Bad News From Meta’s Metaverse

GM, everyone. BitDegree Insider here, it's time for our daily web3 routine.

Today's attention goes to:

• Latest Interest Rate Hike
• Meta's Metaverse Losses
• Google Crypto Ad Revenue Drop
• Ethereum Censorship Problem
• Selected Meme of The Day
• Bite-Sized News

Latest Interest Rate Hike

Everyone's into hiking these days. Unfortunately, Central Banks are among the enthusiasts.

The European Central Bank (ECB) has just announced that they're hiking the interest rates by 75 basis points.

This means that the current interest rates are 1.5%. Numbers like these have not been seen in the Euro zone since 2009.

"The Governing Council took today's decision, and expects to raise interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target", communicated the ECB.Reminder: Euro zone's inflation rate was 9.9% this September. So today's interest rate hike was inevitable.

This puts further pressure on the already-exhausted market.

There's a reason why October, usually dubbed 'Pumptober', has been ironically renamed into 'Pumpsover' by worn-out traders.

TL;DR: ECB hikes interest rates by 75 basis points.

Meta's Metaverse Losses

Metaverse may not be the real world, but it surely creates some real-world problems. At least for the Meta metaverse's developers.

It's been revealed that Reality Labs (the Meta's department responsible for the metaverse's creation) lost over $3.6 billion in the third quarter of 2022. That's roughly a billion per month.

And it's not the first time Meta reveals negative numbers coming from their metaverse. Year-to-date losses are over $9.4 billion.

Meta stocks fell by 20% as a response to the news.

The Meta's financial gains remain metaphysical, but Meta CEO Mark Zuckerberg remains hopeful and optimistic:

"While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth", he said.

Meanwhile, not everyone's buying the metaverse hype. Xbox CEO Phil Spencer has just grabbed the spotlight by saying that metaverse is just like a 'poorly built videogame'.

Well… We've seen the graphics of the Zuck's metaverse. Xbox boss has a point. At least for now.

TL;DR: Meta releases update about metaverse's financial situation. They've lost $3.6 billion in the third quarter of 2022.

Google Feels the Bear Market

Ad revenue for Google is like air for an air balloon. It's what makes it work.

And these ads can be split into categories. One of them is crypto ads.

Alphabet, Google's parent company, has revealed that revenue from Google advertising in the third quarter was down.

Well, not surprisingly. The bear market is here, and the longer it stays (hibernates), the more exhausted, and worn-out traders become.

Apart from the bear market, there are other factors that may have contributed to the lower numbers.

In July 2022, Google updated the rules and requirements for crypto-related businesses and products.

Now crypto advertisers from France, Germany, South Korea, the Philippines, the UAE, Hong Kong and Thailand must meet local jurisdiction requirements before setting up Google ads.

TL;DR: Google's revenue from crypto-related ads fell. This illustrates the industry's response to the bear market.

Ethereum Censorship Problem

OFAC stands for the U.S. Office of Foreign Assets Control. And we're about to hear this abbreviation more and more together with 'Ethereum'.

Because there's something going on. Critics call it a 'censorship problem'.

This August, shortly before Ethereum's Merge, rumours started spreading. People were whispering to each other that after the Merge, Ethereum could be influenced by OFAC.

At the end of September, this turned out to be true. By then, half of the validators had already complied with the OFAC requirements (we already covered this here)

It's just been reported that OFAC already exercises influence over 63% of the network's blocks.

What's going on?

Three letters. MEV. Maximum Extracted Value.

MEVs allow validators to increase the rewards for processing blocks by shuffling transactions. The undisputed leader among them is MEV Flashbots, whose share is 49%.

The problem with this is simple. OFAC has a blacklist of sanctioned addresses. If a transaction occurs and it includes an OFAC-sanctioned address… It gets censored.

External grip on an entire blockchain. This is a technical problem which implies political nuances, such as the basic idea of decentralization and government's influence over crypto.

The problem may escalate. If the entire network gets taken over by OFAC… Ethereum will have a bad time.

TL;DR: Ehereum faces a new challenge. Censorship. The U.S. Office of Foreign Assets Control (OFAC) gains more and more control over what transactions on Ethereum they can censor.

That's it for today, folks. But before we part our ways. Here's a question for you:

Selected Meme of The Day

Bite-Sized News

• Singapore's MAS Proposes New Crypto Rules to Protect Investors. More regulation, more oversight... Coming from one of the vibrant crypto hubs in the world.
• Binance Rolls Out Oracle Network for Its BNB Chain Ecosystem. CZ doesn't sleep on any new opps to step their game up.
• Blockchain.com Introduces Visa Debit Card with 1% Crypto Cash Back. 'Global adoption' starts with banks realising that the rules have changed.
• Q9 Capital Receives Provisional Approval From Dubai's VARA. FIY: VARA stands for 'Virtual Assets Regulatory Authority'.
• myNFT to Bring NFT Vending Machine to NFT.London Conference. 'I'll take uhmm... a Snickers, a can of coke, and a... Bored Ape #9842'.