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- Bitcoin, Ethereum, Cosmos and more Week 19 2024
Bitcoin, Ethereum, Cosmos and more Week 19 2024
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TL;DR
Lightning Network Explores Bitcoin-Backed Stablecoins
Mainnet of Build on Bitcoin Goes Live
Bitcoin ETFs for Mainland China on the Horizon
Vitalik Buterin Proposes EIP-7702
Bybit Integrates Ethena Labs' USDe as Collateral Asset
Injective and Arbitrum Launches inEVM Integration with Arbitrum Orbit
Osmosis Launches a Bitcoin L2
Trump's Embrace of Cryptocurrency
Binance Executive Remain in Detention in Nigeria Despite Release Calls
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Bitcoin Highlights of the Week
According to Lightning Labs CEO Elizabeth Stark, the developer behind Bitcoin's Lightning Network, they have experimented with a protocol aimed at facilitating the issuance of stablecoins on the Bitcoin blockchain. Speaking at this week's Financial Times Crypto and Digital Assets Summit, Stark revealed that the developer had recently conducted a test transaction on the Lightning Network using an asset generated through the Taproot Assets protocol.
"We've released an initial segment of the code back in October, and just this past Thursday, we demonstrated the first-ever transaction on Lightning involving an asset," Stark stated. She elaborated, "The goal is to introduce crypto dollars and stablecoins onto the Bitcoin blockchain."
This week, the Build on Bitcoin (BOB) initiative unveiled the commencement of its initial phase, allowing decentralized applications (dapps) to engage with the world's leading blockchain.
According to announcements on Twitter by the BOB team, the BOB mainnet is now live with a total value locked (TVL) of $300 million and boasts over 40 available dapps. The team heralded "a Bitcoin-driven DeFi summer," promising more developments in the coming three weeks.
Build on Bitcoin is designed to function as a hybrid layer-2 network, akin to an "Ethereum rollup," amalgamating Bitcoin's widespread adoption, liquidity, and proof-of-work security with Ethereum's decentralized finance (DeFi) functionalities, including smart contracts, wallets, and access to stablecoins.
Botanix Labs, a Bitcoin development startup, has secured $8.5 million in a seed series funding round from Polychain Capital, Placeholder Capital, Valor Equity Partners, and ABCDE. The funding will support the creation of a Bitcoin-native DeFi ecosystem.
Based in New York, the company intends to utilize the funds to construct Spiderchain, a Bitcoin-native Layer 2 protocol with full Ethereum Virtual Machine compatibility. Specifically, Botanix Labs plans to expand its team and concentrate on product development with the capital injection.
Wells Fargo revealed its investments in Bitcoin exchange-traded funds offered by Grayscale and ProShares. According to reports, Wells Fargo disclosed ownership of 37 shares of the ProShares Bitcoin Strategy ETF (BITO), which provides exposure to BTC futures, and 2,245 shares of Grayscale Bitcoin Trust (GBTC), recently converted to an ETF. Additionally, the firm reported ownership of 52 shares in Bitcoin Depot, a provider of crypto ATMs.
The combined value of these three Bitcoin-related investments amounted to $143,111. Despite this, it represents a relatively small portion of the major bank's holdings, considering Wells Fargo's reported assets of approximately $1.7 trillion as of June 2023, positioning it as the third-largest bank in the U.S.
The CEO of Harvest, the issuer of a spot Bitcoin exchange-traded fund (ETF) in Hong Kong, aims to extend accessibility of its Bitcoin ETF to investors in mainland China.
Han Tongli is exploring avenues to enable mainland Chinese investors to access Harvest's Bitcoin and Ether ETFs by offering these products through Hong Kong's ETF Connect framework.
Launched in 2022 and approved by both the China Securities Regulatory Commission and the Securities and Futures Commission, ETF Connect facilitates interaction and integration between Hong Kong and mainland China. It aims to provide diverse asset allocation options and enhance liquidity.
