Rollbit Coin

Casey Wagner

The US Senate plans to vote on Joint Resolution 109 on Thursday, and sources on and around Capitol Hill say they believe the measure will draw enough Democrat support to pass.&nbsp;



<a href="https://www.congress.gov/bill/118th-congress/house-joint-resolution/109">Joint Resolution 109</a>, which passed the House of Representatives last week with <a href="https://blockworks.co/news/house-committee-resolution-against-sab121">bipartisan support</a>, aims to invalidate the Security and Exchange Commission’s controversial Staff Accounting Bulletin (SAB) 121.&nbsp;



SAB 121, introduced in March 2022 and enacted the following month, states that digital asset custodians should report a liability and “corresponding assets” on their balance sheets for all custodied cryptocurrencies.&nbsp;



While not an official agency rule, which would have required a public comment period, SEC staff <a href="https://www.sec.gov/oca/staff-accounting-bulletin-121">said</a> that SAB 121 is intended to guard against the “significant risks and uncertainties associated with safeguarding crypto assets.”&nbsp;



In the Republican-controlled House, 21 Democrats voted in favor of passing the resolution. In the Senate, the resolution needs a simple majority to pass, meaning at least two Democrats and all Republican Senators would have to vote in favor.&nbsp;



Four people familiar with the matter told Blockworks that multiple Democratic senators intend to vote in favor.&nbsp;



Longtime crypto advocate Sen. Kirsten Gillibrand, D-N.Y., told Blockworks that she will vote in favor of Joint Resolution 109 on Thursday.&nbsp;



“The rule was issued without proper consultation with the respective regulatory agencies or Congress and without going [through] a proper notice and comment period,” Gillibrand said.&nbsp;



“More importantly, it imposes an accounting approach that deviates from established standards, forcing financial institutions to count their customers’ digital assets as their own. This will limit options for consumers and leave them with less, not more consumer protection in cases of bankruptcy.”&nbsp;



Gillibrand last year co-signed a bipartisan <a href="https://financialservices.house.gov/uploadedfiles/2023-11-15_mchenry_lummis_sab_121_letter_-_final_11.15.pdf">letter</a> along with Sen. Cynthia Lummis, R-Wyom., and House Financial Services Committee Chair Patrick McHenry, R-N.C., opposing SAB 121 and asking the Federal Reserve, Federal Deposit Insurance Corporation, National Credit Union Administration and Office of The Comptroller of the Currency to step in.&nbsp;



While Democratic Reps. Ritchie Torres of New York and Wiley Nickel of North Carolina also signed the letter, Gillibrand was the only senator from her party who supported the effort.&nbsp;



Nickel on Wednesday penned a <a href="https://nickel.house.gov/uploadedfiles/nickel_sab121_letter_to_sec.pdf">letter</a> to SEC Chair Gary Gensler, asking the agency head to withdraw SAB 121 ahead of Thursday’s Senate vote. Nickel later told Blockworks that as of mid-afternoon Wednesday, the SEC had not responded to the letter.&nbsp;



“I&#8217;m just trying to make the point and the case to Gary Gensler and the SEC that they&#8217;re not serving President Biden&#8217;s interests by turning this issue into a partisan political football,” Nickel said in an interview. “And my hope is that Gary Gensler will withdraw SAB 121 and work in a bipartisan way on the custodial banking piece.”&nbsp;



The White House <a href="https://www.whitehouse.gov/wp-content/uploads/2024/05/SAP-HJRes109.pdf">said</a> last week that should the legislation make it to President Joe Biden’s desk, he would veto it.&nbsp;



Gensler defended SAB 121 in December, saying it was “just a staff accounting bulletin,” and it is consistent with precedent set in US bankruptcy court.&nbsp;



“It basically addresses whether liabilities should be on balance sheet, and what we have found actually in bankruptcy court, time and again, many times now, that indeed bankruptcy courts have said that crypto assets are not bankruptcy remote,” <a href="https://blockworks.co/tag/gary-gensler">Gensler</a> said during a December 2023 appearance hosted by the American Bar Association.&nbsp;



The SEC did not immediately respond to Blockworks’ request for comment.



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Senate predicted to overturn SAB 121 in vote Thursday, Hill sources say

Jack Kubinec

Jeff Albus

Howdy!



Web3 is helping pay for both my coffee and my cell phone plan. The latter is the subject of today’s newsletter.&nbsp;



Who said the millennial lifestyle subsidy was <a href="https://www.theatlantic.com/newsletters/archive/2022/06/uber-ride-share-prices-high-inflation/661250/">dead</a>?&nbsp;



— Jack Kubinec



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<h2 class="wp-block-heading">How high can Helium float?</h2>



It’s been more than five months since Helium Mobile debuted its nationwide cell plan, one of the most ambitious applications of what crypto folks call DePIN (decentralized physical infrastructure) to date.&nbsp;



For $20 a month, Nova Labs, the developer behind the Helium Network, <a href="https://blockworks.co/news/helium-cell-plan-goes-nationwide">began offering</a> US residents unlimited data plans.&nbsp;



Helium Network participants run hotspot nodes that emit cellular coverage, and they’re paid in Solana-based MOBILE tokens for operating these miniature cell <a href="https://www.fierce-network.com/wireless/helium-mobile-launches-20month-plan-nationwide">towers</a>. In places where no Helium data is available, Nova Labs purchases coverage from T-Mobile.&nbsp;



The product has <a href="https://dune.com/rawrmaan/helium-mobile">gained</a> nearly 90,000 subscribers since its launch, including this newsletter writer. Nova Labs CEO Amir Haleem told me these growth numbers are solid when put in context.



“It looked like in all of last year, AT&amp;T, Verizon, and T-Mobile only added something like 300-400,000 subscribers combined,” Haleem said, adding that Helium Mobile hopes to reach 300,000 subscribers by the end of the year.&nbsp;



Publicly available data seems to tell a different story: <a href="https://www.investopedia.com/att-q1-fy2023-earnings-preview-7482020">AT&amp;T</a>, <a href="https://finance.yahoo.com/news/verizon-communications-inc-vz-reports-182823453.html">Verizon</a>, and <a href="https://www.t-mobile.com/news/business/t-mobile-q4-2023-earnings">T-Mobile</a> each reported millions of new subscribers last year. Nova Labs did not immediately return a request for comment on the discrepancy.&nbsp;



As a user, I’ll say Helium’s coverage has been as good as any of my past cell carriers. Recently, I enabled discovery mapping, where Helium Mobile pays MOBILE tokens in exchange for location data in order to determine where it needs to create more coverage. On my first day, I earned $0.78-worth of MOBILE — or roughly ½ of a slice of pizza, in New York terms.&nbsp;



But there’s a question that’s followed the Helium Network for a while now: <a href="https://blockworks.co/news/where-is-the-revenue-helium-investors-inquire">Can this make money</a>? Nova Labs added another revenue stream in January when it partnered with the Spanish telecommunications company Telefónica. The company is offloading some of its mobile data in parts of Mexico to the Helium Network. As data usage increases globally, a new network like Helium’s could prove valuable to data providers.&nbsp;



Still, the sustainability of the network’s MOBILE token-based incentives are something of an open question. MOBILE’s price leapt more than 2,000% right after Helium Mobile went nationwide in December, <a href="https://www.coingecko.com/en/coins/helium-mobile">according</a> to CoinGecko. Helium Mobile has yet to face a serious stallout in subscriber growth, which could potentially put downward pressure on the token price.&nbsp;



Haleem thinks that the inefficiencies in legacy cellular coverage make Helium an “obvious” application for DePIN.



“It&#8217;s just wildly too expensive to keep deploying infrastructure the way it&#8217;s being deployed,” Haleem said. “It&#8217;s hundreds of billions or trillions of dollars to deploy towers all the time. It doesn&#8217;t make any sense.”



— Jack Kubinec



<h2 class="wp-block-heading">Zero In</h2>



The Helium Mobile dashboard from Dune Analytics shows steady growth in newly minted subscriber NFTs, with 89,474 issued since January 2024.



<img loading="lazy" decoding="async" width="624" height="472" src="https://lh7-us.googleusercontent.com/IM3WOjmK3k0OI3QCRXqF1fRLgC5VDpegLcxS2XT5BNwls-tuh6bycCArtvhWr5tqksR5o3m9l78Jcr2hWRzzXxBxzqWwdVM1V9lEofG8LG4X2Ob577GmTer222r8GyuNSfwLDrdi8qr6YkssABcdcsg">



Initially, numbers soared, but enthusiasm flattened somewhat in recent weeks. On May 10, however, a spike occurred with 837 newly minted NFTs. This surge coincides with Helium Improvement Proposal 113, which increased rewards for Wi-Fi hotspots and reduced them for CBRS radios, incentivizing efficient coverage. The spike seemingly underscores the importance of user rewards on growth within the Web3 world. However, sustained long-term interest will likely depend on the quality of services, not just profit incentives.



