🔮Microsoft Drops an Ankr, Not So Stable Coin, Oracles, Staking

Token Specific News

Microsoft Drops an Ankr Into Digital Assets

Decentralized blockchain infrastructure provider Ankr has launched its enterprise blockchain creator tool, AppChains, on Microsoft's Azure Marketplace. AppChains enables companies to quickly deploy customized blockchains to support Web3 strategies, starting with the Polygon Supernet and expanding to other options in the future. While AppChains has been available for a year, Ankr has witnessed increasing demand from institutional clients, particularly in sectors such as banking, central bank digital currencies, and gaming. The availability of AppChains on Microsoft's Azure Marketplace provides businesses with a vetted solution to easily access fast and affordable transactions, seamless user experiences, regulatory compliance, and comprehensive engineering. Ankr will continue to enhance the tool based on user feedback and performance metrics, guided by Microsoft. See similar: Apple’s threatening to kick off the Damus app

Oracle Free Baby

A new wave of DeFi protocols is challenging the traditional reliance on oracles for lending and derivatives by introducing "oracle-free" designs. These protocols aim to eliminate the limitations, vulnerabilities, and risks associated with oracles. One category of these protocols is peer-to-peer lending, where the pricing and underwriting decisions are shifted to the user. Lenders can create loans from any on-chain collateral, but users need to actively manage their positions, reintroducing oracle risk when rebalancing is required. Prominent protocols in this category include Blend, PWN.xyz, and Ajna. The second category consists of protocols built on AMM LP positions, typically based on Uniswap V3 concentrated liquidity. These protocols leverage the liquidity pools to calculate liquidations and derivative contract outcomes, essentially functioning as their own oracle. They also provide a primary market for protocol inventory, enhancing efficiency and mitigating some forms of MEV. These "oracle-free" protocols are reimagining the architecture of DeFi, offering novel solutions but also introducing trade-offs that users need to consider.

Source: Messari

Ethereum's Ecosystem is Staking Up

Ethereum's recent protocol upgrade has significantly increased the rate of new ETH being staked, with the monthly staked ETH rising from 600,000 to over 3 million. This growth has had a significant impact on the DeFi ecosystem. One notable effect is the emergence of liquid staking protocols, which have generated Liquid Staking tokens worth over $15 billion. These tokens offer sustainable yields and are becoming a preferred store of wealth compared to ETH, gradually replacing it as the primary collateral in DeFi. As a result, a new category called LST-Fi has emerged, encompassing protocols that integrate LSTs into lending and stablecoin platforms, decentralized exchanges, interest rate swaps, and other innovative platforms, unlocking additional value in the process.

Source: Ethereum

DeFi Platform EigenLayer Rolls Out Restaking Protocol on Ethereum Mainnet

EigenLayer, a decentralized finance (DeFi) platform based in Seattle, has launched its restaking protocol on the Ethereum mainnet. The protocol enables users to restake their ETH by depositing liquid staking tokens such as stETH, rETH, and cbETH. EigenLabs, the developer behind EigenLayer, raised $64.5 million in investment rounds, including a $50 million Series A funding in March, valuing the company at $500 million. The restaking protocol has specific participation parameters for liquid restaking and native restaking. Liquid restaking allows a maximum of 3,200 tokens for each liquid staking token and a maximum deposit of 32 tokens per address. The emergence of liquid staking has gained traction since Ethereum's shift from proof-of-work to proof-of-stake. Currently, the top five liquid staking protocols on Ethereum have a total of $16.92 billion staked, as per DefiLlama data.

Source: DefiLlama

A Spark In The Stablecoin Conundrum

MakerDAO, known for its decentralized stablecoin DAI, is implementing the Spark Protocol to enhance stablecoin resilience and liquidity in the DeFi ecosystem. The protocol, which will become a sub-DAO in Maker's Endgame update, enables users to access a wholesale DAI credit line directly from Maker. The switch involves depositing on automated market makers (AMMs) to inject liquidity into decentralized exchanges (DEXs). Lessons from the depegging of Circle's USDC stablecoin have prompted Maker to add a "kill switch" to prevent severe depegging scenarios. By depositing directly to DEXs, Maker aims to improve rates and cater to user preferences. Spark's competitive advantage lies in its ability to launch on various layer-2 protocols, expanding its presence in the market. The upcoming changes aim to simplify the borrowing process and allow for better allocation of the balance sheet. See similar: Tether CTO Says 'Let Them Come' as Stablecoin's Dollar Peg Wobbles See similar story: There is growing speculation that Tether's USDT stablecoin may be under pressure, as liquidity pools on Uniswap and Curve protocols are flooded with USDT sellers. Although there is currently no indication of a depeg, the selling activity raises concerns about a potential loss of parity with the US dollar. A depeg of USDT could have catastrophic consequences for the crypto economy, especially as USDT has gained market share over USDC. Tether's lack of a proper audit and regulatory scrutiny add to the concerns. The selling pressure on USDT could be a precursor to a more significant event, potentially causing a systemic meltdown in the crypto industry.

Source: Dune

Regulation

A Leaky Bill

The European Commission is set to propose a draft law on June 28 that would ban the payment of interest or surcharges for using a digital euro. The proposed central bank digital currency (CBDC) would need to support offline payments similar to cash transactions and should not have programmable restrictions on its use, the leaked bill stated. The text emphasized that the digital euro should be available for both online and offline transactions from its initial launch. It also highlighted the importance of ensuring a comparable level of privacy for face-to-face, offline use, similar to withdrawing banknotes from an ATM.

