🔮Kraks in the Base, MSFT Floats BTC Investment, Poly-Accuracy, CEX to DEX

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Kraks In The Base

Kraken plans to introduce its Layer 2 blockchain, "Ink," on Ethereum using the OP Stack in early 2025, following Coinbase’s success with Base. Ink aims to support decentralized finance (DeFi) applications like trading and lending on Ethereum’s Superchain—a network of interoperable Layer 2s built with Optimism’s technology. Kraken will initially act as Ink’s sole sequencer, managing transaction validation before gradually decentralizing. No Ink token is planned, focusing instead on expanding DeFi access without creating new tokens, distinguishing it from other projects. Meanwhile, on October 30, Ethereum Layer 2 network Base will introduce permissionless fault proofs, a key feature for decentralizing the network and enhancing security. This upgrade, developed in collaboration with Optimism, will allow any participant to contest potentially erroneous transactions. Following a model similar to Optimism’s OP Mainnet, Base’s fault-proof implementation is part of the broader Superchain ecosystem, which includes networks like Zora and Unichain.

Rising DEX to CEX Volume Ratio Signals Shifting Crypto Landscape

As of late October 2024, the decentralized exchange (DEX) to centralized exchange (CEX) spot trade volume ratio has climbed to 14.12%, up significantly from 0.04% in January 2020. This steady increase highlights DEXs' growing market share, a trend driven by improved on-chain transaction speeds, cost reductions, and heightened user interest in decentralized platforms. This year’s data also show an 8.5% monthly growth rate in the ratio since February, underscoring how DEXs are increasingly attracting traders and reshaping the crypto market. With the final October data pending, this ratio could set a new all-time high, marking a notable shift in trading preferences within the digital asset space.

Buterin Proposes Solutions to Mitigate Ethereum Staking and Block Production Centralization

Vitalik Buterin has proposed strategies to address Ethereum’s growing centralization in staking and block production, which he describes as a significant risk. Recent data reveals that two entities built nearly 88% of Ethereum blocks in October, raising concerns about transaction censorship and control. Buterin suggests capping Ether stake per user and limiting penalties to safeguard decentralization. He also introduced two proposals, “fork-choice-enforced inclusion lists” and “BRAID,” which decentralize block production by distributing control among multiple actors, aiming to curb risks of censorship, transaction delays, and revenue manipulation in Ethereum’s DeFi ecosystem.

Sky Reconsidering Return to MakerDAO Branding Due to Community Confusion

Sky, the rebranded MakerDAO protocol, is considering reverting to the MakerDAO name after feedback revealed community confusion and attachment to the original brand. Co-founder Rune Christensen announced plans for governance proposals to determine the direction, with options like merging Sky and MakerDAO identities, creating separate roles for each, or adopting an updated Maker brand aligned with Sky's new USDS stablecoin and StarDAO ecosystem. As Sky grows, surpassing a $1 billion USDS supply, the project will also expand across Ethereum Layer 2s and Solana. Voting on branding changes begins November 4.

Ethereum’s Path Forward: Addressing Dencun’s Impact with “The Surge”

Ethereum’s 2024 Dencun upgrade aimed to support Layer 2 (L2) solutions by reducing fees and promoting cheaper data storage, yet it also led to Ethereum’s fee revenues dropping by 99% and introduced challenges like liquidity fragmentation. Ethereum founder Vitalik Buterin, however, remains focused on Ethereum as a core Layer 1 (L1) network for L2s. His new “The Surge” upgrade promises higher transaction speeds (up to 100,000 TPS), interoperability improvements, and upcoming features like automated staking pools. Starting with 2025’s Pectra upgrade, these changes seek to solidify Ethereum’s foundation, fostering a unified ecosystem for both L1 and L2 functionalities.

