14 September

Financial heavyweights including Charles Schwab (SCHW), Citadel Securities and Fidelity Investments announced the start of cryptocurrency exchange EDX Markets, the latest evidence Wall Street is forging ahead in digital assets despite the crypto winter.

The exchange will be led by CEO Jamil Nazarali, formerly a senior executive at Citadel Securities. Other high-profile EDX backers include trading firm Virtu Financial (VIRT) and venture-capital firms Sequoia Capital and Paradigm.

Crypto is a $1 trillion global asset class with over 300 million participants and pent-up demand from millions more. Unlocking this demand requires a platform that can meet the needs of both retail traders and institutional investors with high compliance and security standards.

The news follows an announcement last month from BlackRock (BLK), the world’s largest asset manager, that it will give its institutional clients a way to invest into cryptocurrencies.”

See Also: Wall Street Titans’ New Crypto Exchange Aims to Seriously Cut Costs for Investors

“In the guidance posted to its frequently asked questions pages on Tuesday, according to the government department, U.S. residents would not be violating sanctions by copying the mixer’s code, nor making it available online or publishing it through another medium.

While engaging in any transaction with Tornado Cash or its blocked property or interests in property is prohibited for U.S. persons, interacting with open-source code itself, in a way that does not involve a prohibited transaction with Tornado Cash, is not prohibited. For example, U.S. persons would not be prohibited by U.S. sanctions regulations from copying the open-source code and making it available online for others.

Similarly, U.S. persons would not be prohibited by U.S. sanctions regulations from visiting the Tornado Cash website if it again becomes active on the Internet.

The Treasury [further] specified that users could generally interact with the Tornado Cash code provided it didn’t involve a prohibited transaction. Those who initiated transactions using the mixer prior to sanctions being imposed on Aug. 8 can [also] apply for an OFAC license to complete the transaction or to make a withdrawal.

The seeming uncertainty around the U.S. sanctions and how companies were expected to be in compliance came amid many platforms removing or restricting the activity of individuals associated with Tornado Cash. On Sept. 8, Coinbase announced it would be supporting a lawsuit brought by Tornado Cash users against the Treasury Department, alleging it illegally sanctioned the crypto mixer’s smart contract addresses.”

See Also: US Treasury FAQ
See Also: US Treasury Explains How Americans Can Recover Crypto Locked in Tornado Cash

Risk markets declined across the board after inflation data disappointed investors on Tuesday. August’s consumer price index (CPI) data showed an unexpectedly high 8.3% increase in prices versus expectations for an 8.1% increase. Core inflation, which excludes volatile food and energy prices, rose 6.3% versus forecasts of 6.1%. Markets now forecasts an 82% probability that rates will increase by 75 basis points during the upcoming Fed meeting.

Both BTC and ETH’s hourly charts highlight the sharp sell-off during the 12:00 UTC hour. Both assets moved into oversold territory. A distinction between the two assets is the bid that ETH seemed to catch during the 15:00 UTC hour, which accelerated in subsequent hours.

Where BTC appears completely tied to macroeconomic news, ETH prices are also tied to this week’s Merge, which is expected to occur within the next 24-48 hours. The pause and reversal of ETH prices likely implies optimism ahead of the Merge, as traders see an opportunity to accumulate oversold ETH.

Traditional equities markets were down, with the Dow Jones Industrial Average (DJIA) and S&P 500, down 3.9% and 4.3%, respectively. The tech-heavy Nasdaq composite declined 5.3% and is on track for its worst period since May 2020. The Dollar Index (DXY) increased 1.22%, maintaining its inverse relationship to BTC prices.”

Crypto lending platform Maker, the world’s largest decentralized-finance (DeFi) app, doubled the debt ceiling of its staked ether (stETH) vault this week as it looks to reduce its reliance on centralized stablecoins after Centre, the issuer of USD coin (USDC), blacklisted 38 addresses linked to sanctioned crypto tool Tornado Cash.

More than 34% of all assets locked on USDC are locked on Maker, and the tokens are the single-largest source of collateral that backs DAI. Approval of the proposal to raise the ceiling to $200 million allows more stETH to be deposited against DAI, reducing USDC’s influence. Some $49 million worth of stETH has flowed into the vault since the ceiling was raised.

There’s a natural tension between centralized stablecoins and projects like DAI that want to be permissionless and uncensorable. The decision to lean on USDC allowed Maker to grow and focus on an easy user experience, but that came with trade-offs that are now fully visible.”

Ethereum’s historic Merge may change the way its native token, ether (ETH), is used, according to Lex Sokolin, head economist of decentralized protocols at software company ConsenSys.

A fairly large portion of people are going to be staking their ETH in the protocol, which in a sense is going to inevitably turn at least some ETH into a store of value inside of the network.

Sokolin added that ETH is not only “being used to power the protocol” but it is also oftentimes being used as “a unit of account for all sorts of goods and NFTs inside of Web 3.”

It has both of those functions. The sound money function as well as the store of value function.”

See Also: 4 Things Blockchain Analysts Are Saying About the Ethereum Merge
See Also: Ethereum Proof-of-Work Fork Timing Posted

“Brave popularized the concept of giving users crypto rewards for using its web browser, and has seen surging user counts as a result. But now you can add similar functionality to an array of browsers—including Chrome and also Brave—and earn Bitcoin in the process. Adtech startup Slice announced today that it has integrated Bitcoin payments into its browser extension, letting users earn cryptocurrency by viewing ads.

The newly-enhanced extension is based on technology from Bitcoin payments startup Zebedee, and utilizes Bitcoin’s Lightning Network for micropayments. As users browse the web, they’ll see additional advertisements inserted into pages. Viewing those ads earns users points called Slices, which can then be swapped for Bitcoin via a Zebedee account.

