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Also in this letter:
■ Ethereum slashes energy use with ‘Merge’ software upgrade
■ Bengaluru chaos: is India’s Silicon Valley dying?
■ Sea’s top management to forgo salaries amid cost-cutting
India panel calls for regulatory body, new law for online gaming: report
India should create a regulatory body to classify online games as based on skill or chance, introduce rules to block prohibited formats and take a stricter stance on gambling websites, Reuters reported on Thursday, citing a government panel’s report.
Industry-shaping: The panel has for months been drafting regulations for the country’s online gaming sector, in which foreign investors such as Tiger Global and Sequoia Capital have backed startups such as Dream11 and Mobile Premier League.
The much-awaited report is seen as shaping the future of India’s $1.5-billion mobile gaming industry, which is estimated to hit $5 billion by 2025.
Also Read | Online gaming task force may set spend limits in framework
Contentious issue: The development comes amid rising concerns over gaming addiction and “inconsistent state laws” disrupting business.
Simply defining games has been contentious. The Supreme Court has said the card game rummy and certain fantasy games are skill-based and legal, but at least one state court classified games such as poker as chance-based, or akin to gambling, which is banned in most states.
Driving the news: In its confidential draft report dated August 31, the panel of government officials called for the creation of a new regulatory body under India’s IT ministry to determine which online games qualify as games of skill, then “seek compliances and enforcement.”
The 108-page report also said India needs a new federal online gaming law, which will provide regulatory flexibility “with punishment provisions, along with blocking powers, for the government against prohibited gaming formats”.
What’s next? The IT ministry will finalise the report after receiving more comments from panel members. It will then be sent to the cabinet secretariat for approval. There is no timeline for finalisation.
Google to allow some Indian fantasy gaming apps: The news comes a week after Google Play said it was conducting a limited-time pilot programme enabling the distribution of daily fantasy sports (DFS) and rummy apps to users in India by developers incorporated in India.
Also Read | Google slammed for allowing only fantasy sports, rummy apps on Play Store in India
Currently, such apps – which include Dream11, Mobile Premier League and many others – are not available on the Play Store because they fall within the ambit of gambling. The pilot is scheduled to run from September 28, 2022 to September 28, 2023.
Ethereum slashes energy use with ‘Merge’ software upgrade
The Ethereum blockchain has successfully completed the ’Merge’, a major software upgrade that will drastically reduce its energy use, its inventor tweeted on Thursday.
The upgrade, which changes how transactions occur and how ether tokens are created, could give Ethereum a major advantage as it seeks to surpass rival blockchain bitcoin.
Feeding frenzy: We reported on Thursday morning that Indian cryptocurrency exchanges were seeing a jump in trading volumes of Ether ahead of the Merge as investors expected the price of Ether to jump after the Merge.
But so far, the world’s second-most valuable crypto token is down 2.86% to around $1,592 in the past 24 hours.
Reactions:
The Merge: Most blockchains devour large amounts of energy and have come under fire from environmentalists and some investors. Before the software upgrade, which is known as the Merge, a single transaction on Ethereum used as much power as an average US household uses in a week, according to researcher Digiconomist.
With the software upgrade, Ethereum has moved from a “proof of work” system, in which energy-hungry computers validate transactions by solving complex maths problems, to a “proof of stake” system, where individuals and companies act as validators, using their ether as collateral, to win newly created tokens.
The new system will use 99.95% less energy, according to the Ethereum Foundation.
Web3 boost: Ethereum was born in 2013. Proponents believe it will form the backbone of much of the widely hyped but still unrealised “Web3” vision of an internet where crypto technology takes centre stage in applications and commerce.
Also Read | The biggest crypto event of 2022
Tweet of the day
Bengaluru chaos: is India’s Silicon Valley dying?
Last week’s massive floods in India’s IT capital Bengaluru have ignited a debate over the city’s future as India’s tech hub. Just a few days of heavy rainfall was enough to bring ‘India’s Silicon Valley’ to its knees.
How it all began: Once a city of gardens, lakes, and a cool climate in the 1990s, Bengaluru rapidly became India’s top tech hub and the city’s untrammeled expansion led to encroachments on wetlands and floodplains. Concrete replaced green spaces and construction around the edge of lakes blocked off connecting canals, limiting the city’s capacity to absorb water.
In the early 1970s, more than 68 percent of Bengaluru was covered in vegetation. By the late 1990s, the green cover had dropped to around 45% and by 2021 to less than 3% of its total area of 741 square km. If this trend continues, by 2025, 98.5% (of the city) will be choked with concrete.
Troubles for Indian IT: The latest chaos has triggered fresh worries for the $194 billion Indian IT services industry, which is concentrated around Bengaluru. Insurance companies said initial estimates for loss of property could run into millions of rupees, with numbers expected to go up.
Also read | Startup founders, VCs hit by Bengaluru floods bemoan city infrastructure
Sea’s top management to forgo salaries amid cost-cutting
Sea Ltd.’s top management will forgo their salaries and tighten company expense policies as the Singapore gaming and ecommerce giant tries to shield itself from the economic slowdown that’s threatening tech companies.
The company will cap business travel to economy class flight fares, with travel meal expenses limited to $30 a day. It will also curb spending on hotel stays for business trips to $150 a night, and cull reimbursement for meals and entertainment bills.
Sea of troubles: “With investors fleeing for ‘safe haven’ investments, we do not anticipate being able to raise funds in the market,” chief executive Forrest Li said.
Sea is facing increasing pressure to simultaneously grow and control costs. Consumers are pulling back on spending online as rising interest rates and prices weigh on the economy, while investors are becoming less willing to bankroll growth without profits.
Recently, Southeast Asia’s largest ecommerce firm Shopee – a subsidiary of Sea – rescinded dozens of job offers shortly after its parent company reported widening losses and much slower revenue growth.
ETtech Done Deals
■ Data engineering and artificial intelligence (AI) solutions provider Sigmoid said on Thursday it has raised $12 million in funding in a mix of primary and secondary funding, as part of its latest funding round from Sequoia Capital India. With the current round, Sequoia has $19.3 million in Sigmoid. The startup will use the capital to evolve its market offerings, expand delivery centres and cater to new industries.
■ Cross-border raw material sourcing startup Ximkart said it has raised $2.4 million in funding led by Matrix Partners India. The startup will use the funds to strengthen its position in existing categories, launch new categories and expand to new geographies.
■ Edtech firm Upgrad has acquired corporate training solutions leader Centum Learning in a share swap deal. With this transaction, Bharti Enterprises Limited and its affiliates will join Upgrad’s cap table. Centum is expected to clock a revenue of Rs 170 crore in FY23.
■ AI-powered dubbing platform Dubdub.ai has raised $1 million from Waveform Ventures and Accel Atoms. The fresh funds will help the startup build technical expertise in the team and validate several use cases for global customers. It was founded in August 2021 by Anubhav Singh, Rahul Sankhwar, Rahul Garg, and Anchal Jaiswal.
Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai and Gaurab Dasgupta in New Delhi. Graphics and illustrations by Rahul Awasthi.
