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ON THE IMPOSSIBILITY OF STATELESS BLOCKCHAINS

SASSAL ON THE NEXT 12-18 MONTHS IN CRYPTO

SHIBARIUM TEAM REOPENS BRIDGE WITHDRAWALS ON MAINNET

WALLET

BITBOY CRYPTO SAYS GOODBYE TO BEN ARMSTRONG

BIDEN ADMINISTRATION UNVEILS NEW CRYPTO TAX REPORTING RULES

The US Treasury Department is proposing a new rule to place tighter requirements on brokers to report user transactions to the IRS. The way it’s written also seems to include decentralized exchanges and NFT marketplaces, meaning those entities would be required to collect customer information. The proposed Form 1099-DA is said to help simplify the process for users to report their gains and losses. This proposal comes as part of the 2021 Infrastructure Investment and Jobs Act and is expected to take effect in 2025.

BINANCE DROPS SANCTIONED RUSSIAN BANKS FROM PEER-TO-PEER SERVICE

Binance has cut off user access to a number of sanctioned Russian banks for peer-to-peer transactions. This comes in the wake of media reports suggesting the platform was enabling Russians to transfer money overseas. Binance is purportedly in the process of strengthening compliance policies, reinforcing its commitment to operate within global regulatory standards. However, some users said in a group chat they were still able to use the blacklisted banks by exploiting other available payment options.

HASHKEY TO START CRYPTO RETAIL TRADING SERVICE IN HONG KONG TODAY

HashKey Exchange is launching crypto trading services for retail clients in Hong Kong starting today. It will initially offer trading of BTC and ETH. HashKey is the first crypto business in Hong Kong to receive a license to offer such services. It is looking to partner with at least 5 brokerages to offer crypto trading services through its platforms.

CHAINS

Paradigm has announced the alpha release of a developer-focused open-source wallet tool called Rivet. Rivet is designed to improve the web3 frontend development experience by allowing developers to examine, modify, and handle state changes on a local Ethereum node. The project seeks to enhance productivity and encourage robust testing and debugging against a local node, tapping into a kind of functionality inaccessible in regular consumer wallets.

BRIDGEKIT - THE EASIEST WAY TO BUILD MULTICHAIN DAPPS

This repository contains a plug-and-play React library called BridgeKit that enables in-app cross-chain bridging and swaps in decentralized applications. It describes the simple setup process. BridgeKit provides an array of different bridging options for users to utilize in apps.

8 AIRDROPS IN ONE STRATEGY

This thread lays out a step-by-step guide to making transactions that could qualify you for eight different airdrops. Projects include familiar names such as LayerZero Labs, zkSync, Scroll, and Zora. Several of these airdrops like LayerZero, zkSync, and Scroll have been highly anticipated based on the vast amounts of funding the companies have raised.

COLLECTING THE ALGORITHM: A PRIMER FOR ON-CHAIN GENERATIVE ART

This blog explains how on-chain generative art is seen as the new frontier for many collectors. Generative art’s value as a digital asset has begun to move beyond speculation to legitimate appreciation and collectibility. It offers benefits including verifiable provenance, no deterioration over time, instant ownership transfers, and trustless sales. The post also articulates how this new form of appreciating and collecting art could attract new generations of collectors, most of whom are digitally native.

KITE OR BOARD

This essay discusses the concept of fiscal dominance, where the central bank is forced to prioritize government debt funding over maintaining low inflation. It references a paper by Dr. Charles Calomiris, which suggests that the Federal Reserve and US Treasury may resort to such a strategy to address the high levels of government debt and deficits. The essay argues that this could lead to the Fed reducing interest rates, increasing bank reserve requirements, and pushing capital out of the banking system and into alternative assets like crypto.

ON OP’S SUPERCHAIN MODEL AND POTENTIAL CHALLENGES

This post walks through some of the incentives issues that could plague OP’s Superchain model. It specifically focuses on Base’s share of OP tokens and how there are seemingly no restrictions on its sales of those tokens.

This thread is the first part in a series by a former Alameda Research Engineer that gives an inside look into FTX and Alameda and the nature of the relationship between the two companies.

OVER

Jerome Powell continues to hold the position that the fight against inflation is not over and that more rate hikes will likely be necessary.

WALLET

Last week, three ex-team members of PEPE, the memecoin, allegedly stole $15 million, sold the tokens, and deleted their social accounts, causing an 18% drop in PEPE and sending shockwaves throughout the rest of the memecoins.

FTX TAPS GALAXY TO SELL, STAKE, AND HEDGE ITS CRYPTO BILLIONS

Bankrupt cryptocurrency exchange FTX is looking to stake, sell, and hedge its ~$3 billion in digital assets. FTX wants to hire Mike Novogratz’s Galaxy as an advisor to optimize its sales. The company's goal is to protect the value of the holdings through calculated trading, potentially via weekly sales limits, and ultimately return funds to users in fiat instead of crypto.