Today, people surfing the web are right to have high standards for receiving value in exchange for their attention, and to claim that value in the form of real money, delivered to them instantly.”

See Also: Linux Foundation Project Will Tackle Digital Wallet Interoperability

“SWIFT disclosed on Tuesday a partnership with fintech company Symbiont to provide more accurate data for financial firms through blockchain technology. Vanguard, Citigroup, American Century Investments, and Northern Trust are among the companies participating in the initiative.

Through Assembly, Symbiont’s proprietary technology platform, smart contracts will be used ‘to create a network effect that leverages the 11,000+ institutions connected to SWIFT globally. The pilot project could help providers distribute data in near real time to global custody clients.’

Due to the rise of Central Bank Digital Currencies (CBDC), the company has been making efforts to maintain its relevance in the international economic order.”

13 September

Fidelity has more than 34.4 million individual brokerage accounts, according to the report.

This potential move follows BlackRock (BLK) partnering with Coinbase (COIN) to offer crypto trading to its institutional customers. Earlier this year, Fidelity announced plans to allow corporate clients to add bitcoin to the 401(k) plans it manages for them.”

See Also: Leading Derivatives Exchange CME Group Launches Ethereum Options
See Also: Crypto Services Firm Abra ‘in Process’ of Forming US Bank

“The central bank of Norway has hit a major milestone in digital currency efforts, releasing the open source code for the country’s central bank digital currency (CBDC) sandbox. Available on GitHub, the sandbox is designed to offer an interface for interacting with the test network, enabling functions like minting, burning and transferring ERC-20 tokens.

The Norges Bank stated that the Ethereum cryptocurrency system is expected to provide a “core infrastructure” for issuance, distribution and destruction of digital central bank money, which is also referred to as DSP. The Norges Bank emphasized that interoperability was one of the most important problems while considering various technical solutions.”

See Also: Ethereum Blockchain’s Upgrade May Lead to Greater Institutional Adoption of Ether: Bank of America

The company’s Starbucks Odyssey will allow customers to purchase and earn digital collectible stamps in the form of an NFT that offer benefits and immersive experiences.

The program is to be built on Polygon’s proof-of-stake network, a scaling tool that sits on top of the Ethereum network. Customers can now join a wait list to gain access to Starbucks Odyssey.”

See Also: Bored Ape NFT Band to Make Music With Beyoncé-, Timberlake-Linked Producers

“The Blockchain Association is adding its own political action committee to the crypto industry’s growing array of campaign-finance efforts seeking to steer the U.S. government’s debate over digital assets.
The BA PAC will contribute to the campaigns of “pro-crypto candidates” from both parties, according to Kristin Smith, the Washington-based association’s executive director.

The timing is too late to make a splash in November’s midterm elections, but the PAC will be in a position to exert influence in the presidential election year in 2024. The industry has quickly become one of the dominant forces in political giving, with its new PACs outpacing many of the political efforts from more established industries.”

“According to IDEG’s Thielen, traders are increasingly looking to purchase Lido’s staked ether token at a discount, taking away buy side pressures from the ether spot market.

Early this quarter, traders snapped up ether and sold futures to collect a potential Ethereum fork token ETHPoW for free without directional risks. However, the incentive to take the so-called ETHPOW trade has now weakened, and traders could make a higher return by snapping up stETH while heading into the Merge.

Notably, by some estimates, the ‘expected’ PoW airdrop was initially priced at $90-100 and now is expected to be just around $19-27 (1.1%-1.5%). Volumes for stETH (on Lido) have dramatically increased from just $6-8 million to $44 million by end of last week.”

“MetaMask, one of the largest crypto wallet providers, has integrated the Brazilian government’s payment system Pix and started allowing crypto purchases with Brazilian reals. MetaMask integrated with Pix via the payment infrastructure company MoonPay, which takes about a 1% commission per transaction, plus a network fee calculated in real time.

In July, MetaMask revealed that Brazil was its second-largest user market after the US. Pix, a real-time retail payment system launched by the Brazilian Central Bank (BCB) in October 2020, has 126 million users and is already used by leading crypto exchanges such as Binance and Bybit.”

“While the Ethereum co-founder was born in Russia and met Russian President Vladimir Putin in 2017 to discuss Ethereum opportunities, he’s been critical of his homeland’s government for years as well as its war with Ukraine. Still, his visit is notable due to timing: Ethereum’s much-anticipated overhaul known as the Merge is just days away.

I have been following Ukraine closely since the war started. I wanted to come and see for myself and also let Ukraine know that lots of people in the blockchain, Ethereum, crypto world really care about you guys and lots of people support you.

The three-day event was focused on 500 hackers who submitted almost 50 projects as part of a crypto-related hackathon to support Ukrainians in their fight for freedom. What stood out among the themes discussed were decentralized electoral voting, central banks issuing digital currencies, and the role of Web3 and blockchain in fighting disinformation.

It was incredible to have Vitalik join us on the ground as well as important figures from the Ministry of Digital Transformation. Kyiv Tech Summit is not just an ordinary tech event. It’s a protest, a movement and an embodiment of the unbreakable spirit of Ukraine.”

10 September

“Bitcoin (BTC) and Ether (ETH) both moved aggressively higher on Friday, with BTC posting its largest daily gain in six months. It was up by more than 5% in the past 24 hours, while ETH rose by 10% during that time. [Bitcoin’s] volume was roughly twice its 20-day moving average, signaling strong conviction by traders.

Most risky assets were higher on the day, as traders appear to be shrugging off Federal Reserve Chairman Jerome Powell’s hawkish comments on inflation. Bitcoin’s outperformance relative to other risky assets on Friday, however, implies that traders see BTC’s recent sell-off as overdone.

