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What is MiCA and what does the European regulation mean for crypto?

micar regulation explained

What is MiCAR, and what is the Eurozone market’s crypto regulation? Read the complete guide.

What is the MiCAR regulation, and what does it provide for? A more than legitimate question after the European Parliament approved in June 2023 the document that will regulate the cryptocurrency market in the Eurozone, published in the Official Journal of the European Union, and which will gradually come into effect during 2024.

This document is known by the acronym MiCAR or MiCA, which stands for Markets in Crypto-Assets and is the first EU regulation governing the cryptocurrency sector.

This regulation package aims to ensure investor protection through transparency obligations, requirements to operate, and prevention of abuse and to bring systemic order to the crypto asset sector. 

Let’s see what it establishes and how it changes the crypto landscape. 

From ICOs to MiCAR

The regulation of MiCAR was inspired by the phenomenon of crypto public offerings activities in 2017, better known as Initial Coin Offerings (ICOs). These have particularly attracted the attention of national and European lawmakers and regulators. 

The announcement in 2019 of the development of Libra, Facebook’s stablecoin, prompted states to approve regulation on this type of cryptocurrency quickly. Libra would have allowed the transfer of a private currency to billions of users within the closed circuit of the blockchain. 

The opportunities provided by MiCAR

The basic idea is that crypto assets have the potential to become efficient means of raising capital for small and medium-sized enterprises and, due to their inherently transnational nature, to offer themselves as instruments for new payment services while maintaining the European Union as a pole of 

Ensuring a unified regulatory framework would lead Europe to strengthen its industrial and innovation capacity within safe and ethical limits. Indeed, this Euro-unified regulation is unique worldwide and can turn Europe into the first ‘continental’ single market for new assets, securing it a leading position vis-à-vis other jurisdictions, including the United States. 

The current regulatory environment of cryptocurrencies

The European regulatory situation on crypto is highly fragmented and evolving. Each country has adopted its laws, making regulatory harmonisation difficult. France, for instance, has regulations for ICOs (Initial Coin Offerings), whereas Germany classified crypto as a digital currency and subjected it to specific taxation some time ago. Italy has also introduced the taxation of cryptocurrencies within the Budget Law for 2023.

The starting point: what is a cryptocurrency?

The EU’s first attempt was to search for a term and definition encompassing most types of cryptocurrencies and related activities. 

Hence, the term ‘crypto-asset’, defined as ”’a digital representation of a value or right that can be transferred and stored electronically, using a distributed ledger or similar technology”, was introduced.  

MiCAR: what it provides for crypto projects

The MiCAR addresses both crypto-asset issuers and crypto-asset service providers (CASPs). 

From now on, crypto-asset issuers can operate with prior authorisation. They must comply with various requirements, including transparency requirements and publishing a “white paper” detailing the rights and risks associated with the issued asset. Specific categories of crypto-assets must also comply with specific reserve, governance and price stabilisation requirements.

The whitepaper will thus provide transparency on aspects such as system architecture, security mechanisms, governance strategies and the intended use of the technology, thus facilitating investors’ understanding of the project. 

Additionally, CASPs (Crypto-Asset Service Providers) will need to register with national authorities and adhere to strict standards to protect their users.

MiCAR: what it provides for exchanges

The MiCAR stipulates that all companies providing crypto-asset-related services, such as custody, exchange, advisory, and others, must register with national regulators and adhere to strict organisational, operational, and business conduct standards. These standards include protecting clients’ assets, preventing conflicts of interest, and ensuring market transparency. The new framework also holds CASPs directly liable in case of bugs, exploits or insolvency. This will ensure that users are compensated if part of the platforms’ capital is lost. Furthermore, CASPs must keep a history of all transactions processed on their platform for at least five years.

MiCA: Combating Money Laundering Regarding anti-money laundering, the monitoring and enforcement of current regulations will be entrusted to the EBA (European Banking Authority). The entity will also maintain a register of companies that will be prohibited from engaging in CASP activities in the EU, which it will use to restrict the entry of organisations considered to be at “high risk” of money laundering into the market. Additionally, all companies dealing with Proof-of-Work crypto-assets must regularly submit documents attesting to their environmental impact. MiCA does not ban PoW cryptocurrencies but limits their spread by cutting public incentives directed towards this type of technology.

Crypto-assets as Financial Instruments While issuers must comply with MiCA directives concerning all crypto-assets that are not considered financial instruments, service providers must apply them regardless of the nature, value, or right that the crypto-asset incorporates.

The distinction between crypto-assets that can be considered financial instruments and those that cannot is a fundamental component of the entire regulatory framework. MiCA seeks to address all use cases of crypto-assets that were not previously covered by historical regulations, such as MiFID, which regulates crypto-assets akin to financial instruments, and PSD for those akin to electronic money and deposits.

Drawing on the principles of existing regulations, MiCA represents a new and complementary regulatory body which seeks to adapt to the peculiarities of the crypto sector.

New Legal Categorisation of Crypto-assets The first step was defining three categories of crypto-assets that, as mentioned, are not akin to financial instruments:

  • Electronic Money Tokens (EMT)
  • Asset-Referenced Tokens (ART)
  • “Residual” Tokens

The classification of tokens is still evolving and will, therefore, require further clarification from the relevant Authorities.

Let’s see the definitions of the three categories of tokens.

E-money tokens

Electronic money tokens (indicated by the acronym EMT) include all those tokens that refer to the value of a single legal tender fiat currency, such as the euro or the dollar. The difference with ‘asset-linked tokens’ is right here: they link to the value of a single fiat currency.  

This category would include many stablecoins, such as Tether, cryptocurrencies designed to maintain a stable value through a ‘pegging’ system to a trusted currency in a 1:1 ratio. The anchoring, whereby, for example, one unit of stablecoin always corresponds to 1 dollar, is ensured through currency reserves or algorithms. 

With the MiCAR, issuers and EMT providers will mainly have to comply with these obligations:

  • The European Banking Authority (EBA) will supervise and regulate all EMTs.
  • EMT issuers will need an ‘e-money licence’, similar to a standard bank licence, but with strict limits that do not imply the possibility to operate as a credit institution.   

Asset-referenced tokens

The second category, asset-referenced tokens (denoted by the abbreviation ART), include those tokens that are not EMTs and “aim to stabilise their value by reference to another value or right, or a combination thereof, including one or more official currencies.”