MASTERCARD, BINANCE TO END CRYPTO CARD PARTNERSHIP

Mastercard and crypto exchange Binance will terminate their cryptocurrency card programs in Argentina, Brazil, Colombia, and Bahrain from September 22. The cards enabled payments in traditional currencies using cryptocurrency holdings. The termination will not affect Mastercard's other crypto card initiatives. This move comes amidst Binance facing ongoing regulatory challenges, including a US lawsuit for alleged deceptive practices.

BEAM INTRODUCES INSTANT PAYOUTS

Beam has launched a product called Instant Payouts. Instant Payouts allows users to send crypto from their cold or hot wallets directly to their debit card and receive funds on the same day. Beam charges a 1% fee, similar to Venmo and CashApp. Instant Payouts is live on Ethereum, Solana, Avalanche, and Polygon.

MAPLE BRINGS CASH MANAGEMENT SOLUTION TO SOLANA

Maple Finance is returning to Solana to launch its Cash Management Solution, which could provide DAOs, corporate treasuries, and high-net-worth individuals access to yield backed by US Treasury Bills. The pool will accept deposits of USDC-spl, targeting the current 1-month US Treasury bill rate minus fees, and will not impose additional costs on lenders. Maple Finance's return is just one of many big news items on Solana this week.

CRYOGEN

Cryogen is a tool designed to effectively consolidate extracted datasets from Ethereum while boosting query performance and reducing disk space. It does this by consolidating datasets in place and merging parquets into larger files to keep the dataset updated regularly. Caution is advised when using Cryogen with Cryo as it may output duplicate data in the dataset.

12 INDUSTRY-SHIFTING INNOVATIONS ON SOLANA FROM THE PAST WEEK

The news cycle on Solana really picked up speed this past week. Highlights include a direct integration with Shopify, a new ChatGPT plugin, the return of treasury management solution Maple, private token swaps with Elusiv, $3 million seed fundraising for collectible content company DRiP, and video call token-gating via Brave. Other notable mentions were the rollout of Solana Sign-In and the launch of the first euro stablecoin on Solana.

NEW TORNADO CASH INDICTMENTS SEEM TO RUN COUNTER TO FINCEN GUIDANCE

Roman Storm and Roman Semenov have been charged with allegedly operating an unregistered money transmitting service. The allegations seem unclear as they appear to have functioned as anonymous software providers within FinCEN's guidelines rather than as money transmitters. The case revolves around whether they had "independent control" over funds transmitted. The specifics of whether they controlled the smart contracts remain ambiguous.

OP CLIENT DIVERSITY

Coinbase announced plans to decentralize the Base network, aiming to create a system where no single entity has control. Working alongside the Optimism Collective and OP Labs, Coinbase will implement fault proofs and diverse client software to avoid censorship. Additionally, they will contribute to the OP Stack infrastructure and help form a "security council" for the Superchain to further enhance security and decentralization.

A QUICK COMPARISON BETWEEN CHAINLINK’S CCIP AND LAYERZERO

Chainlink’s new CCIP product enables cross-chain trading, lending, and more and has some crossover with LayerZero functionality. This tweet provides a comparison of the two focused on their security models.

IS COINBASE’S BASE ON THE RIGHT SIDE OF THE LAW?

Coinbase’s L2 Base has been accused of violating federal laws. This thread breaks down why that’s not the case.

RETHINKING TOKEN INCENTIVES FOR CONSUMER ADOPTION

This blog explains why current crypto incentive systems, like token rewards and airdrops, are insufficient for mainstream adoption. It instead suggests that web3 products should draw from Web 2.0 loyalty programs, where incentives are based on higher psychological motivators like status and curiosity.

ON LSTS AND THE DISCUSSION AROUND STAKING CONCENTRATION

This thread explains why the framing and discussions around the concentration of staking between different protocols is misguided and could be harmful to the space.

SOLANA PAY INTEGRATES PLUG-IN WITH SHOPIFY FOR USDC PAYMENTS

Decentralized payment protocol Solana Pay has integrated with Shopify, giving shoppers the option to use USDC (and other cryptocurrencies in the future) for their purchases. Credit card transaction fees are typically somewhere between 1.5% and 3.5% of a purchase, whereas USDC payments through Solana Pay can be as low as $0.00025, so there is actually real incentive for Shopify store owners to leverage this option.

FEDERAL COURTS

The founders of Tornado Cash, the scrutinized crypto mixing service, are facing charges from the US Attorney’s Office for alleged money laundering and sanctions violations. The crypto service, a byproduct of Zcash's open-source research, has allegedly been used to launder over $1 billion in assets, some of which were linked to North Korea's Lazarus Group. This investigation, ongoing since last August when the regulators declared it illegal for US citizens to interact with Tornado Cash, has raised questions about responsibility and blame in a decentralized network, as Tornado Cash runs on immutable smart contracts.