Friday’s push appears to be tied to signals that the U.S. central bank will reverse course from monetary tightening to monetary easing in 2023, lowering interest rates in the process. Inflation data set to be released next Tuesday will provide investors more clarity on price expectations.”

See Also: 3 Bitcoin price metrics suggest Sept. 9’s 10% pump marked the final cycle bottom
See Also: 3 reasons why Bitcoin traders should be bullish on BTC

“Ethereum today successfully completed what its developers say is the absolute final dress rehearsal for the historic and massive upgrade, which is likely to occur between September 13 and 15. The Ethereum mainnet’s 13th shadow fork went live earlier today, apparently without a hitch.

No issues surfaced.

Shadow forks are focused trial runs of aspects of the merge. The network’s developers have been running dress rehearsals of the merge almost weekly for the last few months, attempting to game out any scenarios that could potentially derail or delay its execution.”

See Also: Ethereum’s potential fork ETHPOW has crashed 80% since debut — More pain ahead?

“The CoinDesk Market Index initially consists of 148 digital tokens. To be included, each token must have a pricing history from at least two eligible exchanges going back at least 30 days. ‘It’s meant to be as inclusive as possible to represent the market.

The new index joins a growing field of competitors aiming to meet demand from investors and traders for ways to measure the crypto market’s performance. Other providers include Bloomberg Galaxy, CF Benchmarks (part of the Kraken exchange), Nasdaq, Solactive, MarketVector, MSCI and S&P.

A key differentiator for the CoinDesk Market Index, or CMI, is that it’s the first in a “family” of nine indexes built around the company’s proprietary classification system for cryptocurrencies, known as the CoinDesk Digital Asset Classification Standard, or DACS. The DACS divides about 500 of the biggest digital assets into six categories: currency, smart-contract platform, DeFi (decentralized finance), culture & entertainment, computing and digitization.

What really makes this launch unique is the family of indices, representing not just the broad market but the sectors. The first question might be, ‘Is the market up or down today?’ You might look at the broad market index for the answer. But then you ask, ‘Why, what drove it?’”

“Six Democratic members of the Senate Banking Committee have sent a letter to Meta Platforms (META) CEO Mark Zuckerberg asking what the company is doing to fight cryptocurrency scams on its Facebook, Instagram and WhatsApp platforms.

An FTC study shows 49% of crypto-related frauds originated on social media platforms like Facebook, members of the Senate Banking Committee say.”

Seven mayors received recognition for their cities’ ideas centered on the digital economy. The Ethereum based proof-of-attendance (POAP) NFTs were issued through Hazama Base. The assets are non-transferable, and therefore cannot be sold on the secondary market.

The country’s prime minister has also shared interest in the use of NFTs on a number of occasions in the past. Thus, the recent initiative from the government could become a tradition to carry forward.”

9 September

A group of Tornado Cash users filed a lawsuit against the U.S. Department of Treasury, calling its sanctioning of the Ethereum mixing service an ‘unprecedented, overbroad action.’ The suit, which is being funded by Coinbase and includes several employees as plaintiffs, also names Treasury Secretary Janet Yellen and Director of the Office of Foreign Assets Control (OFAC) Andrea Gacki.

That rationale is far too broad, Coinbase CEO Brian Armstrong wrote in a blog post about the lawsuit. ‘Sanctioning open source software is like permanently shutting down a highway because robbers used it to flee a crime scene.’ Jonathan Van Loon, one of the plaintiffs and an Ethereum core developer at Prysmatic Labs, wrote:

Code is speech and free speech is a constitutional right worth protecting.”

See Also: Firm Behind Ethereum Name Service and Virgil Griffith Sue GoDaddy Over Sale of Eth.link

The White House Office of Science and Technology Policy called for the U.S. to conduct further research on the energy impact of crypto mining in order to set standards for the industry, in a new report published Thursday.

The report calls on federal agencies including the Environmental Protection Agency and the Department of Energy to work with states and local officials to develop standards for the industry’s impact on the environment; the intensity and source of energy that goes into it, noise pollution, water usage as well as how to build carbon-free energy to balance out crypto mining’s consumption.

Should these measures prove ineffective at reducing impacts, the Administration should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining.

The report said that crypto mining, particularly bitcoin (BTC) mining, uses a lot of electricity, which undermines U.S. sustainability goals.”

“The U.S. Treasury Department will advise the federal government to press forward on work to issue a digital dollar, though it should only take the final step if there’s sign-off that the government-created tokens are in the “national interest,” according to a person familiar with a report emerging soon.

The Treasury’s document on how to handle the question of a digital dollar – expected to be released in the coming days – is among the most eagerly awaited, because issuing such a token could upend the digital assets industry and have major implications for consumers’ relationships with traditional banks.

While the “Future of Money” report won’t explicitly provide an administration endorsement for the digital dollar, it will suggest potential ideas for how it could be designed. It will also highlight work being done on a government real-time payments system expected to begin next year, which may take some pressure off the CBDC decision.

Even if Biden, Congress and the Fed eventually decide to put out a digital dollar, it could take as much as five years to design and launch one. That would give the crypto industry a long time to establish private stablecoins as an alternative for users. Fed officials have said they believe there would be room for the private sector to operate dollar-pegged cryptos alongside a public token.”

See Also: House Republicans Want Answers From Fed on Digital Dollar
See Also: UK economic secretary commits to make country a crypto hub under new PM

“In a Wednesday report, Chainalysis explained that the upcoming Ethereum upgrade would introduce institutional investors to staking yields similar to certain instruments such as bonds and commodities while also becoming much more eco-friendly. The report said ETH staking is expected to offer a 10-15% yield annually for stakers, therefore making ETH an ‘enticing bond alternative for institutional investors.’

Ether’s price could decouple from other cryptocurrencies following The Merge, as its staking rewards will make it similar to an instrument like a bond or commodity with a carry premium.