— Jeffrey Albus



<h2 class="wp-block-heading">The Pulse</h2>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">For the first time ever on May 12, Solana generated more Total Economic Value than Ethereum in a single day <a href="https://t.co/nrCe7pMNjb">pic.twitter.com/nrCe7pMNjb</a>&mdash; Dan Smith (@smyyguy) <a href="https://twitter.com/smyyguy/status/1790429003553165393?ref_src=twsrc%5Etfw">May 14, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



On May 12, Solana surpassed Ethereum in daily economic value, recording $2.25 million in transaction fees and MEV — compared to Ethereum’s $1.98 million. The community has been abuzz since, with vibrant discussions spreading across social media.



In one X thread by <a href="https://twitter.com/smyyguy">Dan Smith</a> of <a href="https://www.blockworksresearch.com">Blockworks Research</a>, users pointed out the milestone’s intriguing timing. Users debated the significance of Ethereum’s L2 solutions, noting that reduced transactions on Ethereum’s L1 could reflect L2s working as intended rather than a decline in utility. This raised questions about whether L2 activity should be included in such metrics.



Mert Mumtaz, co-founder and CEO of Helius and co-host of the Lightspeed podcast, highlighted competitive dynamics, noting how other blockchain projects are targeting Solana developers with job offers. He has been vocal about the potential of Solana’s integrated approach and the limitations of Ethereum’s dominance.



Valuation disparities between Solana and Ethereum also fueled discussions, with some suggesting that Solana’s lower current valuation indicates significant potential for growth. This broader sentiment reflects a belief that Solana could see increased adoption and value as it continues to showcase its capabilities and attract more developers and users.



— Jeffrey Albus



<h2 class="wp-block-heading">One Good DM</h2>



A text from Arman Dezfuli-Arjomandi, a board member at the Helium Foundation:



<img loading="lazy" decoding="async" src="https://lh7-us.googleusercontent.com/HYP_lDuO3lOzrWi2Phdt2kTPkQiq_lqEfnsxZ6hxjYd7uWk5Y61Xu9nQBvcWaH2NlZtrACBVg1BWMi0RqagvfD2Vt5nc-Uc699QxaaZhzsXxi0iyBiPsaHNuPxFVf7KFOzJqXCrZnscnEJghDhG6_1s" width="624" height="611">



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Lightspeed Newsletter: Helium eyes the big guys

Katherine Ross

Two brothers accused of orchestrating an attack last year on Ethereum trading bots have been indicted by the US government.&nbsp;



The Department of Justice unsealed charges against Anton Peraire-Bueno and James Peraire-Bueno on Wednesday.



The pair are charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering after the brothers allegedly tried to “exploit the very integrity of the Ethereum blockchain to fraudulently obtain approximately $25 million worth of cryptocurrency within approximately 12 seconds.”



Both were arrested on Tuesday and will face judges in Massachusetts and New York.&nbsp;



<a href="https://blockworks.co/news/validator-frontruns-mev-bots">The April 2023 exploit</a> targeted bots that seek profit by essentially trying to front-run transactions on the network. Maximum extractable value, or MEV, referring to the maximum value that can be obtained during transaction block production beyond rewards and fees.&nbsp;



Read more: <a href="https://blockworks.co/news/validator-frontruns-mev-bots">Ethereum Validator Goes Rogue, Frontruns MEV Bots for $25M</a>



The Peraire-Bueno brothers sought to “lure” MEV bots from the traders they allegedly targeted by “proposing at least eight specific transactions that…the defendants knew would cause the” targeted bots to include the lure transactions in the bundles, the indictment said. The exploit took advantage of a since-patched code vulnerability in the MEV-Boost software.&nbsp;



“In each of these eight bundles, the victim traders effectively bought substantial amounts of particularly illiquid cryptocurrencies…for approximately $25 million of various stablecoins.”&nbsp;



“Through the Exploit, which is believed to be the very first of its kind, Anton Peraire-Bueno and James Pepaire-Bueno manipulated and tampered with the process and protocols by which transactions are validated and added to the Ethereum blockchain. In doing so, they fraudulently gained access to pending private transactions and used that access to alter certain transactions and obtain their victims’ cryptocurrency,” a DOJ press release said.&nbsp;



To avoid detection, the two tried to conceal their identities through shell companies and private crypto addresses.&nbsp;



Following the attack, the brothers even “transferred the stolen cryptocurrency through a series of transactions designed to conceal the source and ownership of the stolen funds.”



They researched know-your-customer (KYC) procedures online, per the indictment, to learn the KYC standards and extradition procedures. They allegedly also researched the crimes they’d end up being charged with.



“As alleged in today’s indictment, the Peraire-Bueno brothers stole $25 million in Ethereum cryptocurrency through a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds,” said Deputy Attorney General Lisa Monaco.



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DOJ charges 2 brothers tied to $25M attack on MEV bots last year

Ben Strack

Vanguard has said it doesn’t believe in crypto’s investment case, and it doesn’t allow bitcoin ETFs to trade on its platform.



But the fund giant’s new CEO, Salim Ramji, led BlackRock’s ETF business as the company spurred an industry double-take with its bitcoin ETF filing last year.&nbsp;



So something’s got to give, right?&nbsp;



Maybe not soon, but ultimately yes, according to Ric Edelman, founder of the Digital Assets Council of Financial Professionals (DACFP).



Ramji was <a href="https://blockworks.co/tag/blackrock">BlackRock</a>’s global head of iShares and index investing before leaving the world’s largest asset manager in January. He started his career leading the firm’s corporate strategy and moved on to become its head of US wealth advisory.



Vanguard said Tuesday that Ramji would succeed Tim Buckley as chief executive on July 8. The firm had revealed in February that Buckley was set to retire by the year’s end.&nbsp;&nbsp;



Though Ramji left BlackRock the month that US spot bitcoin ETFs <a href="https://blockworks.co/news/sec-approves-bitcoin-etf">gained Securities and Exchange Commission clearance</a>, he was of course involved in the lead-up.



Fast-forward four months, and BlackRock’s iShares Bitcoin Trust (IBIT) has so far <a href="https://blockworks.co/news/blackrock-bitcoin-etf-inflows-streak">led the category with $15.5 billion of net inflows</a>. IBIT trails the segment’s largest fund — the Grayscale Bitcoin Trust ETF (GBTC) — by less than $1 billion in assets under management.&nbsp;



Read more: <a href="https://blockworks.co/news/bitcoin-etf-performance-first-four-months">Strong start, slowing demand: The first 4 months of US spot bitcoin ETFs </a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



In a July 2023 <a href="https://twitter.com/BloombergTV/status/1678499259581100040">interview</a> on Bloomberg TV, Ramji said the company was “incredibly excited” about blockchain technology given its ability to remove considerable “friction” across the financial ecosystem.



The then-BlackRock executive likened the planned bitcoin product to its physical gold ETF — the iShares Gold Trust (IAU) — launched in 2005.



“The gold is held in custody in a vault, which is remote from us, but it’s now easier to transact in gold using our gold ETFs,” he said at the time. “We’re applying that same philosophy to other new and emerging asset classes like bitcoin, just as we did to gold 20 years ago and just as we did to bonds 20 years ago.”



The <a href="https://blockworks.co/tag/bitcoin-etf">bitcoin ETF</a> bid was an effort to “help investors gain access to parts of the market that otherwise have been more difficult or really expensive or opaque for them to access otherwise,” Ramji added.&nbsp;&nbsp;&nbsp;



For what it’s worth, Vanguard’s Tuesday news release does not mention IBIT or crypto.



A company spokesperson did not immediately return a request for further comment.&nbsp;



While brokerage firms Fidelity and Charles Schwab, for example, give investors access to trade bitcoin ETFs, Vanguard does not. The company has called the investment case for cryptocurrencies “weak” — noting that most crypto assets “lack intrinsic economic value” and are highly volatile.



Read more: <a href="https://blockworks.co/news/vanguard-disallows-bitcoin-etf-trading">As spot bitcoin ETF volumes soar, Vanguard is blocking such trades</a>



DACFP’s Edelman, who also founded Edelman Financial Services, said he believes Ramji will bring a more “market-focused approach” to Vanguard.&nbsp;



After all, he noted, the company’s focus on being the cheapest doesn’t give it as much of an edge in an increasingly low-cost industry.



“Paternalistic views that prevent investors from owning what they want won’t foster growth either,” Edelman told Blockworks.



Bloomberg Intelligence analyst James Seyffart said in an X <a href="https://twitter.com/JSeyff/status/1790504096195084583">post</a> that he doesn’t think the hire means Vanguard launches a bitcoin ETF in the near-term.



“But I think Salim could reverse Vanguard’s stance on not allowing their clients to buy spot bitcoin ETFs on their brokerage platform,” Seyffart added.



Bitcoin won’t be the first item on Salim’s agenda, Edelman noted.



“But eventually…Vanguard will indeed offer bitcoin ETFs,” he said. “From a purely business perspective, it’s foolish not to. And Salim is not foolish.”



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Yes, Vanguard’s new CEO supported BlackRock’s bitcoin ETF launch

Circle’s looking to move across the pond.&nbsp;



The USDC issuer confirmed to Blockworks that its parent company filed the “required paperwork with the High Court of the Republic of Ireland to redomicile the company to the US.”



<a href="https://www.bloomberg.com/news/articles/2024-05-15/usdc-issuer-circle-to-make-us-legal-home-ahead-of-ipo">Bloomberg</a> first reported the news.



