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MARKETS INC.

Better Markets made a comment on Fidelity's Bitcoin ETF to the SEC that seems suspect. This short thread outlines how it might have come from Gary Gensler or Elizabeth Warren.

LET’S TALK BITCOIN STAKING: BABYLON’S LITEPAPER

Babylon proposed an intriguing concept in a new litepaper whereby L2s could operate a proof-of-stake model using Bitcoin instead of the native L2 asset to secure the chain. The idea is an attempt to solve the issue of L2 assets not having enough capital to properly secure a chain.

BINANCE FILES FOR PROTECTIVE ORDER AGAINST SEC

Binance is seeking a protective court order against the SEC amid intensifying scrutiny from the regulator. The company is arguing the SEC's requests for information are overly demanding. Binance aims to limit the regulator to four employee depositions and exclude BAM's CEO and CFO. The SEC previously accused the firm of deceiving investors and misusing customer funds, which Binance denies.

DEPART

Several executives, including CFO Jonathan Hugh, have left crypto market maker GSR as the firm has begun to scale back its crypto operations. GSR claims its retreat has mostly been due to an intense bear market and heavy regulatory scrutiny on the industry. It has been one of the main market makers in crypto since 2013, but it expanded rapidly during the latest bull market, growing its headcount to over 300 and bringing in executives from Wall Street. Sources familiar with the matter seem to imply that GSR’s pullback can be attributed to bringing these executives in at the height of the market, incurring significant costs, and being out of touch with the crypto industry.

SAFE{CORE} PROTOCOL: SOLVING THE WICKED PROBLEM OF SMART ACCOUNTS

Safe has released a whitepaper about its Safe{Core} Protocol, aimed at transitioning on-chain accounts to smart accounts. The protocol addresses several issues, such as fragmentation, vendor lock-in, and security. The Safe{Core} Protocol represents a unified standard that can support a smoother transition to smart accounts, reduce smart contract risks, ensure account portability, and maintain interoperability. This comes amid growing concerns about externally owned accounts, which are struggling with user experience problems.

Sei Labs deployed its long-awaited L1, Sei, to mainnet yesterday. The native token SEI is now on exchanges. Rather than focusing on solving technical issues, Sei’s core focus is making trading easier for social platforms, games, and NFTs. Boasting 10x the speed of Solana, Sei achieves transaction finality in 250 milliseconds. More than 200 teams have started building on Sei. 7.5m unique wallets were onboarded in the testnet phase and some large, established protocols like Sushiswap have integrated the chain into their offerings.

THE HIDDEN COSTS OF MODULAR SYSTEMS

This article challenges the prevailing view that modularity is key to scalability in crypto. It argues that modular systems significantly increase complexity for app developers both technically and socially. The article also dispels the myth that modular chains execute code faster, asserting that separating data availability and execution doesn't inherently boost performance. It challenges other popular beliefs regarding modular chains' benefits, ultimately arguing that fully integrated systems are more user-friendly and beneficial to developers.

UNDERSTANDING CRYPTO IN AFRICA

The author of this article took a nine-day trip to Kenya and Nigeria and recorded his observations on the crypto scene there. The people he met in the meetups he went to demonstrated interest in receiving payment via cryptocurrency, specifically stablecoins like USDT. The Binance P2P marketplace was a widely popular platform amongst locals to swap to and from their native currencies. It seems that Africa is ripe for even more crypto adoption as it offers a sense of stability and empowerment that many Africans do not have with their local currencies.

WITH CRYPTO VALUES?

In this essay, Vitalik Buterin discusses X's fact-checking tool Community Notes, how it works, and the crossover it has with crypto. While not crypto-related, Buterin claims the Community Notes product has the "crypto values," of open sourcing and decentralization. Community Notes is taking strides in combating misinformation and polarization with its algorithm, which determines the visibility of notes based on widespread user votes. Despite some of its flaws and complexity, the open-source nature of the project makes it verifiable and transparent.

BINANCE CONNECT IS SHUTTING DOWN ON AUG 16

Binance announced it will discontinue its Binance Connect service as of Aug 16. It will concentrate more on its primary products and long-term objectives. Binance Connect, a tool that helped merchants to accept crypto payments, supported 50 cryptocurrencies and all key payment methods. It was launched only a year ago in 2022.

