🔮3Q Done, Backed By BUIDL, Kamala on Krypto, FTX Saga Continues, That BASE

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Ethena to Launch New Stablecoin Backed by BlackRock’s BUIDL Fund

Ethena plans to introduce a new stablecoin, UStb, backed by BlackRock’s tokenized U.S. Treasuries fund, BUIDL. This follows the success of Ethena’s synthetic stablecoin, USDe, which has grown to a $2.6 billion market cap. UStb will operate independently from USDe and invest its reserves in BlackRock’s BUIDL fund, which holds U.S. Treasuries and repurchase agreements. UStb aims to offer a stable, real-world asset-backed alternative with a different risk profile from USDe, which relies on crypto assets and derivative hedging strategies. Ethena's governance could allocate USDe assets to UStb during difficult market conditions to mitigate risk. Additionally, UStb will serve as collateral on exchanges like Bybit and Bitget. Ethena raised $14 million earlier this year in a strategic funding round.

Web3 Developer Shortage: A Chicken and Egg Problem?

The challenge of attracting developers to Web3 lies in a critical chicken-and-egg dilemma: Web3 needs more developers to thrive, but poor usability, volatility, and security issues deter developers from entering the space. A report from Electric Capital shows that only 7,661 full-time Web3 developers exist globally, a fraction compared to the 27 million developers worldwide. Efforts to recruit developers have mainly centered around hackathons and grants, which are not scalable. New ideas, such as a "universal builder income" (a form of UBI for developers) or employer training to upskill workers, are being proposed as potential solutions. With 87% of businesses planning to invest in Web3, companies may look to train existing employees, creating a more direct pipeline of talent to build the future of decentralized technologies.

All About That BASE

Coinbase's Layer 2 network, Base, has rapidly emerged as the dominant force in the Ethereum ecosystem. It recently hit record highs for weekly active wallets (6.7 million) and weekly transactions (31.9 million), surpassing former leader Polygon, whose transactions dropped to 17.5 million from 31 million in March. Base’s success is driven by Coinbase’s vast user base and its appeal to DeFi users seeking faster transactions and lower fees. Additionally, more than 3.5 million decentralized exchange (DEX) traders now use Base, dwarfing activity on Ethereum and Optimism. Base's rise has led to a decline in user activity across other Layer 2 networks like Polygon, Arbitrum, and ZKsync, with Base continuing to absorb users from its competitors.

I said a hip-hop, the hippie, the hippie. To the hip, hip-hoppotamus

Pump.fun has seen a significant resurgence, with daily revenue hitting $1.1 million on September 28th, following the successful launch of $MOODENG on September 11th, which now boasts a $260 million market cap. This marks a return to levels not seen since August, signaling renewed interest in meme tokens. The platform's ease of use and quick token launches have made it a popular destination for speculators, even though most launched tokens have short lifespans. Despite the risks, the thrill of potential short-term gains continues to draw users, highlighting robust demand for high-risk, high-reward products. However, with increasing regulatory scrutiny, Pump.fun may need to adapt to ensure long-term sustainability and compliance. Hippo

Regulation

Kamala Harris Advocates U.S. Blockchain Dominance in Economic Plan

Vice President Kamala Harris emphasized her commitment to making the U.S. a global leader in emerging technologies like blockchain, AI, and quantum computing during a speech at The Economic Club of Pittsburgh. She reiterated this focus on digital assets in her 80-page economic plan, stating her administration would support innovative technologies while ensuring consumer and investor protection. While Harris has been relatively quiet about crypto on the campaign trail, her recent comments align with her broader vision of fostering an "opportunity economy." Analysts suggest that both Harris and Donald Trump’s policies could be bullish for Bitcoin, but Harris may be more favorable to Bitcoin’s long-term adoption due to structural economic policies. See similar: Polymarket considers token launch to raise over $50 million

Federal Judges Criticize SEC for Refusing to Clarify Bitcoin and Ethereum's Status