Earlier this year, Circle revealed that it confidentially filed for an initial public offering in the US in January of this year. The approach is common and has been used by other companies such as Airbnb and Uber. 



Read more: <a href="https://blockworks.co/news/circle-files-ipo">Circle confidentially files for US IPO</a>



“The number of shares to be offered and the price range for the proposed offering have not yet been determined. The initial public offering is expected to take place after the [Securities and Exchange Commission] completes its review process, subject to market and other conditions,” the press release said at the time.&nbsp;



This isn’t the first time that <a href="https://blockworks.co/tag/circle">Circle</a>’s expressed interest in a US IPO, though the move from Ireland could suggest that the company is pursuing the traditional approach to going public.&nbsp;



Circle had previously <a href="https://blockworks.co/news/circles-public-listing-plans-undeterred">expressed interest in going public</a> through a special-purpose acquisition company or SPAC. The route — which requires the private company looking to go public to merge with an existing publicly listed shell company — was popular throughout 2021 and 2022.&nbsp;



While the S-1 filed with the <a href="https://blockworks.co/tag/sec">SEC</a> hasn’t been publicly released yet, it shows that the company is pursuing the more traditional IPO model this time around. 



Per SEC <a href="https://www.sec.gov/corpfin/announcement/draft-registration-statement-processing-procedures-expanded">rules</a>, potential investors won’t be able to publicly view the S-1 filed with the regulatory agency until 15 days before the company starts its roadshow. This changes, however, to 15 days prior to the registration date if a company chooses to not pursue a roadshow.



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Circle says it plans to ‘redomicile’ company in the US

Miller Whitehouse-Levine

We find ourselves in a strange interregnum for crypto policy in the United States.&nbsp;



On one side, Securities and Exchange Commission Chair Gary Gensler is <a href="https://blockworks.co/news/secs-gensler-crypto-disclosures-for-investors">ramping up an all-out war</a> against the crypto industry, accelerating enforcement actions and saber-rattling, perhaps in anticipation of being replaced after November&#8217;s elections. The aim seems straightforward: Let’s do as much damage to crypto while we have the chance.&nbsp;



On the other side, a growing bipartisan group in Congress is working, ploddingly, towards new crypto-focused legislation in an acknowledgment that the current status quo is untenable.&nbsp;



The slow and steady legislative pace gives Chair Gensler the chance to be the fox in the crypto henhouse while our lawmakers are occupied with other jobs on the farm.&nbsp;



The insatiable campaign against crypto undermines the work that Congress has done so far to address crypto’s long-standing regulatory quagmire. It’s time the farmers regain control and flush the fox out.



Indeed, Congress has made notable progress towards addressing key regulatory issues, even if their efforts remain imperfect and incomplete. Some of the pieces of draft legislation could prove a net positive for the crypto ecosystem with considered revisions. Rep. Patrick McHenry and Rep. Maxine Waters&#8217; yet-to-be-released stablecoin bill has <a href="https://www.coindesk.com/policy/2024/03/20/key-us-lawmaker-mchenry-says-house-has-workable-stablecoin-bill/">garnered decent bipartisan support</a> and could reach a House floor vote this session. McHenry&#8217;s FIT21 bill on crypto market structure is <a href="https://rules.house.gov/bill/118/hr-4763">headed for a full-House vote at the end of May</a>.&nbsp;&nbsp;



Just last week, <a href="https://www.axios.com/2024/05/08/house-vote-sab121-sec-guidance-crypto-custody">a bipartisan House coalition repealed</a> the SEC&#8217;s punitive SAB 121 accounting rules for crypto — a clear rebuke of Gensler&#8217;s aggressive tactics, and a sign there is Congressional appetite to move quicker than the typical glacial speed they are accustomed to with core crypto issues.&nbsp;



These moves demonstrate that lawmakers at least seem to grasp that if they don&#8217;t act soon to rein in Gensler&#8217;s crusade, they may end up protecting just a <a href="https://blockworks.co/news/crypto-industry-will-move-offshore-if-congress-doesnt-act-executives-warn">rump of what was once a vibrant American crypto industry.</a>



What is to be done? Congress faces two key constraints: It&#8217;s an election year when major legislative lifts are difficult, and they must consolidate enough bipartisan consensus to push comprehensive crypto legislation over the finish line.



Fortunately, new polling indicates growing public engagement on the crypto issue which could provide productive tailwinds.&nbsp;



According to a <a href="https://theblockchainassociation.org/cryptovoters/">recent Harris Poll</a>, most voters don&#8217;t trust elected officials to understand innovative technologies like crypto, and over half are concerned about policymakers stifling innovation through heavy-handed regulation. Those sentiments are warning lights for the SEC and are opportunities for members of Congress. Former President Trump&#8217;s <a href="https://x.com/EleanorTerrett/status/1788375364223283485">recent overtures</a> embracing crypto and courting crypto-aligned voters should also add impetus for Congressional action.



Read more from our opinion section: <a href="https://blockworks.co/news/eth-not-security-howey">No, ETH isn’t suddenly a security now</a>



Ultimately, lawmakers must recognize that an overzealous regulator is attempting to unilaterally decide the fate of an ecosystem that is vitally important to America&#8217;s future economic competitiveness and technological leadership. This circumvents the proper role of Congress in setting foundational rules, and our elected officials should reassert their prerogative rather than ceding that power to crypto&#8217;s most fervent detractors.



The clock is ticking. As election day approaches, the impetus for Chair Gensler to gobble up even more crypto hens will grow stronger. Our nation&#8217;s legislative farmers must return to the crucial task of protecting and catalyzing the homegrown crypto ecosystem. They’re close to drafting fit-for-purpose rules that would clarify how the government understands and regulates crypto, though much more work needs to be done.&nbsp;



If they don’t move quickly, they may find the hen house empty and wonder why they didn’t act sooner.



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<div class="wp-block-post-author-biography">Miller has overall strategic and operational responsibility for the execution of the organization’s mission and goals. Prior to joining the fund, Miller led the Blockchain Association’s policy operation and worked at Goldstein Policy Solutions on a range of public policy issues, including crypto. Miller holds a B.S. in international politics and a minor in Mandarin Chinese from Georgetown&#8217;s School of Foreign Service.
</div>


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It’s time for Congress to protect the crypto henhouse

<h2 class="wp-block-heading">A new scare tactic</h2>



Crypto mixers, and those who make them, are having their day in court.&nbsp;



Yesterday, Tornado Cash developer Alexey Pertsev was <a href="https://blockworks.co/news/alexey-pertsev-tornado-cash-guilty">found guilty of money laundering</a> and sentenced to 64 months in a Dutch prison.&nbsp;



The sentencing, which happened after a brief trial in March, left CoinCenter’s Peter Van Valkenburgh “sad” and “angry that the money laundering laws in the Netherlands have such a low threshold for intent, especially mere negligence.”



But the verdict shouldn’t impact US cases, which is important to note because <a href="https://blockworks.co/tag/tornado-cash">Tornado Cash</a> co-founder Roman Storm is expected to face a trial later this year.&nbsp;



So let’s zoom out for a second here.&nbsp;



Crypto mixers, such as Tornado Cash, have clearly hit a nerve with governments outside the US. But, as we previously mentioned here, the US government is looking to seriously inhibit or scare people away from these services. Tornado Cash was <a href="https://blockworks.co/news/roman-semenov-tornado-cash-ofac-list">sanctioned years ago</a>, then both Storm and Roman Semenov were charged. (Semenov is notably still at large, though Storm was arrested.)



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/8AcwGA-hMmu3Qec1xlLPHqD85nj2Mc6DHjQ2s_NgBuux66vOKMeg_YqASNZLOQyU1SlYHgUejbRAARHyukSUy9BV6F3Rj2sZ-c_6aKMoSZZuc-n2Nn0v_MwdyeUunJif36UfiGCIBfMzcqf0oruSyS8" alt=""/></figure>



The chart from Dune shows that there are still cash deposit transactions happening on Tornado Cash, though there’s clearly been a drop-off since the March 2022 highs. The US government sanctioned Tornado Cash in August 2022, making it illegal for US citizens to interact with the protocol, which is reflected in charts of deposit and withdrawal transactions.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/sNZzs8Jh4Qw_JoezRWH20lQfq8pO_ys_2VWtQqcsuaC7zd2_1YKaXM9k-26yEXjKQEOwG5ukqGNsEYhdHKwJAW75K-sXEGzFnpqWY6J0GFXIumOeDJyEm85GkWKqwDj-Q4sYxWqTHRslM84LBirDv3M" alt=""/></figure>



The privacy tool has many lawful users and provides a receipt mechanism to prove the provenance of withdrawn funds when requested by an appropriate authority.



Then there’s Samourai Wallet, which <a href="https://blockworks.co/news/doj-arrests-founders-samourai">saw a bit of a different approach</a> from the US government.



The Department of Justice teamed up with other international agencies to not only arrest two co-founders — William Lonergan Hill and Keonne Rodriguez —- but also seized the web servers and domain “in coordination with law enforcement authorities in Iceland.”



The indictment accuses the Samourai Wallet account on X of encouraging users to “launder proceeds” using its services.&nbsp;



What’s the aim here for the government? Is it to suppress the technology or is it to punish those behind it?