GOLDMAN PENCILS IN FIRST FED RATE CUT FOR SECOND QUARTER OF 2024

Goldman Sachs predicts the Fed will begin lowering interest rates by June 2024 as inflation nears its target. It forecasts a quarterly cut pace, aiming for a 3-3.25% funds rate.

THE ARGUMENT FOR BITCOIN AND ETHEREUM AS HARD ASSETS

BTC and ETH have hit escape velocity where they are viewed as legitimate assets by the wealthy. As opposed to physical assets, they cannot depreciate, degrade, or be seized. These differentiators make these assets even more interesting as stores of value for the wealthy

TRACKING BASE’S REVENUE

Base has generated $1.25m in revenue in the past 2 weeks while Optimism and Arbitrum have only generated $404k and $424k respectively.

A NOVEL DEFENSE AGAINST ERC-4626 INFLATION ATTACKS

ERC-4626, an ERC-20 extension, introduces token vaults, susceptible to inflation attacks where attackers manipulate share values. OpenZeppelin proposes several defenses in this article.

STAKE

Crypto news outlet CoinDesk is reportedly planning staff cuts as it nears the close of a $125m deal led by crypto investors Matthew Roszak and Peter Vessenes. The full extent of the layoffs varies from 16% to 45% based on different reports. As a reminder, CoinDesk’s parent company, DCG, has been in search of liquidity to aid its ongoing financial woes, and this sale would provide some much-needed cash for the struggling company.

COINBASE ROLLS OUT CRYPTO SERVICES IN CANADA

Coinbase, the crypto exchange giant, is extending its reach into Canada, taking advantage of the country's high level of crypto-awareness and strong regulatory framework. To kick off this expansion, the company is offering a 30-day free trial of its Coinbase One subscription service to Canadian users. This expansion is yet another reminder of the stark contrast between the crypto regulatory landscape in the US and the rest of the world.

METAMASK, BANXA ROLL OUT '1-CLICK' CRYPTO BUYS WITH APPLE PAY

MetaMask users can now purchase Ethereum and other cryptocurrencies more easily, thanks to a new integration with Banxa that includes Apple Pay and its "1-click" feature. This feature is available to users who have already completed KYC procedures. Lorenzo Santos, MetaMask product manager, emphasized that the goal is to make it easier for users to make repeat purchases. Banxa, which has been experiencing growth, is the sole provider of the 1-Click service among MetaMask's eight integrated on- and off-ramp services.

ETHEREUM

Take-Two Interactive Software's subsidiary Zynga is venturing into web3 gaming with its new Ethereum-based game, "Sugartown". Take-Two, the company behind hits like Grand Theft Auto, bills this as the first crypto game built from scratch by a major mobile game developer. Users will gain access to the game via an ERC-721 token and they will be able to stake these tokens to earn in-game currency - it’s unclear whether the currency will be an ERC-20 or proprietary. The combination of both a huge name getting into the space and the appropriate use of crypto mechanics to enhance the in-game experience makes this an interesting one to watch.

TOP TOOLS FOR YOUR CRYPTO TOOLBOX

Crypto is a constant barrage of market-moving events, multi-million dollar exploits, groundbreaking innovations, and narrative plays. This thread gives a great list of essential tools that can help you stay on top of the news and narratives in the space. The tools span categories like news, alerts, on-chain security, analytics, deep-dives, airdrop farming, and more.

BREAKING DOWN UNISWAPX

UniswapX, Uniswap’s upgraded protocol, has introduced a feature that draws liquidity from centralized exchanges. This move signifies a shift in the crypto marketplace as it recognizes that on-chain markets might not always yield the most optimal execution. However, this move brings up questions about the potential impact on liquidity providers and the future reliance on intermediaries, answers to which could drastically change the DeFi landscape.

CELSIUS TO POLL CUSTOMERS ON LAUNCHING NEW USER-OWNED COMPANY

Bankrupt crypto lender Celsius Network is set to poll account holders about a proposal to relaunch as a user-owned company, distributing roughly $2 billion in Bitcoin and Ether. The approval by US Bankruptcy Judge Martin Glenn hinges on Celsius providing more details regarding industry volatility and potential operating challenges. The proposed company, backed by investment firm Arrington Capital, would use equity to partially repay customers and aims to start repaying creditors by the end of 2023.

