🔮Whole Lotta BTC, Strategic Partnerships, Confusing Tax Gibberish, TVL Tanks

Token Specific News

Up, Down, and Around Bitcoin

In Q2 2023, Bitcoin achieved record daily transaction numbers, peaking at 680,000 transactions, primarily driven by the emergence of NFT protocol Ordinals and blockchain inscriptions. Notable Bitcoin NFT projects like Bitcoin Rocks, Ordinal Punks, TwelveFold, and Taproot Wizards debuted. Bitcoin's dominance in NFT volume during May and June was evident as it outperformed Polygon and Solana, underlining its NFT strength. The quarter was pivotal for Bitcoin with new narratives, transformative developments, and emerging use cases attracting newcomers and capital, partly due to external factors like a banking crisis, new spot-Bitcoin ETF entrants, and regulatory actions. Unexpectedly, Bitcoin surpassed Polygon and Solana in NFT sales, and it saw a remarkable 309% increase in transaction fees, a 44% rise in transactions, and an 8% growth in miner revenue from fees compared to the prior year, contributing to its strong Q2 performance. That said, Bitcoin is currently experiencing an internal conflict between two groups of investors: short-term BTC holders (who have held BTC for less than 155 days) and long-term BTC holders (who have held BTC for more than 155 days). Long-term holders are largely profiting and accumulating more BTC, while short-term holders are mostly facing losses and around 88.3% of them are underwater due to a recent flash crash. Consequently, short-term holders have been selling their holdings, which presents a bearish outlook for Bitcoin in the immediate future. This selling pressure from nervous short-term investors could potentially drive the BTC price even lower, and this situation is being closely monitored, particularly as Bitcoin historically tends to perform poorly in September.

Source: Messari

Balancer (almost?) Loses Balance

Balancer, a decentralized exchange, disclosed a critical vulnerability affecting some of its V2 pools, putting $33 million worth of assets at risk. While the protocol managed to mitigate 80% of the threat, 4% of the total value locked (TVL) remained at risk. Users responded by withdrawing nearly $200 million from Balancer pools within 24 hours. This incident occurred three weeks after multiple DeFi protocols lost $70 million due to an exploit targeting the Ethereum programming language Vyper. Balancer has managed to handle the situation swiftly and safely, earning praise from experts for its communication and response.

Blockchain IRL

Solana Pay's integration as a payment option on Shopify is poised to enhance crypto adoption, providing millions of Shopify businesses the capability to accept payments through stablecoins like USDC. This collaboration offers fast settlement times and cost savings compared to credit card fees, potentially driving mass crypto adoption. The partnership also enables the creation of innovative NFT loyalty programs, adding further value to the integration. Given Shopify's significant role in U.S. e-commerce (contributing to 10% of total e-commerce and generating $444 billion globally), this move could have a substantial impact on expanding crypto's practical use. See similar: Dropbox Sunsets Unlimited Storage Plan, Partly Blames Crypto Mining See similar: Mastercard, Binance to end crypto-card partnership in September

USDC Launching on Polygon PoS, Base and Polkadot Blockchains

The USDC stablecoin founded by Circle and Coinbase is launching on six new blockchains including Polygon PoS, Base, Polkadot, NEAR, Optimism and Cosmos via the Noble network. Announcement follows Coinbase taking a stake in Circle in an effort to shore up USDC amid crumbling share of stablecoin market.

Source: The Block

More Cowbell Base

Coinbase has revealed its plan to transition the Base network, a part of Optimism's OP Stack, to a decentralized model. This move aims to prevent any single entity from having control over the network. Coinbase intends to achieve decentralization through the implementation of fault proofs and diverse client software, ensuring censorship resistance. While the timeline for this transition has not been specified, the collaboration with Optimism Collective and OP Labs will drive the process. Despite being launched just two weeks ago, Base has gained significant traction, with around $223 million in total value locked (TVL) and promising potential for rapid expansion. See more: Base boasts around 140 integrations two weeks after launch

Source: Messari

RiscZeroKnowledge... What Do You Have To Do

Risc Zero plans to release the open-source "Type 0" zkEVM, Zeth, to enhance accessibility to zero-knowledge infrastructure for developers. Zeth, built using standard Rust crates, offers the same code semantics as Ethereum's EVM, enabling developers to create zk technology on other networks without rewriting the code. Zeth's modular nature allows developers to customize their zk stack and innovate within a zk context more easily. It also facilitates zk proving technology independently, reducing dependence on validators or sync committees and accelerating transaction processing through parallel computation.

Regulation

Crikey, No CBDC's Yet Mate

Australia's central bank revealed that a decision regarding a central bank digital currency (CBDC) will be postponed for several years due to unresolved concerns surfaced after a pilot project. The announcement stated that due to the many outstanding issues, any decision on a CBDC in Australia is anticipated to be delayed. The report clarified that the pilot project aimed at exploring CBDC usage within industries to improve payment systems, rather than providing a comprehensive evaluation of costs, benefits, risks, and other implications associated with CBDC implementation.