An example is Pax Gold, whose acronym is PAXG, an attempt to combine the advantages of gold and blockchain. This stablecoin reproduces 1:1 the value of gold, the precious metal of which its reserves are also composed. Pax Gold is issued by Paxos Trust Company. Thanks to this stablecoin on the blockchain, even small and fractional amounts of gold can be purchased.

With the MiCA, issuers and providers of ART will be subject to additional obligations, such as:

  • Unless deemed ‘significant’, all ARTs will be supervised by the European Securities and Markets Authority (ESMA). They are significant when they exceed certain thresholds, such as a market capitalisation of more than 5 billion. In this case, the EBA will take over. 
  • Only token issuers with a registered office in the EU can issue ARTs.  
  • ARTs not pegged to a European currency will be controlled to preserve the EU’s monetary integrity.   

The interpretive debate on EMT and ART

The debate on the definition of ART is particularly heated. It seems to extend to all stablecoins, thus constituting a broad set that includes the more specific one of EMT. However, for some, the interests and rights associated with ART are not easily compatible with those of EMT. 

Regardless of first impressions, it is clear that these definitions remain too limited to cover the various facets of stablecoins fully. A regulation that truly reflects the sector’s technological and legal characteristics will require true collaboration between the cryptocurrency world and the regulatory authorities, not a cramped ‘copy cut’ of the old regulations for the crypto market.

Residual tokens

The third category, the ‘neither meat nor fish’ category, includes all ‘residual’ tokens. This general category also includes utility tokens and all crypto-assets that do not qualify as ART or EMT—that is, those that do not peg their value to a fiat currency or basket of assets. 

Utility tokens provide digital access to a specific product or service. The MiCAR rules require transparency here but are less restrictive than those for EMTs and ARTs.

Companies issuing this type of token must create a White Paper, which must be published on the website of the organisation issuing the cryptocurrency.

This document should contain all fundamental information about the token, such as a detailed project description, how crypto is issued and sold, and the technologies on which it is based.

The case of Bitcoin

Although bitcoin (BTC) falls under ‘residual tokens’ in terms of categorisation, the exclusion from the Regulation is clarified in the Considerando. Here, it is said that the rule does not apply when a crypto asset is automatically created as a reward for blockchain maintenance or transaction validation. 

This regulatory approach demonstrates the choice to exclude blockchain technology’s most innovative and dynamic aspects. The division into three categories, while including a residual open category, excludes many crypto assets, effectively ignoring Bitcoin.

It is almost as if placing it in limbo, neither currency nor financial instrument, is the best way to make it as harmless as possible. This is if it is true that every good or bad law ends up being perceived positively because its mere existence can incentivise investment and a certain trust in the entire ecosystem. 

The fact remains that we continue to ignore the elephant in the room. Bitcoin is the most popular crypto asset by far, the number one by market capitalisation, with a dominance (Bitcoin’s valuation relative to the overall cryptocurrency market valuation) of over 50%. In addition, almost all of the market players for which MiCAR is intended offer related services. Bitcoin is unique in its decentralised governance characteristics, against which the regulator’s ambitions of control continue to clash without finding a solution. 

DeFi, the great absentee 

DeFi is also outside the MiCAR framework.

DeFi is an issue, changing every criterion for imputing liability in decentralisation. Therefore, it is putting regulators worldwide in a quandary, uncertain how and whether creating an ad hoc rule makes sense.

It is also surprising that credit markets in crypto assets have been excluded from regulation, considering their reputation as one of the most risky areas for consumers, especially regarding the relationship between service providers and consumers. 

MiCAR focuses on the risks associated with centralised platforms, whereas lending and staking crypto assets are more common on decentralised platforms. Although these activities often imply a certain centralisation of processes, raising doubts about whether decentralisation is truly decentralised and whether responsible parties can be identified, this does not seem to lead to a balanced supervisory framework.

NFTs are also missing

The exclusion of NFTs (Non-Fungible Tokens) from regulation is based on their distinctive characteristics. Unlike other crypto-assets, NFTs are unique and not easily interchangeable, which makes it difficult to determine their value through direct comparisons with other markets or equivalent assets. 

Their uniqueness significantly reduces their use in the financial sector and the associated risks for the financial and monetary system (fiat). Consequently, the legislator decided to exclude them from the scope of certain regulations. 

This does not imply that NFTs cannot be classified as financial instruments in the future. The discussion on NFTs is ongoing, and further guidelines on their classification and regulation may emerge.

Exchange wallets and private wallets: what changes with MiCAR?

Also, European laws aim to protect users when regulating crypto wallets. P2P payments between private individuals via cryptocurrencies have not been affected.

Finally, MiCAR also deals with the impact of crypto influencers, those who express personal opinions on certain cryptocurrencies by recommending them to their followers on social networks. The bill penalises those who do not behave transparently, expressing opinions on a particular asset without disclosing their exposure.

Industry opinion: pro-MiCAR

Crypto enthusiasts have known about the MiCAR and its provisions for several months. In fact, the first draft of the document was drafted in 2020, so they have had plenty of time to understand this regulation. 

According to some experts, MiCAR is positively impacting the industry. The new framework’s consumer protection makes the crypto world more accessible. In addition, the new rules prevent suspicious or questionable companies from entering the European market, reducing the risk of scams or rug pulls. According to Dante Disparte, Circle’s Head of Global Policy, the laws will transform the European Union into a competitive and innovative crypto terrain.

Looking at the confusing and penalising regulatory situation in the US, MiCAR has become an example of how clear rules can attract developers and new projects. In Europe, investments in crypto projects are becoming the most numerous in the world.

Industry opinion: against MiCAR

On the other hand, critics think these new European laws could negatively affect the market. This is mainly because some transactions that, as of today, are carried out immediately, such as transactions between exchange wallets and withdrawals of large amounts of crypto, could become complicated. Critics, therefore, believe this will slow the adoption of cryptocurrencies.

In general, however, the opinions of members of the crypto community who have long known what MiCAR regulation is and what it provides are positive. After all, most of the pioneers in the field (such as Charles Hoskinson and Andre Cronje) have always favoured cryptocurrency regulation.  

You are on the blog of Young Platform, the Italian platform for buying cryptocurrencies. Here you can find the latest news on blockchain, Bitcoin and Web3. We look closer at this emerging economy with an eye on traditional finance so you have everything you need to enter the new age of money.