That’s the question I’ve been mulling over when looking at the approach that the DOJ has taken to both cases.&nbsp;



CoinCenter’s note earlier this month explained how the DOJ changed tack when it comes to the developers.&nbsp;



As we <a href="https://blockworks.co/news/binance-changpeng-zhao-deal-unpacked">talked</a> about previously, guidance from FinCEN — the Treasury’s financial enforcement bureau — has long suggested that crypto shouldn’t count as funds.



The agency further wrote: “The person participating in the transaction to provide additional validation at the request of the owner does not have total independent control over the value.”



These points are worth bringing up once again because of the potential shift they show. The <a href="https://blockworks.co/tag/doj">DOJ</a> has seemingly disregarded such guidance in favor of directly targeting the developers.&nbsp;



And, while the Dutch legal system is totally separate and neither the US nor the Dutch systems will have any direct influence on these types of cases, the underlying theme here is that multiple governments have targeted the developers behind the technology.



Is that enough to end mixers? In crypto, probably not as seen by the aforementioned charts. But it’s clearly enough to scare folks from using the services.&nbsp;



<h2 class="wp-block-heading">Data Center</h2>



<ul>
<li>Among memecoins, FLOKI’s <a href="https://www.coingecko.com/en/crypto-gainers-losers?top=100">leading</a> the gains — up 10% — this morning as Roaring Kitty continues to post videos on X. </li>



<li>Grayscale’s bitcoin ETF saw outflows of $50 million on Tuesday, while ARKB brought in $133 million, per <a href="https://farside.co.uk/?p=997">Farside data</a>. </li>



<li>Ark’s Bitcoin Monthly <a href="https://ark-invest.com/crypto-reports/the-bitcoin-monthly-april-2024-report/?utm_campaign=The%20Bitcoin%20Monthly&amp;utm_medium=email&amp;_hsenc=p2ANqtz-9omYG7oTStDKnjIqc2-iL8QUtnSf0MsTMGsbQs9fWfDd-FC9mGUNfLMVvcbUH9OVM0Dz6w-ikAqe-DaoKGfL9u4KYVEQ&amp;_hsmi=307073862&amp;utm_content=307073862&amp;utm_source=hs_email">noted</a> that there are two “crucial” support levels remaining for bitcoin: the 200-day moving average of $48,335 and the on-chain mean, which is $42,538.</li>



<li>BTC’s price is hovering around $62,000, a 1.2% change in the last day.</li>



<li>Core Consumer Price Index month-over-month fell to 0.3%, just under the 0.4% expected in April. </li>
</ul>



<h2 class="wp-block-heading">The end is near</h2>



After a few years of bankruptcy proceedings, we may be near the endgame when it comes to the companies that failed at the beginning of last cycle’s downturn.&nbsp;



As we wrote about last week, <a href="https://blockworks.co/tag/ftx">FTX</a> put forth a creditor payback plan that could be approved by both a creditor vote and, in June, a court.



But it may not be all smooth sailing for the former crypto exchange, as Blockworks’ Ben Strack and I <a href="https://blockworks.co/news/ftx-latest-creditor-payback-proposal">previously reported</a>. The estate’s plan does have some “controversial elements” that aim to shield some of the non-debtor entities from potential future lawsuits, Matthew Gold, partner at Kelinberg Kaplan, told Ben last week.&nbsp;



<a href="https://blockworks.co/tag/ftx">FTX</a>’s bankruptcy — though it came at a time when there were a number of other bankruptcies such as Celsius, Voyager and BlockFi — <a href="https://blockworks.co/news/ftx-comparison-crypto-bankruptcies">stands on its own</a>, said Jonathan Groth, partner at DGIM Law.



The bankrupt exchange is a “special case” in comparison.&nbsp;



“The plan that they&#8217;re proposing [and the fund they’ve amassed] to repay creditors is really based more on the liquidation of securities holdings through FTX’s branch of Alameda and other recoveries…just really selling off other assets,” Groth said.



Voyager and Celsius returned between 35% and 65% to 85%, respectively, to creditors. Just looking on a numbers basis, FTX is saying it is planning to make customers whole and even pay interest to some. That, of course, doesn’t take into account the appreciation of certain cryptocurrencies such as bitcoin. When FTX filed for bankruptcy, bitcoin was under $20,000. Now, of course, it’s above $60,000. That’s clearly a massive change.&nbsp;



However, the bankruptcy code — which Judge John Dorsey <a href="https://blockworks.co/news/ftx-bankruptcy-victim-compensation">upheld earlier this year</a> at a hearing after some creditors said they wanted their <a href="https://blockworks.co/news/ftx-former-customers-oppose-bankruptcy-plan">payouts to recognize current prices</a> — says that customers should be repaid based on the date that the company declared bankruptcy.&nbsp;



FTX also benefited from the asset location, managing to cobble together between $14 billion and $16 billion to repay creditors. Creditors are owed $11 billion.



“In any of these other insolvency proceedings where the estate and the fiduciary may be lucky enough to still hold some crypto assets, they may be able to benefit from this market upswing that we’re seeing,” Groth said.



Even if some creditors are unhappy with the plan, Groth said “it’ll be really difficult for a court to look at this and say, ‘How unhappy can you be?…You’re being made whole.’”&nbsp;



— Katherine Ross



<h2 class="wp-block-heading">The Works</h2>



<ul>
<li>Circle is looking to make the US its legal home base ahead of its planned IPO, Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-05-15/usdc-issuer-circle-to-make-us-legal-home-ahead-of-ipo">reports</a>. </li>



<li>Peter Thiel’s VC fund and Vitalik Buterin <a href="https://www.bloomberg.com/news/articles/2024-05-14/peter-thiel-s-founders-fund-backs-election-betting-with-polymarket-funding">backed</a> Polymarket in a $70 million raise across Series A and Series B rounds.</li>



<li>Ex-FTX executive Ryan Salame is <a href="https://www.coindesk.com/policy/2024/05/15/former-ftx-exec-ryan-salame-asks-for-lenient-18-months-in-prison/">seeking</a> an 18-month sentence, according to a court filing.</li>



<li>Robinhood <a href="https://blockworks.co/news/robinhood-solana-staking-europe">announced</a> its first-ever staking product — Solana staking — for customers in Europe. </li>



<li>Berachain’s $1.5 billion valuation following its $100 million Series B raise last month <a href="https://news.crunchbase.com/venture/unicorn-board-april-2024-ai-web3-e-commerce-xaira/">earned</a> it a spot on Crunchbase’s Unicorn Board. </li>
</ul>



<h2 class="wp-block-heading">The Morning Riff</h2>



Former Binance CEO <a href="https://blockworks.co/tag/changpeng-zhao">Changpeng Zhao</a> is about to have a lot of time on his hands as he prepares to serve his four-month prison sentence in the US. Or, as he called it, “quiet time.”



So what’s a guy to do with all that time?



Sounds like CZ might be going the very classic route of publishing a book. The former executive said he’ll “give it a try” in a <a href="https://twitter.com/B_daojia/status/1789506320204435781">response</a> on X.&nbsp;



What could the said book be about? I’m thinking not about what led to his prison sentence, and Zhao — at least in court — said he’d go back and “change that part of Binance’s story” when discussing what led him to be in front of a judge for sentencing.&nbsp;



Read more: <a href="https://blockworks.co/news/empire-newsletter-cz-vs-sbf-sentencings">Empire Newsletter: Why CZ and SBF’s sentencings were so different</a>



CZ’s newest endeavor is Giggle Academy, a nonprofit education platform, so maybe he’ll pen a self-help book or advice on how to be the next crypto kingpin.&nbsp;



Actually, the latter might be helpful — depending on what he writes about — because we’ve seen quite a few topple thanks to casual law-breaking and deceptive practices. But, hey, there’s always room for improvement.&nbsp;



Either way, there’s no denying that CZ is a force within crypto even putting the guilty plea aside. I’m hoping that his book ends up in the hands of our very own Molly Jane Zuckerman.&nbsp;



— Katherine Ross



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Empire Newsletter: Crypto mixers have their day in court

Yet another potential milestone for crypto is just days away.



Or, we may find out US spot ether ETFs are — for now — not meant to be.



The Securities and Exchange Commission’s decision on such funds by fund firms Ark Invest and VanEck, slated to come by May 23, is only half of what to watch for next week.



In the case of a denial, the SEC is set to give its reasoning. There is also the question of whether a lawsuit follows, how quickly it is filed, and who would lead that charge.



<h2 class="wp-block-heading">Expected reasons for possible denial&nbsp;</h2>



The SEC was essentially forced to <a href="https://blockworks.co/news/sec-approves-bitcoin-etf">approve spot bitcoin ETFs</a> in January after Grayscale Investments notched a legal victory against the regulator.



Then there was SEC Chair Gary Gensler’s warning in his statement published a day before spot bitcoin ETFs launched on Jan. 11: “Today’s commission action is cabined to ETPs holding one non-security commodity, bitcoin.”



A reasonable interpretation: Not so fast, prospective ether ETF issuers.&nbsp;



Read more: <a href="https://blockworks.co/news/ether-etf-approval-unlikely-soon">Ether ETFs coming in May? Here’s why many are bearish</a>



“I think the SEC is aware that sponsors may assume an air of inevitability of additional spot crypto approvals once multiple crypto ETPs have been approved,” said Arie Heijkoop, partner at law firm Haynes Boone. “It will take an extra cautious approach as a result before approving any further spot crypto ETP — at least under this current administration.”