BITCOIN IS ABOUT TO GO FROM BORING TO “BOING”

Bitcoin's volatility was muted throughout August, falling to levels below the average volatility of stocks, bonds, and even gold. The reasons for this lack of volatility could be attributed to various factors. Historical patterns suggest that low volatility periods are typically followed by violent volatility - the past few times this has happened, it has been to the upside. In parallel with Bitcoin's low volatility, the DXY is reaching a crucial point that could potentially signal a market shift, as it has in the past.

HARRYPOTTEROBAMASONIC10INU LEADS LATEST MEMECOIN RALLY, SURGING 30%

There’s a new kid on the memecoin block - HarryPotterObamaSonic10Inu. The coin, launched in May, calls itself “The People’s Bitcoin” and goes by the ticker $BITCOIN. It has grown to a $150m+ market cap. The interest and volatility in memecoins throughout the summer is a side effect of market malaise in the majors, with the prices of BTC and ETH having been relatively stagnant.

BITCOIN ETF APPROVAL CALENDAR

Here is a quick calendar view of when pending Bitcoin ETF applications are expected to be approved or denied.

DYDX ROLLING OUT PUBLIC TESTNET 2

As part of its migration to dYdX chain, the protocol is moving from the Testnet 1 phase to the Testnet 2 phase.

TRUST AND TRANSPARENCY IN DEFI’S UX LAYER

While DeFi UX has been lacking for years, the foundation on which to build great UXs has finally been laid at the infrastructure layer through innovations like faster, cheaper L2s and account abstraction.

COINBASE

Crypto venture firms a16z and Paradigm submitted a joint brief for Coinbase, contesting the SEC’s regulatory authority over the crypto industry as too broad. They argue for a dedicated, comprehensive legislative framework for digital assets, negating the SEC's inconsistent approach, to create a predictable environment for crypto entrepreneurs. a16z and Paradigm stress that such regulations should be crafted by Congress, not the SEC. These briefs were followed by one from sitting Senator Lummis, an ardent bitcoin supporter, and 6 leading legal scholars from top-tier institutions.

OCTOBER TRIAL

Sam Bankman-Fried's bail has been revoked due to suspicions of witness tampering and other violations of his bail agreement. He will be detained ahead of his October trial. The DOJ previously sought to revoke his bail, claiming its conditions were insufficient. They finally found grounds to jail him, and he will remain incarcerated until his trial. The upcoming trial will include charges related to money laundering, wire fraud, and political influence campaigns.

PAYING GAS FEES WITH VISA CARD

Visa released a paper outlining a solution that will allow users to pay on-chain gas fees with their Visa cards rather than using native tokens. The experimental solution, which utilizes paymasters and leverages account abstraction, aims to create an alternate and smoother onboarding experience for users when they don’t have native tokens available for gas - usually a requirement to initiate a transaction. It has been successfully tested on Ethereum's Goerli testnet, providing an initial proof-of-concept.

LOOK LIKE

The latest sensation on Base is Friend.tech, a decentralized social media app. Engineered by a crypto veteran, it has already generated a buzz and surpassed OpenSea in total volume on its first day. Friend.tech enables the tokenization of social media profiles, so users can buy and sell shares of individual profiles. Token holders have the ability to initiate private chats with the profiles. Friend.tech has had some strong initial traction despite being in beta and grappling with functionality issues due to overwhelming traffic.

HOW POLYGON ZKEVM PROVES BATCHES OF TRANSACTIONS

This article discusses how Polygon's zkEVM works. It details the process of submitting transactions and executing them instantly and describes how batches of transactions are encrypted and sent to Ethereum L1. The blog analyzes the structure used to sequence the transaction batches, states the three finality states a transaction can go through, and elaborates on the process of aggregating sequenced batches. It goes on to emphasize the benefits of the zkEVM approach, which include low gas fees and quick transaction speeds.

