance. Needs are expressed in monetary value according to market prices prevailing as of February 24, 2023. Needs do not equal the sum of damage and losses.

Comparison of results between RDNA and RDNA 2

The RDNA2 assesses the impact between damage and losses borne over one year until 24th of February 2023. In doing so, it builds on the foundations and analytics provided during RDNA1 which covered a slightly shorter period, namely the period between February 24 and June 1, 2022, which estimated USD 97 billion in direct damage, USD252 billion in losses, and USD 349 billion for Ukraine's recovery and reconstruction needs.

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The launch of the DAO Governance marks a significant milestone in the decentralization of the Arbitrum One and Arbitrum Nova networks, becoming the first EVM rollup technology to achieve Stage 1 decentralization

NEW YORK, March 16, 2023 /PRNewswire/ -- The Arbitrum Foundation today announced the launch of DAO governance for the Arbitrum One and Arbitrum Nova networks, a massive leap forward in the decentralization of the two networks. Alongside the DAO governance structure, The Arbitrum Foundation also announced an upcoming drop of $ARB to users of the Arbitrum ecosystem on Thursday, March 23.

Late last year, Vitalik Buterin proposed a 3 stage schema for decentralizing rollups, and with today's announcement Arbitrum has now become the first EVM rollup ever to achieve Stage 1. The milestone signifies an important achievement for both Arbitrum networks and for the state of Ethereum scaling more broadly.

The $ARB token will facilitate the decentralization of the Arbirum network, and the $ARB airdrop will place the governance token in the hands of the users who are actively participating in the Arbitrum ecosystem. Users can visit gov.arbitrum.foundation and follow the prompts for eligibility details and to claim their share in governance. The majority of the $ARB supply will be under the control of the Arbitrum community via The Arbitrum Foundation, accelerating growth of the ecosystem organically. $ARB token holders will govern The Arbitrum Foundation through the Arbitrum DAO.

Steven Goldfeder, CEO and Co-Founder of Offchain Labscommented: "We are extraordinarily excited for the official launch of The Arbitrum Foundation and DAO governance and to see Arbitrum One become the first EVM rollup to advance to Stage 1 decentralization, a tremendous milestone for both Arbitrum and Ethereum. Through the community airdrop, the delegation process, and the introduction of the Security Council, community participation and control is at the forefront of today's announcement, and the requirements for receiving a share of Arbitrum governance have been crafted meticulously, optimizing for the longevity of the ecosystem and community. Looking ahead, we're moving closer and closer toward a decentralized financial system, with the Arbitrum technology at the very forefront of that.."

To facilitate effective community governance, users will be able to delegate voting power to individuals they view as effective stewards of their values. Delegates will be expected to vote on proposals that pass through the Arbitrum DAO in a way that represents the token-holders who have assigned their voting power to them. The Arbitrum DAO will have the power to control key decisions at the core protocol level, from how the chain's technology is upgraded to how the revenue from the chain can be used to support the ecosystem. Those interested in becoming a delegate are encouraged to visit the governance forum and apply.

Crucially, Arbitrum's governance will be self-executing, meaning that the DAO's votes will directly have the power to effect and execute its on-chain decisions, and not rely on an intermediary to carry out those decisions. Self-executing governance is a critical milestone for decentralization and giving the community the power to govern the chain, and Arbitrum is leading the way as the first L2 to launch self-executing governance.

The Arbitrum Foundation also announced the creation of the Arbitrum Security Council, a 12-member multisig of highly regarded community members designed to ensure the security of the chains and be able to act quickly in the event of a security vulnerability. The decision-making powers of the Security Council are determined by a smart contract that will require multiple secure signatures by its members in order to implement any changes to the protocol. In case of emergency, the Arbitrum Security Council will be able to act quickly but this will require participation from 9 of the 12 members. The Arbitrum DAO will be the ultimate governing body over the Arbitrum Security Council, with elections for the Council being held twice annually.

The introduction further reinforces Arbitrum's focus on decentralization by giving the community the ability to play a more active role in Arbitrum governance and have a say over what occurs within the ecosystem.

Arbitrum is the leading Layer 2 (L2) scaling solution for Ethereum, boasting the highest Total Value Locked (TVL) across all L2 networks with approximately $3.61B, 55% market share across all rollups, and the Arbitrum One network recently surpassed Ethereum daily transactions on two occasions.

