🔮 Lots of Gary, AAVE's New Governance, Money Transmitting, Blockfi Gets The Go Ahead, UK Eyes Web3

Token Specific News

ETH Hits $10B

The Ethereum network has achieved a significant milestone by generating $10 billion in all-time revenue, with $16.8 billion in fees, of which 60% has become revenue in the form of burned ETH. Notably, Ethereum reached this revenue benchmark faster than Facebook, Microsoft, Shopify, Zoom, and Salesforce, with only Google achieving a faster pace. This is unique because Ethereum is a decentralized network, meaning the revenue benefits the network stakers responsible for maintaining Ethereum's operations.

Source: Caleb & Brown Research

Blocked Up: BTC Invalid Error

Marathon Digital, a Bitcoin mining company, mined an invalid Bitcoin block. They attributed this rare occurrence to a "bug" in an optimization experiment but emphasized Bitcoin's security, as the network rejected the invalid block. Some in the Bitcoin community, including Casa CTO Jameson Lopp, pointed out that this incident highlighted Bitcoin's resilience against double spend attacks, particularly concerning a "transaction ordering issue."

Source: Messari

Ethereum Supply Is Starting to Grow Again as Gas Prices Plummet
Ethereum's supply dynamics fluctuate based on different time frames, influenced by trends in DeFi, NFTs, and meme coins. EIP-1559 linked supply to gas prices, burning more ETH with higher gas fees. The shift to proof of stake reduced ETH issuance by 90%, creating "ultrasound money," but gas price drops and reduced transactions challenge this. Lower fees, due to Ethereum 2.0 and Layer-2 solutions, resulted in levels last seen in late 2022. The future of Ethereum's gas prices is uncertain, influenced by factors like account abstraction (ERC-4337) adoption and Layer-2 impact on supply dynamics. Lower fees attract users but may lead to network congestion as activity rises.

Aave Gears Up for Governance Revolution

Aave, a leading web3 lending protocol, is preparing to revamp its governance process. The upgrade, known as "Aave Governance v3," will introduce voting through a new interface on the Polygon PoS and Avalanche networks to minimize transaction fees, with the Aave DAO covering user participation costs. This governance update will also activate on Ethereum to serve as a backup network. It will allow aAAVE tokens as voting assets alongside AAVE and stkAAVE and introduce the Aave Delivery infrastructure for cross-chain communication. BGD Labs, the team behind this upgrade, estimates a 21-day migration process and a reset of all Aave governance delegates. Discussions on Aave governance v3 began in January 2022, and the upgrade aims to enhance Aave's governance control. Despite this development, the price of AAVE remains relatively stable.

That Hits The Spot

Spot trading volumes in September hit a low of $312 billion, the lowest since October 2020, reflecting a prolonged trend of declining volumes in the summer. Regulatory scrutiny following the FTX incident has forced exchanges to delist assets and exit markets to cope with regulatory pressures, causing volume reductions. Binance's decision to reintroduce fees on Bitcoin pairs in March 2023 led to a significant drop in its volumes, with a decline of over 75% from March to September. Despite experiencing a decline, Binance remains the largest exchange in terms of spot volumes, affecting the broader market. Its volumes saw a substantial decrease from August to September due to fee adjustments and the transition from TUSD to FSUSD as the preferred stablecoin, though BTC/FDUSD volumes have not reached the levels of the TUSD pair.

Source: The Block

Chainlink Extends Cross-Chain Protocol to Coinbase’s Base

Chainlink has expanded its cross-chain capabilities to the Ethereum layer-2 network Base, enabling the Cross-Chain Interoperability Protocol (CCIP) for cross-chain communication and interactions with traditional Web2 applications. Chainlink serves as the primary oracle for the Base network, and various projects are already integrating CCIP on Base. This development enhances the interoperability of different blockchains and offers developers the ability to create cross-chain applications and services, with Chainlink having integrated CCIP into multiple blockchain networks to date.

Source: Dune

Regulation

Center Circle, In The Ring With Binance

Circle, a stablecoin issuer, has inserted itself into the Securities and Exchange Commission's (SEC) lawsuit against Binance, contending that financial trading regulations should not extend to stablecoins that derive their value from other assets. In June, the SEC accused Binance of multiple legal violations related to trading in cryptocurrencies, including Solana's SOL, Cardano's ADA, and the Binance stablecoin BUSD, alleging that these assets were unregistered securities. This case has become a prominent issue in the crypto space as major cryptocurrency exchanges, such as Binance and Coinbase, endeavor to assert that cryptocurrencies are not subject to existing stringent U.S. financial regulations.