During a hearing on Monday, a panel of federal appeals court judges in Philadelphia expressed frustration with the SEC’s refusal to provide clear guidance on whether Bitcoin and Ethereum are considered securities. The case, involving Coinbase and the SEC, centered on the agency's lack of specific rulemaking related to cryptocurrencies. Judge Stephanos Bibas criticized the SEC for not explaining how the Howey Test applies to Bitcoin and Ethereum, noting these assets have been around for years. Judge Thomas Ambro added that the SEC’s approach seemed aimed at crushing the crypto industry without establishing formal rules. Despite approving Bitcoin and Ethereum ETFs earlier this year, the SEC has maintained that regulatory decisions must be made on a case-by-case basis. Coinbase's attorney, Eugene Scalia, voiced concern over the lack of clarity, saying the situation leaves the crypto industry and courts uncertain about the SEC's stance on these major cryptocurrencies. See similar:

Wells Notice to OpenSea Sparks NFT Bill in the U.S. House

The Wells notice issued by the SEC to OpenSea in August has quickly led to legislative action in the U.S. House of Representatives. On September 12, Rep. William Timmons introduced the New Frontiers in Technology (NFT) Act, following calls from The Digital Chamber for certain NFTs to be defined as consumer products, exempt from federal securities laws. The bill proposes classifying NFTs based on their usage, with collectibles like artwork and intellectual property falling outside the SEC’s purview, while NFTs marketed as investment vehicles would still be regulated. This follows prior SEC enforcement actions against NFT projects, such as Stoner Cats and Impact Theory, which faced penalties for allegedly selling unregistered securities. Meanwhile, the House Financial Services Committee held a hearing on September 18 to address the SEC’s regulatory approach toward digital assets, where the new NFT bill was also discussed.

Former Alameda CEO Caroline Ellison Sentenced to Two Years for Role in FTX Collapse

Former Alameda Research co-CEO Caroline Ellison was sentenced to two years in prison for her role in the collapse of FTX, which led to billions of dollars in losses for consumers. Ellison pled guilty in December 2022 to multiple fraud and money laundering charges and cooperated with authorities, testifying against former FTX CEO Sam Bankman-Fried. Her cooperation earned her a significantly lighter sentence than Bankman-Fried's 25-year term. During the trial, Ellison admitted to following Bankman-Fried's directives, including using customer funds and sending misleading financial statements. The judge highlighted her cooperation as a key factor in the leniency of her sentence. Ellison also expressed remorse during the hearing, apologizing to those affected by her actions. See similar: Tornado Cash co-founder Roman Storm to face trial as US judge rejects dismissal

Other Domestic Regulation Updates

• Gensler warns crypto industry 'will not long persist' without investor protection
• Rep. Maxine Waters calls for 'grand bargain on stablecoins' before the end of 2024 following years of negotiations
• US spot Bitcoin ETFs continue net inflow streak, reaching $365 million on sixth day
• Republican control of Senate would benefit digital assets, says Sen. Lummis
• BlackRock Approved for BTC ETF Options Trading on Nasdaq
• USDC Issuer Circle Adds Compliance Platform to Pursue Tokenization Market
• WisdomTree Launches Platform for Tokenized RWAs

Other International Regulation Updates

• South Korea fines Worldcoin Foundation and Tools For Humanity for data privacy violations
• Binance launches pre-market spot trading service with 'actual tokens'
• Ireland Central Bank Official Seeks to Implement MiCA

Pain & Gain

Pain

• Hamster Kombat Faces Backlash For Excluding 57% Of Users From Airdrop
• Samourai Wallet Founders Face Judge Over Money Laundering Charges
• Cathie Wood’s Ark Invest offloads another $2.8M worth of its own spot Bitcoin ETF
• Hamster Kombat’s Highly Anticipated Airdrop Goes Live
• Unmet Expectations Spark Hamster Kombat Airdrop Outrage

Gain

• Hamster Kombat teases token buyback, NFTs and launch of web app ahead of airdrop
• Celestia Foundation raises $100 million in a round led by Bain Capital Crypto
• EIGEN Tokens Will Become Transferable On Sept. 30