Daily Edition · Page 6

THE DAILY INDEX

Technology, AI, software, security, crypto and business

MARKETS & BUSINESS

TLDR Crypto

PHILIPPINES PROPOSES 10,000 BTC STRATEGIC RESERVE WITH 20-YEAR LOCKUP

Philippines Congressman Miguel Luis Villafuerte has introduced a bill calling for the central bank to buy 2,000 BTC annually over five years, creating a 10,000 BTC reserve locked for 20 years. The bitcoin would only be used to retire government debt, with strict limits on sales even after the lockup period. If passed, the Philippines would join El Salvador and Bhutan in treating bitcoin as a strategic national asset.

DUAL FLOW BATCH AUCTION

The Dual Flow Batch Auction (DFBA) is a novel market structure that addresses critical flaws in blockchain-based Continuous Limit Order Books, including MEV exploitation, latency arbitrage, and adverse flow that drive up trading costs. The system separates orders into maker and taker groups, conducting two independent auctions every ~100ms where makers compete purely on price rather than speed, eliminating time-priority advantages and allowing market makers to quote tighter spreads with reduced exposure to toxic flow. DFBA provides uniform pricing within each auction (all participants fill at the same clearing price) while maintaining efficient liquidity provision, with analysis suggesting auction intervals of 100ms-1s are optimal for natural flow traders who see negligible benefit from lower latencies. This design represents a fundamental shift away from speed-based competition toward fair pricing mechanisms that better serve actual trading needs rather than optimizing for bots and block producers.

INTEGRATING 3-SLOT FINALITY WITH EPBS, FOCIL, AND PEERDAS

Researchers Luca Zanolini and Roberto Saltini explore integrating Ethereum's proposed Three-Slot Finality protocol with three other major upgrades: enshrined Proposer-Builder Separation (ePBS), Fork-Choice Inclusion Lists (FOCIL), and PeerDAS, aiming to achieve finality in just three slots while maintaining censorship resistance and data availability. The integration requires restructuring slot timelines to accommodate builder-proposer separation, introducing an Availability Committee to verify payload release, and modifying the RLMD-GHOST fork-choice algorithm to handle different payload availability states. While the authors believe the combination preserves 3SF's core security properties under assumptions of synchrony and reduced adversarial resilience, they identify a critical challenge around low validator participation scenarios where builders may struggle to reach the 60% threshold needed for safe payload release.

GENIUS WAS JUST THE PROLOGUE

Stablecoins represent a fundamental platform shift comparable to historical infrastructure transformations like railroads and the internet, with the recent GENIUS Act passage marking just the beginning of mainstream adoption. Legacy financial rails like wire transfers and ACH are inadequate for modern needs requiring composability and machine-to-machine transactions, while stablecoins offer instant settlement, programmability, and borderless functionality that will unlock trillions in economic activity. AI agents will accelerate this transition by natively using stablecoins for automated commerce and treasury operations, creating an entirely new category of "AI-native" economic activity. Despite the current $280 billion stablecoin market cap, the industry is still underestimating the speed of adoption given the 100:1 gap with the $20 trillion US M2 money supply, positioning stablecoins as the foundational layer for the future digital economy.

COINBASE INSTITUTIONAL RESEARCH WEEKLY HIGHLIGHTS

Markets pulled back ahead of Jackson Hole amid macro headwinds, with the US Treasury rebuilding its General Account balance by $185B since early August, while Fed rate cut odds dropped from 96% to 70%, contributing to $756M and $867M in BTC and ETH ETF outflows, respectively. Circle launched Gateway, making USDC effectively chain-agnostic with sub-500ms cross-chain transfers that could save large exchanges up to $40M annually per $1B of float by eliminating rebalancing costs and reducing safety stock requirements. Despite spot weakness, ETH derivatives markets showed strength with 9% annualized funding rates and open interest hitting new all-time highs at $125.5B globally, suggesting crypto-native traders are buying the dip. Gateway's initial lack of Solana support may strategically benefit EVM chains in capturing multi-chain institutional flows until Circle expands coverage or prioritizes its upcoming Arc L1.

STARGATE DAO APPROVES LAYERZERO ACQUISITION

Stargate DAO approved LayerZero Foundation's $120 million acquisition offer with nearly 95% of votes, despite last-minute competing bids from Wormhole, Axelar, and Across protocols. Under the modified deal terms, STG holders will swap tokens for ZRO at a 1:0.08634 ratio, with veSTG holders receiving 50% of Stargate's revenue for six months before all excess revenue goes toward ZRO buybacks. The competing protocols requested a vote pause to submit proper bids, but the DAO proceeded with the original timeline, completing what LayerZero claims is the first private DAO acquisition over $100 million. There is some controversy about the lack of consideration of the other protocols' proposals, though, given that Stargate is built using LayerZero's interoperability technology, this outcome was not unexpected.

WESTERN UNION EYES STABLECOINS AS REMITTANCE MOAT SHRINKS

With revenue down 25% as digital-first rivals like Wise and Remitly take share, Western Union (WU) is piloting stablecoin settlement in South America and Africa. Its edge isn't the tech - others can adopt stablecoins too - but instead its 400K global cash agent network, which could make WU the key bridge from cash to stablecoins for individuals and fintechs. This pivot could buy time against the decline of cash while positioning WU as infrastructure for the digital economy.

TLDR IndexPage 6