According to Chainalysis data, the number of institutional ETH stakers — those with $1 million worth of ETH staked or more — has “been steadily increasing” from under 200 as of January 2021 to around 1,100 as of August this year. The report also tips ETH to draw in more retail and institutional traders after The Merge, as the forthcoming upgrade will make staking a much more attractive investment tool.

See Also: Bitcoin is a ‘wild card’ set to outperform —Bloomberg analyst
See Also: Investment Management Giant Franklin Templeton to Offer Digital Asset Strategies to Wealth Managers

“The DAO behind Aave has accepted a proposal to reward members from Aave Companies with $16.28 million in retroactive funding for their role in the development of Aave Protocol v3. The community has overwhelmingly voted in favor of the retroactive funding request, with community members suggesting ‘Aave Companies did tremendous work and should be paid for that.'”

The “retroactive public goods funding” model provides an incentive for developers to work on projects by allowing them to get paid after the project is completed and can be based on the value it provides. The core principle behind the concept is that “it’s easier to agree on what was useful than what will be useful.”

Vitalik suggests in the post that it can be difficult in the beginning phase of a project to get it off the ground, with donations and grant money being insufficient to incentivize developers.”

“At an industry conference today, Securities and Exchange Commission (SEC) chief Gary Gensler said that he supports handing the Commodity Futures Trading Commission (CFTC) the power to ‘oversee and regulate crypto nonsecurity tokens and related intermediaries.’ Gensler stressed that should Congress give the CFTC prime oversight over crypto, his own federal agency shouldn’t be overlooked.

There has been a flurry of proposals, both from the crypto industry itself and from Washington, to delegate oversight of the crypto industry to the CFTC, which presently only has the power to regulate derivatives.”

See Also: Crypto Doesn’t Need More Guidance, SEC Chair Gensler Says
See Also: International Regulators Struggle With How to Oversee DeFi

“Soulbound tokens, which in this case act as an identity passport across the BNB chain, are unique and non-transferrable. Users who would prefer their identity not be shared across the entire network can opt out of the token.

Binance’s soulbound token – named binance account bound (BAB) – will allow users to participate in “building projects” while earning rewards, according to the release.”

See Also: Sony Music files trademark application for NFT-authenticated music

8 September

Swiss digital asset banking platform SEBA Bank said that it has launched an Ethereum staking service for institutions that want to earn yields from staking on the Ethereum network. According to the firm, the move is a response to the growing institutional demand for decentralized finance (DeFi) services.

The launch of our Ethereum staking services will enable institutional investors to play a key role in securing the future of the network, via a trusted, secure and fully regulated counterparty.

In June, crypto bank Anchorage Digital also announced its ETH staking service for institutional clients. Anchorage Digital co-founder Diogo Mónica said that institutional entry into ETH staking is a “win-win” situation for both the ecosystem and institutions.”

See Also: Ethereum’s Merge May Boost Public’s View of Crypto
See Also: Ethereum Merge FAQ: What You Need to Know

“It’s a question of when, not if, regulators will take aim at MakerDAO and the industry’s leading decentralized stablecoin DAI. With this assumption in mind, Christensen argued that the task now is thus to make DAI as attack-resistant as possible.

The call to arms also means that the project needs to prepare ‘for the likely possibility that DAI will have to become free-floating,’ or leave its peg to the greenback.

Christensen’s “Endgame Plan” would put a cap on how much of the project’s collateral is in Real World Assets, or RWAs. For example, Reif Financial Investments Inc. has collateralized real estate loans in exchange for DAI. This would also include Circle’s USDC stablecoin, of which roughly 50% backs DAI. As you can probably imagine, it’s much, much easier for regulators to crack down on these types of companies than it is to crack down on something like Ethereum.

However, by capping this type of collateral, there may not be enough attack-resistant (i.e., pure cryptocurrencies) collateral to supply continued demand for DAI. As supply slows because there are fewer ways to mint more DAI, continued demand could push the price of DAI past a dollar.

[Thus], Christensen also argued for the introduction of a “negative target rate,” essentially Maker’s version of negative interest rates, to drop demand for DAI. Much like in the real world, dropping interest rates into negative territory means that it costs currency holders to sit on their money. Dropping interest rates also makes borrowing, or in our case minting more DAI, much cheaper.

That’s the basic recipe for surviving any regulatory crackdowns, but the plan goes further, unpacking two more tools that ‘turn the free-floating of DAI into something that Maker can survive, and even thrive with.’

The only way to convince someone that owning an asset suffering from negative rates is good is by also convincing them that they need this asset to get other, more valuable assets. Here is where Christensen introduces the idea of so-called MetaDAOs and MetaDAO tokens. These mini-DAOs would have full autonomy to pursue any objectives they define, as well as hunting down any “profit-generating activities.” DAI holders could then yield-farm these new tokens.

Maker will not just become exciting once again; it will be the single most exciting and important place to be in all of crypto – and we have the perfect tool that allows us to capture that meta and hook people into our ecosystem: MetaDAO yield farming.

It’s a big, bold plan.”

See Also: DeFi Platform Curve Finance Takes First Steps Toward crvUSD Stablecoin
See Also: Binance Ditched a Bunch of Stablecoins. Even a Newly Banished Issuer Was OK With It

“Financial regulators in South Korea want to bring security tokens, which are blockchain-based digital forms of traditional securities, into the scope of the country’s capital markets rules in an effort to formalize the products.

The FSC plans to publish guidelines for the issuance and commercialization of security tokens by the end of 2022. South Korea is speeding ahead with new plans to regulate the digital asset sector following after a turbulent market earlier this year.”

“We have singled out, for the first release of the digital euro, three use cases.