Perhaps the biggest elephant in the room is the SEC’s reticence to call ether a security or a commodity.



A March 8 <a href="https://www.federalregister.gov/documents/2024/03/08/2024-04928/self-regulatory-organizations-the-nasdaq-stock-market-llc-order-instituting-proceedings-to-determine">filing</a> confirms the regulator continues to mull this question, Van Buren Capital general partner Scott Johnsson said in an X post.



The <a href="https://blockworks.co/tag/sec">SEC</a> asks in the document whether the listing exchange — in this case Nasdaq — filed to properly list and trade shares of BlackRock’s proposed iShares Ethereum Trust “given the nature of the underlying assets held by the trust.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">The obvious purpose is to potentially deny on the basis that these spot filings are improperly filed as commodity-based trust shares and do not qualify if they are holding a security.&mdash; Scott Johnsson (@SGJohnsson) <a href="https://twitter.com/SGJohnsson/status/1790219763211198510?ref_src=twsrc%5Etfw">May 14, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The document also asks whether arguments supporting the list of spot bitcoin ETFs apply to ether given “its proof of stake consensus mechanism and concentration of control or influence by a few individuals or entities.”



Read more: <a href="https://blockworks.co/news/sec-investigation-of-eth-as-security">SEC has been investigating ETH for over a year, new court filing shows</a>&nbsp;



Indeed, K&amp;L Gates partner Richard Kerr noted during an ETF Prime <a href="https://etfstore.com/vanecks-matthew-sigel-on-spot-ether-etf-hodl-cryptos-investment-case/">podcast</a> last week that the proposed spot ether ETFs are registered under the Securities Act of 1933 as commodities-based products. They would not be allowed to trade under that designation if ether is deemed a security, he noted.&nbsp;



More likely, Kerr added, the SEC will “very carefully try to push the decision on ETH down the line” by saying the correlation between the ether futures and spot markets is not as strong.&nbsp;



The SEC <a href="https://blockworks.co/news/ether-futures-etfs-vaneck-proshares-bitwise-offerings#">allowed ETFs that hold ether futures contracts</a> to start trading last October.&nbsp;&nbsp;&nbsp;



Matthew Sigel, VanEck’s head of digital assets research, said during the same podcast he does not believe such an argument holds water.



A March <a href="https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/rule-filings/filings/2024/SR-NYSEArca-2024-31.pdf">analysis</a> by crypto asset manager Bitwise <a href="https://twitter.com/BitwiseInvest/status/1773427635919458551">found</a> the correlation values for the ether futures and spot markets, when compared to bitcoin, differ up to 0.2% for the hourly correlation, 5% for the five-minute correlation and 8% for the one-minute correlation.



“We think the SEC may use any reason, not necessarily a logical one, to disapprove,” Sigel said. “But we would highlight that the correlation between ethereum spot and ethereum futures…is similar to what the SEC found acceptable for the approval of spot bitcoin ETFs.”



Approved or not, multiple industry watchers previously told Blockworks the SEC would almost definitely not allow ether products that stake their holdings. Ark Invest and 21Shares, which previously <a href="https://blockworks.co/news/ark21shares-ether-etf-staking">proposed for their planned fund to stake the fund’s ETH</a>, did not include such language in a May 10 <a href="https://www.sec.gov/Archives/edgar/data/1992508/000121390024041758/ea0205580-01.htm">filing</a>.&nbsp;



<h2 class="wp-block-heading">Would a lawsuit follow?</h2>



An SEC denial could be challenged, as the bitcoin ETF rejections ultimately were.



Some lawyers have told Blockworks a court decision could be the best route to seeing these products launch.&nbsp;



Read more: <a href="https://blockworks.co/news/ether-etf-sec-question">Court decision could be only way US spot ether ETFs see light of day</a>



But Johnsson <a href="https://twitter.com/SGJohnsson/status/1788973146478948614">said</a> he would be surprised to see a lawsuit after Grayscale withdrew its ether futures ETF application earlier this month.&nbsp;



<a href="https://blockworks.co/tag/grayscale">Grayscale</a> CEO Michael Sonnenshein <a href="https://www.dlnews.com/articles/regulation/grayscale-to-focus-on-spot-ethereum-products-says-ceo/">reportedly</a> said at an event hosted by the Financial Times that the firm “decided to focus our energy on our spot products.”&nbsp;



A company spokesperson declined to comment further on the proposal withdrawal.&nbsp;



Johnsson noted in a separate X <a href="https://twitter.com/SGJohnsson/status/1787955970762490042">post</a> that keeping the product in registration would have put the SEC “on record with a 19b-4 order” related to ether futures.&nbsp;



A 19b-4 form is filed by stock exchanges and other entities to record a rule change with the SEC. A regulatory decision on such a rule change was “critical” in Grayscale’s legal victory against the SEC last year, Johnsson added.



Existing US ether futures ETFs, registered under the Investment Company Act of 1940, did not go through the 19b-4 process.



Heijkoop said he doesn’t expect Grayscale’s ether futures product withdrawal to impact a decision to sue the SEC, if it comes to that.



“If a litigant can show strong correlation between ether futures and spot prices, I think the same premise of the Grayscale bitcoin court ruling should provide legal precedent here, which is that disparate treatment of futures and spot market products is ‘arbitrary and capricious’ in cases where strong correlation is present,” Heijkoop told Blockworks.&nbsp;



Neena Mishra, director of ETF research at Zacks Investment Research, puts low odds on a lawsuit, noting the regulator should approve the products based on the correlation argument.&nbsp;



Issuers, she guessed, would re-apply for ether funds and hope for more engagement with the SEC within the next 240-day period.



“The legal process is costly, and spot ether ETFs are likely to attract much less interest from investors compared to spot bitcoin ETFs,” Mishra explained. “Moreover, with elections approaching, issuers may prefer to wait until the outcomes are known. They will hope for an SEC chair who is more favorable towards cryptocurrency.”



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Why the SEC could choose to deny ether ETFs, and what could happen next

Robinhood’s European crypto branch launched Solana staking.



The feature will offer roughly 5% APY at launch, though that could vary as staking rewards change, Robinhood Crypto general manager Johann Kerbrat told Blockworks in an interview.&nbsp;



This puts Robinhood Crypto a tick below Coinbase, which offers an estimated reward of 5.42% for Solana stakers. The Phantom wallet offers Solana staking with an APY as high as 7.58%.



The firm chose Solana for its first staking product because SOL’s one of the most popular tokens among its EU customers, and staking on <a href="https://blockworks.co/tag/solana">Solana</a> is simpler than on Ethereum, Kerbrat said.



Read more: <a href="https://blockworks.co/news/robinhood-trading-volume-february">Robinhood’s crypto trade volume rose 10% in February</a>



(Bitcoin is the most-held crypto among EU customers, <a href="https://blockworks.co/tag/robinhood">Robinhood</a> said in a press release.)



Kerbrat mentioned that the company was drawn to Solana’s shorter bonding period — the amount of time it takes before newly-staked assets begin earning yield. Solana’s bonding <a href="https://solana.com/staking#how-do-i-estimate-and-view-my-staking-rewards">period</a> is roughly two days, while Ethereum’s <a href="https://help.coinbase.com/en/prime/staking/unbonding">varies</a> from a few days to a few weeks.



When asked if Robinhood Crypto would add <a href="https://blockworks.co/tag/staking">staking</a> for additional assets — like Ethereum — in the future, Kerbrat said “we are definitely thinking about it,” but declined to go into specifics.&nbsp;



Robinhood Crypto launched in December as a crypto trading app in the European Union. The entity is registered and regulated in Lithuania, according to a Robinhood blog <a href="https://newsroom.aboutrobinhood.com/robinhood-launches-crypto-trading-in-the-eu/">post</a>. The company’s crypto arm noted that its app is highly downloaded by users in Poland, Italy and Lithuania.



Read more: <a href="https://blockworks.co/news/robinhood-eyes-eu-expansion">Robinhood looks to jumpstart crypto trading revenue via EU expansion</a>



Robinhood Crypto lists 33 tokens, as opposed to Robinhood’s US trading app, which only <a href="https://robinhood.com/us/en/support/articles/no-commission-crypto/">offers</a> 15 crypto assets — even fewer in New York and Texas.&nbsp;



SOL and Solana <a href="https://blockworks.co/tag/meme-coins">memecoins</a> including BONK and DogWifHat are available in the EU but not the US.



<a href="https://blockworks.co/news/robinhood-nixes-ada-matic-sol">Robinhood’s US arm delisted Solana</a> — among other cryptocurrencies alleged by the US Securities and Exchange Commission to be unregistered securities — in June of last year after the agency filed lawsuits against Coinbase and Binance.



Robinhood’s crypto efforts in <a href="https://blockworks.co/tag/europe">Europe</a> are perhaps overshadowed by the company receiving a Wells Notice from the US SEC for its crypto listings last week. 



