Daily Edition · Page 6

THE DAILY INDEX

Technology, AI, software, security, crypto and business

MARKETS & BUSINESS

TLDR Crypto

SEC CHAIR CALLS FOR CLEAR RULES TO UNLOCK ONCHAIN CAPITAL RAISING

SEC Chair Paul Atkins said entrepreneurs and investors should be able to raise capital onchain “without endless legal uncertainty,” reaffirming that most crypto tokens are not securities. He outlined “Project Crypto,” aimed at modernizing securities rules to enable onchain trading, lending, and staking under a unified framework. Atkins criticized the prior administration for driving innovation offshore and said the new SEC approach is to provide the “minimum effective dose” of regulation to protect investors while fostering growth.

MARKETS NEED RULES, AND CRYPTO IS NO DIFFERENT

Crypto markets require clear regulatory frameworks to achieve broad adoption, countering both the "regulatory free-for-all" approach favored by some crypto advocates and the current hostile regulatory environment. There are four essential objectives for crypto regulation: predictability and stability, protection of property rights, transparency and information clarity, and fair competition. The SEC's approach of pursuing enforcement actions without first establishing clear legal standards creates uncertainty that stifles innovation while allowing bad actors to operate in regulatory grey zones. Crypto-specific regulation should recognize blockchain technology as both a financial system and a web infrastructure platform, requiring specialized frameworks like token taxonomy, decentralization standards, and guidelines that enable legitimate businesses to operate without fear of arbitrary prosecution.

THE BOROS FUNDING RATE TRADE

Boros is a new Pendle-built platform that enables direct trading of funding rates rather than underlying assets or perpetual contracts. The strategy, called "Optimistic Funding Rate Trading," involves longing rates when Binance's real-time funding rate rises above the market's implied rate and shorting when it falls below, attempting to capture both settlement gains and price movements from rate shifts. The approach relies on timing market sentiment cycles in funding rates, with traders earning the spread between actual funding settlements and their locked-in fixed rate, plus potential profits from correctly anticipating rate direction changes. This is high-risk in nature, and there is potential for significant losses from mistimed entries or misjudged market shifts.

FROM WORLD COMPUTER TO GUARANTEE MACHINE

A developer building a real-time fitness aggregator demonstrates why blockchains are fundamentally unsuitable for most applications by detailing how a simple Python app becomes impossible to implement onchain. The app easily handles continuous data streams, event-driven updates, external API calls, real-time processing, and hot deployments using traditional web infrastructure, but each capability is blocked by blockchain constraints like determinism requirements, oracle dependencies, gas costs, and sandboxed execution environments. Blockchain applications remain toy-like because they're designed around extreme blockchain limitations rather than actual user needs. A new approach is needed to bridge the gap between computational requirements and verifiable guarantees.

BASTION PROPOSES TO ISSUE HYPERLIQUID'S USDH STABLECOIN

Bastion, a regulated stablecoin issuer with a New York trust charter and broad MTL coverage, has submitted its proposal to issue Hyperliquid's native USDH. Unlike other contenders, Bastion doesn't run a competing chain or stablecoin, positioning itself as a neutral infrastructure partner with strong U.S. regulatory compliance. The proposal calls for USDH to be a full-stack stablecoin with segregated, bankruptcy-remote reserves, 95% of yield reinvested into Hyperliquid growth, and global on/off-ramp access via partners like Rain, LayerZero, and Securitize. Bastion argues USDH should serve as the base stablecoin for the ecosystem, with others built on top of it rather than as wrappers.

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