WITH CARD PAYMENTS

EUROe, a euro stablecoin compliant with the upcoming MiCA regulation, has expanded to Solana. Digital money app Wirex, which boasts over six million users, will support EUROe on Solana from day one. EUROe's integration with Solana creates a native fiat bridge between several blockchains and traditional finance in hopes of making Solana a more attractive ecosystem in which to build and transact.

MARKETS

Base64, built as part of Base’s On-Chain Summer Hackathon, creates on-chain 'power-of-2' tournament prediction markets. It allows users to compete in on-chain tournament prediction markets, with the outcome decided by oracle or voting. Potential use cases could be products within companies like DraftKings and FanDuel. It’s important to note that this contract remains unaudited, may be buggy, and could have legal consequences upon deployment to mainnet.

THE ENGINEER’S GUIDE TO BLOCKCHAIN FINALITY

Security researchers have discovered that some applications, like Juno and Pathfinder, are not checking for finality or are incorrectly doing so. This opens the door to attack vectors like double spend attacks. After reporting this issue to the protocols in question, the researchers put this guide together to discuss their findings, thoroughly describe finality, and propose an alternative way of checking for finality.

TOKEN

This thread cautions against using a rollup protocol’s native token for gas fees. The process risks creating no net new token demand as users sell the tokens to cover transaction costs, potentially leading to the protocol subsidizing rollup usage. Additionally, it can create issues for interoperability, complicate users’ token inventories, and add user-experience hurdles. The thread goes on to suggest alternatives like buybacks with excess sequencer revenues for more sustainable demand and stronger incentive alignment.

NETWORK

Offchain Labs, the team behind Arbitrum, has launched AnyTrust - a lower-cost alternative to rollups for developers seeking to launch on Arbitrum's network. The innovation relies on a Data Availability Committee, which stores call data temporarily, making transaction costs for rollups leveraging this option cheaper, with faster withdrawals. This innovation comes as more protocols are choosing to launch their chains on top of other stacks like the OP stack instead of creating their own stack.

CENTRAL BANKS WARN

Global central banks say that cryptocurrency assets have increased financial risks in less developed economies and should be regulated like other assets. The Consultative Group of Directors of Financial Stability urged a quicker, bolder regulatory approach, especially if crypto assets are more broadly adopted by retail investors. However, it’s not clear what risks they are referencing here - whether it’s asset volatility risk or protocol vulnerability risk. It’s been well documented that stablecoins have provided a safe haven for individuals in high-inflation environments, so it seems like it would be difficult to argue that those assets increase risk.

CRYPTO HACKS

According to the FBI, North Korean Hackers have amped up activity lately and are getting ready to cash out $40m in funds.

AMID ROYALTY DEBATE

Rarible has decided to stop aggregating NFT marketplaces that are not enforcing royalties as a show of support for creators.

DECENTRALIZED SOCIAL MEDIA FARCASTER TO MIGRATE TO OP MAINNET

Farcaster, a decentralized social media protocol, is migrating from Ethereum to the OP Mainnet L2, enabling permissionless sign-ups and enhancing platform functionality.

BNB fell to $204 after reports of Binance potentially violating Russian sanctions. This is yet another item to add to the litany of qualms regulators have had with Binance that have also been putting pressure on the token price.

RUSSIA

Binance is being investigated by the DOJ over potential US sanctions violations concerning Russia. Despite scaling back operations in Russia following the Ukraine invasion and implementing Western sanctions requirements, substantial ruble trading has continued on Binance's platform. The exchange is suspected of helping clients convert funds from sanctioned Russian banks into Binance balances and enabling trades involving blacklisted banks. This is just another of many accusations that US regulators have made and are investigating Binance over.

CRYPTO EXCHANGE EDX MARKETS TAPS ANCHORAGE AS CUSTODY PROVIDER

ELUSIV LAUNCHES PRIVATE SWAPS ON SOLANA

MORE ACCESSIBLE

Risc Zero will open-source its "Type 0" zkEVM, Zeth, to bring zero-knowledge infrastructure to developers. Written in Rust, the software not only mirrors the functionality of Ethereum, it can also be adopted by other networks, thus broadening application possibilities. It offers faster and more efficient transaction verification and application simultaneously thanks to its ability to divide computation tasks concurrently.

BREAKING DOWN FRIEND.TECH’S STACK

NEUTRALITY?

A **POSITIVE** BLACK SWAN

HOW SOLANA IS ENFORCING ROYALTIES FOR NFTS

BRAVE RELEASES SOLANA NFT TOKEN GATING FOR WEB3 CALLS