TLDR CRYPTO 2024-02-16

HOUSE LAWMAKERS TO HASH OUT CRYPTO, ILLICIT FINANCE AS AML BILLS COME INTO FOCUS

The U.S. House's Financial Services Committee is set to discuss cryptocurrency's role in illicit finance in an upcoming subcommittee hearing. Experts from prominent crypto businesses including Coinbase and Circle will be speaking at the event. Its focus will likely be on how the industry can combat illicit activities. This is part of a larger discussion politicians are having around Anti-Money Laundering laws for the cryptocurrency sector.

VANECK CUTS BITCOIN ETF FEES AS COMPETITION AMONG ISSUERS INTENSIFIES

VanEck is reducing the sponsor fee of its HODL spot Bitcoin ETF from 0.25% to 0.20% effective February 21. The move is a response to competitive pressures to attract more investors in the rapidly evolving ETF landscape. ETFs are often a winner-take-most market, so cutting fees in the crowded market is the primary way issuers have been trying to gain market share.

USDC ANYWHERE: CROSS-CHAIN LENDING AND BORROWING

Moonwell has introduced USDC Anywhere, a feature that expedites the lending and borrowing of USDC across Ethereum networks. Powered by Circle’s Cross-Chain Transfer Protocol and Socket, USDC Anywhere securely transfers USDC across various networks streamlining the use of on-chain apps, games, and NFT marketplaces.

ASCEND: THE GAME TO UNLOCK YIELD FROM NFTS

Crypto game Ascend has launched, aiming to unlock untapped yield potential in NFTs. MetaStreet, the company behind Ascend, raised $25 million to fund what it is calling Liquid Credit Tokens (LCTs) to create scalable capital markets for on-chain illiquid assets. Its aim is to democratize access to high-yield credit, inviting institutional and individual investors to participate equally. The company expects $3.5 billion of sustainable new yields from the NFT market with LCTs.

BREAKING BFT: QUANTIFYING THE COST TO ATTACK BITCOIN AND ETHEREUM

Researchers used the Total Cost to Attack model to assess the feasibility of 51% attacks on Bitcoin and 34% attacks on Ethereum. This model incorporates the operational and capital expenditures required for such attacks, considering both profit-driven and ideologically motivated attackers. They found that the security mechanisms in place make these attacks economically impractical, providing evidence of Nash Equilibrium in the networks. The research questions the assumption that network security linearly correlates with fee revenue, suggesting that miner speculation on fee cycles actually enhances security.

ON ALPHA AND EDGES IN CRYPTO

This thread goes over the concepts of "Alpha" and "Edge" in crypto. Alpha refers to information that can be utilized for financial gains, while edge involves extracting yield from the market using a superior skill or understanding. The thread describes three types of alpha: time-sensitive alpha, mass psychology-based alpha, and intuition-based alpha, providing detailed examples for each type.

U.S. FEDERAL RESERVE GOV. WALLER SAYS DEFI COULD BOOST DOLLAR'S GLOBAL STRENGTH

Fed Governor Christopher Waller argues that the majority of stablecoins, which are largely tied to the dollar, could actually strengthen the dollar’s hegemony. His basic position on this is that stablecoins are pegged to the US dollar, they are central to DeFi, and DeFi activity is continuing to grow at a rapid rate. While acknowledging potential risks if a shift from dollars to digital currencies occurs, Waller dismissed these fears, reiterating that the dollar will continue to stay central to economic activity no matter what technology that activity is leveraging.

COINBASE IS SO BACK (IN PROFIT): STOCK JUMPS 11% AS CRYPTO EXCHANGE POSTS BULLISH RETURNS

Coinbase bounced back from losses in Q3 to report a better-than-expected Q4 largely driven by higher interest income on its stablecoin reserves and other products. The markets responded positively to these surprising income numbers and to the efficiencies created on expenses within the business. What was most interesting about this quarter’s report for Coinbase were the signs of retail volumes coming back with higher-than-expected volumes in that segment of the business.

BITCOIN ETF FLOWS (DASHBOARD)

This dashboard provides an easy way to keep up with the daily flows into/out of the spot Bitcoin ETFs, a direct indicator of institutional and retail interest in the ETFs.

LEARNINGS FROM PAST CYCLES

This thread from a popular Crypto Twitter figure details his 7-year journey in the space and the key lessons he learned in each of those 7 years.

CRYPTO EXITS REMAIN LOW BUT INVESTORS REMAIN UNFAZED

This article details how the crypto space has seen very few traditional exits due to its complex nature. Regulatory uncertainty has dampened some of the activity. Liquidity events driven by the release of tokens have partially substituted the need for a traditional exit.

THREAD ON DYNAMIC $TAO (BIT1)

The Dynamic TAO proposal, BIT1, could be a major shift in Bittensor's approach. It focuses on decentralization, community governance, and aligning incentives for a more dynamic and economically vibrant network.

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