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Want to buy Bitcoin? Recurring purchasing is the way

Buying Bitcoin with recurring purchases: why it pays off

Why you should consider buying Bitcoin regularly explained in 3 charts

Buying Bitcoin through recurring purchases is cheaper than spot buying by constantly looking for the perfect moment to enter the market (spoiler: it does not exist). We’re going to show you this with three charts: you’ll see that the drawdown is lower, as is the volatility and average price. Recurring purchasing is the most effective strategy to set aside Bitcoin regularly and automatically and you can set it up in your Moneybox. 

We ran a simulation based on historical market data on the price of BTC, and imagined a recurring purchase of €50 in Bitcoin per week from January 2020 to March 2023. Here are our results. 

A positive performance for 80% of the period 

Maybe you have some regrets about 2020 spent on the couch in your pyjamas… Today we add to the list not having set up a recurring purchase on the Moneybox. If you had decided to spend €50 per week to buy Bitcoin automatically now your situation would be as described by this chart. 

Chart Bitcoin Value with recurring purchase

Here you can see the value your wallet would have had in March 2023. The yellow line indicates the total amount spent to buy BTC, the green line is the value of your holdings (+22.5%). The moneybox represented by the graph was in the positive for 86.2% of the time considered. With the best performance at +71.43 and the worst at -30.77%. 

Wouldn’t it have been cheaper to buy Bitcoin at its lows instead of at any time? If you have this doubt, read the results of this research which shows that there is actually no such thing as the ‘perfect moment’. Predicting market movements is not for everyone, recurring buying removes this difficulty and still leads to good results. 

Even in a bear market the losses are smaller

In this second graph, the blue line shows the price of BTC from March 2022 to March 2023, the green line the percentage return (profit and loss) of the holder that chose to buy Bitcoin with recurring purchases. 

Chart Bitcoin performance with recurring purchase

According to the analysed data, the drawdown, i.e. the maximum loss that can occur in a time interval, is smaller compared to that of a single purchase. In the period considered, from the beginning of March last year with BTC at $45,000 to March 2023, there would have been a maximum drawdown of 20% compared to the -64% recorded by the price of Bitcoin. In short, the recurring buyer would be in profit by 16% after one year. 

The savings are obvious

In these times of inflation, saving money is becoming a mission for most people. If you are looking for a way to buy Bitcoin while optimising your spending, recurring purchasing is again an option you might consider. Let’s look at the third chart. 

Chart Bitcoin's average price with recurring purchase

The blue line shows the price of BTC from January 2020 to January 2023, while the red line shows the average price paid to buy Bitcoin with recurring purchases. Considering that the cryptocurrency has a bullish trend over large time intervals, the result is that with recurring purchases over the long term, you can get a very good average purchase price compared to the market value. In January 2022 buying spot would have been around $5,000, with recurring buying instead less than $2,000. This is not because there are different prices in the same period, but because the price of the recurring purchase averages out all levels by also including purchases made when the cryptocurrency was at its lowest. 

Again you may ask yourself if buying at lows is not the best thing to do, theoretically the answer is yes. But again ‘lows’ are not easy to predict, so buying on a regular basis is a good trade-off to avoid fretting over ‘impromptu’ market analysis and instead buy Bitcoin conveniently. 

*The information in this article is for educational purposes and is not an incentive to invest. It is based on historical and objective Bitcoin market data, charts do not represent future predictions. The performance of any cryptocurrency wallet is always subject to market conditions and volatility. 

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Token YNG: First Quarter 2023 Report

Token Young (YNG): updates and news Q4 2024

A retrospective on the start of the year for the YNG token, with an in-depth look at Clubs and the latest news

Let’s take stock of the Young (YNG) token distribution, sales and use cases nine months after its market launch. In this report compiled at the beginning of April 2023, you can find an overview of the clubs, the token’s up-to-date distribution in the first months of the year, and the project’s future goals. 

Participation in Clubs

The YNG token is Young Platform’s utility token whose main use case is to grant access to Clubs: subscription plans that offer exclusive benefits within the exchange. 

Currently, 1343 people participate in the Clubs, divided into: 

  • 976 for the Bronze club;
  • 196 for the Silver club;
  • 112 for the Gold club;
  • 59 for the Platinum Club.

To join a Club it is necessary to lock a certain amount of YNG into it, which is why the number of registered members gives us a relevant figure on the distribution of the token: the more YNG are locked (for a minimum of 90 days) in the Clubs, the less it will be sold, and consequently its market price will be sustained. Compared to the last report, the recorded growth of Clubs is +10.6%.

Distribution of the YNG token

The number of tokens in circulation at the end of January was 20.5M. The number of tokens in circulation at the end of March was about 22M, which means that there was a net increase of 1.5M tokens, or 7.3%. 

These tokens were distributed via the Young Platform Step app in different ways: 

  • 13,910.9 through the completion of Quizzes by 28,239 users;
  • 1,299,439.24 through the winning of Challenges by 82,702 users;
  • 243,275.65 through the use of the Up&Down function by 72,840 users.

The YNG token market is run through an algorithm that defines the exchange rate by means of two underlying liquidity pools, in EUR and YNG respectively. Initially, these pools contained:

  • 1M Euro;
  • 4M YNG.

Considering the sales and purchases of tokens handled in recent months, the pools contained at the end of March 2023:

  • 677.3k Euro;
  • 6.17M YNG.

This configuration is the result of purchases and sales during the first quarter, summarised in the table below together with the price trend:

yng token trend

Future Objectives

During this first quarter we released some features anticipated in the previous report, such as free deposits for clubs and the market report.

Other projects, however, are in development: here are the updates. 

Airdrop & Voucher

We have officially launched the second coupon distribution campaign, as already anticipated in our last report. The promoter chosen for this initiative is Freename, a cutting-edge platform that allows you to create, buy and sell NFT and TLD domains. As with the previous campaign, we distributed coupons that can be used on the aforementioned platform to all Club members. We are confident that this partnership will help us offer our members the chance to discover new opportunities and make the most of blockchain technologies. 

The next quarter will be devoted to planning the next coupon distribution campaign, which we hope to announce soon. We continue to work hard to offer our members access to unique services and promotions to enrich the Club experience and keep their satisfaction levels high.

Token tracking (CoinMarketCap and CoinGecko)

Currently, we are still waiting for a response from CoinMarketCap and CoinGecko for our submission, which is still under evaluation. In the meantime, we are focusing our internal efforts on improving our token information tracking page.

Earning Wallet

The product team is working on the new version of the ‘Earning wallet’ functionality, as already mentioned in our last report. We are devoting special attention to the legal aspects, and if the assessments bring a positive outcome, we expect to release the functionality by the end of this quarter.

