🔮BTC Mining, M&A, Additional Gemini Settlement, Somewhat Hacked

Top Stories

Mine Yo Business

The bitcoin mining sector faces challenges and opportunities following April’s halving, with miners seeking new revenue streams amid reduced block rewards. Donald Trump’s recent support for U.S.-made bitcoin underscores growing political attention. AI companies like CoreWeave are partnering with miners like Core Scientific, aiming to leverage their computing power for AI operations, signaling a mutually beneficial trend. Meanwhile, consolidation looms as miners like Riot Platforms vie for acquisitions; its bid for Bitfarms faces resistance despite strategic moves by both parties. Bitfarms’ plans for a Pennsylvania mining site to boost capacity, underpinning its resistance to the Riot bid. Both Core Scientific and Bitfarms have seen significant stock gains, reflecting investor optimism amid industry shifts, despite uncertainties about long-term impacts post-halving.

Source: The Block

Protocol M&A Trends Reflect Market Saturation in DeFi and Ethereum Ecosystem

The uptick in protocol mergers and acquisitions (M&A) underscores the saturation in the DeFi and Ethereum ecosystem infrastructure, contrasting with previous trends dominated by centralized entities like Coinbase and Robinhood. In 2023, the crypto industry saw about 148 M&A deals, a notable shift from the past focus on centralized platforms. Highlight transactions include Polygon Labs' $250 million merger with Hermez in 2021. Facing stagnant organic growth and a flood of similar offerings, protocols with significant capital reserves are leveraging M&A to strengthen their market positions. For example, Uniswap's recent acquisitions of Crypto the Game and Genie in 2022 and 2021, respectively, aim to enhance its user experience and network effects. Eigenlayer's acquisition of Rio Network and Arbitrum's exploration of an M&A arm further illustrate this trend, emphasizing consolidation as a strategy to navigate intensifying competition and drive sustained growth in decentralized finance.

Tether Launches Alloy: Centralized Challenger to DeFi with Gold-Backed aUSDT

Tether is gearing up to challenge leading DeFi platforms with its upcoming Alloy platform, introducing aUSDT as its inaugural "tethered asset" pegged to the U.S. dollar and backed by tokenized gold (XAUt). This move signifies Tether's strategy to offer a centralized alternative to decentralized money market protocols like Aave and Curve. Unlike DeFi platforms that operate autonomously via smart contracts, Alloy requires users to undergo KYC verification. Users can mint aUSDT by depositing XAUt into a smart contract and manage their positions similarly to DeFi, facing liquidation if collateral values drop below specified levels. Tether plans to expand Alloy into an open platform allowing collateralized synthetic assets backed by various digital assets, potentially including yield-bearing products. Despite skepticism about Alloy's business model due to the costs of storing gold and its lack of yield, Tether aims to leverage its massive stablecoin market cap to establish Alloy as a bridge between traditional finance and DeFi for CeFi users.

ZKsync Token Launches with $925 Million Market Cap Following Airdrop Surge

ZKsync's new token debuted with a market capitalization exceeding $935 million and a fully diluted value approaching $5.3 billion, following its listing on Binance and other major exchanges. The launch included a notable airdrop where 45% of the allocated tokens were claimed within two hours by over 225,000 addresses. This surge in token claims temporarily strained ZKsync's RPC services due to intense user activity. Despite successful distribution, the project faced security challenges from malicious dApps impersonating its verification processes, underscoring ongoing risks in the ecosystem. Developed by Matter Labs, ZKsync utilizes zero-knowledge proof technology to enhance Ethereum scalability and supports Ethereum Virtual Machine compatibility as a Layer 2 network.

Source: ZK Nation

Aave Community Backs Lido Alliance for stETH-Focused v3 Deployment

The Aave community recently approved a proposal to launch Aave v3, focusing on integrating the Lido ecosystem with an emphasis on stETH liquidity and leveraging. This decision reflects Aave's alignment with the Lido Alliance, aimed at promoting the adoption and utility of stETH, a liquid staking token. The proposal highlights the mutually beneficial relationship between Aave and Lido, emphasizing stETH as a significant collateral asset and leveraged staking as a profitable use case for both platforms. The deployment will exclusively support assets like wETH and Lido's wstETH, ensuring consistent profitability for stETH/wETH loops without the risk of negative returns.

Xai Drives Record Throughput for L2 and L3 Networks with Vanguard Campaign

Xai's Vanguard: Genesis campaign has ignited substantial engagement, attracting 1.3 million wallets and driving Ethereum Layer 2 and Layer 3 networks to achieve a new daily throughput record. On June 16, these networks collectively processed an average of 246.3 transactions per second (TPS), as reported by L2beat, marking a significant increase from previous highs. Xai alone accounted for 101.7 TPS, an astounding 9,000% surge within just one week of launching its gaming-focused Layer 3 network. The campaign's success underscores Xai's emergence as a formidable player in the on-chain gaming sector, leveraging its partnership with OffChain Labs and Arbitrum's Orbit infrastructure to support high-throughput decentralized applications like Crypto Unicorns and Final Form.

