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THE DAILY INDEX

Technology, AI, software, security, crypto and business

MARKETS & BUSINESS

TLDR Crypto

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The SEC has filed 13 charges against the world's largest crypto exchange, Binance, and its founder CZ. The SEC alleges that Binance has violated securities laws, commingled billions in user funds, purposefully worked to attract US customers to its unregulated international exchange, and included some extremely incriminating statements made by Binance officials in the lawsuit. Additionally, the SEC accused Binance of operating market-making companies to inflate trading prices. Binance claimed to have been cooperating with regulators and pledged to continue to for the investigation. The suit also alleged that several leading altcoins, such as Solana, Polygon, BNB, Cardano, and others, are classified as securities, causing crypto markets to tumble yesterday.

CURVE’S STABLECOIN TO SUPPORT LIDO’S STETH

Curve holders have voted to include Lido's liquid staking token, stETH, as a collateral alternative for Curve's new stablecoin, crvUSD. This development will increase the crvUSD debt ceiling by 15 times to $150M. If this new limit is reached, crvUSD would become the 13th largest stablecoin. The addition of stETH will allow more liquid staking token holders to utilize their position in DeFi with crvUSD. The vote also increases the limit on PegKeepers pools, a system that helps maintain crvUSD's stable value.

A METRIC TO EVALUATE LP COMPETITIVENESS IN AMMS

Uniswap has introduced a new metric called fee liquidity-adjusted instantaneous returns (FLAIR) to gauge the performance of LPs in AMM pools. FLAIR takes into account the intra-pool competitiveness, considering factors like timing of liquidity deployment and rebalancing of in-range liquidity. It also helps LPs measure historical performance and strategize future capital deployments. While it's applicable to Uniswap's protocol, it can also be adjusted for traditional exchanges, offering a comparative tool to understand various market structures.

CRYPTO BASICS SERIES: DEX AGGREGATOR BASICS

This article likens DEX aggregators to hotel search engines - tools to find the best deals across multiple DEXs. They monitor numerous liquidity sources using algorithms to determine the most beneficial rates and least slippage, saving users what might otherwise be lost in transactions due to high slippage or suboptimal exchange rates. Some aggregators may even split trades across several exchanges to maximize conditions. Prominent examples of DEX aggregators include 1inch and Paraswap. In the future, DEX aggregators will likely become an integral part of wallets, enhancing their functionality as we have already seen with larger wallets like MetaMask.

A BREAKDOWN OF THE PROPOSED MARKET STRUCTURE BILL

The proposed crypto bill aims to integrate crypto regulation into the existing US financial regulatory landscape, allowing tokens and related intermediaries to be simultaneously regulated by the CFTC and SEC. In this framework, tokens would sometimes be regulated as securities and sometimes as commodities. For example, insider tokens would be treated as securities with a 12-month lockup period, and could be sold on SEC-registered platforms. The bill also provides a clear securities law exemption for end user distributions. Potential downsides include fragmented markets, SEC authority over crypto projects, possible lack of liquidity for insiders, and a dual regulatory regime.

SEC COMPLAINT AIMS TO UNILATERALLY DEFINE CRYPTO MARKET STRUCTURE

In its own statement, Binance expressed disappointment over the SEC's lawsuit, stating that it has cooperated fully during investigations and attempted to address the SEC's concerns. The crypto exchange feels that the SEC's approach lacks clarity for the digital asset industry, and unilaterally labeling tokens as securities complicates matters further. Binance refuted allegations that user assets on its platform were at risk, assuring that all assets are secure. It criticized the SEC's apparent intent to make headlines rather than protect investors and claimed that the agency was hindering innovation in the US with its enforcement actions. Despite the lawsuit, Binance stated that it remains committed to cooperating with regulators and fighting the SEC's perceived overreach.

VC FUNDING OVER THE LAST FEW MONTHS

In May, there were 120 crypto venture deals that raised a total of $1.2B, down from the previous month’s count of 130 deals. While the raw numbers showed declines, it was still promising to see projects securing funding during the bear market. Three of the projects that raised in May include zkLink, a multichain trading layer for DeFi & NFTs; Dolomite, a next-gen money market and margin trading platform; and Hourglass, a marketplace for trading time-bound tokens.

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