Read more: <a href="https://blockworks.co/news/robinhood-wells-notice-sec">Robinhood discloses Wells notice over its crypto business</a>



Robinhood and Robinhood’s EU crypto branch are “completely separate entities with different business models and different structures, and so at this point, the business in Europe is completely isolated from what&#8217;s happening in the US,” Kerbrat said.



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Robinhood enables Solana staking for customers in Europe

Hiya!



Markets may be down slightly, but that’s not the main thing bumming me out today. Last night, I took a train all the way up to Queens just to see the Mets blow a 9th-inning lead. What even is a “Phillie?”



Anyways, let’s talk Solana.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">Pandora’s Box of L2s</h2>



Solana’s lack of layer-2s has long been a point of pride for some Solana supporters.&nbsp;



Rather than relying on a fragmented and expanding network of blockchains to scale à la Ethereum, why not just move to a blockchain fast and cheap enough to keep everyone in the same building?



But since fast things can always be faster, and cheap things cheaper, the layer-2 bug appears to be coming for Solana.&nbsp;



Zeta Markets announced a $5 million raise Tuesday, partially to build a DeFi layer-2 on Solana. Electric Capital led the round, which added to the $8.5 million Zeta Markets raised in a 2021 seed round led by Jump Capital.&nbsp;



Zeta Markets currently runs a regular derivatives DEX — the fifth-largest on Solana, <a href="https://defillama.com/protocols/Derivatives/Solana">according</a> to DefiLlama. By adding a layer-2 to the mix, it wants to make its DEX as fast as a CEX.



Zeta Markets founder Tristan Frizza told me that he’s always been a “monolithic chain maxi,” but when you’re letting traders take big leverage on derivatives, market makers want to see some really low latency.



“Solana does what, 400 millisecond block times? But these guys are used to like 10 milliseconds on Binance,” Frizza said.



Off-chain centralized exchanges can basically figure out the price of assets faster than decentralized exchanges, which are slowed down by the underlying blockchain’s throughput. In some cases, savvy arbitrageurs can exploit the momentary differences in price — <a href="https://blockworks.co/news/bell-curve-lvr-defi-liquidity-providers-unfair">to the detriment</a> of DEX liquidity providers.&nbsp;



So, there are justifiable reasons beyond snake oil sales for why Solana would want to build layer-2s. Still, it bears notice that Solana co-founder Anatoly Yakovenko — who invested in this Zeta Markets round — <a href="https://blockworks.co/news/lightspeed-yakovenko-layer-2-scaling">appeared on Lightspeed</a> in August asserting that having too many layer-2s can create massive composability and user experience problems. Other notable Solana ecosystem angel investors also took part in Zeta’s round.



Perhaps this signals that Solana’s thought leaders are softening toward rollups.&nbsp;



Zeta’s layer-2 is set to launch in the first quarter 2025, The Block <a href="https://www.theblock.co/post/294284/solana-dex-zeta-markets-token-funding-round">reported</a>. By then, I wouldn’t be surprised to see other Solana projects following suit.



— Jack Kubinec



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<h2 class="wp-block-heading">Zero In</h2>



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1600" height="963" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png" alt="" class="wp-image-85890" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=434 434w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=364 364w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /></figure>



Solana&#8217;s fee generation looks to be rapidly closing the gap with Uniswap. Over the past year, Uniswap&#8217;s fees stand at $751.193 million, while Solana&#8217;s reach $185.173 million; that&#8217;s about $14.446 million and $3.562 million per week, respectively.&nbsp;



However, Solana&#8217;s fees have risen sharply over the past week to $10.078 million, nearly matching Uniswap&#8217;s $12.260 million. Interest in the Solana network continues to increase, thanks at least in part to Solana&#8217;s high network uptime, low transaction fees, and ever-increasing user adoption in the DeFi and NFT segments.&nbsp;



If this trend continues, Solana could soon surpass Uniswap in fee generation. This rise suggests growing network usage and transaction volume, which — while positive for Solana&#8217;s ecosystem — could also mean higher costs for users​.



— Jeffrey Albus



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<h2 class="wp-block-heading">The Pulse</h2>



If you&#8217;ve ever spent time exploring Solanaland, you&#8217;ve probably come across the term OPOS — Only Possible on Solana. And while this may sound exaggerated to the uninitiated, it is true that certain innovations are indeed only achievable within the Solana ecosystem. Well, for the most part&#8230; kind of&#8230; at least for now.



The idea isn&#8217;t so much that other blockchains can&#8217;t do what Solana is capable of, full stop. It&#8217;s more that there are a lot of things that other chains just can&#8217;t do quite so well.&nbsp;



For instance, Solana&#8217;s state compression technology drastically reduces the cost of storing data on-chain. That makes large-scale transactions far more feasible, and is why projects like Drip Haus are able to affordably distribute millions of NFTs to users across the ecosystem. Other blockchains, which famously struggle with scalability and high fees, would have a tough time developing similar projects.



Projects like Hivemapper and Helium also benefit from Solana&#8217;s high throughput and low costs in support of their decentralized mapping and community-powered 5G services. This is yet another area where transaction speeds and costs hinder the practical implementation of such large-scale decentralized applications for most other chains.



But while Solana holds the advantage in these areas for now, there is little reason to believe it will stay that way forever. Competing networks are assuredly taking notes on what is and isn&#8217;t working across Web3, and may soon develop similar or even superior capabilities. So the question is: Will Solana be able to keep up with these challenges over the long term? Anything is possible.



— Jeffrey Albus



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<h2 class="wp-block-heading">One Good DM</h2>



An excerpt of our chat with Sam Lehman, principal at Symbolic Capital:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="550" height="628" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png" alt="" class="wp-image-85886" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=550 550w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=263 263w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=225 225w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=229 229w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=192 192w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=70 70w" sizes="(max-width: 550px) 100vw, 550px" /></figure>



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Lightspeed Newsletter: Solana caught the layer-2 bug

Macauley Peterson

On-chain social network infrastructure Lens is getting a new home.



The new Lens Network will build upon the work of the original Lens Protocol as one of zkSync’s ZK Stack hyperchains.



Lens Lab develops the protocol under the umbrella of Avara, which also built DeFi giant Aave.



But <a href="https://blockworks.co/news/aave-companies-rebrands-avara">Avara CEO Stani Kulechov</a> told Blockworks that the non-financial use cases of crypto — citing identity and online social interactions — have the potential to be even bigger.



“The way I think about finance and social [spaces] is that there are a lot of people who have financial capital, but everyone on the planet has social capital — the content we create, the relationships we create and the identities we interact with,” Kulechov said.



Read more: <a href="https://blockworks.co/news/web2-social-media-kinda-sucks">Web2 social media kinda sucks. So why aren’t people using Web3 platforms?</a>



The ZK Stack chain will serve as a “central hub” for Lens, which, according to a blog <a href="https://app.t2.world/article/clw6l2z0018727620mc1dq26xr2">post</a> released Tuesday, will “seamlessly integrate with other EVM and non-EVM blockchains.”



A testnet release of the new network is still months away. The current version of <a href="https://blockworks.co/tag/lens-protocol">Lens</a> has been operational on Polygon’s PoS chain since May 2022.



The modular, open-source ZK Stack framework, <a href="https://blockworks.co/news/zksyncs-evm-era-opens-to-the-public">based on the zkSync Era code</a>, will provide Lens with horizontal scaling, connecting as many Lens chains as needed by zk bridges, according to Matter Labs CEO Alex Gluchowski.



“You can add one billion users and you will not lose any of the properties of verifiability,” Gluchowski told Blockworks. “Every single transaction of those millions and billions of users will be verified by every single Ethereum validator — which is the magic of zk,” he said.



Lens pioneered on-chain social infrastructure, but was initially conceived and developed at a time when <a href="https://blockworks.co/tag/zero-knowledge-rollup">zk rollup</a> technology was still seen as years away from production at scale.



Read more: <a href="https://blockworks.co/news/zksync-launches-op-stack-rival">ZkSync launches rival to Optimism’s OP Stack</a>



“We want to build something that enables open and fair social spaces that anyone can participate on a network level, and because of the ownership aspect that also means you can own your social capital,” Kulechov explained.



That’s not possible with today’s social networks. User-created content is owned by the platforms, giving users limited ways to monetize without locking them in or relying on advertisers.



“We see Lens as the forebearer of Ethereum values when it comes to social,” Gluchowski said. “Lens is the only network that is actually making users the owners of their identities and their content. Everything is happening on-chain.”



Read more: <a href="https://blockworks.co/news/empire-newsletter-crypto-users">Empire Newsletter: Here’s where all the crypto users really are</a>



That’s in contrast to <a href="https://blockworks.co/tag/farcaster">Farcaster</a>, where posts and interactions are primarily off-chain, as are user profiles, although they are linked to an on-chain Ethereum address.



Mainstream <a href="https://blockworks.co/tag/web2">Web2</a> social options like Facebook are <a href="https://blockworks.co/news/web3-web2-interoperability-mistakes">centralized and silo user-generated content</a>.



“Our mission is to change the relationship to be more fair [and] give more ownership and power to the users. Hopefully that user choice creates more open social spaces where users can choose algorithms and experiences as well, and there’s more competition on the application level,” Kulechov said.



The parties did not disclose any financial terms related to the move, or a strategy to incentivize users to migrate to the new version.