Ethereum Highlights of the Week
EigenLayer initiates the eagerly awaited EIGEN token airdrop, marking a significant milestone for the project. However, the new tokens are currently non-transferable for an unspecified duration, delaying their tradability. Amidst speculations placing EIGEN's fully diluted market capitalization around $15 billion, the Eigen Foundation, established by Eigen Labs, announced the commencement of EIGEN token claims on May 10th, 2024. This inaugural phase, within Season 1, encompasses 6.05% of the token's initial supply, equivalent to approximately 113 million EIGEN tokens.
Optimism announced that Layer 3 chains can now integrate with the Superchain by leveraging the OP Stack and sharing sequencer revenue with its governance body, Optimism Collective. Builders opting to join the Superchain from Layer 3 will gain access to retroactive funding, airdrops, and growth campaigns, alongside a wide network of developers, as stated by Optimism.
A Layer 3 chain refers to a network settling on one of Optimism's Layer 2 chains: OP Mainnet, Base, Mode, and others. In order to facilitate the integration of Layer 3s, Optimism introduces two new features to the OP Stack: custom gas tokens, enabling chains to customize their transaction fees, and Plasma Mode, a solution allowing chains to select their own data availability (DA) layer.
Franklin Templeton, the asset manager and issuer of spot bitcoin exchange-traded funds, expressed high praise for Base, an Ethereum Layer 2 network incubated by Coinbase, stating it has achieved remarkable success in the SocialFi sector, fueled by activities on platforms like Friend.Tech. According to a report by Franklin Templeton released on Thursday, Base accounts for approximately 46% of all SocialFi transactions, significantly impacting the market share of Polygon and BNB Chain within this niche.
The recent surge in Base's activity was attributed to the anticipation and launch of Friend.Tech's native FRIEND token, along with the rollout of version 2 last week. DeFiLlama data indicates that Friend.Tech currently has a total locked value of approximately $14 million and a market capitalization of $208 million.
Vitalik Buterin, co-founder of Ethereum, has recently put forward EIP-7702, a proposed network enhancement poised to bring substantial benefits to Ethereum. The upgrade aims to notably enhance the user experience within the Ethereum ecosystem.
EIP-7702 primarily entails enabling Externally Owned Accounts (EOAs), or standard Ethereum account addresses, to temporarily serve as smart contract wallets. This will be facilitated by introducing a new transaction type, permitting EOAs to operate as smart contract wallets during transactions while reverting to their original state afterward.
Ethena has revealed a collaboration with crypto exchange Bybit, aimed at incorporating USDe as a collateral asset for trading perpetual futures across all assets within the exchange's UTA. This move holds the potential to grant users the opportunity to earn yield and enhance capital efficiency.
The integration will introduce Bitcoin and Ether spot trading pairs with USDe, as outlined in a press release. USDe will also make its debut on the exchange's Earn platform, enabling users to utilize their synthetic dollars for farming within the Bybit launchpool.
Cosmos Highlights of the Week
Arbitrum and Injective have teamed up to pioneer an innovative interoperable Ethereum Virtual Machine (EVM) infrastructure. This collaboration promises to open up new horizons in the blockchain ecosystem, providing users with smooth, efficient, and economical transactions.
The integration of Injective's inEVM with Arbitrum's Orbit stack marks a significant milestone. Developed by Offchain Labs, the Orbit stack serves as a cornerstone for constructing scalable, secure, and effective layer 2 solutions. It streamlines the incorporation of smart contracts across various blockchain platforms.
Through tailored adjustments to Arbitrum's distinctive Orbit stack, Injective's inEVM becomes even more tailored, ushering in new possibilities for inEVM and empowering users with seamless, efficient, and cost-effective transactions. This integration expands the developer toolkit for inEVM users, a capability previously exclusive to the Ethereum L2 ecosystem.
Osmosis is stepping into the Bitcoin layer 2 competition, signaling the growing activity among Bitcoin developers. Next month, Osmosis is set to introduce "alloyed Bitcoin," the latest addition to its suite of in-house products aimed at simplifying trading and injecting more liquidity. Alloyed Bitcoin serves as a tradable asset, representing a derivative of a bitcoin liquidity pool.