Asia Pulls Ahead

Hong Kong aims to reclaim its fintech prominence and compete with Singapore by considering the inclusion of retail investors in cryptocurrency trading. Major banks, including HSBC, Standard Chartered, and Bank of China, have been urged to embrace crypto exchanges as clients following the announcement of a clear regulatory framework. The Hong Kong Monetary Authority has questioned banks about their hesitancy in accepting crypto exchanges and advised them to conduct due diligence without excessive burdens. The move aligns with Hong Kong's efforts to become a thriving crypto hub, attracting companies like Gate Group and Huobi to establish operations in the region. Similarly: Several major lenders in South Korea, including Hana Bank, Shinhan Bank, and Woori Bank, have joined a bank consortium established by NongHyup for security token offerings (STOs). STOs are blockchain-powered versions of traditional investments like stocks and bonds, and they can represent ownership rights in real estate, investment funds, and artwork. South Korea legalized STOs earlier this year, and the consortium aims to create an ecosystem centered around security tokens. The consortium members will explore ways for banks to enter the STO market while adhering to regulatory guidelines, and they plan to develop platforms for issuing token securities. The South Korean STO market is projected to reach 34 trillion won ($26.6 billion) by 2024.

SEC Wants Four Months to Potentially Respond to Coinbase's Request for Rulemaking

The US Securities and Exchange Commission (SEC) has stated that it may take up to 120 days to potentially respond to Coinbase's request for rulemaking regarding digital asset trading. The SEC has not yet decided whether it will respond to the request and has downplayed the urgency, suggesting that the request may be weak. The agency filed a document in court opposing Coinbase's demand for a faster response and stated that the petition should be denied. The SEC emphasized that Coinbase is currently bound by existing laws while the request is under consideration. Coinbase's request aims to replace current requirements with clearer rulemaking. The exchange's Chief Legal Officer criticized the SEC's response on Twitter, accusing it of ignoring statements made by SEC Chairman Gary Gensler. Coinbase previously sued the SEC in April to obtain a response to its 2022 request for rulemaking, while the SEC maintains that digital asset rules already exist.

Binance Not Frozen

The judge presiding over the U.S. Securities and Exchange Commission's case against Binance has rejected a request to freeze the assets of its U.S. division, Binance U.S., stating that a restraining order is unnecessary. The SEC alleges that Binance and Binance U.S. mingled funds, potentially endangering billions of dollars of customer funds. However, Judge Amy Berman Jackson expressed concern over the SEC's inability to confirm if any Binance U.S. customer funds had actually left the country. Binance CEO Changpeng "CZ" Zhao has denied allegations of price manipulation involving the exchange's native token, BNB. Additionally, Binance is withdrawing its regulatory application in Cyprus to prioritize compliance with the new European Union's Markets in Crypto Assets (MiCA) legislation.

A New Crypto Banking System is Emerging

A new crypto banking system is emerging amidst increased regulatory scrutiny on major cryptocurrency exchanges Coinbase and Binance. As regulators crack down on these exchanges, alternative banking solutions are gaining traction. Avanti Financial Group, a Wyoming-based digital asset bank, is stepping in to provide banking services specifically tailored to the needs of cryptocurrency firms. Avanti offers custody, wire transfers, and stablecoin issuance services, positioning itself as a compliant and secure alternative to traditional banks. With a focus on regulatory compliance, Avanti aims to address the industry's banking challenges and provide stability in an evolving regulatory landscape. The emergence of specialized crypto banking institutions reflects the maturing nature of the cryptocurrency industry.

FPG In Trouble

FPG, a crypto prime brokerage, has temporarily suspended withdrawals, trades, and deposits after suffering a cyberattack. The attack resulted in losses estimated to be between $15 million and $20 million worth of cryptocurrency. FPG is collaborating with third-party forensics experts and law enforcement agencies to investigate the incident. The brokerage has taken measures to secure its wallets and has locked all third-party accounts. FPG is working with the FBI, the Department of Homeland Security, and Chainalysis in response to the attack. The spokesperson mentioned that FPG's account segregation helped mitigate the overall impact of the cyberattack. See similar: DeFi Lending Protocol Sturdy Finance Hit By Exploit, Over $750K Drained

Other Domestic Regulation Updates

• Prometheum: What You Need to Know About the SEC’s Poster Child for Crypto Compliance
• Crypto Is Leaving The US
• Binance US Made a 'Burdensome' Deal With SEC, Former SEC Official Says
• Layer 1 Tokens Crumble After SEC Calls Them Securities
• U.S. Dept. of Justice Charges Two Russian Nationals in 2011 Mt. Gox Heist
• Judge Dismisses Federal Reserve’s Request to Dismiss Custodia ‘Master Account’ Lawsuit

Other International Regulation Updates

• Ukrainian Central Bank Unveils Crypto Rules Based on MiCA
• Bank of England-Backed Project: CBDCs Could Enable 'Programmability' for Money
• Terra Co-Founder Do Kwon Sentenced to Four Months in Prison for Forged Passports
• Bank of China Issues $28MM in Tokenized Securities on Ethereum in Hong Kong

Pain & Gain

Pain

• Bakkt to Delist Solana, Cardano and Polygon Following SEC Lawsuits
• Wyre winds down
• Meta's New AI Speech Tool Is Ready-Made for Deepfakes—So It's Not Being Released
• Optimism Sinks Ahead of Major Token Unlock
• Apple Rejects Bitcoin Wallet Zeus a Day After Threatening to Delist Damus
• Binance.US to slash headcount in wake of SEC lawsuit
• Binance exits the Netherlands after failing to acquire regulatory approval

Gain

• Rocky Horror Show NFT collection to drop in June, metaverse in the works
• BlackRock is reportedly about to jump into the bitcoin ETF fray
• EigenLayer deploys restaking protocol on Ethereum mainnet
• Haun Ventures Leads $10MM Seed Round for Web3 Gaming
• SEC officials pushed Hinman to clarify ETH wasn’t a security: Court docs