Daily Edition · Page 5

THE DAILY INDEX

Technology, AI, software, security, crypto and business

MARKETS & BUSINESS

TLDR Crypto

JACK DORSEY'S BLOCK FACES SCRUTINY FROM FEDERAL AUTHORITIES OVER NON-COMPLIANT CRYPTO SERVICES

Block, the parent company of Square and Cash App, is under investigation over alleged sanctions, violations, and other regulatory issues. Whistleblowers complained that the company processed transactions linked to sanctioned countries and terrorist organizations, with thousands of suspicious transactions going unreported. Block states that it did not intentionally or knowingly violate sanctions.

HOW REDSTONE WILL CHANGE THE GAME

Redstone is an OP Stack Layer 2 and part of the Optimism Superchain ecosystem that just went live. It was created by Lattice, the company behind the MUD framework for building complex onchain apps centered primarily around gaming and autonomous worlds. Over the next few months, Redstone, which was made to realize MUD's potential, will deploy several games, including onchain Minecraft, a multiplayer real-time strategy game, a sci-fi horror, and the traditional suite of DeFi products.

INTRODUCING AAVE 2030

Aave V4 introduces the Unified Liquidity Layer, which allows for a more flexible approach to managing liquidity that builds upon a base layer while allowing modification at the module layer. It adjusts interest rates and liquidity premiums based on market conditions and collateral risk to provide fairer pricing for lenders and borrowers. The ultimate goal is to create a chain-agnostic liquidity protocol facilitating cross-chain liquidity and an expansion of its GHO stablecoin. Aave is also rebranding with a new logo and design.

SELL IN MAY & GO AWAY

Seasonality has a statistically significant impact on returns in both traditional and crypto markets. Over the past five years, buying BTC in October and selling in April netted 1,449%, while buying in May and selling in September led to -29%. Retail and institutional sentiment is waning this May, as evidenced by trading volume, volatility, and ETF outflows. Macroeconomic conditions are also driving liquidity away from all markets, which the Treasury could solve by injecting up to $1.4 trillion of liquidity into risk assets.

UNISWAP: PRICE IMPROVEMENT WITH ORDER FLOW AUCTIONS

Uniswap Labs has introduced a new methodology for evaluating price improvements when using Order Flow Auctions (OFAs) and Automated Market Makers (AMMs). It focuses on factors like liquidity access, gas optimization, and priority fee settings. Uniswap Labs' initial findings suggest that the Uniswap interface, when compared to other major interfaces like 1inch, often provides better pricing for users, especially in larger trades.

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