TLDR CRYPTO 2024-05-17

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U.S. SENATE VOTES TO KILL SEC'S CRYPTO ACCOUNTING POLICY, TESTING BIDEN'S VETO THREAT

The Senate has joined the House of Representatives in overturning the SEC's SAB 121 in a 60-38 vote. SAB 121 requires crypto custodians to hold customer assets on their balance sheet, which has significant consequences and makes the process much more complex. President Biden previously warned that he would veto this resolution if it passed in Congress, stating that he would side with Gensler and the SEC. The vote passed with support of most Republicans and 12 Democrats.

CME LOOKS TO TAKE ON BINANCE AND COINBASE, COULD LAUNCH SPOT BITCOIN TRADING

The Chicago Mercantile Exchange intends to offer spot Bitcoin trading to its clients as demand for the product increases. As a global derivatives powerhouse, it hosts the top Bitcoin futures exchange by open interest, while Binance leads in spot trading volume. A spot market would allow for complex spot and futures strategies to be executed in the same place.

CHAINLINK TOKENIZATION TEST

Chainlink recently shared the results of the Smart NAV (Net Asset Value) industry pilot, which involved Chainlink, DTCC, and ten major financial institutions. In the pilot, the team successfully delivered mutual fund data onchain, which demonstrated DTCC's capability to provide NAV data across various blockchains (private/public). This pilot illustrates how Chainlink's CCIP can be used as an open blockchain interoperability standard to prevent fragmentation and improve automated data dissemination and access for fund tokenization.

VEDA: THE FIRST NATIVE YIELD LAYER

DeFi is a complex user experience, with various chains and protocols that become overwhelming for new users. Veda is creating the “bedrock of an entire yield ecosystem” with black box yield optimization, a modular architecture, and secure cross-chain communication. It takes the concept of native yield popularized by Blast and Ethena and extends it to any protocol and DeFi product.

RECONCILING THE TWO OPPOSING PATHS FOR DECENTRALIZED STABLECOINS

Maker's DAI stablecoin has been in an awkward position, unable to commit fully to the idea of being a completely decentralized stablecoin or a large-scale, dollar-pegged asset. Maker's Endgame allows these visions to be pursued simultaneously, with DAI being replaced by two stablecoins: NewStable and PureDai. NewStable will focus on utility and adoption, emphasizing decentralization but incorporating RWA and TradFi. PureDai will be collateralized by decentralized assets like ETH, with a free-floating peg, maximally decentralized oracles, and no governance.

DEEP DIVE INTO TON ECOSYSTEM

TON, founded by the Durov brothers in 2017 and rebranded to "The Open Network" in 2020, has seen a resurgence since its collaboration with Telegram in September 2023. It is now the 9th largest crypto project with a current FDV of ~$25B. TON's ecosystem includes the TON Blockchain, TON DNS, TON Storage, and TON Payment. TON benefits from being able to leverage Telegram's user base of ~900M users. It is currently experiencing significant growth in TVL and trading volume bolstered by USDT integration and incentive programs like The Open League.

ATTENTION IS ALL YOU NEED

Attention is the most valuable yet misunderstood resource. Big tech has attempted to monetize it to the greatest extent possible via algorithms. These companies aim to capture, retain, and monetize attention, creating the attention economy that dominates the internet today. GameStop's stock pump and memecoins exemplify how attention can be monetized and demonstrate its value – crypto democratizes attention by tokenizing it. Bitcoin's various narratives, from a store of value to a hedge against World War 3, make it broadly approachable and create a contagious expression of ideas.

MEMECOIN LAUNCHER PUMP.FUN CLAIMS EX-EMPLOYEE BEHIND $1.9M EXPLOIT

Although Pump.fun, a new popular memecoin launcher, claims its smart contracts are secure, a former employee allegedly exploited a vulnerability, stealing ~12.3K SOL (approximately $1.9 million).

THOUGHTS ON CRYPTO AND VC

Top venture capital firms have generated 3x returns in ideal macroeconomic conditions, but crypto VC has drastically outperformed even the best traditional firms.

NARRATIVE MINDSHARE DASHBOARD

AI remains one of the strongest narratives, taking up 30-50% of mindshare in 2023, with SocialFi and memes growing significantly.

ALEX LABS HACKED FOR $29.3M IN STX

Alex Labs was recently hacked for ~$29.3M USD hack in STX because of a phishing attack that compromised private keys.

937 FINANCIAL FIRMS DISCLOSED BITCOIN ETF HOLDINGS IN Q1 2024

Nearly 1,000 firms hold spot Bitcoin ETFs less than a quarter after release.