For more information, please visit the Arbitrum blog: http://arbitrumfoundation.medium.com/

About Offchain LabsOffchain Labs is a venture-backed and Princeton-founded company that was the initial developers of Arbitrum, a suite of secure scaling solutions for Ethereum. Arbitrum's technologies instantly scale dApps, significantly reducing costs and increasing speed, without sacrificing Ethereum's security. Porting contracts to Arbitrum requires no code changes or downloads as Arbitrum is fully EVM compatible. Offchain Labs also maintains Prsym, the leading Ethereum consensus client.

About The Arbitrum FoundationThe Arbitrum Foundation has a mission to help support and grow the Arbitrum network and its community while remaining at the forefront of blockchain adoption. The Foundation oversees the $ARB token and governance structure as well as the Arbitrum Security Council, a 12-member multisig of well regarded community members designed to ensure the security of the chains.

Media contact: Dillon Arace, [emailprotected]

SOURCE Arbitrum Foundation

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If there is a social media phenomenon getting some kind of popularity, Meta will try to jump in. We have seen the company copy different kinds of formats ranging from Stories to short videos after seeing the success of other platforms. Now, the Mark Zuckerberg-led company is working on a decentralized text-based app.

Meta confirmed this development in a statement but didnt give out details about when it plans to release the app.

Were exploring a standalone decentralized social network for sharing text updates. We believe theres an opportunity for a separate space where creators and public figures can share timely updates about their interests, a Meta spokesperson said.

This new decentralized app, codenamed P92, is still under development as first reported by MoneyControl. According to the documents seen by the publication, the app will let users log-in through their Instagram credentials. This could irk people who might not want to share that data with another Meta app.

A report by Platformer said that the project will be overseen by Instagram head Adam Mosseri. The company is already involving the legal department to sniff out early privacy concerns before the app is public, the report added.

Metas move is seen as its attempt to build a Twitter alternative or a Mastodon competitor. The latter gained popularity after Elon Musk took over Twitter. The decentralized network is part of the Fediverse a network of decentralized servers that supports the ActivityPub protocol. Metas new app also plans to support ActivityPub, making it easier to connect with other instances like Mastodon, according to MoneyControl.

There are plenty of other tools that have implemented (or are planning to implement) ActivityPub support, including Tumblr, Flipboard and Flickr.

But decentralization is not limited to this protocol. Jack Dorsey-backed Bluesky launched its iOS app in beta last week. And messaging apps like Rocket.chat have embraced the Matrix protocol.

However, former Twitter engineer Blaine Cook told TechCrunch last year that the existence of competing protocols is a good thing.

I think the diversity of protocol is important, as is the diversity of the applications built on top of the protocols. That said, I strongly believe that interoperability between ActivityPub and Bluesky wont be difficult. The only thing preventing, for example, interoperability between Twitter and Facebooks timeline has been protectionist policies by those companies, he noted.

Its important to remember that Meta has tried making new apps and experiences that havent always taken off. In the past few years, it has killed experiments like the anonymous teen app tbh, Cameo-like app Super, Nextdoor clone Neighborhoods, couples app Tuned, student-focused social network Campus, video speed dating service Sparked and TikTok clone Lasso, just to name a few. So it wont be surprising if the new decentralized experience shuts down in a couple of years after the launch.

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Meta is working on a decentralized social app - TechCrunch

Made famous by her love of innovation, Cathie Wood's Ark Invest is naturally a fan of Bitcoin (BTC 1.16%). Every month a team of Ark analysts explore statistics on the Bitcoin blockchain and other economic trends in an effort to gauge Bitcoin's overall position in the market and where it might be headed.

This month's report looked back on February. It was full of valuable information for investors and highlighted why Bitcoin will likely remain at the top of the cryptocurrency asset class for years to come.

Despite retreating more than 14% at the beginning of March, likely due to uncertainty in the crypto landscape as talks of regulation heated up and more crypto-related businesses went bankrupt, Bitcoin has actually had a great start to 2023. Since the beginning of the year, Bitcoin is up nearly 50% and looks to be the most resilient as it is one of the most resistant and resilient to regulation. This comes from a combination of its vast decentralization and high levels of security.

