🔮 (a lot) of Crypto Are Commodities, TVL/Locking/Market Share Update, Enough Probing

A Week in Review

After weeks of chop/consolidation, digital assets have started a slow but steady recovery as bearish headwinds have begun to wane – the German Government has concluded its selling of Bitcoin, Mt. Gox stickershock has faded, global liquidity is on the rise – and Bitcoin's price has stabilized above $60,000. This price action has been buoyed by significant new inflows into Bitcoin ETFs (evidenced by $414 million in inflows). Ethereum followed suit, up over 10% on the week, with additional bullishness boosted by the impending launch of spot Ethereum ETFs.

Source: Twitter

Source: Dune

Top Stories

Maple Finance's TVL Growth Accelerates with Launch of Syrup.fi

Maple Finance's total-value locked (TVL) surged by 123% in Q2 2024, reaching a record $230 million, according to Dune Analytics. This growth, alongside a 39% rise in quarterly revenue, was fueled by the launch of Syrup.fi, a retail-focused product, on June 25. The DeFi market, by comparison, saw a modest 9% increase in the same period, per DeFiLlama. The robust performance reflects strong demand for Maple's high-yield, institutional-grade products and the anticipation for Syrup.fi, which offers retail users permissionless access to these yields. Co-founder Joe Flanagan attributes Maple's success to its secured lending products that provide yield from fully collateralized loans to large institutions. Syrup.fi, which has already accrued over $13 million in TVL, allows users to earn "Drips" for early access, convertible to Maple's upcoming Syrup token. Maple's secured pools, backed by assets like BTC, USDC, and ETH, comprise $147 million of its TVL. The launch of Maple's High Yield Secured pool, offering a 15% net APY, also contributed to the growth.

Source: Dune

Crypto.com’s Market Share Growth Signals Potential Retail Resurgence

Crypto.com has been steadily climbing the ranks in USD support exchange volume market share, suggesting a potential resurgence of retail participation in the crypto markets, as the exchange's user base has historically been retail investors. As of July 2024, Crypto.com's market share has reached 31%, a significant recovery towards its peak of 44% observed in April 2022. This growth appears to come at the expense of smaller U.S. exchanges, whose collective market share diminished from 14% to 12% this year. While Coinbase consistently holds around 45% of the market share, Kraken's share has slightly declined from 20% to 17%. Crypto.com's trading volumes have remained stable at around $30 billion monthly, indicating a loyal user base. High-profile marketing initiatives, such as its Formula 1 sponsorship and securing the naming rights to the Crypto.com Arena, have boosted brand recognition. However, despite this growth, Crypto.com’s native coin, CRO, is down in 2024, highlighting mixed performance indicators.

Source: The Block

"Hypothetically" Losing Half But Not In a Divorce (Ethereum)

Vitalik Buterin has called for the Ethereum network to develop automated responses to hypothetical 51% attacks to alleviate the burden on its social layer. In a keynote speech at ETHCC in Brussels on Wednesday, the Ethereum co-founder emphasized the need for further research and development in this area. A 51% attack occurs when a malicious actor, or coordinated group, controls more than half of the network’s mining power, potentially leading to censorship. Buterin proposed that honest validators should automatically switch to a minority fork of the chain if censorship occurs. While acknowledging the challenges in getting the entire network to switch automatically, he believes partial automation could ease social consensus efforts. Buterin also called for increased adoption of light clients, support for zk-EVMs to bolster Layer 2 networks, quantum resistance, and protocol simplification to enhance Ethereum's infrastructure and user experience.

Curve Finance Users Lock Record Amounts of CRV Tokens in the DEX

Curve Finance is witnessing unprecedented levels of CRV token lockups. In the week ending July 8, users locked 51 million CRV tokens, valued at $14.7 million, surpassing the previous record of 24 million from October 2022. This surge brings the total CRV deposited to 796 million tokens, worth $230 million. According to Michael Egorov, Curve Finance's founder, this significant increase indicates a growing focus on governance and fee distribution among investors. The protocol also experienced its best week in fee revenue since April 2024, with earnings rising to $951,000. Despite this, Curve's total value locked (TVL) has only slightly increased to $2 billion, down from its peak of $4.3 billion last year, though it remains the second-largest decentralized exchange after Uniswap. Curve’s market cap stands at $346 million, with the CRV token down 98% from its all-time high but showing recent gains. The spike in CRV locks may signal a revival of the competitive "Curve Wars" from 2021.

Source: Dune

Regulation

CFTC Chair Asserts Majority of Crypto Assets Are Commodities

CFTC Chair Rostin Behnam has asserted that 70-80% of crypto assets, including Bitcoin and Ethereum, should be classified as commodities rather than securities, urging Congress to expand the CFTC's authority over digital assets. This stance, reinforced by a recent federal court ruling, contrasts with SEC Chair Gary Gensler's more stringent regulatory approach. The court's decision, coupled with the SEC's approval of spot Ethereum ETFs, signals a shift towards clearer regulatory boundaries. Behnam emphasized the need to focus on regulating centralized exchanges, leaving DeFi to potentially unique regulatory approaches. These developments aim to reduce regulatory uncertainty and enhance investor protection in the crypto sector.