Source: L2Beat

Regulation

Gemini Settles for (an additional) $50 Million Over Earn Program

Gemini has agreed to pay an additional $50 million to settle claims regarding its Earn program, following a settlement with New York Attorney General Letitia James. The agreement aims to compensate over 230,000 investors, including 29,000 New Yorkers, who were misled by Gemini's Earn program, which promised growth but instead locked investors out of their accounts. This latest settlement, combined with a previous $2 billion recovery from Gemini's partner Genesis, ensures affected investors receive full restitution in digital assets. Attorney General James emphasized that such deceptive practices are illegal, underscoring her office's commitment to safeguarding investors from fraudulent cryptocurrency schemes. Gemini is also prohibited from offering crypto lending products in New York as part of the settlement terms.

SEC's Crypto Assets and Cyber Unit Head Departs After Nine Years

David Hirsch, who led the SEC’s Crypto Asset and Cyber Unit in the Division of Enforcement, has announced his departure from the agency after a nine-year tenure. Hirsch, who took charge in October 2022 during a tumultuous period for the crypto market, cited personal excitement for new challenges ahead but did not specify his next career move. Under his leadership, the SEC intensified its scrutiny with high-profile actions against entities like FTX, Coinbase, Binance, and Kraken, aiming to enforce securities laws in the crypto space. His exit comes amidst ongoing regulatory debates and political pressures surrounding cryptocurrency in the United States.

Certik Returns $3 Million to Kraken Amidst Controversy Over Held Funds

Certik, a cybersecurity firm, has returned $3 million in crypto assets to Kraken following a contentious dispute. The conflict began when Certik discovered and exploited a critical bug on Kraken's platform, leading to the temporary withholding of funds as part of their security testing. Kraken's Chief Security Officer confirmed the return, noting a deduction for transaction fees. The incident sparked public debate within the crypto community, with accusations of extortion and irresponsible security practices leveled against Certik. Despite Certik's claims of acting in the spirit of security research, the situation underscored broader concerns about ethical boundaries in vulnerability testing within the cryptocurrency sector.

German Government's Bitcoin Sell-Off Triggers Market Volatility

Bitcoin faced a 3.5% decline amid heightened volatility concerns exacerbated by the German government's sale of seized Bitcoin assets. This significant liquidation, amounting to $325 million over 48 hours from assets confiscated from Movie2k.to, a piracy website, has stirred unease in the cryptocurrency market. The move by German authorities reflects their view on Bitcoin's short-term trajectory, potentially signaling further sales.

Source: X (Formerly Twitter)

EU Innovation Hub Examines Encryption Challenges and Opportunities

The EU Innovation Hub for Internal Security's "First Report on Encryption" delves into the complexities surrounding encryption technology, emphasizing the delicate balance between individual privacy and collective security. The report advocates for ongoing collaboration among regulators, law enforcement, developers, academia, and crypto firms to navigate the rapid pace of innovation. It highlights the effective use of now-decrypted communications as evidence in criminal cases, facilitated by blockchain transparency. Looking ahead, the report anticipates challenges from advancements like zero-knowledge proofs and encrypted layer 2 applications, which could obscure transaction details critical to investigations.

Other Domestic Regulation Updates

• U.S. Senator Tells Gary Gensler Crypto Desperately Needs Resources
• Biden officials will attend a Bitcoin roundtable in DC according to a leaked report
• Gensler Tells Congress ETH ETFs Could Be Approved This Summer
• Uphold Delists 6 Stablecoins Ahead of MiCA Taking Effect
• Coinbase Advanced to Offer Pre-Launch Token Trading

Other International Regulation Updates

• Standard Chartered is creating a Bitcoin and Ethereum trading desk in London, launching a spot trading desk for Bitcoin and Ethe
• Deutsche Telekom Expands Crypto Activities, Adding BTC Mining
• Itaú Unibanco, Brazil’s Largest Bank, Offers Crypto Trading to 60MM+ Customers

Pain & Gain

Pain

• Memecoins Get Decimated Amid Market Downturn
• ️LayerZero Airdrop Allocations Disappoint DeFi Users

Gain

• Base Network Surpasses Binance Chain in Active DEX Users
• Ronin Network Unveils Permissionless zkEVM
• LayerZero’s Airdrop Drives Record Arbitrum Fee Revenue
• MicroStrategy Just Bought Another $786 Million in Bitcoin