Buyback

During the first quarter of this year, we structured buyback operations to boost the exchange and volumes of the YNG token. Specifically, we identified two types of operations to be executed. The first is a “one-shot” buyback operation aimed at rebalancing the amount of EUR allocated to the pool compared to the amount present at the beginning of the year. The second is a mixed operation involving the periodic repurchase of tokens and/or the ‘Burn’ of it.

Specifically, the first model proposal confirmed by the company’s management takes the monthly buying and selling volumes and derives the delta. If the delta (Buying Volume – Selling Volume) is positive, it is proposed to buy through EUR a sum of YNG tokens. Conversely, if the delta is negative, it is proposed to ‘burn’ a sum of YNG tokens. In summary, the plan presented aims to stimulate the exchange and volumes of the YNG token in order to improve its overall performance. These operations will be presented and executed during this quarter and will be communicated on this Blog with the various details. 

Club Section of Discord

We are making progress in structuring our server to allow Club subscribers access to a confidential Q&A channel with our team. We are confident that we will be able to test a first version during this quarter. 

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The fourth edition of the Reply Investment Challenge with Young Platform kicks off 

Reply Investment Challenge

Turin, 11 April 2023 – Young Platform announces its partnership with Reply to launch the fourth edition of the “Reply Investment Challenge”. Aimed at students and young professionals. The international online competition in 2022 reached record numbers with 13,750 participants from 95 countries, with a total volume of 36,000 transactions carried out.  

The online trading competition will focus this year on a very topical subject: cryptocurrencies. The objective of the Challenge, which will take place from Monday 8 May to Friday 19 May 2023, will in fact be to invest in cryptocurrencies and participants will be asked to implement profitable investment strategies, making tactical choices based on the fluctuations of the crypto market. 

In addition to deepening their trading knowledge, the competition will enable participants to broaden their skills on cryptocurrency market dynamics and blockchain technology through exclusive e-learning content which will be provided by Young Platform and MIP, and made available, in the month before the competition, on the Challenge platform. MIP, which will thus support Young Platform in providing high-level materials for the preparation of the competitors, is the Graduate School of Business of the Politecnico di Milano, active for more than 40 years in the provision of management training programmes for graduates, professionals, companies and institutions.

Participants will have a virtual capital of $1,000,000 to invest in real time in the cryptocurrency market. On 8 May, the participants’ wallets will be credited and the challenge can begin. Participants will be ranked and evaluated according to their investment choices, and only the top three, those who have maximised the most in terms of profit, will win the competition. This year players will also be able to choose between two different interfaces: a simpler and more intuitive one and a more comprehensive and detailed one, respectively Young Platform and Young Platform Pro.

This year’s Reply Investment Challenge will have Young Platform, Italy’s largest regulated cryptocurrency platform, as a partner. Young Platform is a Turin-based scale-up founded in 2018 with the aim of making the cryptocurrency market accessible to everyone. The platform acts as a reference point for those who want to use cryptocurrencies in a simple, transparent and effective way, even without having specific skills in the field. It stands out for its focus on the security and privacy of its users, guaranteeing the use of cutting-edge technology to protect data and transactions. 

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Join the Crypto Investment Challenge by Reply

Register from 4 April to 5 May to take part in the Reply Investment Challenge for free and win Apple products!

In collaboration with Young Platform, Reply is launching one of its famous challenges: the Investment Challenge, which this time is purely crypto-themed. In fact, the competition will take place on the demo version of our exchange, so participants can test their strategies with virtual money! The international competition in 2022 reached record numbers with 13,750 participants from 95 countries, with a total volume of 36,000 trades executed.  

Who is Reply?

Reply is among the largest Italian consulting companies in the field of digital services and technological innovation, with a main subsidiary in Germany and stakeholders from all over the world. In order to be able to support so many companies in digitisation and technological development, it has a large research area, but does not limit itself to developing in-house knowledge. 

The company also promotes innovation externally, organising many different international challenges throughout the year: from software development to creativity challenges.

Small history trivia: we are fellow citizens! In fact, the company was founded in 1996 in Turin, just like Young Platform. 

What is the purpose of The Challenge?

Reply organises these challenges not to create competition, but rather with an educational intent. These events open up access to theoretical resources, opportunities to put them into practice and learning through confrontation in a young, international environment. 

The Investment Challenge, specifically, aims to promote financial awareness, and this is its fourth edition, following the one in 2022.

On this occasion, the team chose to give participants the opportunity to learn more about the trend of cryptocurrencies, blockchain and their application in trading.

What prizes are up for grabs?

  • For 1st place: MacBook Pro M2
  • For 2nd place: iPad
  • For 3rd place: AirPods

How to participate in the Investment Challenge?

  • Registration: Registration starts today 4 April and closes on 5 May
  • Duration of the challenge: The challenge will last from 7 a.m. UTC on 8 May to 4 p.m. UTC on 19 May.
  • Access: Participation is completely free of charge.

To register, simply create an account and complete the registration from the Challenge page. 

How does the Investment Challenge work?

Here are the terms of the competition:

  • It opens at 7 a.m. UTC on 8 May and closes at 4 p.m. UTC on 19 May.
  • You will have a total balance of €1,000,000. Of course, this is not real money, but a simulation.
  • You will be able to trade on selected cryptocurrency markets.
  • You can participate on both Young Platform and Young Platform Pro, even switching platforms while the challenge is already in progress.
  • During the game week, the Reply Team will publish useful clues for your in-game decisions on the “Your Challenge Page”.
  • Each day, the global and daily rankings will be updated. 

What are the criteria for moving up in the rankings?

The ranking algorithm follows a bonus/malus logic: thus some results earn points to move up in the rankings, others imply a fall in position.

Bonuses/malus are determined by the sum of 4 positive or negative values:

  • Profit & loss (P&L): the profits and losses generated by ‘investments’.
  • Average number of trades made daily during the Challenge. A bonus is awarded if the trades fall within the ‘optimal range’, i.e. a number that reflects a trading strategy that lies between long-term investment and high-frequency trading, and exceeds the minimum amount indicated. A malus is applied if the number of trades is below or above the optimal range. 
  • Diversification index: this metric cross-references the number of daily trades with their value in Euros. Higher diversification earns a higher bonus and vice versa. 
  • Beware of hints: players who follow the team’s ‘hints’ during the challenge will receive a bonus.

How to prepare for The Challenge?

