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- Bitcoin, Ethereum, Cosmos and more Week 16 2024
Bitcoin, Ethereum, Cosmos and more Week 16 2024
Keeping you updated on crypto, web3 and blockchain
TLDR: The Bitcoin Network Undergoes its Fourth-ever 'Halving' Event, Runes Excitement Drives up Transaction Fees on Bitcoin, OKX Rolls Out Its Layer 2 Solution, EigenLayer Ditches Deposit Caps and Lets the Staking Party Begin, Picasso Network Launches Solana IBC, Kraken Unveils its Very Own Web3 Wallet & Worldcoin to Launch its Own Layer 2 Blockchain.
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Bitcoin Highlights of the Week
Last Friday on April 19th, the Bitcoin network marked its fourth "halving" event, reducing miners' rewards from 6.250 bitcoins to 3.125. The price of bitcoin experienced volatility leading up to the event, dropping approximately 4% during the week to hover around $64,100. While the halving itself is not expected to have an immediate impact on bitcoin's price, many investors anticipate significant gains in the coming months, drawing on the cryptocurrency's performance following previous halving events. Historically, after the halvings in 2012, 2016, and 2020, the price of bitcoin surged by approximately 93x, 30x, and 8x, respectively, from its halving day price to its peak in each cycle.
U.S.-based spot bitcoin (BTC) exchange-traded funds (ETFs) recorded a combined outflow of $4.3 million on Thursday, continuing a four-day streak of withdrawals leading up to the anticipated bullish mining reward halving. Since April 12th, these ETFs have experienced a cumulative net outflow exceeding $319 million, with Grayscale's GBTC accounting for a substantial portion of the withdrawals. Notably, on Thursday, GBTC alone witnessed a significant outflow of $90 million, partially offset by inflows into Fidelity's FBTC and BlackRock's IBIT.
This week marked the occurrence of the bitcoin halving, an event generating excitement primarily because it slows down bitcoin's issuance, reducing the block reward to 3.125 BTC. However, there's additional buzz surrounding the emergence of Runes, a new protocol developed by Casey Rodarmor, the mind behind Ordinals. While Ordinals primarily aimed to introduce non-fungibility to Bitcoin by distinguishing specific satoshis based on their minting order, it also gave rise to the BRC-20 token standard, facilitating the issuance of fungible tokens on the network. Unlike BRC-20, Runes adopts a UTXO (unspent transaction output) model, aiming to enable the trading of new tokens on Bitcoin more efficiently without causing network congestion.
This week, Jamie Dimon reignited his criticism of Bitcoin, dismissing its value. While Dimon acknowledges the potential of smart contracts and blockchain technology, he remains a staunch critic of Bitcoin, asserting that its only practical applications are in "sex trafficking, tax avoidance, anti-money laundering, and terrorism financing." Dimon has suggested that if these "bad use cases" cannot be addressed, regulators should consider shutting down Bitcoin. However, with over 20,000 Bitcoin nodes currently active, such a move would be challenging. Despite his outspoken disapproval of Bitcoin, Dimon declared during an interview with CNBC at the World Economic Forum in Davos, Switzerland, in January that he would no longer discuss the cryptocurrency on the platform, stating, "This is the last time I'm ever talking about this on CNBC, so help me God." Interestingly, Dimon's critique of Bitcoin contrasts with the investment activities of his own firm. JP Morgan is an "authorized participant" in spot Bitcoin ETFs offered by BlackRock, Invesco/Galaxy Digital, and Fidelity, all of which were approved by the U.S. Securities and Exchange Commission earlier this year.
Following the recent approval of cryptocurrency ETF products in the region, Hong Kong-based investment firm Victory Securities has revealed its proposed fees to investors for Bitcoin and Ethereum exchange-traded funds (ETFs). Despite the Hong Kong Securities and Futures Commission (SFC) not yet publishing the list of approved ETF issuers, Victory Securities has outlined its proposed fees. If approved by the SFC, customers of Victory Securities will encounter proposed fees for Ethereum and Bitcoin ETF shares in the primary market. These fees are set at 0.5% to 1% of the total transaction, with a minimum fee of $850, as per a translated report excerpt shared by Wu Blockchain on April 20. For investors looking to trade existing ETF shares on the secondary market, online transactions will incur fees of 0.15%, while telephone transactions will be subject to a 0.25% fee.
Ethereum Highlights of the Week
OKX has debuted its proprietary Ethereum-based zero-knowledge Layer 2 network, known as X Layer, on the mainnet, with the goal of incorporating its 50 million users into the ecosystem. Developed utilizing Polygon's Chain Development Kit, this network supports over 170 decentralized applications and utilizes OKX's platform token, OKB, for transaction fee payments. X Layer aims to boost transaction throughput, lower costs, and uphold Ethereum's security standards. Additionally, its integration with the AggLayer enables shared liquidity across various blockchain networks.
Amidst this week's market turbulence, Binance made a surprising move by converting all assets held in its Secure Asset Fund for Users (SAFU), amounting to $1 billion, into USDC on Ethereum. Previously known for operating somewhat outside of regulatory norms, Binance has shifted its stance in response to recent challenges from the Department of Justice, adopting a more compliant approach.
EigenLayer, the Ethereum restaking protocol, concluded its rollout phase this week by eliminating caps on all ETH liquid staking tokens (LST) and reactivating restaking deposits. This action grants unrestricted access to EigenLayer's eleven existing liquid staking token (LST) pools. EigenLayer's choice to remove caps and resume restaking aligns with a proposal to cap LSTs at 33%, deemed a figure conducive to neutrality and decentralization—both considered foundational tenets for the protocol. Despite a minor decline in total value locked (TVL) in dollar terms due to market volatility, the restaking protocol has enjoyed considerable success since its late 2023 launch.