The three immediate applications will be peer-to-peer payments that enable transactions among family and friends; consumer-to-business payments in physical or online stores; and payments to or by governments.

Other potential uses of the CBDC – including the payment of wages, settlements among businesses, payments initiated automatically by machine and the functionality required to support decentralized finance – could still be considered in a later phase.

Officials at the central bank still have to decide where they stand on issues like how transactions with a digital euro will be settled and intermediaries be compensated before finalizing the start of development in September 2023.

Whether or not blockchain will be used as a technology is currently not in the investigation phase.”

See Also: Fed Vice Chair Brainard Calls for Crypto-Specific Regulations, Notes Stablecoin Risks

The two companies will promote e-commerce and marketing initiatives, while certain GameStop retail stores will carry FTX gift cards, according to a statement Wednesday. GameStop is also being given the label of FTX’s “preferred” retail partner in the U.S.

GameStop’s NFT marketplace went live this summer, and garnered strong volumes that eclipsed crypto exchange Coinbase’s (COIN) volumes.”

7 September

The Ethereum blockchain’s Merge is officially underway. The activation of the Bellatrix upgrade on the Ethereum blockchain triggers the beginning of the Merge, which will likely be completed sometime around Sept. 13-16.

The Bellatrix upgrade prepares Ethereum’s PoS Beacon Chain – also called its Consensus layer – for a Merge with Ethereum’s mainnet Execution layer. When the TTD number is reached, the network will merge its Execution layer with the new PoS Consensus layer, allowing the chain to continue on with a new system for issuing and authenticating blocks of transactions.

The completion of the Merge will mark the end of Ethereum’s energy-intensive proof-of-work chapter. The next steps on Ethereum’s roadmap involve improving fees and transaction speeds via sharding and rollups.”

Ethereum’s impending Merge could prompt a global wave of people using the blockchain, including for global payments, according to one of the Merge’s leading developers.

Ethereum is aiming to be a global settlement layer. That means that everything can settle on Ethereum, even bitcoin [BTC], in the far future.

One of the biggest obstacles to Ethereum’s expansion has been the environmental impact of the proof-of-work mechanism, according to VanLoon. ‘We see this as a barrier for global adoption.’ With the switch to proof-of-stake, Ethereum’s energy consumption should be cut by 99.95%. That could increase the appeal of Ethereum to institutions that have concerns with the blockchain’s environmental impact.

Decentralization would be another benefit, said Van Loon. Participants can join and produce blocks on the network ‘with a minimal barrier to entry. With proof-of-stake, you can be a block producer and a participant in the consensus of Ethereum with something as small as a laptop, or a Raspberry Pi.’

Van Loon said users will not need to do anything ahead of the Merge.”

With an end to Ethererum proof-of-work mining on the horizon thanks to the upcoming Merge and its shift to a proof-of-stake blockchain system, prices for GPUs are dropping like a rock. Ethereum’s shift away from computationally intensive proof-of-work to proof-of-stake means that the tens of millions of GPUs purchased over the last four years to mine ether no longer have a use.

Some miners are considering moving their operations to Ethereum Classic, but despite the protocol being around for nearly six years it just hasn’t garnered the network effect needed to allure a critical mass of decentralized apps, non-fungible tokens (NFT) or decentralized finance (DeFi). GPU prices are reflecting this.

According to GPUTracker.eu, prices for some of the most popular GPUs are down by double-digits. The RTX 3080 Ti, a once-favorite for miners, has seen its average selling price drop by 45% in the last quarter, putting it almost at MSRP. In February, the card was being sold for around $2,000; now it’s just over $1,100. In China, wholesalers can’t get rid of these cards fast enough as inventory piles up from mining farms trying to offload supply.

All this is being felt on Nvidia’s (NVDA) bottom line. During recent earnings, the company said its gaming line (read: GPUs that were being used for mining) was down 33% on the year to $2.04 billion.”

See Also: Large Ethereum Miners Look to Cloud Computing, AI Ahead of The Merge

  1. The Ethereum Merge is successful
  2. Rollups to bring the next wave of crypto user demand – Rollups now making up around 15%-25% of all transactions on the Ethereum blockchain.
  3. Ether flips bitcoin as the top cryptocurrency – For digital assets, what is more important is that it becomes more of an “innovation-driven, structural trend rather than a macroeconomic asset class.” Ether represents this “innovation-crypto,” and if it succeeds in building the blockchain digital economy, ETH could be adopted as digital money, the team argued.
  4. DeFi on rollups brings back the DeFi summer – Layer 2 scalability, however, is now making DeFi affordable again.
  5. NFTs pivot to gaming and play-to-earn becomes play-to-own – Chhugani and Agrawal are seeing a big migration in talent to Web3 game development from traditional gaming studios – a strong leading indicator in their opinion.
  6. Token economic designs start to focus on value accumulation – More sustainable token designs will bring back retail interest in investing in application tokens versus the latest fast blockchain or retail meme coins.
  7. Fat protocol thesis becomes the fat application thesis – The “long-tail of application tokens” will grow thanks to enhanced scalability, economical transaction costs, better user growth on rollups, improved token value accrual and retail interest to invest in applications that they use.”

Russia is talking to several friendly countries about launching clearing platforms for cross-border settlements in stablecoins.

We are currently working with a number of countries to create bilateral platforms in order not to use dollars and euros. We offer mutually acceptable tokenized instruments that will be used on these platforms, which are essentially clearing platforms that we are currently developing with these countries.

The Bank of Russia is also in the process of developing a digital ruble. The Finance Ministry and the Bank of Russia agreed that in the current environment, where Russia has been sanctioned, ‘it is impossible to do without cross-border settlements in cryptocurrency.'”

“Trezor, the company behind one of the most popular crypto wallets, has teamed up with privacy project Wasabi to bring CoinJoin mixing to Bitcoin transactions on its hardware wallets. The goal is for Trezor Suite users to be able to send private coins directly from their hardware wallets.