  1. Demo – From the moment you register until 7 May at 4 p.m. UTC, you will have access to the Young Platform Demo in order to test the trading platform with a virtual balance of €1,000,000 already available. From 4 p.m. UTC onwards, you will no longer be able to log in until 7 a.m. UTC the following day, which is the start time of the challenge and the time when the balance will return to €1,000,000 after your trials.
  2. Support – before and during the competition, you can ask any questions or concerns you may have at the chat available on the Reply Challenge platform, by providing your username.
  3. Educational content – created in cooperation with Young Platform Academy and enriched by materials produced by the POLIMI Graduate School of Management, is accessible from the Learning section of the Challenge from 4 April, but we give you a preview of our content so you can start preparing:
    1. What does investing mean? A beginner’s guide 
    2. Bull vs Bear Market: what they mean and their difference
    3. Technical Analysis: How to Draw Trendlines 
    4. Technical Analysis: How to Identify Support and Resistance 
    5. Technical Analysis: How to Read Candlestick Charts 
    6. What’s the Order Book and how to read it? 
    7. Buy limit and buy stop: what is the difference and how to trade with them 
    8. The meaning of stop loss and take profit: the art of closing 
    9. Limit orders and stop orders: trading on Young Platform Pro 

Read the regulations.

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Compliance as the key to cryptocurrency adoption

There are several reasons why, at Young Platform, compliance with local regulations is the top priority. It is not only a question of ethics and respect for the law, but above all of user protection, which in turn must be the very purpose of financial laws.

Furthermore, we believe that regulation is the key to the mainstream adoption of cryptocurrencies, and that the first step in this direction is the harmony between crypto players and their reference legal system from the outset.

The events of the last year underline this message more than ever: the failures of Terra-Luna and FTX are certainly not the result of virtuous behaviour. While some regulators are particularly alert and wary of cryptocurrencies, the responsibility for proving that there is no reason for this lies with those who work in the industry.

From day one, Young Platform has always put compliance first, with a collaborative attitude towards regulators and law enforcement in defining and controlling a new sector like cryptocurrency in the Italian and French markets. Our Anti-Fraud and Anti-Money Laundering team continues to develop up-to-date solutions to manage the risk of financial crime, with a specialisation in blockchain.

This commitment can be seen, for instance, in the procedure required by law from all exchange users: the Know-Your-Customer, i.e. the Identity Verification managed through specialised providers. 

User protection also concerns the service itself, which is why no cryptocurrency derivatives or other high-risk trading instruments such as leverage are offered on the exchange. In addition to this, all the educational resources necessary to use the service and explore the sector with awareness are provided, both to protect one’s own accounts, to properly guard one’s funds, and above all to avoid scams that exploit the cryptocurrency trend. A section of the official website is also dedicated to frequently asked security questions for users of our products.

Not only that, Young Platform was the first company to be registered with the Italian Organismo Agenti e Mediatori (OAM), an obligation that came into force in January 2022 following an enactment by the Italian Ministry of Economy and Finance.

Also when entering the French market, the first step was to obtain registration as an operator of digital asset services (Prestataire de Services sur Actifs Numériques, or PSAN) under number E2022-60 from the French Financial Markets Authority (AMF).

These practices, unfortunately, are not a given: even basic information such as the registered headquarters is not always known in the industry. In the case of Young Platform, this is public information, available on any page of the official website. Overall, you can find our legal documents.

However, the contribution of exchanges is not enough. The road to mass adoption requires the joining of all forces: if service providers need to be compliant, their customers must use them legally. This scenario requires in turn that governments work on legislation that favours both financial freedom and investor protection.

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Polygon zkEVM: mainnet beta is live. The most eagerly awaited tech news of the year

Polygon zkEVM: the mainnet beta is live. What do you need to know?

Everything you need to know about Polygon zkEVM, Ethereum’s Layer 2 that exploits zero-knowledge technology

We’re live: the Polygon zkEVM mainnet beta went online on 27 March. MATIC‘s blockchain team announced on 20 July 2022 the development of an innovative scalability solution for Ethereum (Layer 2), capable of improving the performance of the entire industry. Thus, the Polygon zkEVM was born, combining zero-knowledge (ZK) technology and compatibility with the Ethereum Virtual Machine. 

The project has become the most eagerly awaited tech news in recent months, so much so that 2023 has been dubbed the year of ‘zero-knowledge’.  

Now that the mainnet beta is live, here’s everything you need to know about Polygon zkEVM, Ethereum’s latest scalability innovation!

Polygon zkEVM: blockchain focuses on zero-knowledge

For Ethereum, there is no more pressing challenge than scalability. The increasing amount of dapps and DeFi services using its network are testing its efficiency. The number of transactions to be processed increases day by day and according to Polygon, the most promising solution to meet this challenge are Layer 2s based on zero-knowledge technology. Which allows so many transactions to be processed at once and at a reduced cost. 

One type of Layer 2 derived from this technology are rollups. These aggregate a series of  off-chain transactions into a ‘rollup’ that is transferred to the reference Layer 1 blockchain with one and only one proof of validity for all transactions (zero-knowledge proof). In other words, transactions are not verified one by one, transferring a large amount of data to Ethereum. Everything is reduced to a single step.

This makes the finalisation of transactions and the amount of data that ends up on the blockchain lighter. Polygon zkEVM rollups allow instantaneous transactions unlike other types such as optimistic rollups, chosen as a scalability solution by protocols such as Arbitrium and Optimism. 

Zero-knowledge rollups: pros and cons

Although promising, zk rollups are an underused technology as a scalability solution for Ethereum. In general, these take a long time to develop and are expensive to integrate. Most importantly, in most cases, they are not compatible with the Ethereum Virtual Machine and are therefore not interoperable with Ethereum. 

Compatibility is crucial because it allows different projects to be standardised and interchangeable with each other, facilitating the exchange of information and value. 

Polygon decided to work precisely on this weakness of zk rollups: ‘We knew that Ethereum needed to scale. We knew that ZK Proofs were the best way to do so. We knew that EVM-equivalence was the secret sauce that would empower both devs and users. So we built Polygon zkEVM”. 

The Polygon zkEVM mainnet beta that went online on 27 March is thus a zero-knowledge Layer 2 solution for scaling Ethereum, that is fully compatible with the EVM. 

Polygon zkEVM: why it’s really news

Zk rollups yes, but compatible with Ethereum. This is Polygon‘s project that is finally a reality! Basically, not being EVM compatible is a big disadvantage, it means not being able to use the same programming language as Ethereum (Solidity), its code or development tools. The problem with zk rollups is therefore one of usability. 