After a successful January, its price climbed further in February thanks to a new technology called Ordinals, which was introduced to make the Bitcoin blockchain non-fungible token (NFT) compatible. Before Ordinals, only blockchains with smart contracts could host NFTs.

With the introduction of Ordinals, the average block size of Bitcoin hit a new all-time high. Ark analysts believe this is a bullish sign as they view the limited space in each block as being similar to real estate. The less block size available, the more valuable the space becomes as demand increases.

Although still in their infancy, Ordinals could prove to add even more pressure to block space demand. While the launch of Ordinals and a stellar February were a bit of good news for Bitcoin, it seemed to be short-lived.

While there is reason to be optimistic about Bitcoin's future, Ark believes there are two unknown factors that could dampen growth -- looming regulation and an uncertain macroenvironment.

As a result of multiple catastrophes in 2022, politicians and legislators seem to be turning up the heat in the regulatory environment. Just three months into the year, there have been multiple examples of fines and penalties being levied against crypto-related businesses by the Securities Exchange Commission (SEC).

This is likely due to SEC Chairman Gary Gensler's beliefs that a majority of cryptocurrencies are actually securities and therefore fall within reach of the commission's jurisdiction.

To start off 2023, the SEC has already announced a settlement with the cryptocurrency exchange platform Kraken to suspend its staking product. The agency also sent a warning to the stablecoin issuer Paxos, which stated that its products also met the criteria of a security and to cease its offering.

Ark believes that these efforts by the SEC and other government agencies will only pick up in 2023 and could prove to be detrimental for the majority of cryptocurrencies.

However, it also believes that Bitcoin is different from other cryptocurrencies due to its high levels of decentralization. This opinion has been reaffirmed as chairman Gensler is on record saying multiple times that he considers Bitcoin a commodity and, therefore, outside of his commission's control.

Adding to potential regulation, Ark views the current macroeconomic environment as being less than ideal for more-risky assets like Bitcoin to grow. Analysts pointed to a handful of metrics like the monetary velocity, trends in consumer spending, and patterns in the 10-year Treasury yield as a reason to believe that not only will riskier assets continue to struggle but that a recession might even be looming.

While it remains unknown as to whether our worst fears come to be, Ark analysts painted a clear picture that in the current economic and regulatory landscape, Bitcoin is the safest option for those looking to invest in cryptocurrency. It reiterated this stance with a variety of supporting statistics, such as mining difficulty and the long-term holder supply, which show that even in the depths of a bear market, Bitcoin's blockchain is still relatively healthy.

As the future remains unclear, Bitcoin offers crypto investors a refreshing sense of hope that no matter what happens, it can still continue on its path of price appreciation.

RJ Fulton has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

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On March 10, after days of uncertainty spurred on by $1.8 billion in surprise bond losses, Silicon Valley Bank (SVB) collapsed, sending a tidal waves worth of ripple effects throughout the financial industry. The event quickly prompted the U.S. Treasury, Federal Reserve, and the FDIC to step in to effectively circumvent catastrophe and assure depositors of access to all of their funds, whether insured or not.

While the situation is still developing, the seeming fiasco has left those in traditional finance to shudder in remembrance of the 2008 financial crisis. Yet, the context of the collapse that SVB was a significantly popular choice for venture capitalists and tech startups has urged more contemporary investors (like those in Web3) to remark about the potential of decentralization in eschewing central bank issues.

But even so, in the days since the debacle, its become clear that the NFT space mightve actually dodged a bullet itself with help from regulators. Because while Web3 staunchly purports to be decentralized, some of the most prominent players seemingly only narrowly escaped being caught up in the debacle.

How did the 16th largest bank in the United States become the second-biggest bank failure in U.S. history? To summarize, the collapse came down to two major factors.

The first is that, within the last year, the Federal Reserve has raised the Federal funds rate by nearly five percentage points in an attempt to tame inflation. These higher interest rates significantly chipped away at the value of long-term bonds that SVB and many other banks took on previously when interest rates were next to nothing.

The second factor concerns the quick and broad decline in tech revenue and venture capital experienced within the U.S. In response to the wane, startups had opted to withdraw funds held in SVB, meaning that the bank was facing significant unrealized losses in bonds while simultaneously, customer withdrawals were escalating. This, in turn, caused a run on the bank where customers panicked and all attempted to withdraw their money at once.