SEC Concludes Paxos Probe Without Enforcement Action

The Securities and Exchange Commission (SEC) announced it will not recommend enforcement action against blockchain infrastructure firm Paxos following an investigation into the Binance USD (BUSD) stablecoin. Paxos received a "formal termination notice" from the SEC on July 9, marking the end of the probe without further action, as first reported by Fortune. Paxos stated that this development could lead to increased adoption of stablecoins with robust consumer protections, potentially transforming the financial system in areas such as payments, settlement, and remittance. The SEC had initially issued a notice to Paxos last year regarding its role in BUSD and subsequently sued Binance, labeling BUSD as a security. The SEC's decision leaves ambiguity around the agency's stance on whether stablecoins are considered securities. SEC Chair Gary Gensler has previously likened stablecoins to money market funds and other securities. Concurrently, U.S. lawmakers are crafting legislation to regulate stablecoins, with ongoing debates about the primary regulator for stablecoin issuers. See similar: Uniswap Says SEC Should Drop Proposed DeFi Rules, Citing Chevron Decision / Bitcoin Scaling Network Stacks Avoids Charges as SEC Closes Investigation / SEC drops its probe into Hiro's Stacks, according to a regulatory filing

New IRS Rules Shift Tax Reporting Burden to Crypto Brokers

U.S. crypto traders have traditionally reported their own tax information to the IRS, leading to a significant tax gap due to confusion, information-gathering challenges, and tax evasion. This is set to change with new rules transferring the reporting responsibility to brokers. After receiving 44,000 public comments, the U.S. Department of the Treasury and the IRS have finalized the new regulations. Custodial digital asset trading platforms, some hosted wallet providers, digital asset kiosks, and certain digital asset payment processors will now annually provide investors and the IRS with a 1099-DA form, akin to the 1099-B used for equities tax reporting. Mandatory reporting starts in 2026 for the 2025 tax year. Brokers must report the original price, sales prices, and gains or losses if over $600. DeFi platforms and non-hosted wallet providers are initially exempt, with separate rules effective in 2026. IRS Commissioner Danny Werfel highlighted these regulations as crucial for high-income individual tax compliance, aiming to ensure digital assets are not used to hide taxable income. The change is projected to raise approximately $28 billion over the next decade.

Terraform Labs To Sell Four Businesses Amid Bankruptcy Proceedings

Terraform Labs, the company behind the failed Terra blockchain, is looking to sell four of its businesses as part of its Chapter 11 bankruptcy process. The firm announced on July 9 that it seeks buyers for Pulsar Finance, a cross-chain portfolio tracker acquired in November 2023, Station, a non-custodial Cosmos-based hot wallet, Enterprise, a no-code DAO management platform, and Warp, an on-chain automation protocol for smart contracts. Terraform Labs stated that the sales are intended to maximize value for creditors and stakeholders while winding down operations under a settlement with the U.S. Securities and Exchange Commission. Terraform Labs filed for bankruptcy in January and settled with the SEC for $4.47 billion in June, following fraud charges against co-founder Do Kwon.

Source: DeFi Llama (Terra Classic TVL)

Other Domestic Regulation Updates

• SEC allows certain firms to skirt controversial crypto accounting bulletin
• Biden Insists He Won’t Drop Out, But Crypto Oddsmakers Still Say He Will
• Trump Doubles Down On Pro-Crypto Pivot In RNC-Backed Policy Doc
• VanEck, 21Shares Apply to Cboe for Solana ETF 
• U.S. Court Rules Two Altcoins are Commodities 
• ETH ETF Issuers Submit Revised S-1 Filings to SEC

Other International Regulation Updates

• Celsius Aims To Recover $100 Million From Users Who Withdrew Funds Before Bankruptcy
• Australia to Get Second Spot Bitcoin ETF on ASX
• DigitalX Becomes Second BTC ETF Issuer on Main Australia Stock Market
• Nigeria Explores Building Its Own ‘Nigerium’ Blockchain

Pain & Gain

Pain

• Friend.Tech Plummets After Abandoning FriendChain
• More Than 120 DeFi Front-End Could Be Vulnerable To DNS Attacks
• lliptic exposes $11B scam network via Huione Guarantee, alleging money laundering and other crimes linked to the multi-billion dollar marketplace

Gain

• Starknet token staking proposed to hit mainnet by Q4 2024
• Bitcoin Miner Profits Rise in June as Market Adjusts to the Halving 
• Why Are 240MM People Playing Hamster Kombat?
• Token distribution protocol ZAP reaches $100 million valuation