Polygon zkEVM however is a Layer 2 that can be used exactly like Ethereum. Developers and users can find the same security and decentralisation of the ETH network but more speed and convenience. 

Polygon zkEVM: what changes now for blockchain

To summarise, the advantages of Polygon zkEVM are: 

  • More scalability and security for the network;
  • Lower transaction processing costs;
  • Faster transaction finalisation times;
  • Compatibility with Ethereum, the most widely used smart contract platform.

So what is going to change with the arrival of the Polygon zkEVM mainnet beta? The first immediate consequence according to the project team is that the cost of transaction fees on Layer 1 (i.e. on Polygon itself) will decrease by 90%. 

Moreover, thanks to full compatibility with EVM, Web3 developers who want to improve the performance of their dapps built on Ethereum can simply transfer the execution of existing smart contracts to Layer 2. 

Polygon zkEVM: first applications

The Polygon team explained that the main applications of Polygon zkEVM will be in the field of DeFi dapps, NFTs, blockchain gaming and payments. 

One of the first projects to have chosen the Polygon zkEVM to scale its activities is ImmutableX, the blockchain dedicated to crypto gaming that has always used zk rollups since its foundation.  

Earlier this month, Polygon unveiled a new product built on its zkEVM: Polygon ID. It is a service for verifying one’s digital identity, in which users can register credentials in a wallet via smart contract. The owner of a café, for instance, could verify the age of a customer even without documents. Or developers could build decentralised solutions for KYC. 

After the launch of the Polygon zkEVM mainnet beta on 27 March, we will see further applications of the new scalability solution. Which has all the makings of setting new tech standards for blockchain and its development. 

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How to hedge against inflation with Bitcoin? An analysis

How to hedge against inflation with Bitcoin

Research compares Bitcoin and traditional financial assets in the fight against inflation

How to hedge against inflation? A legitimate question given the recent trend in consumer prices. Well, Bitcoin turns out to be an effective hedge against inflation according to research from 2022 published in Axioms, an international academic journal supported by The European Society for Fuzzy Logic and Technology (EUSFLAT), International Fuzzy Systems Association (IFSA) and Union of Slovak Mathematicians and Physicists (JSMF). 

In this article we will explain why:

  • Bitcoin is the asset that responds better than other safe haven assets in both stable and turbulent market times; 
  • Recurring buying (or DCA) is the best strategy to enter a market (whatever its trend may be); 

Hedging against inflation? Bitcoin beats the competition

In the economic climate in which we live, characterised by rising prices and stagnating wages, it is legitimate to try to understand how to hedge against inflation. And thus protect our savings. 

The research entitled “Do Bitcoin and Traditional Financial Assets Act as an Inflation Hedge during Stable and Turbulent Markets? Evidence from High Cryptocurrency Adoption Countries‘, compares the effectiveness of different strategies and instruments to combat inflation using those with high cryptocurrency adoption as sample countries. 

In summary, what has emerged is that Bitcoin is better protected against inflationary shocks than other traditional assets such as shares, gold and oil.

On Young Platform with the ‘Recurring Purchase‘ feature you can set aside Bitcoins automatically and with an amount and frequency of your choice.

What is inflation? 

When wondering how to hedge against inflation, it is worth making a few conceptual clarifications. Inflation refers to the increase in the prices of the goods and services we buy every day, which leads to a reduction in the purchasing power of money. In other words, we can buy fewer things with our savings than in the past. 

For example, in the US in 1980 going to the cinema cost only $2.89, in 2019 the average price of a ticket increased to $9.16! So with a $10 note in 1980 we would have bought 3 tickets, but today only 1. 

Solutions against inflation 

You may have heard that one of the most effective solutions to respond to rising prices is to invest ‘in bricks and mortar’. For a long time, real estate has been a safe haven for our savings, but it is not always a viable option for those who are perhaps younger and do not have much liquidity. 

In any case, this option reminds us that the important thing is to defend our own savings by converting them into an asset that is more resilient than money, whose value is maintained over time, such as a safe haven asset. This is because keeping your earnings ‘under the mattress’ does not bring results in the long term, as they gradually lose their value due to inflation.  

Investors try to hedge against inflation by buying assets that increase in value when prices rise, such as shares in companies that produce commodities or raw materials. Other examples are gold and oil. In short, the rule applies: investing is better than saving. 

Beyond gold and oil: how to hedge against inflation with Bitcoin 

Are gold, stocks and oil really the only ways to hedge against inflation? There are those who advocate relying on Bitcoin, but can it work as a hedge? At first it is difficult to answer this question with certainty. After all, Bitcoin is a new asset that needs to be studied in its own right, in relation to its target market. 

The analysis presented by Axioms experts tries to answer this doubt. See the results. 

First, it is noted that in order to assess how well an asset can hedge against inflation, several factors must be taken into account. Such as inflation trends over time and the national territories studied. Which in the case of this research are 10.  

In short, there are some assets that can offer protection in the short to medium term, such as Bitcoin, gold, stocks or oil. For the long term things get complicated, the levels of effectiveness against inflation are more heterogeneous and it is not easy to find a better and definitive asset.

However, Bitcoin seems to be an attractive option for countries with high cryptocurrency adoption. In times of increased economic turbulence, Bitcoin is the asset that statically responds best to market downturns. But what does this mean for investors?

To avoid inflation, you should consider leveraging BTC to create a hedge during a market downturn or when asset prices respond to inflation more quickly.  

Secondly, research results show that Bitcoin is the most effective inflation hedging instrument for most countries, both in stable and turbulent economic regimes. With a peak especially in countries with less resilient economies. This could be an advantage that every government should consider when developing cryptocurrency regulations.

What is the best strategy? 

To hedge against inflation, however, it is not enough to choose the right asset, this must be combined with a strategy. That of regularity. 

The analysis conducted by the Charles Schwab Corporation, a US investment firm that manages over $7 trillion in assets for its clients, compares five investor profiles and calculates their performance over five years, assuming each has $2,000 to invest each year. 

Here is the result: in first place is the trader who – by preparation or luck – chooses the timing perfectly and buys at the correct time. They are followed in second and third place by those who invested the $2,000 every year in one lump sum and those who broke it up into 12 installments and entered regularly every month. Closing the ranking with the worst results are those who bought at the wrong time – driven by FOMO or through extreme bad luck – and those who did nothing and obstinately kept their liquidity on their savings account. 

The good news is that for ordinary mortals who are not traders or do not feel kissed by luck, there are great opportunities to get the most out of their investments through regularity. That is, by regularly buying a certain asset. This strategy is called recurring buying or (DCA). 