Colombian Peso Stablecoin Goes Live on Polygon, Aiming for $10B Remittances Market

Num Finance, a stablecoin issuer, has launched a Colombian peso-pegged token named nCOP on the Polygon network. Over-collateralized by reserve assets, nCOP facilitates various financial activities such as transfers, payments, earnings, and savings using blockchain technology. This offering addresses the growing demand for stablecoins, particularly in regions with fragile financial systems like Latin America, where remittances and value storage are significant use cases. Num Finance aims to serve Colombia's substantial remittance flow by providing nCOP for remittance transfers and yield generation.

Bitcoin Dreams Are Coming True in Argentina and Turkey

Javier Milei's unexpected victory in the Argentinean primary election coincided with digital asset volatility and Bitcoin's decline due to rising interest rates and market liquidity issues. A libertarian candidate and Bitcoin advocate, Milei calls for abolishing the central bank, asserting it's a mechanism for inflationary taxation. This prompts broader reflections on the global cryptocurrency experience. The notion of "exorbitant privilege" attributed to the U.S., owing to the dollar's widespread use, is discussed, along with the advantages it brings, including the ability to print dollars with minimal consequences and borrow at lower interest rates. Bitcoin holders outside the U.S., particularly in inflation-prone countries like Argentina and Turkey, have often experienced favorable gains due to their local currencies' depreciation against the dollar and Bitcoin's relative strength.

Source: Chainalysis

Binance, Moonlight, Moonpay, Banks

Binance US, which transitioned to a crypto-only platform a month ago, appears to be reconsidering its decision as it works on integrating new USD on-ramp solutions, potentially partnering with third-party payment provider MoonPay. While details are not fully clear, Tether's USDT is indicated to be a supported asset at launch. This development follows Binance's previous offering of crypto purchases via dollar deposits before regulatory challenges arose.

More US Tax Rules... 282 Pages You Probably Won't Understand

The U.S. government has proposed new cryptocurrency tax rules, which are outlined in a 282-page document. These rules would require crypto brokers, including trading platforms, payment processors, and certain wallets, to gather and report customer information to the IRS using a new 1099 form detailing gains and losses. Investors would then utilize this form for tax reporting purposes. If approved, these rules would come into effect in 2026 for the 2025 tax year. The proposal has been introduced by the Department of Treasury and the IRS, and it carries significant implications. While regulation is expected to bring the crypto industry into the mainstream and potentially generate $28 billion in government revenue over a decade, concerns are rising due to the inclusion of decentralized exchanges and self-hosted wallets. If these rules pass, they might hinder decentralized finance in the U.S. The public can comment on the proposal until October 30th, followed by a public hearing on November 7, 2023. Unclear regulations targeting decentralized platforms could push crypto companies away from the U.S., as some companies have already shut down U.S.-based services and founders are advising developers to focus on non-U.S. customers.

ETF Fee Frenzy: Crypto Funds Engage in Epic Price War, Investors Await 'Buy One, Get One Crypto Free' Deals

The proposed management fee of a forthcoming ether futures ETF suggests a potential fee competition in the crypto fund space. Roundhill Investments plans to charge a management fee of 0.19% for its Ether Strategy ETF, which is notably lower than the fee proposed by Volatility Shares for a similar ETF. While the impact of this fee war on the cost of a spot bitcoin ETF remains to be seen, observers believe that volume and expense ratio might be crucial factors for the success of multiple ETFs if they are approved simultaneously, with institutions likely driving fund volumes.

Other Domestic Regulation Updates

• SEC Fines LA Company $6 Million Over NFTs Sold as Securities

• Fidelity-backed EDX selects Anchorage Digital for clearinghouse custody
• Bitstamp ending ETH staking for US customers in September
• 18 Venture Capital Firms Named in Class Action Suit Over Support for FTX
• Sam Bankman-Fried again pleaded not guilty to fraud and money laundering charges
• Tornado Cash's Semenov added to US government sanctions list️, Storm arrested

Other International Regulation Updates

• PayPal Will Pause UK Crypto Sales Pending Regulatory Changes
• Oman Regulators Approve Its First Crypto Exchange
• Taiwan Releases 13-Point Draft Regulations

• Thailand warns Facebook to tackle crypto-related scams or face possible shutdown

Pain & Gain

Pain

• Prime Trust Lost $8M in Doomed Terra Stablecoin Investment, CEO Says
• FTX and BlockFi Hit by Third-Party Data Breach, Exposing User Data
• Balancer reveals 'critical vulnerability' in some V2 pools
• FBI Warns Crypto Firms That North Korean Hackers ‘May Attempt to Cash Out Bitcoin’
• It’s Now Harder Than Ever to Mine Bitcoin
• CRV down 20% on the week as traders scrutinize OTC deals
• Yuga Labs To Block OpenSea After NFT Marketplace Abandons Royalty Enforcement

Gain

• Ledn opens crypto-native path to Cayman Islands 'Golden Visa'
• Metaverse & Creator Platform ZTX Raises $13MM Seed Round
• Curve Finance Vows to Reimburse Users Hit By $62MM Hack
• Sultanate of Oman Launches $350MM Crypto Mining Center
• friend.tech Crosses 100,000 Users As Crypto Community Debates Its Longevity
• Cypher Protocol Fast Tracks Token Launch