You will be able to join our zkSNACKs WabiSabi CoinJoin rounds with your hardware wallet in the Trezor Suite application.

CoinJoin is a coin mixer that groups Bitcoin transactions together to obscure their origins. Wasabi Wallet is a popular Bitcoin wallet made by ​​software firm zkSNACKs that uses CoinJoin technology.”

“The secretive society is releasing 77 digital art NFTs under the name CryptoMasons, with profits going back to local charities supported by the chapter.

The collection contains esoteric images related to Masonic history and lore, such as black and white checkered floors and the infamous square and compass symbol. Even the specific number of 77 NFTs available correlates to a numeral significant within occultist traditions and spirituality.

Profits from the sale of CryptoMason NFTs will go toward a local orphanage, a professional development center for youth and an immigration rights center in Argentina.”

6 September

Binance is to convert its users’ holdings in three stablecoins – USDC, USDP and TUSD – into its own stablecoin BUSD. At 03:00 UTC on Sept. 29 users’ balances in the three stablecoins will be automatically converted into BUSD, though users can convert them manually before then if they wish to do so.

The world’s largest crypto exchange announced Monday it is taking this action to enhance liquidity and capital-efficiency for users.

With a market cap of $19.5 billion, BUSD is the third largest stablecoin. TUSD and USDP rank fifth and sixth with market caps of $1 billion and $945 million respectively. The stablecoin market is dominated by Tether’s USDT with a market share of around 44%, though this may be about to change with large amounts of USDC, USDP and TUSD being consolidated into BUSD.”

“Most traders looking to time the next parabolic bull run are waiting for the world’s most powerful central bank to declare victory over inflation and abandon liquidity tightening.

While the Fed decisions are undoubtedly important, indicators unrelated to macroeconomic factors and unique to the crypto market, like coin dormancy metrics, could be equally valuable in timing the next bull run.

Dormant supply peaks are springboards for upwards price action. There are more unspent one-year plus old coins than ever before.

If two-thirds of bitcoin is off the market (not for sale) for an extremely long period of time, the price is driven up when more buyers enter the market bidding for a finite supply—a scenario that has played out in bitcoin twice before.”

See Also: Bitcoin in Accumulation Phase Despite Macro Headwinds, On-Chain Data Indicate
See Also: Ether Primed for Pre-Merge Rally After Wedge Breakout

“Truss will be formally appointed on Tuesday after Johnson officially announces his resignation to Queen Elizabeth II.

In 2020, the year that Brexit was finalized, Truss – who was trade minister at the time – said she believed the country could ‘create great opportunities in areas such as blockchain.’

We should welcome cryptocurrencies in a way that doesn’t constrain their potential.

Despite these two statements, Truss has not said much about crypto or blockchain, and has made no concrete policy proposals on these issues. It’s also unclear if Truss will support or continue Sunak’s plans to turn the U.K. into a crypto hub.”

See Also: DeFi Speculators Awaiting Arbitrum Token Flock to GMX

PoolinWallet, the wallet service of one of the world’s biggest bitcoin mining pools, is suspending all withdrawals as it tries to preserve assets and stabilize liquidity, the firm said on Monday. On Sunday, the firm’s CEO and founder Kevin Pan said that Poolin was facing liquidity issues but assured users that assets were safe.

A “feasible” solution will be provided within a week, the post said, echoing Pan’s statement that the company would soon come up with a plan to fix the issues. That plan might include debt, according to Pan’s post.”

“Named IS-NEWS #01, the digital token is said to be an image bearing the Islamic State’s emblem with text praising Afghanistan-based Islamic militants for attacking a Taliban position. The user created another two other NFTs on Aug. 26: one showing an Islamic State fighter teaching students to make explosives and the other condemning smoking cigarettes.

The analysts said this could be a sign that terrorist groups may be using the emerging technology to spread their message and test new funding strategies.

The digital token was reportedly listed on NFT marketplace OpenSea, but the company quickly took the listing down and closed the posters account.”

The Disrupt Weekend

“The internet was built without an identity layer. Decades of efforts to construct that layer have relied on some form of centralized provider… until now.

The critical difference in the decentralized identity revolution is that ownership of your online identities is no longer account-based and “provided” for you by a middleman. Instead, it is a digitally shared connection that all parties to the relationship commit to maintaining over time, reflecting the types of direct relationships we have in the real world.

Broadly speaking, there are three groups of Web3 digital identity players. They are Proof of Personhood (PoP) projects, verifiable credentials (VC), and most recently, soulbound tokens (SBT).

PoP projects are primarily leveraged towards establishing unique identity. In turn, this solves issues for when sybil attacks are especially problematic, such as universal basic income or quadratic fundraising.

SBTs can be simply thought of as a permanent and non-transferable token on a public blockchain. They can be issued in various forms — a scholastic achievement, a financial debt, an employment contract — by anyone, be it an individual, private company, university, commune, or government.

SBTs are an attempt to formalize that handshake on a public blockchain that the rest of the world can witness and verify. In doing so, it allows us to color a person’s identity with social context, opening up a world of coordination possibilities that until now wasn’t possible without a middleman. In essence, SBTs are a codification of social capital (i.e., reputation) into formal property ownership. By “baring our souls”, individuals can stake their reputation openly and prove the authenticity of who they say they are.

The grand vision behind SBTs is that there would exist an ecosystem of abundant SBTs so pervasive that a person’s wallet address can provide a reliable and comprehensive “digital identity”, in contrast to the unreliable self-issued credentials that we decorate our LinkedIn pages and job resumes with.