Sticking to the terms of the analysis, if we had bought €25 worth of Bitcoin once a week for 5 years, as of today (March 2023) we would have €6,925 in Bitcoin but with a portfolio value of €15,803, i.e. a net gain of €8,800 (+128%). 

Conclusions 

In summary, those who are trying to figure out how to hedge against inflation should keep in mind that no asset can offer complete protection in the long run. But assets like Bitcoin can be a good option in the short to medium term. In any case, it is always important to pay attention to asset selection and the timing of investments.

***

*This article was written on the basis of research published in Axioms, an international, peer-reviewed, open-access academic journal covering mathematics, mathematical logic and mathematical physics, published monthly online by MDPI. Aximos is supported by The European Society for Fuzzy Logic and Technology (EUSFLAT), International Fuzzy Systems Association (IFSA) and Union of Slovak Mathematicians and Physicists (JSMF). To read the full research, download the PDF at this link.  

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Gautam Adani: the financial scandal that brought down the world’s third richest man

Gautam Adani and the collapse of the Adani Group: what happened?

In just a few days, billionaire Gautam Adani lost a large part of his fortune. What happened to the Adani Group? 

The collapse of the Adani Group was a major blow to the Indian economy. In just a few days, billionaire Gautam Adani’s empire lost significant shares, estimated at around $100 billion. 

Adani Group: the collapse and financial scandal

What triggered the collapse of the Adani Group were the serious allegations made by the US firm Hindenburg Research. On 24 January 2023, the Indian giant was accused of using tax havens, tax fraud, share value manipulation and unsustainable debt. Hindenburg placed the main emphasis on the high debt. 

Adani Group CFO Jugeshinder Singh called the Hindenburg report a ‘malicious combination of selective misinformation and stale, unfounded and discredited allegations’. Singh stated that the company has always complied with all laws and suggested that the allegations had a devious purpose. 

Singh was referring to the upcoming IPO (Initial Public Offering) of Adani Enterprise, the flagship branch of the group, which was to be listed on 27 January with the aim of raising USD 2.5 billion. According to the CFO, Hindenburg would have exposed itself at a crucial moment, just in time to block the IPO. Which indeed happened, the Enterprise’s IPO was cancelled, marking the peak of Adani Group’s collapse. 

Hindenburg’s accusations had immediate effects. The group’s seven listed companies lost a total of $10.73 billion in market capitalisation in one day. Just as Gautam Adani’s net worth dropped from $126.4 billion to $120 billion. Moreover, a large number of investors abandoned Adani Group.

Finally, the Indian market regulator, the Securities and Exchange Board of India (SEBI), started an investigation (still ongoing) to confirm or deny the validity of the allegations made. 

Adani Group vs Hindenburg Research

In the early stages of this affair, Adani Group hinted that it would take legal action against Hindenburg. The latter in turn commented on Twitter: 

Who is behind Hindenburg?

Hindenburg Research is a forensic financial research firm that analyses equities, credit and derivatives, founded in 2017 by Nathan Anderson. On its website, Hindenburg says they look for “man-made disasters” such as accounting irregularities, mismanagement and suspicious transactions. And on Twitter they specify ‘we burst bubbles where we see them’. 

The firm was named after the Hindenburg airship disaster that caught fire in 1937 while flying towards New Jersey. 

After identifying potential wrongdoing, Hindenburg publishes a report explaining the case and bets against the targeted company, hoping to make a profit. According to its website, Hindenburg has reported at least 16 companies since 2017. 

Gautam Adani, who is the Indian billionaire?

Before the collapse of Adani Group, Gautam was the third richest person in the world. According to Forbes, he is now at the 32nd position in this ranking. 

The entrepreneur, originally from Gujarat in western India, built his empire from scratch after starting his career as a commodities trader. He was born on 24 June 1962 into a large family, consisting of his textile dealer father, mother and seven siblings.

After compulsory schooling, Adani enrolled in the Faculty of Economics at the University of Gujarat, but dropped out after two years. He then moved to Mumbai with just over a hundred dollars in his pocket, where he started working as a diamond selector for Mahendra Brothers. After three years in the diamond business, he opened his own company, but the real turning point came when his older brother asked for his help in handling a large shipment of plastic that he had purchased. From there, he began his career in the commodities business that led him to found the Adani Group in 1988. 

This is not the first time that Gautam has ended up at the centre of a scandal. He is in the spotlight mainly because of his friendly relationship with Narendra Modi, the Indian Prime Minister. The latter, as a supporter of Adani, found himself in trouble in the face of Hindenburg’s accusations. This is why the issue also took a political turn.  

The most recent controversy that has engulfed Adani concerns the protest of some fishermen against the construction of a $900 million port in Kerala, southern India. 

Also in Australia, environmental activists have been protesting for years against the Carmichael coal mine project by Adani in Queensland, over carbon emissions and damage to the Great Barrier Reef.

Adani Group: what does it do? 

Adani Group is a conglomerate, i.e. a company that operates in several sectors through separate subsidiaries. The company was founded in 1988 and is based in Ahmedabad, in the Indian state of Gujarat. The company operates in various sectors, including energy, transport, agriculture, logistics and utilities. Some branches of the group are the aforementioned, Adani Enterprise, Green Energy, Power, Ports & SEZ.

The group is one of the largest private power producers in India, with a renewable energy generation capacity of over 18,000 MW. 

Its growth has been large and remarkable over time thanks to a strategy of diversification and acquisitions. It has a global presence and also operates in Australia. United Arab Emirates, Bangladesh and Myanmar. 

By November 2022 it was the second largest conglomerate in India. 

But the company does not only have industrial interests, the company also owns several sports teams such as the Gujarat Giants of the Pro Kabaddi League and the Gulf Giants of the Cricket League.  

Simple allegations, which have not yet been confirmed, led to the sudden collapse of the Adani Group. However, this is not a definitive exit or bankruptcy. Until the investigations are concluded for Indian billionaire Gautam Adani, the game is still open. 

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Metaverse Fashion Week 2023: all the brands and things to know

Metaverse Fashion Week 2023: all you need to know

Metaverse Fashion Week 2023 is coming. Which haute couture brands will parade in Decentraland? 

Decentraland’s Metaverse Fashion Week 2023 is just around the corner! According to a study by Gartner dated 7 February 2022, in 2026 25% of the global population will spend at least one hour a day in the Metaverse “for work, shopping, education, social interactions and entertainment”. Considering that 2026 is only three years away, it is safe to say that this virtual world will soon be part of our everyday life. The fashion industry seems to be the most advanced as far as this new technology is concerned and the second Metaverse Fashion Week in history will take place from 28 to 31 March 2023. 