“We haven’t had any thoughts on migration incentives,” Kulechov said, adding: “I think people will organically migrate from the existing structure into the Lens Net fork down the line.”



But Kulechov noted that the phased approach to the rollout would include inviting users to migrate during a testnet phase and then be upgraded into the mainnet when ready.



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Lens Network to migrate to zkSync

Gísli Kristjánsson

A <a href="https://www.bloomberg.com/news/articles/2024-05-05/more-than-90-of-stablecoin-transactions-aren-t-real-study-finds">Bloomberg headline</a> recently claimed that &#8220;more than 90% of stablecoin transactions aren’t from real users,” sparking concern about the authenticity of transactions within the blockchain ecosystem.&nbsp;



This isn’t the first time that the digital assets industry has faced scrutiny about an apparent lack of authenticity in transactions. Last year, the SEC <a href="https://www.wsj.com/articles/some-binance-us-crypto-trading-was-a-mirage-the-sec-alleges-55a6e321?st=ruat3lr6wfei3rn&amp;reflink=desktopwebshare_permalink">accused</a> Binance.US of inflating trading volumes. Way back in 2019, a <a href="https://www.cnbc.com/2019/03/22/majority-of-bitcoin-trading-is-a-hoax-new-study-finds.html">study</a> by Bitwise found that 95% of spot bitcoin trading volume by unregulated exchanges was faked. Both findings have their detractors.



This isn’t the first moral panic around crypto’s legitimacy, and it won’t be the last.



However, a deeper dive into this “more than 90%” figure reveals a more nuanced narrative. A narrative, in fact, that oversells the fraudulent nature of crypto and severely undersells the transformative nature of blockchain technology.



The cited source for this headline, a collaboration between Allium and VISA, introduces a <a href="https://www.allium.so/post/visa-x-allium---making-sense-of-stablecoins">dashboard</a> that attempts to differentiate between &#8220;organic&#8221; stablecoin transactions initiated by end consumers and businesses versus transactions orchestrated by computer programs.&nbsp;



This differentiation, while well-intentioned, fails to grasp the unique execution model of blockchain technology.



Blockchain technology operates on a fundamentally different paradigm compared to traditional payment rails. At its core, blockchains are decentralized, immutable ledgers maintained by a network of nodes. Transactions on blockchains are executed through smart contracts, which are self-executing agreements with contract terms directly written into code.



Unlike centralized payment systems where transactions are initiated and validated by trusted intermediaries, blockchain transactions are triggered by external actions interacting with smart contracts. These actions can be programmatically executed by automated processes — commonly referred to as bots — without the need to extend any trust to the bots.



Read more from our opinion section: <a href="https://blockworks.co/news/cryptographer-expertise-web3">You’re still rolling your own crypto. You need to stop.</a>



Bots play a crucial role in facilitating efficient and secure transactions on blockchains. They serve various functions, from optimizing transaction fees to executing complex financial operations on behalf of users. They are not the equivalent of social media “bots” like those that now plague Elon Musk’s X.



With that in mind, let&#8217;s explore some practical examples of bot-initiated stablecoin transactions:



1. Gas payment services: With blockchain networks like Ethereum, users must pay gas fees to execute transactions. Paymasters are services that cover these gas fees on behalf of users, ensuring seamless transaction execution without requiring the user to own the underlying transactional token.



2. Recurring payments: Smart contracts can be programmed to execute recurring payments based on predefined conditions set by users. While authorized by users, the execution of these payments is automated through smart contract logic initiated by bots.



3. Coupon payments for tokenized bonds: In DeFi, tokenized bonds can automate coupon payments to bondholders through smart contracts, ensuring timely and transparent distribution of interest payments. Smart contracts are unable to initiate future coupon payments, so bots must be the initiators of the payments. Importantly, the bots are trustless in the sense that they never have custody of the funds being paid.



4. Intent-based trading: Users can express their trading intentions, e.g., swapping a token for a stablecoin, by providing a digital signature to a bot through user interfaces. Bots then leverage DEXs to identify the best trade routes and execute transactions on behalf of users, optimizing for efficiency and cost-effectiveness. The blockchain ensures that the bots are unable to do anything other than what was expressed by the user.



5. Rollups and layer-2 solutions: Scaling solutions like rollups enable off-chain transaction aggregation while settling final balances on the main blockchain. Bots can initiate transactions on these layer-2 solutions, streamlining transaction throughput and reducing costs.



<h2 class="wp-block-heading">No cause for alarm</h2>



The dominance of bot-initiated transactions in stablecoin flows is not a cause for alarm, but a testament to the disruptive capabilities of blockchains. It is a feature, not a bug.&nbsp;



Automation empowers developers to create sophisticated financial applications. For instance, imagine a future where flash loans are used for daily mortgage refinancing, facilitated entirely through automated smart contract execution initiated by bots. This level of automation reduces operational overhead and introduces unprecedented accessibility to financial services.



The dominance of bot-initiated stablecoin transactions is a sign of the maturation of blockchains into a robust infrastructure for automated financial interactions. Rather than viewing bots as a detractor of &#8220;real&#8221; transactions, we should celebrate their role in enhancing user experience and unlocking new use cases. Embracing automation on blockchains enhances efficiency and fosters innovation across diverse industries.&nbsp;



As we navigate the evolving landscape of blockchain-based payments, it&#8217;s essential to revisit our understanding of what constitutes a &#8220;real&#8221; transaction.



In traditional finance, payments are often equated with direct human interaction. However, blockchain&#8217;s execution model introduces a paradigm shift where transactions are initiated and executed through autonomous code.&nbsp;



That isn’t to say that fraudulent transactions don’t exist, or that trading volumes aren’t ever inflated — but a casual read-across from traditional finance to DeFi is rarely so easy.



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<div class="wp-block-post-author-biography">Gísli Kristjánsson is co-founder and CTO of Monerium, the first company to issue fiat onchain. He fell in love with programming at the age of 13. After working as a bonds broker, Gísli saw the inefficiencies of securities settlements firsthand and recognized the potential of Bitcoin. Prior to co-founding Monerium in 2015, Gísli founded and sold a platform to give users access to geo-blocked content. Fun fact: Gísli’s Ethereum address is among the 1% of the oldest addresses.</div>


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Stablecoins bots are a feature, not a bug

The upcoming US presidential election may spur bitcoin out of its current “consolidation phase,” according to Galaxy CEO Mike Novogratz.



Crypto will likely stay politicized until more Democrats pivot their anti-segment stance, he argued, meaning a change in administration could be significant for the space.



Novogratz said during a Tuesday earnings call that, following the approval of spot bitcoin ETFs and last month’s block reward halving, he believes bitcoin could keep trading between $55,000 and $75,000 in the near-term.&nbsp;



The price of bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) was at about $61,450 at 12:30 pm ET Tuesday.



“I think that’s probably where we are — certainly for this quarter and maybe next quarter — until either the Fed starts cutting rates because the economy finally slows or we get through the election.”



Read more: <a href="https://blockworks.co/news/macro-headwinds-bitcoin-summer">Macro headwinds could spur a ‘boring’ bitcoin summer — or something worse</a>



The 2024 presidential election is likely to bring clarity to the crypto regulatory landscape as the segment has increasingly been politicized. Joe Biden and Donald Trump are set to face-off in a rematch as they did four years ago.



Just last week, the Biden administration said in a statement that <a href="https://blockworks.co/news/biden-backing-gary-gensler-resolution">the president would veto a resolution</a> invalidating Securities and Exchange Commission’s Staff Accounting Bulletin (SAB) 121 if it reached his desk. The bulletin, introduced in 2022, says crypto custodians <a href="https://blockworks.co/news/sec-staff-call-for-crypto-entities-to-show-liability-on-balance-sheet">should report a liability and “corresponding assets”</a> on their balance sheets for all custodied cryptocurrencies.&nbsp;



“It just read to the crypto community as the Democrats saying no to crypto,” <a href="https://blockworks.co/tag/mike-novogratz">Novogratz</a> said of the Biden administration&#8217;s comments. “And it’s unfair; there are a ton of Democrats that are pro-crypto…but the power has been held by Elizabeth Warren on the Senate banking committee, [Gary] Gensler and a few others.”



The Galaxy CEO likened Democrats’ crypto opposition to party members bad-mouthing dogs.



“Can you imagine a party coming out and saying we don’t like dogs?” Novogratz said. “It’s just terrible politics, but that’s where we’re at.”&nbsp;



Forbes pegs the number of US dog owners at 65 million. There could be as many as 93 million crypto owners in America, according to recent <a href="https://www.security.org/digital-security/cryptocurrency-annual-consumer-report/">estimates</a> by Security.org.&nbsp;&nbsp;



Pair Biden’s veto possibility with Trump signaling he would be a pro-crypto president, and the differing attitudes become more highlighted. Trump invited Ryan Selkis, founder of crypto data platform Messari, to speak during an event last week at Mar-a-Lago.&nbsp;&nbsp;



“There was a shift in the Twitter space; there was a shift in people I spoke to saying, ‘Wow, Republicans good, Democrats bad,’” Novogratz said.



“I think that’s kind of dangerous thinking in that broadly, for our industry to thrive, you’re going to need bipartisan support,” he added. “Because you can’t go from one regime to the next and not know where you stand.”