Soulbound tokens are not without their criticisms. The permanence and public nature of an SBT might incentivize certain forms of negative discrimination. For example, a racist employer might discount a potential employee because a peek into the jobseeker’s wallet shows proof of attendance at a Black Lives Matter event.

To mitigate this problem, SBT critics like McMullen much prefer the W3C-led format of “verifiable credentials” (VCs), sometimes confusingly referred to as attestations, badges, or claims. Like SBTs, VCs can be issued by anyone and can represent any bit of information. The key difference, however, is that it operates privately by applying zero-knowledge proof technology. In short, verifiable credentials work on a “selective disclosure” basis, unlike SBTs.

Many verifiable credential protocols in the Web3 space already exist and are market-tested. They build on the official web standards established by the W3C framework recently in July, and provide a decentralized way of establishing digital identity that is privacy-sensitive and does not require a central issuing agency.”

Creators should be rewarded based on collection marketcap, not collection volume. There’s a clear incentive distortion that pays creators based on how much volatility and holder turnover they have, while they earn nothing from diamond-handed true believers. This explicitly encourages low-quality pump-and-dump free mints.

When a collection is dumping to zero because the community learned unsavory details about the founding team, it’s not right for that same unsavory founding team rake in additional secondary fees.

[Further], royalties are not enforceable. NFTs are decentralized bearer assets. Bearer asset means that the person holding it has ownership and full control, decentralized means that ownership/control cannot be revoked by a third party at a later date. It is impossible to enforce royalties onchain without introducing centralized control or breaking wallet-to-wallet transfers.

A couple options: (1) Creator holds a portion of supply; (2) Creator earns a share of sale profit rather than sale price; (3) Creator earns a rolling percentage of current project valuation through harberger taxes.

“Human society in the 21st century is faced with numerous global-scale challenges and systemic risks. Our legacy institutions are not equipped to handle these issues, largely because individuals are focused on their own interests, and nations are focused on their own citizens, leading them down paths that help them but harm the overall system. These sorts of problems are known as “coordination failures.”

With the dawn of Web 3, there is an opportunity to build a better world for our generation and beyond. We can leverage the properties of Web 3 to design crypto-economic systems that are regenerative: systems that are resilient and sustainable, and align conflicting priorities toward the greater good.

To fight coordination failure on the environment and other issues, we need a coordination mechanism that is truly global in nature. Luckily, we may have found one: Decentralized blockchain networks allow us to create new incentives and mechanism designs that are borderless and direct. One way to reinforce coordination is to realign the economic incentives that support a system. By doing so, we create a systematic economic incentive for work to support that system.

ImpactDAOs, defined as any DAO (a decentralized autonomous organization) that creates net positive benefits for the ecosystems around it, are the scalable, atomic building blocks of the regenerative crypto-economic movement. With ImpactDAOs and the properties of Web 3, we can design a regenerative internet of value to enable the thriving of a diverse global citizenry. We can increase and ensure funding for the creation and maintenance of digital public goods. We can program our values into our money and make public goods financially sustainable.

With cryptocurrency very much in the headlines these days, some question whether it’s actually good for the world. While the headlines love big winners, crypto’s main benefit over time won’t be to billionaire investors. Its real promise is in creating new structures that drive new behaviors.

Regenerative crypto economics is already helping us build a sustainable funding system for digital-native public goods. In the coming decades, we expect to see economies, democracies and civic groups all over the world upgraded with similar coordination mechanisms.”

See Also: How Web3 and Bitcoin Billionaires Will Revolutionize Philanthropy

RAI is a USD-denominated, floating exchange rate stablecoin that can only be minted using ETH collateral. What separates RAI from other $1 pegged stablecoins is that RAI doesn’t have a fixed $1 peg, instead it actively updates its own peg — called the redemption price — to oppose deviations of the market price from the redemption price.

RAI uses an onchain PI controller to set the rate of change of its redemption price — called the redemption rate — which is expressed as an annual interest rate. The sensitivity of the redemption rate to market price deviations is determined by the controller PI parameters, which we aim to tune such that RAI is able to autonomously maintain price stability in the face of a wide variety of scenarios and potential shocks.

Tuning PID controllers for dynamic real world systems takes time, we ran the controller in P-only mode for 1 year. After we settled on what seems to be a reasonable parameter for the P-term, we added the I-term in Feb 2022 as part of a 6-month planned experiment to evaluate its effects in prod.

As the last 18 months of RAI in production have demonstrated, RAI mostly works. The P-rate is simple way to balance RAI supply and demand, and with the addition of the I-rate, RAI can express directional rates even while at price equilibrium.”

3 September

See Also: In-Depth: Ethereum Uncensored with Justin Drake

“A legislative push toward the crypto industry’s first significant set of U.S. regulations remains bogged down over negotiations between the panel’s Democratic chairwoman and its ranking Republican, despite initial plans that aimed to release a draft of the bill as early as this week.

There have been a number of points to iron out, including such thorny topics as the role of state regulators, the possibility of a future digital dollar in the U.S. and the treatment of customer money held by crypto platforms.

When Waters announced in late July that an agreement was still out of reach and they would have to revisit the legislation after the recess, she had also said that she wanted the bill to direct the Federal Reserve to do more work toward a digital dollar – a controversial point. McHenry and other Republican lawmakers have asked for caution from the Fed on issuing a central bank digital currency (CBDC), insisting that the central bank ensures it’s worthwhile and allows a leading role for the private sector.

At this stage – as lawmakers devote more and more attention to the November midterms and as the legislative session winds to a close – the effort is unlikely to make it through this year.

“Kyle McDonald, an independent researcher, predicts that the Bitcoin network may be “regulated away,” causing the price of bitcoin to collapse.

The reason is that after the Ethereum blockchain switches to a drastically less energy-intensive method of validating transactions, known as “proof-of-stake,” investors and regulators may realize that the energy-intensive method that both Bitcoin and Ethereum use now, called “proof-of-work,” was never really necessary.