Regulation

Microsoft to Consider Bitcoin Investment Proposal in December Meeting

Microsoft has included a proposal for potential investment in Bitcoin as an item for shareholder voting at its December 2024 annual meeting. This proposal, put forth by the National Center for Public Policy Research, suggests Microsoft assess Bitcoin investments for its diversification and inflation protection. However, Microsoft’s board has recommended voting against the proposal, calling it “unnecessary” since the company already evaluates cryptocurrency trends. If approved, Microsoft would surpass Tesla and MicroStrategy as the largest Bitcoin-investing publicly traded firm.

The Reliability of Polymarket’s U.S. Election Odds

Mark Cuban recently cast doubt on the reliability of Polymarket’s odds for the 2024 U.S. presidential election, arguing that foreign investments skew results on the crypto-based prediction platform. At present, Polymarket's odds suggest a strong advantage for Trump, with a 64.1% chance of winning over Vice President Kamala Harris, backed by over $2.2 billion in total bets. Cuban, who indirectly invested in Polymarket through a crypto fund, noted that U.S. residents are prohibited from participating due to a 2022 CFTC ruling. Critics of Polymarket argue that the platform’s structure, where odds are shaped by users’ direct trading rather than expert odds-makers, leaves it vulnerable to possible manipulation. Four high-volume traders betting heavily on Trump’s victory have already fueled speculation about distorted odds. Cuban’s remarks join broader discussions on the reliability of prediction markets, even though Polymarket correctly anticipated Biden’s withdrawal from the race before November. See similar: Ripple CEO Says Kamala Harris Taking 'Nuanced' Approach to Crypto

Ripple CEO Predicts XRP ETF Approval is “Inevitable” Amidst SEC Dispute

Ripple CEO Brad Garlinghouse expects an eventual SEC-approved XRP ETF, following recent Bitcoin and Ethereum ETF endorsements. Despite an ongoing SEC lawsuit against Ripple, Bitwise has already filed for an XRP ETF, sparking confidence in XRP's regulatory potential. Garlinghouse emphasized significant demand for an XRP ETF from institutional investors, viewing such developments as progress. This follows Ripple’s partial victory limiting SEC claims and recent positive court rulings, which the company hopes will further XRP’s market integration and legal clarity.

FTX Reaches $228M Settlement with Bybit to Aid Creditor Repayments

The FTX estate has settled its lawsuit with Bybit, securing $175 million in crypto held by Bybit accounts and proceeds from the sale of over 105 million BIT tokens, totaling approximately $52.7 million. This legal action followed accusations that Bybit leveraged "VIP" access to withdraw substantial assets from FTX before its 2022 collapse. The funds recovered will support FTX’s reorganization plan, which aims to repay 98% of creditors over 118% of their claims in cash, based on FTX's bankruptcy valuation.

Other Domestic Regulation Updates

• FBI arrests Alabama man behind SEC social media hack and phony spot bitcoin ETF post
• US government crypto wallets hacked for $20M, say Arkham and ZachXBT
• Northern Data Wants to Sell Crypto Mining Unit to Fund AI Venture 
• “Gold Paper” Reveals Trump Family, Insiders Get 75% of World Liberty Profits
• U.S. SEC Clears Cboe, NYSE for BTC ETF Options Trading
• Game Developer Sues Market Maker Jump Crypto for Pumping and Dumping Its Tokens 

Other International Regulation Updates

• Nigeria drops money laundering charges against Binance executive Tigran Gambaryan
• Denmark plans to propose taxing unrealized crypto gains in upcoming bill
• Italy plans to raise capital gains tax on bitcoin from 26% to 42%: report
• Report: 76% of Asian Private Wealth Funds Hold Crypto

Pain & Gain

Pain

• Michael Saylor's comment on regulated bitcoin custody draws criticism from Vitalik Buterin
• Crypto CEO Loses $450K to 'Best Friend' After Connecting to His WiFi
• Remember Farcaster? Activity on the SocialFi Dapp is Plummeting
• Human-Like Typo By AI Millionaire Nukes Token

Gain

• World Network Launches Ethereum Layer 2 'World Chain'
• Maple Finance Prepares for Syrup Token Launch
• Bittensor Launches Smart Contracts and Ethereum Compatibility
• PumpFun Teases Token and Launches Unveils 'Advance' Platform