According to Sunny Aggarwal, co-founder of Osmosis Labs, alloyed Bitcoin is an innovative product comprising a variety of BTC variants sourced from across the ecosystem. This amalgamation pools together assets such as nBTC from Nomic, wBTC from Ethereum, and Osmosis' native wBTC to enhance liquidity.
This approach mirrors practices seen in centralized exchanges, where platforms like Coinbase classify all Ether (ETH) as Ether, regardless of its origin or bridging across different chains. For Osmosis, alloyed Bitcoin represents the latest addition to a series of similar products, including alloyed Ether.
Inter-Blockchain Communication (IBC) stands out as the foremost interoperability communication protocol renowned for its reliability and success, boasting trust minimization as one of its key attributes. As a universally embraced standard with robust community backing, this versatile messaging protocol continually extends its reach into diverse ecosystems.
In a groundbreaking collaboration, TOKI and XION are joining forces to introduce the initial Chain Abstraction solution linking the BNB Chain with the XION ecosystem, facilitating seamless cross-chain applications and user interaction. This milestone will be achieved through the establishment of the inaugural IBC connection between the BNB Chain and the XION ecosystem.
Euclid Protocol has unveiled its new shared liquidity layer today, which links the ecosystems of Cosmos, Solana, and Ethereum Virtual Machine (EVM)-based chains through virtual pools established on Nibiru Chain. This initiative aims to address the issue of fragmented liquidity within the blockchain ecosystem.
The announcement underscores the fragmented nature of liquidity in the decentralized finance (DeFi) sector. Despite boasting a total value locked (TVL) of nearly $136 billion, these funds are dispersed across various DeFi platforms.
Euclid's Virtual Liquidity Pool (VLP) model tackles this challenge by virtually consolidating liquidity without the necessity of physically transferring it, thus preserving modularity and accessibility. The VLP enables the seamless tracking and movement of liquidity across all interconnected chains.
The Cosmos community has approved Proposal 914, signaling the implementation of the v16 software upgrade. Cosmos Hub has specified that this upgrade is scheduled to take place at block 20440500, expected around May 15th.
Reportedly, the v16 upgrade incorporates several new key features facilitated by the upgrade to SDK v0.47:
The IBC rate limit module: This module prevents the rapid influx or outflow of IBC tokens within a short timeframe, adding an additional layer of protection for IBC transfers.
The ICA controller submodule: This submodule empowers Hub users to execute operations on other chains using their Hub accounts.
The IBC fee middleware: This middleware facilitates the creation of IBC channels through in-protocol relay incentives.
Other Highlights of the Week
In an unforeseen twist, FTX bankruptcy claims have surged beyond their face value, with a draft recovery plan projecting a potential recovery rate of 118% for most creditors. Simultaneously, the secondary market for claim buying is witnessing a notable uptick due to concerns regarding tax implications and the feasibility of cashing USD checks.
Consequently, FTX claims are currently trading between 101% and 112%, indicating a seller's advantage. Despite these figures, claimants remain cautious as the valuation is based on Bitcoin's price from December 2022, when the asset was valued around $16,000.
Cryptocurrency seized a spotlight during the Presidential campaign, particularly with Trump. At a recent NFT trading card event, the former president expressed his approval of crypto, causing TREMP on Solana and TRUMP on Ethereum to surge by 187% and 43%, respectively, within the subsequent 24 hours.
Trump's remarks presented a clear divergence from President Biden's recent veto of legislation aiming to ease capital requirements for banks dealing with crypto. This stance by Trump has sparked conversations within the crypto community, with many viewing his potential re-election as a favorable development for the industry.
This week, Binance CEO Richard Teng urged for the immediate release of Tigran Gambaryan, a Binance executive held in custody in Nigeria for over two months. Teng clarified that Gambaryan was one of two executives detained, with the other managing to flee the country. These detentions occurred amidst regulatory discussions, prompting international apprehension regarding the treatment of foreign business representatives.
Furthermore, the Nigerian government's recent prohibition on cryptocurrency trading in the local currency, citing adverse effects on the Naira, has heightened tensions. Binance has also alleged ransom demands from Nigeria, claiming that they were asked for $150 million in cryptocurrency in exchange for Gambaryan's release.
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