Because Bitcoin doesn’t have the coordination like Ethereum to leave proof-of-work, it could be the first to be regulated away.”

See Also: Why I Don’t Own Bitcoin Anymore

“There are genuine technological limits to the graphical fidelity and avatar-tracking that’s possible in an immersive virtual reality (VR) environment, but Horizon Worlds could have done a lot better within those limits. Compare its aggressively bland corporate vibe to the spectacularly colorful Minecraft-inspired voxels of The Sandbox.

That comes down substantially to business models. Blockchain-backed metaverse projects like Sandbox and Decentraland are gratifyingly weird and quirky in part because they’re fairly chaotic organizations answering to a lot of stakeholders. But Zuckerberg has effectively total control of Meta, and the emptiness inside of him is written across every pixel of his creation.

Over the past six months Meta’s stock has underperformed both every other major tech stock except Netflix, and the overall market. Meta is down 21% for that span, versus a 4% drop for Apple (AAPL), a 15% drop for Amazon (AMZN), a 10% drop for the Dow Jones industrials and a 14% drop for the Nasdaq composite index.

There are endless reasons for this, but one in particular deserves highlighting. As Kotaku’s reviewer observed, Horizon Worlds is currently packed with hall monitor-like “community guides” keeping watch on what’s going on. If the “community guides” are a permanent necessity, as 15,000 content moderators still are at Facebook, the whole thing may yet prove fundamentally economically non-viable.

Then there’s the ultimate sign of imminent doom – the June departure of former Meta Chief Operating Officer Sheryl Sandberg. Sandberg has always been the “adult in the room” at Facebook/Meta. Sandberg’s departure signals a deep lack of faith by probably the single living human who knows the most about what’s actually going on over there.”

2 September

“Arbitrum One has now been fully migrated to the Nitro stack – increased throughput (7x-10x higher), lower fees, next generation rollup architecture is happening, and it’s all live now on Arbitrum One mainnet!”

See Also: What is “data availability” and why is it the top priority for Ethereum’s development team?

The U.S., by all measures, has lagged behind on consumer privacy regulations. This gap has created an environment where Big Tech is able to surveil and monetize your personal and sensitive data for profit. The adtech industry is a behemoth, and it has made the internet a worse place.

The American Data Privacy and Protection Act (ADPPA), a proposed privacy-enhancing bill snaking its way through the U.S. legislative system now, would set strong limits around the type of data that companies can collect about you online. It would be, if passed, the most significant internet law introduced in decades and strongly bolster civil rights.

There are a number of minor issues that we still believe can be tweaked in the bill, but at core it would create strong privacy protections for all Americans and block some of the most harmful data collection practices with its strict data minimization requirements (especially for sensitive data categories).

ADPPA would prohibit the use of sensitive data (like precise geolocation, biometric and health information) for targeted advertising. It would also prevent companies like Google, Facebook and Coinbase (COIN) from tracking your web behavior over time and across third-party sites. It sets strong restrictions on data collection and the “transferring” of it to third parties without your consent. Companies would only be permitted to collect and use data for 17 essential reasons, like authentication and fraud management.

That’s in contrast with other privacy-focused regulations, like the European Union’s GDPR, that are “based on consent,” as Wired magazine put it. That leads to ‘an endless stream of annoying privacy pop-ups that most people click ‘yes’ on because it’s easier than going to the trouble of turning off cookies.’

Crypto’s approach to privacy has primarily focused on creating tools or methods to shield your transactional history. This code-first approach can be symbiotic with legislative efforts.”

“California Gov. Gavin Newsom is set to sign a recently passed bill that would require digital asset exchanges and other crypto companies to obtain a license to operate in the state. The Digital Financial Assets Law, dubbed California’s “BitLicense,” takes after New York’s BitLicense regulation, which came into effect in 2015. California’s law, if signed by Newsom, a Democrat, would go into effect in January 2025.

Among the requirements is a prohibition, which would be phased out in 2028, on California-licensed entities dealing with stablecoins, unless that stablecoin is issued by a bank or is licensed by the California Department of Financial Protection and Innovation.

The Blockchain Association, an industry trade group, tweeted that the bill would ‘create shortsighted and unhelpful restrictions that would impede crypto innovators’ ability to operate and push many out of the state.’

See Also: Digital Dollar Project Plans to Explore CBDC Technical Solutions With New Sandbox
See Also: New Global CBDC Platform Could Cut Payment Costs, IMF Says

“The software will support activities such as data capture, document management, study monitoring and consent. As told by Triall, the purpose of the collaboration is to demonstrate an immutable public ledger audit trail through its blockchain technology to boost the integrity of clinical trials. Investigators, regulators and stakeholders can then review and assess such trial-related data with trust, knowing that no one can modify the records.

In addition, the firm is developing APIs through eClinical that enable existing third-party clinical trial software providers to connect to Triall’s blockchain infrastructure. The native TRL token is designed for ecosystem utility, such as paying compensation to clinical trial participants. If successful, Triall plans to further collaborate with the Mayo Clinic in the realm of decentralized medical research.”

“Celsius has about 58,300 users who collectively deposited over $210 million with its custody and withhold, with 15,680 customers holding “Pure Custody Assets” worth around $44 million. Celsius said these funds are not part of the bankruptcy estate, unlike funds from Earn and Borrow clients.

Celsius’ filing comes a day after an organized group of 64 customers claiming around $25 million in custody holdings also petitioned the court for their funds back.

The argument is that unlike Celsius customers using its Earn or Borrow products, customers with custodial accounts still maintain ownership of their crypto assets. Celsius is merely acting as the storage provider. Therefore, these funds belong to the customers, not to Celsius’ estate.”