Bankrupt Crypto Firm BlockFi Gets Court Approval for Restructure Plan

Bankrupt crypto lending firm BlockFi has received approval from a bankruptcy judge to begin repaying customers based on a new plan. Debtors are tasked with compiling a list of creditors, with a focus on the top 50 unsecured creditors. BlockFi had initially presented a liquidation plan in November, but it faced criticism from FTX, which claimed it wasn't fair to their claims, stemming from BlockFi's exposure to FTX's bankruptcy, and BlockFi's repayments will depend on the outcome of its legal battle with FTX and other bankrupt cryptocurrency firms. See similar: Curve founder Michael Egorov settles entire debt position on Aave

Tea, Crumpets, Crypto

The UK recently entered the forefront of Web3 strategy during the British Blockchain Association (BBA) summit, where UK leaders addressed global counterparts. Despite prioritizing Web3 growth, the UK lags in blockchain job opportunities, primarily in the financial sector, with many startups in the seed funding phase. The UK's 2021 national blockchain roadmap is ambitious, aiming to address climate issues, implement digital identity programs, and create circular economy networks, involving academia, government, industry, and a unique fourth stakeholder, the public. Public interest in the metaverse is growing, but there's a need for education. On the global stage, technology executives show strong enthusiasm for Web3 and metaverse investments. The UK also recently passed the Online Safety Bill, expanding to the metaverse. The UK encourages other nations to create their blockchain roadmaps and collaborate on execution.

Challenges and Inconsistencies in Money Transmitter Licensing: A Call for Regulatory Clarity

Collecting Money Transmitter Licenses (MTLs) in the United States can be expensive and challenging, creating a "regulatory moat" that benefits current license holders and financially strong firms. MTL applicants must demonstrate their ability to meet financial obligations, maintain assets exceeding liabilities, and provide liquid assets for immediate payment demands. MTL regulations vary across states, with some treating cryptocurrencies like fiat, while others exempt digital currency sales from individual investments. This lack of uniformity, inconsistent enforcement, and regulatory innovation lag create uncertainty for the U.S. digital asset industry, as the classification of digital assets as securities, commodities, or money remains unsettled.

Gary Gensler Probably Thinks This Email Is A Security

Lawmakers have urged SEC Chair Gary Gensler to promptly approve the listing of spot bitcoin exchange-traded funds (ETFs). This push follows a court ruling favoring Grayscale, which required the SEC to reevaluate the crypto asset manager's application, highlighting inconsistent treatment between spot bitcoin ETFs and futures-based funds. The lawmakers argue that a regulated spot bitcoin ETF would provide safer and more transparent access to bitcoin, enhancing investor protection. In a separate matter, Rep. Blaine Luetkemeyer expressed concerns about registered broker-dealers with ties to the Chinese Communist Party operating in the U.S. Gensler reiterated the importance of crypto compliance ahead of a House Financial Services Committee hearing. Coincidentally, the SEC postponed a decision on the proposed ARK 21Shares Bitcoin ETF into the following year, and also delayed a decision on the proposed Global X Bitcoin Trust until November 21, indicating potential delays for additional spot bitcoin fund applications. See similar: October is shaping up to be a pivotal month for crypto ETF clarity

Other Domestic Regulation Updates

• U.S. Shutdown, Assuming It Doesn’t Run Long, Will Slow, Not Cripple Crypto Efforts
• U.S. Federal Reserve Publishes Paper on Tokenization
• U.S. Sen. Warren Adds 9 New Supporters to Anti-Money Laundering Bill
• VanEck prepares to launch Ethereum Futures ETF
• SEC delays BlackRock, Valkyrie spot bitcoin ETFs decision

Other International Regulation Updates

• Philippines SEC Teams With U.S. SEC, Asian Development Bank to Fight Crypto Crime
• Coinbase granted full license in Singapore
• JPMorgan Chase UK imposes ban on crypto transactions
• Bitbuy Partners with Localcoin to Expand ATM Access in Canada
• Binance has sold its Russian unit to a day-old crypto exchange
• Kraken secures EMI license in Ireland, VASP registration in Spain

Pain & Gain

Pain

• Crypto Investors Lost $686 Million to Hacks, Fraud in Just 3 Months
• Binance US revenue fell 70% year to date
• Arbitrum Users Leave $56M In ARB On The Table

Gain

• In Emerging Economies Like Chile, Worldcoin Is Seeing Strong Success
• Google Cloud is now a Polygon validator
• Bitget Exchange Lists PayPal Stablecoin PYUSD
• Everything's bigger in Texas, even the Bitcoin mining
• Payments giant MoneyGram plots noncustodial wallet launch
• Grab Launches Web3 Wallet for Singaporean Users
• Firm Led by Farmville Co-creator Raises $33MM for Web3 Games
• Acclaimed Director Raises $1.5MM via DeFi Crowdfunding for Animated “Bottle Shock”
• ApeCoin Community To Acquire Top NFTs Through New DAO