Read more from our opinion section: <a href="https://blockworks.co/news/only-a-fool-would-vote-on-crypto-alone">Only a fool would vote on crypto alone</a>



After the House of Representatives approved the resolution to reverse SAB 121 in a 228-182 vote, it now moves onto the Senate. Along with across-the-board support from House Republicans, 21 Democrats backed it.&nbsp;&nbsp;



Novogratz said a prospective Senate vote would be the “first litmus test” on whether some Democrats would look to pivot their stance on crypto.&nbsp;&nbsp;&nbsp;



Though the House has passed several bills out of committee, like the<a href="https://blockworks.co/news/stablecoin-bill-bipartisan-support"> Clarity for Payment Stablecoins Act</a>, it has not held floor votes on them.&nbsp;



Sens. Cynthia Lummis,&nbsp; R-Wyom., and Kristen Gillibrand, D-N.Y., brought a <a href="https://www.congress.gov/bill/118th-congress/senate-bill/2281/all-actions">new</a> version of their Responsible Financial Innovation Act to the Senate floor last summer, but the bill has not progressed.



Read more: <a href="https://blockworks.co/news/crypto-bills-in-house-and-senate">Crypto bill update: What legislation is making its way forward?&nbsp;</a>



“We’re in an election year, and you’re having a hard time getting Dems and Republicans to do much together,” Novogratz said. “While, for us, this is unbelievably important…broadly it just doesn’t rise to the level of [being] important enough for the mass of Congress to care enough about.”&nbsp;



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Bitcoin may stay in a ‘consolidation phase’ until US election: Novogratz

As the 2024 election looms, crypto-focused legislation is starting to make its way through the US House. But roadblocks in the Senate still loom.&nbsp;



House members last week approved joint resolution 109 — which would invalidate the Securities and Exchange Commission’s Staff Accounting Bulletin (SAB) 121 — in a 228-182 vote. It’s the first time a crypto bill has made it to and passed the House in a floor vote.&nbsp;



The resolution now moves on to the Senate, where the Democrat majority makes it unlikely to pass, although there were 21 Democrats who voted against their party and in favor of the resolution in the House. If the legislation does make it past the Senate, however, the Biden administration has said the president will veto the resolution.&nbsp;



Read more: <a href="https://blockworks.co/news/biden-backing-gary-gensler-resolution">Biden backs Gensler as House advances resolution to power-check SEC&nbsp;</a>



​​“Limiting the <a href="https://blockworks.co/tag/sec">SEC</a>’s ability to maintain a comprehensive and effective financial regulatory framework for crypto assets would introduce substantial financial instability and market uncertainty,” the White House wrote in a <a href="https://www.whitehouse.gov/wp-content/uploads/2024/05/SAP-HJRes109.pdf">statement</a> last week.&nbsp;



The House has passed several crypto bills out of Committee, but has failed to bring the vast majority of them to the floor for a full vote. The <a href="https://blockworks.co/news/republicans-landmark-crypto-bill-clears-2-house-committees">Blockchain Regulatory Certainty Act</a>, the <a href="https://blockworks.co/news/stablecoin-bill-bipartisan-support">Clarity for Payment Stablecoins Act</a>, the Keep Your Coins <a href="https://www.congress.gov/bill/118th-congress/house-bill/4841/text">Act</a> and the Financial Technology Protection <a href="https://www.congress.gov/bill/118th-congress/house-bill/2969/text">Act</a> all survived markup, but have not been scheduled for a full vote.&nbsp;



The Financial Innovation and Technology for the 21st Century Act, known as the FIT act, last week advanced to the House Committee on Rules. It should be <a href="https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=409251">heading</a> for a floor vote later this month, House Financial Services Committee Chairman Patrick McHenry, R-N.C., said.&nbsp;&nbsp;



In the <a href="https://blockworks.co/tag/senate">Senate</a>, crypto-related bills, even those with bipartisan support, have yet to grab the interest of committee heads, who would need to add markups to their respective agendas.&nbsp;



The Digital Asset Anti-Money Laundering Act, backed by Elizabeth Warren, D-Mass., Roger Marshall, R-Kan., Joe Manchin, D-W.V., and Lindsey Graham, R-S.C., has been the topic of several Senate Banking Committee hearings, but has not been voted on or marked up.&nbsp;



“At the end of the day, <a href="https://blockworks.co/tag/elizabeth-warren">Elizabeth Warren</a> has a lot of power right now in the Biden administration, she&#8217;s got a lot of influence over who the appointees are,” Blockchain Association CEO Kristin Smith said last month at a Brown Rudnick event in New York. “But she hasn&#8217;t always been influential in actually getting legislation passed.”&nbsp;



Longtime collaborators Sens. Cynthia Lummis,&nbsp; R-Wyom., and Kristen Gillibrand, D-N.Y., last summer brought a <a href="https://www.congress.gov/bill/118th-congress/senate-bill/2281/all-actions">revamped</a> version of their Responsible Financial Innovation Act to the Senate floor, but the bill has not progressed.&nbsp;



The Senate received joint resolution 109 last week but has not yet scheduled a date to vote. Both the Senate and House are scheduled to recess on May 24 until June 3.



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Crypto bill update: What legislation is making its way forward? 

<a href="https://trondao.org/">TRON DAO</a> today announced that Google Cloud has joined its roster of Super Representative candidates on the TRON blockchain. <a href="https://tronscan.org/#/sr/representatives">Super Representatives</a> are responsible for producing blocks and packing transactions to help ensure blockchain governance on the TRON network.&nbsp;



This initiative builds on TRON’s collaboration with Google Cloud to make its data <a href="https://console.cloud.google.com/marketplace/product/bigquery-public-data/blockchain-analytics-tron-mainnet-us?hl=en-GB">available</a> on BigQuery, Google Cloud’s fully-managed, serverless data warehouse. Having TRON data on BigQuery equips developers with advanced analytics to dissect blockchain transactions and smart contract intricacies on the TRON network. 



It not only streamlines in-depth analysis for data-driven decision-making but also paves the way for more sophisticated decentralized applications (dapps). The scalability and cost-efficiency of BigQuery bolsters the TRON ecosystem, aligning with its vision of an accessible decentralized internet. 



TRON will also be using Google Cloud’s suite of solutions that empower the Web3 space including Compute Engine for scalable computing resources and Kubernetes Engine for managing containerized applications.



Dave Uhriyniak, Ecosystem Lead at the TRON DAO, expressed enthusiasm about this collaboration: &#8220;The initiative with Google Cloud represents a significant&nbsp; step for TRON DAO in our journey towards decentralizing the web and making blockchain technology more mainstream. Google Cloud&#8217;s becoming a Super Representative candidate underscores our shared vision for a secure, innovative, and decentralized future.&#8221;



“At Google Cloud, we’re committed to making it easy for developers to build Web3 products on our efficient, secure, and reliable infrastructure. We look forward to providing this infrastructure for the TRON ecosystem,” said Rishi Ramchandani, Head of APAC Web3, Google Cloud.



With its high-performance blockchain that supports smart contracts, dApps, and a wide array of digital assets, TRON facilitates fast, low-cost transactions, making it an attractive platform for developers and users alike.



This content is sponsored by TRON and does not serve as an endorsement by Blockworks. The veracity of this content has not been verified and should not serve as financial advice. We encourage readers to conduct their own research before making financial decisions.  



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TRON DAO adds Google Cloud as a Super Representative candidate on the TRON blockchain

Degen chain, a layer-3 blockchain, hasn’t produced a block in over 42 hours. 



According to the last post on Degen’s X account, a resync was expected to be completed at around 9 am ET, or 6 am PT. Yet hours later, the network remains stalled.&nbsp;



“Post-resync, they&#8217;ll test the chain to ensure all data affected by the reorganization is restored. We apologize for the downtime,” the last post — which went up earlier Tuesday — <a href="https://twitter.com/degentokenbase/status/1790267562137153780">said</a>.



Degen’s chain explorer <a href="https://explorer.degen.tips/">shows</a> that no transactions have happened today, and that the last transaction took place two days ago.



Third-party infrastructure provider Conduit’s last post is nearly 24 hours old.&nbsp;



Read more: <a href="https://blockworks.co/news/community-focused-layer-3-degen-chain">What is Degen chain? The L3 built for the memecoin community Degen</a>



“After a custom config change on Friday at [2 pm ET] 11 am PT, two Conduit chains, Degen and Proof of Play’s Apex, stopped posting batches for more than 24 hours. Upon resuming, the first batches triggered reorgs on both chains,” Conduit <a href="https://twitter.com/conduitxyz/status/1790065376975552549">said</a>.



“We’re working with both teams and Offchain Labs to restore service and minimize impact to users,” the post continued.



As previously reported by Blockworks, Degen chain was designed to let developers access the <a href="https://blockworks.co/tag/meme-coins">memecoin</a> community, and has become especially popular with <a href="https://blockworks.co/tag/farcaster">Farcaster</a> users.



“Degen, an ERC-20 token launched in January 2024, has reshaped the Farcaster ecosystem by enabling Casters to reward others with Degen for posting quality content,” Degen’s site <a href="https://www.degen.tips/">said</a>.



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