BlockByBlock | MENA P.E. Deals Cross $14 Billion In 2022
Local Developments
Blockchain Movements In The GCC 👇
Private equity investors pile over $14 billion into a record 64 Middle East-based buyouts in a steady rebound since the pandemic-induced trough in 2020.
The Dubai Multi Commodities Center (DMCC), an award-winning free zone, launches the DMCC Gaming Center, which will incorporate Web3 and Metaverse projects.
Mag Group, a real estate developer in Dubai, signs an agreement with CoinMENA to facilitate real estate transactions using cryptocurrencies.
“So far this year, investors have piled over $14bn into a record 64 buyouts in the Middle East. The deal value year-to-date would mark an all-time high if not for Aramco's $25.6bn IPO in 2019," says Caroline Rolle of PREQIN.
Thoughts From A Crypto Unicorn
About The Interviewee 👨💼:
A couple of months ago, we spoke to Jamie Thomson, CEO of Vulcan Forged to get his insights on blockchain’s evolution and his experience raising funds and developing partnerships in the GCC.
Vulcan Forged is an established NFT game studio, marketplace, and dApp incubator with 10+ games, a 100,000+ user community and top 5 NFT marketplace volume.
A Crypto Conversation🗣️:
Q1: What are your thoughts on blockchain’s evolution and its role in the future of gaming?
A1: I think the jury’s still out on this one. I’m undecided on whether play-to-earn has a future in its current state or if it’s sustainable. I believe its very hard to combine the notion of earning money and having fun. Gamers don’t seem to want the idea of NFTs, and those playing to earn don’t seem to care about the quality of gameplay, so it’s hard to square that circle.
Q2: Can you talk about any key partnerships developed from your visit to the GCC region?
A2: The best partnerships were meeting like-minded companies and individuals, allowing us to collaborate with them and use our influence in the metaverse space to offer them strategic partnerships and in turn giving our own blockchain and brand value. We also met many individuals connected to exchanges, VCs and other strategic positions, which are always available to us.
Q3: Vulcan Forged attended AgoraGroup’s Global Blockchain Congress, how did you feel the project was received by local investors?
A3: The event was held incredibly professionally and we were given all opportunities needed to take Vulcan Forged to the next level. A good 40% of the people we met we’re still in contact with.
“What I do believe is that ownership of items is certainly something that will continue to evolve in popularity. There’s an emotional attachment created between a user and an asset when they know they own it, and this can be capitalized on by companies that understand sustainable economies and how to utilize them,” Jamie Thomson, CEO of Vulcan Forged.
Key Industry Development
Concerns Over Binance's Liquidity Rise As the Exchange's Auditor Suddenly Turns "Offline." 😲
Following FTX's "bank run," the crypto community has become increasingly wary of liquidity issues at central exchanges.
The "Proof of Reserves" movement has risen to address this liquidity concern. It dictates that central exchanges undergo audits of their assets and liabilities by independent organizations. Binance was one of the first exchanges to accept and adopt this change.
On Nov. 25th, Binance released its Proof of Reserves System, which showed the exchange had a 1:1 ratio of on-chain reserves to customer net balance in Bitcoin. On Dec. 16, concerns about Binance's liquidity began to fester after news that Mazars Group, its auditing firm, went 'offline.' Around the same time, another auditor, Armanino, ended its crypto auditing services.
John Reed Stark, former chief of the Securities Exchange Commission of Internet Enforcement, claimed in a tweet:
Binance’s “proof of reserve” report doesn’t address effectiveness of internal financial controls, doesn’t express an opinion or assurance conclusion and doesn’t vouch for the numbers. I worked at SEC Enforcement for 18+ yrs. This is how I define red flag.
On the other hand, a quantitative trading firm CryptoQuant lent aid to Binance's Proof of Reserves report, claiming that the data Binance supplied about its liabilities “makes sense" and mirrors their own findings.
While it's suspicious that Binance's auditor would quickly switch 'offline,' experts have criticized claims that this switch caused the slump in Bitcoin last week. Specifically, they claim that critical macroeconomic news also coincided with the incident, and the tape could simply be reflecting that.
As of this writing, the only centralized exchange with externally-audited, publicly-listed assets and liabilities is Coinbase. Coinbase trades on the NASDAQ Capital Market and is required by law to post its balance sheet on a quarterly basis; it's audited by Deloitte.
Startup Action
Updates From The Startup Ecosystem 💸
MorningStar Ventures, a recently-established UAE-based fund, invests $5 million in local NFT art gallery '37xDubai.
Educatly, a Cairo-based eductech startup, begins using blockchain to verify records for its community of 500,000 students.
Green Data City, a project with the first license for sustainable crypto-mining in Oman, launches a crypto mining center.
Blockchain Trends
Global Trends 📉
Two prominent auditors suddenly pause their crypto auditing services shortly after the "proof of reserves" movement launches.
A Donald Trump NFT collection reaches $1.08 million in trading volume and doubles in price.
The Polkastarter Gaming GAM3 Awards 2022 crowns Big Time as Web3 Game of the Year.
Sam Bankman-Fried faces 115 years in prison if convicted of the 11 accounts of fraud he is accused of.
Local Trends 📈
A report by Wamda finds MENA startups raised $439 million across 39 deals in November, a 32% month-on-month decline.
Upcoming Events
Events By AgoraGroup 🔴
AgoraGroup will host the Global Blockchain Congress (11th Edition) on March 6th and 7th in Dubai, the UAE.
Events Across The UAE 🔵
The Future Blockchain Summit will be hosted between May 10th and May 12th in Dubai, the UAE.
Crypto Expo Dubai will be hosted on March 8th and 9th in Dubai, the UAE.