Only two days after the SVB closure, the Department of the Treasury, Federal Reserve, and FDIC released a joint statement saying that depositors will have access to all of their money starting Monday, March 13, and that no losses associated with the resolution of SVB would come from taxpayer dollars.

The statement also mentioned that regulators took these unusual steps because SVB presented a significant risk for the U.S. economy. While regulators continue to look for a buyer for SVB and the uncertainty for what comes next is mounting, HSBC has acquired SVB UK for a symbolic 1.

Outside the traditional finance world, those in the blockchain industry are doing their best to understand how the situation might have, and could still, affect their stomping grounds.

Not to be confused with the fall of FTX, this latest three-letter acronymous fiasco had a significantly less detrimental effect on the NFT space than the aforementioned failed crypto exchange. Thanks to the actions of the Federal Reserve and FDIC, the many accounts housed under SVB which included consumer accounts as well as those of high-profile companies like Roblox, Buzzfeed, Etsy, and more were made whole as of March 13.

But the fact remains that the SVB collapse couldve very significantly affected the blockchain industry. Because apart from crypto companies like Avalanche, BlockFi, Ripple, Pantera, and others that had funds locked up in the SVB debacle, numerous NFT adjacent entities wouldve been in for a world of hurt as well. Here are a few examples.

One of the most immediate and impactful concerns arose from the untethering of the USDC stablecoin. USDC lost its 1/1 peg to the U.S. dollar only hours after SVB was closed, and Circles $3.3 billion cash reserves (about eight percent of the funds backing USDC) went into limbo. Although the situation has since been rectified, USDC has yet to return to the $1 peg as Signature Bank (another institution critical to USDC holdings) was seized in the wake of a similar bank run.

The Proof Collective which has grown increasingly in popularity over the past few years thanks to the success of projects like Moonbirds,Oddities,and Grails became an immediate concern for the NFT community in the aftermath of the SVB news. Addressing the Proof community via Twitter, the project team confirmed that Proof held cash in SVB, although they didnt state how much. Further, they noted that they had diversified assets across ETH, stablecoins, and fiat.

When word first came down about SVB, many also looked to the popular PFP project Azuki (helmed by ex-big tech entrepreneur Zagabond) to see if it was affected. Yet, Zagabond quickly dispelled worry, stating to the projects thousands of Discord members that SVB was only one of their many banking partners and that the bank held less than five percent of project funds.

NFT community members also quickly voiced concern for Yuga Labs following SVBs closure. Yet, similar to Azuki, the brand made it clear that the fiasco wouldnt affect their business or plan in any way. Yuga founder Greg Solano announced via Discord that the company had super limited financial exposure to the situation.

Memeland, the Web3 venture studio created by Hong Kong-based meme-centric entertainment website 9GAG, was similarly minimally affected by the SVB collapse. Taking to Twitter, Ray Chan, CEO and Co-founder of 9GAG, shared that Memeland had only around $40,000 held in the bank, with no plans of withdrawing. He went on to voice his lack of concern about the fiasco as well, stating, when SVB falls down as quickly as FTX did, crypto and NFT dont look so risky at all.

Its no stretch to say that the implications of the SVB closure mightve been significantly worse had regulators not stepped in to guarantee deposits. Even considering the minimal exposure that most major NFT players had to the bank, Web3 wouldve surely felt ripples from the Circle situation alone, as USDC is a highly popular stablecoin to those in the NFT space.

Yet, a few key takeaways have emerged in response to the near-catastrophic experience. The most prominent of which has everything to do with the already widely held Web3 ethos: decentralization. Of course, this goes far beyond advocating for decentralization and keeping funds out of the central banking system (as many already do). Because the major lesson learned from the SVB fiasco is that to mitigate crypto and NFT risk, users should absolutely not keep all their assets in one place.

Surely, NFT-native users will have heard this warning time and time again. Aside from following the best practices in Web3 security, locking up assets for safekeeping or even simply spreading assets throughout multiple secure wallets and accounts could help mitigate risk significantly.

So goes the adage: Dont put all your eggs in one basket.

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A Web3 Cautionary Tale: The Biggest NFT Brands Had Funds in SVB - nft now