🔮Coinbase Smart Wallet, Polymarket Volumes, Biden Veto, Dropping ZK Trademarks

Note from the team: Following the 6/7/2024 newsletter, we will move from releasing 'Weekly Attestations' on Friday to Monday.

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Token Specific News

Coinbase Launches Smart Wallet to Simplify Crypto Experience

Coinbase unveiled its new "smart wallet," aiming to address key UX challenges in the crypto space such as complex onboarding, network fees, and recovery phrases. Announced initially at EthDenver in February, the wallet allows new users to create accounts using Face ID, Google Chrome profiles, fingerprints, or Yubikeys, eliminating the need for recovery phrases. The wallet also resolves "insufficient balance" issues by using balances from self-custodial wallets or Coinbase accounts. Additionally, it supports gasless transactions through paymaster integrations, enhancing the user experience. Currently, the wallet supports eight networks, including Base, Ethereum, Optimism, Arbitrum, Polygon, Avalanche, BNB, and Zora, with plans for further expansion.

Polymarket: A Decentralized Prediction Market Shattering Records

Polymarket, a decentralized prediction market, hit over $62 million in betting volume in May, breaking records and showcasing impressive growth. The platform, which allows users to bet on real-world events like politics, attracted significant attention during the US political season, with bets on the presidential election winner already reaching $149 million. With $45 million in Series B funding, 14.7K active users, and $23.7 million in total value locked, Polymarket stands out for its lower fees, global accessibility, user-driven bets, market sentiment insights, and onchain transparency. Its strong community engagement and potential airdrops suggest continued momentum and success.

Source: Dune

StarkWare to Scale Bitcoin with Zero-Knowledge Tech

StarkWare, the developer behind Starknet, plans to bring its zero-knowledge technology to Bitcoin, aiming to scale both Bitcoin and Ethereum networks. This initiative follows the OP_CAT technical proposal, which provides the necessary framework for STARK scaling on Bitcoin. StarkWare CEO Eli Ben-Sasson announced that Starknet will become the first network to settle on both Bitcoin and Ethereum, scaling Bitcoin to thousands of transactions per second within six months after the potential Bitcoin upgrade, OP_CAT. The plan utilizes the existing Starknet network without creating an extra chain or requiring a fork, maintaining the same governance and tokenomics. Additionally, StarkWare introduced a $1 million fund to support Bitcoin researchers interested in contributing to this scaling effort.

Blast Converts to Blobs, Gaining Traction as a Layer 2 Network

Blast, a new optimistic rollup, transitioned from calldata to blobs, improving its data storage efficiency. Launched in February 2024, Blast initially gained traction for supporting native yield, accumulating over $1 billion in total value locked (TVL) during its early access phase from November 2023, despite "Ponzi scheme" allegations regarding its invite rewards structure. Backed by Paradigm and created by the founder of NFT marketplace Blur, Blast has captured public interest, although it hasn't announced an airdrop yet. It supports trendy protocols like fantasy.top, a platform for trading crypto influencer cards, which was among the top 10 in daily fees generated earlier this month. While Blast’s daily transactions are around 500,000, similar to Optimism, it lags behind more established networks like Arbitrum and Base. The switch to blobs has further reduced transaction fees, which were already below $0.10, enhancing its appeal as a cost-effective layer 2 solution.

Source: The Block

Regulation

Biden's Veto Strikes SAB 121 Repeal: SEC Crypto Rules Stay

President Joe Biden vetoed a bill aiming to overturn the SEC's controversial SAB 121, which sets accounting standards for firms that custody crypto. Biden emphasized the necessity of these guardrails to protect consumers and investors while supporting the potential benefits of crypto innovation. Despite bipartisan support in the House and Senate for the repeal, Biden's veto underscores his administration's commitment to maintaining financial stability and comprehensive regulatory oversight. The crypto industry has criticized SAB 121, arguing it could hinder banks from safeguarding digital assets. However, the SEC contends that SAB 121, as non-binding staff guidance, enhances transparency and investor protection by ensuring customer crypto holdings are recorded as liabilities on balance sheets, thus revealing the risks taken by crypto custodians.

BlackRock's IBIT Dethrones Grayscale's GBTC as Largest Bitcoin ETF

As June begins, the spot Bitcoin ETFs approach their five-month anniversary, demonstrating unprecedented success. BlackRock’s IBIT has taken the lead in inflows and trading volumes, benefiting from its connection to the world's largest asset manager and a competitive 0.25% fee. Initially, Grayscale’s GBTC held the largest assets under management (AUM) with 619,220 BTC worth over $28.5 billion. However, Grayscale faced heavy outflows as investors began redeeming their funds post-conversion. Meanwhile, IBIT started with a $10 million seed and steadily increased its AUM through inflows. On May 29th, IBIT dethroned Grayscale as the largest spot Bitcoin ETF by AUM. The positive trend in the crypto market since mid-May further boosted these ETFs. As Ethereum ETFs gain approval, a similar scenario may unfold, with Grayscale starting strong but likely facing competition from rapidly growing funds like BlackRock’s, provided their fees stay competitive.