ROLLUPS ARE REAL — ROLLUP ECONOMICS 2.0

This article discusses an updated framework for understanding rollup economics in crypto. Changes in technology have given rise to variations of rollups such as independent rollups, rollup cooperatives and federations, Layer 3 systems, and more. The framework this article discusses considers economic aspects like extraction and allocation of MEV, fee management, operational costs, and overall resource allocation. It aims to enhance understanding of this ecosystem's direction and shape ongoing innovation and discussions.

ON CIRCLE’S WEB3 SERVICES STRATEGY

Circle recently launched its wallet-as-a-service product. The company said this was the first product in what will become the Circle web3 services product line. In this thread, Circle’s CEO lays out the company’s strategy for its new services line, the thesis and background behind it, and a vision for how it fits into the broader crypto ecosystem.

NEXT?

The SEC has extended its decision period on the proposed Bitcoin ETF by Ark Invest and 21Shares, with the next deadline set for early September. Bitwise's proposal will be considered on September 1, followed by decisions on other proposals from BlackRock, Fidelity, Invesco, WisdomTree, and VanEck on September 2. The SEC has 240 days to consider each application from its federal register publication date.

MAGIC EDEN UNVEILS BRC-20 API

Magic Eden released an API for BRC-20s that allows developers to easily access and build on top of indexed Bitcoin data.

MEMPOOL DUMPSTER

This tool, still a work in progress, collects and archives Ethereum mempool transactions from execution layer nodes. It saves metadata in Parquet format and raw transactions in CSV. It can process 2-4m transactions daily.

KRAKEN OUTPACES COINBASE AS MOST LIQUID US EXCHANGE FOR ALTCOINS

Kraken has been gaining ground in the bear market. It now accounts for 50% of the market depth on altcoins and has risen to over 20% market share in exchanges that accept USD deposits.

AAVE DAO VOTES IN FAVOR OF ACQUIRING CRV TOKENS WITH USDT

Aave DAO approved a proposal to acquire CRV tokens using USDT. The move aims to support the DeFi ecosystem and Aave's stablecoin, GHO.

The scrutiny on Worldcoin continues. The Argentine Agency for Access to Public Information (AAIP) has initiated an investigation to ascertain the legality of its data collection practices. It wants entities like Worldcoin to register with the organization, provide information about its data processing policies, and indicate the purpose for collecting sensitive data and the retention period for such data. The AAIP did not confirm whether Worldcoin complies with the standards.

BITSTAMP TO SUSPEND TRADING OF MAJOR ALTCOINS FOR US USERS

Bitstamp is suspending trading of Axie Infinity, Chiliz, Decentraland, Polygon, Near, Sandbox, and Solana for US customers, with all seven tokens being named by the SEC as securities. Users will still be able to hold the seven tokens in their accounts and withdraw them at any time. The SEC’s allegations against the tokens have not yet been proven in a court of law. It currently alleges that 68 cryptocurrencies are securities.

TELEGRAM INTRODUCES TON SPACE

TON, a blockchain system originally created by Telegram, announced the launch of its self-custodial crypto wallet TON Space that would be integrated in the prominent messaging app. It is now in a beta phase and available for developers. TON Space will provide users with full control over their assets. It will be able to seamlessly link to any app built on Telegram.

INTRODUCING LASSO AND JOLT

Silicon Valley venture-capital giant Andreessen Horowitz has released a pair of open-source software projects, Lasso and Jolt, with the goal of speeding up the core tech behind zero-knowledge proofs. Lasso and Jolt solve three crucial issues with SNARKs: performance, developer experience, and auditability. Lasso is a new lookup argument where the prover commits to fewer and smaller values than prior works. Jolt is a new frontend unlocked by Lasso's ability to use gigantic lookup tables. This article explains the projects and why they matter.

INTRO TO AMM INCENTIVES

10 SECTORS TO KEEP AN EYE ON

ROLLUP DECENTRALIZATION - DOES IT MATTER?

FIREBLOCKS DISCLOSES MASSIVE VULNERABILITY AFFECTING CRYPTO WALLETS

THIS WEEK ON-CHAIN

EIGHTEEN LEADING VC FIRMS FACE FTX CLASS ACTION LAWSUIT

ONCHAIN SUMMER

The open-source GitHub repository for Coinbase’s Onchain Summer project.

DCG FILES TO DISMISS GEMINI’S FRAUD CLAIMS