Ernst & Young (EY) introduces EY OpsChain Contract Manager (OCM), a revolutionary blockchain-based solution designed for contract management. EY OCM empowers enterprises to navigate intricate business agreements while prioritizing confidentiality, enhancing time efficiency, and driving cost reduction, all while automatically adhering to agreed-upon terms. Unveiled at the annual EY Global Blockchain Summit, EY OCM tackles the enterprise challenge of managing business agreements spanning internal and external operational and technological silos. By synchronizing data across business partners, EY OCM ensures consistent enforcement of critical business terms, including standardized pricing, volume discounts, rebates, and strike prices.
Degen Chain, a novel Ethereum layer 3 network, has achieved the highest transaction per second (TPS) rate in the Ethereum ecosystem. However, despite this impressive TPS figure, Degen Chain only saw $819,600 in trading volume over the same timeframe, placing it 35th out of 44 blockchains tracked by CoinGecko. Consequently, the average value per transaction amounted to a mere $0.27, significantly lower compared to Ethereum and Base, which stood at $1,867 and $170, respectively. While TPS serves as a commonly used metric to gauge a blockchain's scalability limits, many industry leaders argue that it is flawed, as it overlooks the computational size of each transaction.
Cosmos Highlights of the Week
Ondo Finance, a platform specializing in tokenized real-world assets (RWA), announced its collaboration with asset issuance chain Noble to introduce tokenized U.S. Treasury offerings to the Cosmos (ATOM) ecosystem. The first asset slated for issuance through Noble by Ondo is USDY, a tokenized note backed by short-term U.S. Treasuries offering a 5.2% annual yield. This launch is expected by the end of the second quarter of this year, as per a spokesperson. Currently, USDY is accessible on Ethereum, Solana, Mantle, and Sui platforms. Ondo's expansion to Cosmos implies that its token offerings will be seamlessly integrated with over 90 blockchains within the Cosmos ecosystem. This integration aims to enhance adoption for Ondo's products, which are supported by U.S. Treasuries and serve as yield-earning savings, payment, and collateral assets.
Zignaly, a decentralized social-investing marketplace, unveiled the ZIGChain layer 1 blockchain on Cosmos along with a $100 million ecosystem development fund. During the Token2049 event in Dubai, the team emphasized that the fund aims to create wealth-generation infrastructure that is user-friendly. Operating akin to a crypto fund manager, Zignaly enables users to replicate trades made by professionals. Recently, it received a cryptocurrency license in South Africa, allowing it to provide discretionary financial services, comparable to those offered by fund managers in traditional finance.
This week, the Picasso Network introduced the inaugural Solana IBC connection, uniting the Solana ecosystem with the Cosmos interchain. The expansion of IBC to Solana facilitates seamless interoperability between one of the most innovative DeFi ecosystems and other IBC-enabled chains.
Union Labs, a project focused on blockchain interoperability, plans to integrate with both Cosmos and Polygon through AggLayer. This move aims to broaden liquidity access and enable smooth transactions between AggLayer-connected chains and IBC-enabled chains. The objective is to create an efficient, trustless, and low-latency experience for users. Following this announcement, the prices of the two altcoins, Polygon and Cosmos, have experienced slight increases, although they continue to show a bearish trend on longer timeframes.
Injective has quickly emerged as the premier blockchain for finance, driven by its native token INJ. INJ serves various functions within the Injective ecosystem, including staking and governance. The introduction of token burn auctions on Injective mainnet has led to a weekly decrease in the INJ supply, with nearly 5.9 Million INJ burned to date, valued at approximately $190 Million. The upcoming launch of INJ 3.0 aims to further enhance the ecosystem by creating a robust deflationary asset. With reduced inflation rates and improved responsiveness to staking, INJ will foster a sustainable ecosystem, rewarding stakeholders and ensuring long-term success in the dynamic crypto landscape.
Other Highlights of the Week
Kraken, the crypto exchange giant, has introduced its new self-custodial mobile wallet, dubbed the Kraken Wallet. This innovative wallet boasts multi-chain support, enabling users to manage NFTs, tokens, and DeFi holdings. It prioritizes user privacy by minimizing the collection of customer data. Moreover, its code has been made publicly available on GitHub. However, it's worth noting that the wallet operates as a hot wallet due to Apple iOS CryptoKit compatibility. As a result, it relies on an internet connection for transactions and does not utilize secure elements for signing transactions.
Worldcoin, spearheaded by Sam Altman's proof-of-humanity initiative, is gearing up to implement its proprietary Layer 2 blockchain, World Chain, aimed at enhancing efficiencies during user onboarding. According to an official statement, World Chain will be Ethereum-secured. Moreover, verified human users are slated to receive priority blockspace over bots and some complimentary gas, as outlined in the statement. The Worldcoin Foundation is formally launching the new Layer 2, although Tools for Humanity has been the primary developer and promoter of Worldcoin.
On Thursday, a cryptocurrency trader was found guilty of fraud after prosecutors alleged that he manipulated the Mango Markets exchange, resulting in the theft of approximately $110 million. Avraham Eisenberg, 28, was convicted of commodities fraud, commodities manipulation, and wire fraud by jurors in federal court in Manhattan. This marks the U.S. Department of Justice's inaugural criminal case involving cryptocurrency market manipulation. Eisenberg maintained that his trades were lawful and denied any intention to deceive others. The jury reached a verdict after deliberating for less than a day.
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