Source: The Block

Matter Labs Drops "ZK" Trademark Bid Amid Backlash

Matter Labs, creators of the ZkSync Ethereum scaling solutions, have abandoned their attempt to trademark "ZK" after facing significant backlash from the web3 community. The effort to trademark the widely-used acronym for zero-knowledge cryptography sparked criticism from competitors like Polygon, Starkware, and Polyhedra, who argued that such a move violated the open, community-driven ethos of web3. Critics accused Matter Labs of trying to monopolize a common term, potentially to secure their forthcoming token under the ticker ZK. Following the outcry, Matter Labs announced on June 2 that they would drop all trademark applications for "ZK," stating their intention to support the term as a public good. This decision comes amid speculation of an upcoming airdrop of ZkSync tokens, adding to the project's ongoing developments in the zero-knowledge cryptography space.

RFK Jr. Advocates Bitcoin to Tackle U.S. Debt Crisis

Presidential candidate Robert F. Kennedy Jr. proposed using Bitcoin and blockchain technology to address the U.S. debt crisis during the Consensus 2024 conference in Texas. Kennedy plans to incorporate Bitcoin into U.S. debt management, suggesting backing the U.S. dollar and Treasury Bills with hard assets like Bitcoin to enforce financial discipline. He owns over $1.42 million in BTC and believes that gradually increasing Bitcoin reserves could stabilize the dollar. Kennedy criticized current government spending, especially military expenditure, and emphasized the need for hard currency to maintain economic freedom. He also pledged to position the U.S. as a global leader in blockchain and digital assets, opposing the current administration's stance which he claims drives innovators abroad. Kennedy’s campaign accepts Bitcoin donations, a move now followed by other presidential candidates like Vivek Ramaswamy and former President Donald Trump.

Binance to Restrict Access to Unauthorized Stablecoins in the EU

Starting June 30, Binance will restrict access to "unauthorized" stablecoins in the EU to comply with the new Markets in Crypto-Assets Regulation (MiCA). The world's largest cryptocurrency exchange by trading volume will implement these changes gradually, encouraging users to switch to "regulated" stablecoins issued by authorized companies. Binance has not specified which stablecoins will face restrictions but will allow users to convert them into Bitcoin, Ether, "regulated" stablecoins, or fiat currency. This move follows the sentencing of former CEO Changpeng Zhao to four months imprisonment in April. Under new CEO Richard Teng, Binance aims to show increased collaboration with regulators, aligning its operations with the EU’s stringent crypto regulations.

Robinhood to Acquire Bitstamp in $200 Million Deal

Robinhood plans to acquire Bitstamp, the world’s oldest running crypto exchange, in a deal worth $200 million. Set to close in the first half of 2025, this acquisition will expand Robinhood's reach beyond the U.S. and introduce institutional crypto clients to its platform. Bitstamp, founded in 2011, serves retail and institutional customers across the EU, UK, U.S., and Asia, boasting over 50 global licenses and registrations. Robinhood aims to leverage Bitstamp's trusted reputation and extensive crypto services, including trading, staking, and lending, to enhance its own offerings. Barclays Capital Inc. advised Robinhood, while Galaxy Digital Partners LLC advised Bitstamp. Johann Kerbrat, General Manager of Robinhood Crypto, emphasized the strategic importance of this acquisition for expanding Robinhood’s global footprint and welcoming institutional customers. Bitstamp’s existing team will integrate with Robinhood, maintaining a strong focus on compliance, security, and user experience.

Other Domestic Regulation Updates

• U.S. Treasury Warns That NFTs Are Vulnerable To Fraud and Money Laundering
• Wisconsin’s Pension Fund Buys $160M Worth of Bitcoin in Trailblazing Move
• Polymarket Records Strongest Ever Month As Election Season Heats Up
• Coinbase Accuses SEC of 'Purposeful Effort to Destroy' Crypto
• SEC Commissioner Proposes Cross-border Sandbox for U.S. and U.K. Crypto Industries

Other International Regulation Updates

• Euro-Pegged Stablecoin Lugh to Withdraw From EU as MiCA Looms
• Vitalik Buterin Donates 30 ETH to Tornado Cash Devs Legal Defense
  

Pain & Gain

Pain

• Matter Labs In Hot Water Over ‘ZK’ Trademark Bid
• Japanese Exchange DMM Bitcoin Hacked for $308 Million
• MoonPay lays off 10% of staff despite having 'years of runway'
• There Is a Second Best: Bitcoin Bull Michael Saylor Softens on Ethereum
• There Is a Second Best: Bitcoin Bull Michael Saylor Softens on Ethereum

Gain

• Tether purchases $100 million of shares in Bitcoin miner Bitdeer
• Peter Thiel's Founders Fund co-leads $43 million Series A for modular blockchain Avail
• Tether moves deeper into bitcoin mining with Bitdeer investment
• Base Ecosystem TVL Hits All-time High