The Metaverse chosen for the occasion is once again Decentraland (MANA), which has already hosted the 2022 edition. This year’s theme mixes tradition and innovation through collaborations between new generation designers and historically established fashion brands. Find out all about the event and the brands that will be guests at Metaverse Fashion Week 2023!

Metaverse Fashion Week 2023: how to access

Metaverse Fashion Week was created to let the public experience fashion from different perspectives and to make it accessible to everyone, not just insiders. To enter Decentraland’s metaverse and thus participate in the events of this fashion week, you simply have to connect your crypto wallet or visit the virtual world in guest mode. Decentraland has already provided the coordinates of all the areas where the events will take place and with a simple click (‘jump in’) you can reach afterparties, digital shops, fashion shows and conferences organised by many brands. 

The Metaverse Fashion Week 2023 calendar

Below you can find a selection of events from the eagerly awaited Decentraland virtual fashion week 

28 March 

  • 00:00 UTC, Fashion District: Metaverse Fashion Week 2023 opening event – DJ Set by ‘KDS’ and discussion on the future of fashion in the metaverse;
  • 14:14 UTC, Genesis Plaza: “CRISTÓBAL BALENCIAGA: NEW CODE” – Haute couture evening dresses inspired by the designs of Cristòbal Balenciaga;
  • 14:14 UTC, Decentraland South, Neo Plaza: ” META FASHION HOUSE IN THE NEO PLAZA FEATURING 3DMETADRESS” – The augmented reality presentation of the digital clothing that will be physically produced for NFT Week New York 2023;
  • 18:18 UTC, Genesis Plaza: “HAUS OF FUEGO FASHION SHOW!” – The Nikki Fuego avatar fashion show, inspired by cyberpunk and high tech culture.

29 March

  • 00:00 UTC, Adjacent District: “THE TRAVELER PARKA” CO-CREATION @SAKOASKO AND @KAFTANCREADOR” – The second day of Metaverse Fashion Week 2023 will open with an event dedicated to Latin American artists from the metaverse;
  • 21:21 UTC, Binary Code Building: ‘FASHION SPACES: MERCURY DASHA X RENOVI STUDIOS’ – The fashion show of the ‘urban-luxe’ collection resulting from the collaboration between the two brands (Mercury Dasha and Renovi Studio);
  • 22:22 UTC, Valhalla: ‘METAVERSE FASHION WEEK BY DECENTRALAND (MVFW) AFTER PARTY’ – A concert featuring various musicians from the Decentraland community.

30 March

  • UTC, Uniquely.io Land: ‘METAVERSE FASHION WEEK MEETING BY UNIQLY.IO & PUNKSCLUB’ – Debate on the relationship between fashion and NFT followed by a DJ Set;
  • 16:16 UTC, The Crypto Valley “NTR1-META” – A party in the metaverse organised by the digital sneakers brand of the same name;

31 March

  • 21:21 UTC, Dlan Holding 004: “DKNY.3 X MVFW23 CLOSING NIGHT PARTY” – The closing party of Metaverse Fashion Week 2023

This calendar is generic and does not present the events organised by the most famous brands, these have their own customised LANDs where their respective programmes will be staged. But which of these big brands have decided to participate?

Dolce and Gabbana

Among the brands that have already shown in Decentraland during Metaverse Fashion Week 2022 is Dolce and Gabbana. D&G’s journey into the Metaverse began in 2021 and after several NFT collections that expanded the brand’s artistic and craftsmanship potential, it organised its own fashion show in Decentraland. During the 2023 edition, the historic Italian brand will present a selection of the winning entries of the Future Reward competition. The designs were chosen by Domenico Dolce and Stefano Gabbana themselves and are all digital wearables.

Tommy Hilfiger

Tommy Hilfiger opened its digital shop in the Boson Portal District during 2022 and is making its second appearance at Metaverse Fashion Week. Last year, users were able to buy some limited edition products from the Spring 2022 collection in NFT format and have them worn by their avatars. For the 2023 event, new digital garments designed by artificial intelligence will be released every day and a challenge will be held among the community of aspiring designers attending the event. The winner will be selected by Tommy Hilfiger himself!

Adidas

At Metaverse Fashion Week 2023 Adidas will present the ‘adidas virtual gear‘ collection, a collection of cyberpunk and high-tech inspired garments that will be produced in both physical and digital versions. These include a personal flotation device, a life jacket built for space.

Clarks

The British footwear brand will be present at Metaverse Fashion Week 2023 with its own dedicated area called ‘Clarks Arcade’ – part amusement park and part disco. Within this space, people will be able to try out Clarks-themed video games and compete with others at dance competitions. This is not the first experience in the Metaverse for the shoe brand, which had already landed on Roblox in May 2022 to present its trainer for kids, ‘Cica’.

Decentraland Fashion Week 2022

Metaverse Fashion Week 2023, which will be held from 28 to 31 March, is the second edition ever; the first was last year and was very well received by the community and brands. Among the main events of the past year, besides those already mentioned by Dolce and Gabbana and Tommy Hilfiger, was Philipp Plein. The German brand presented its space on Decentraland, the Plein Plaza, in which it exhibited works from the NFT Museum of the Arts (M.O.N.A).

Etro‘s event was also a success. The ‘liquid paisley’ motif reinterpreted by the brand in a contemporary way and presented at Metaverse Fashion Week 2022 was also back in fashion in the real world. Hogan‘s event, on the other hand, featured guest Bob Sinclar who played at the after party.

Why a Fashion Week in the Metaverse?

The brands that participated last year and will participate in Metaverse Fashion Week 2023, presenting their collections online, have made a significant choice that falls primarily on the fashion house’s own perception of innovation. The potential of events in the virtual world lies in the contact with younger consumers, Gen Z or the even more budding Gen Alpha, who are increasingly interested in buying digital goods. 

Secondly, participating in events in the Metaverse is a way for brands to experiment, test trends and give value to their products, which are protected by blockchain. 

However, as Sam Hamilton, creative director of the Decentraland Foundation and co-organiser of Metaverse Fashion Week 2023 reiterated: ‘fashion and high fashion are not new to the Metaverse. Decentraland has been at the forefront of digital fashion, in demand since the launch of wearables (tokens) in 2020. Since then, creators have been working on the technical and stylistic limits of these digital wearables and have created a booming economy’.