10 August

The Senate rejected an amendment championed by the cryptocurrency industry that exempts non-custodial crypto actors from a crypto tax reporting requirement built into the $1 trillion infrastructure bill.

After putting forth rival amendments last week, the senators behind those amendments agreed on a compromise on Monday morning. The Toomey-Warner-Lummis-Sinema-Portman amendment made clear that non-custodial actors such as Bitcoin miners, validators on proof-of-stake networks, wallet providers, and protocol developers would not be included in the bill’s reporting mandate.

However, as debate on the infrastructure bill had already closed on Sunday evening, the amendment could only be adopted into the bill by unanimous consent; a single “nay” vote would sink it and send the bill’s original language forward for a vote tomorrow.

Sen. Richard Shelby (R-AL) tried to piggyback consideration of his own amendment, which would have added $50 billion in military spending, to the crypto amendment. Sen. Toomey, who had risen to ask the room for unanimous consent, allowed it, but Sen. Bernie Sanders (I-VT) would not. Sen. Shelby then killed the cryptocurrency amendment.

If the bill is approved by the Senate, it will then go to the House of Representatives [which is not expected before the fall].”

See Also: ‘We’ll be back on this’ — Alabama senator derails crypto amendment with two words
See Also: US Senate Set for Final Vote on $1T Infrastructure Bill (Video)
See Also: Against the US Senate’s Heavy-Handed Crypto Provision

We’ve now given over 400 projects mainnet access, and dozens of them have successfully completed their deployments. We know that end users have been waiting eagerly for their chance to interact with their favorite apps on Arbitrum, and we’re excited to announce that we will be opening up to users late this month.

Opening up a general L2 is uncharted territory, and our guiding principle is to make sure that we do so responsibly and safely. This is still early software, and we will be operating Arbitrum with several guardrails in place for the time being. While we will do our best to ensure uptime, our core focus will be security and users should be prepared for downtime and outages in the early days that will decrease steadily over time.”

“In May, Tether published a breakdown of its reserves, showing that about 50% of its reserves was held in commercial paper. But that breakdown report was not “attested” to. In the latest attestation report, Tether not only included the composition of its reserves, but also provided a breakdown of the ratings and maturity of its commercial paper (CP) and certificates of deposit (CDs).

Roughly 93% of Tether’s commercial paper and certificates of deposit holdings was rated A-2 and above, while 1.5% was rated below A-3.

​​As of June 30, Tether was the defendant in four ongoing legal cases, ‘the outcomes of which cannot yet be reasonably reliably estimated by management,’ according to the report.”

“Non-fungible token (NFT) marketplace OpenSea topped the leaderboard in gas consumption on Ethereum over the past 24 hours in a rare flippening of decentralized finance (DeFi) stalwart Uniswap.

Since 2020’s “DeFi Summer,” Uniswap – Ethereum’s largest decentralized exchange – has typically commanded the most in daily transaction fees, a key barometer for actual usage of the world’s second-largest blockchain.

However, the resurgence of NFTs from early-2021 highs has helped put OpenSea in the top spot with over $1.9 million in gas spent on transaction fees in the past day. By comparison, a combined $1.57 million in transaction fees has been spent on Uniswap V2 and V3.

There have been a slew of NFT projects launched in recent weeks, like Space Poggers, Pudgy Penguins and Sad Frogs District. Glassnode projects that OpenSea could do $1 billion in volume during the month of August with a run rate of 300,000 unique users.”

“Fresh on the heels of announced plans to go public, Circle said Monday it intends to become “a full-reserve national commercial bank.” To be clear, this would be an industry first, with a scope far beyond the OCC banking charter already conditionally issued to Anchorage, Paxos and other crypto-native financial services firms.

This would allow us to access the Federal Reserve System directly, reducing the costs and time for settling transactions.

We are embarking on this journey alongside the efforts of the top U.S. financial regulators, who through the President’s Working Group on Financial Markets are seeking to better manage the risks and opportunities posed by large-scale private-sector dollar digital currencies.”

Spoiler alert: Private blockchains have no compelling value proposition. If you and a bunch of other companies could agree upon a single vendor to build and run a blockchain, you could just as easily agree upon the rules of setting up a centralized server.

Indeed, most enterprises have come to that conclusion. A survey commissioned by EY and Forrester in 2019 showed that for each company that was willing to join another company’s private blockchain, two companies started their own. There is no path there to sustainable network scale. Nearly 75% of private blockchain users believe the best future path is on a public network.

So why is it that so many companies continue to invest in private blockchains? The answer is that large enterprises are deeply risk-averse. They want to get to the real thing: public blockchains; they just want to get there in the lowest risk manner possible.

The most common road map is the creation of a separate Ethereum-based private blockchain with the intent to connect and migrate to the public Ethereum main network in the future once the entities involved are comfortable with the technology. The problem is that permissioned systems are much too easy to customize in ways that make them unsustainable in the long-term.

These delicate ecosystems, built in a safe, cozy world of design-by-committee with only nice people at the table, would be slaughtered if exposed to the real Ethereum blockchain ecosystem. Even worse, over time, these sheltered ecosystems drift ever further from the public standards.

There’s a better way: Instead of building a fully private blockchain, companies that cannot bring themselves to go all the way public from day one should look at building connected, permissioned sidechains to the Ethereum network. Though still permissioned, these connected side chains would be much more closely linked to the standards and tooling of the public Ethereum main network. They can and should use the same token and security standards as the public networks, even if all the participants are permissioned.

In this model, migrating to a public network would be a much faster and actually viable path forward with lower risk of stranded investment.

For all the same reasons that the open, public internet has become our dominant networking technology, public blockchains, most probably Ethereum, will take up a similar role in the economy. And private networks, a lot like corporate private intranets, will never go away, but they will become ever-less strategic to the ecosystem or the companies involved.”