Sens. Cynthia Lummis, R-Wyom., and Tim Scott, R-S.C., took the stage together at the Bitcoin 2024 conference in Nashville Friday afternoon, praising both cryptocurrency and the Republican party. 



“The ability to bring resources and opportunities and access to the marketplace to the people who need it most, that’s bitcoin,” Scott said. “That’s what this is about.” 



Lummis and Scott, colleagues on the Senate Banking Committee, said that progress in Congress has been slow, but are confident that a Republican sweep in November will move things along. 



Read more: On the Margin Newsletter: What a Republican sweep would mean for markets



“There are serious people in the way of making sure that American innovation is leading global innovation, and we have to get rid of the folks who are in the way, most of whom are on the Senate Banking Committee,” Lummis said. “Republicans are going to be in the majority next year and Senator Tim Scott is going to be the Chairman [of the Senate Banking Committee].” 



The crowd, most of whom waited for more than an hour for a seat at the main stage, erupted into “boos” when Scott mentioned the Securities and Exchange Commission and its head Gary Gensler. 



Allowing for innovation while maintaining investor protections is the goal, the Senators said, noting that Gensler’s enforcement practices have stifled the industry. 



Read more: SEC’s Gensler calls for more crypto disclosures for investors



“That’s the sweet spot we are looking for,” Lummis said. 



The comments come shortly after a historic moment for crypto in American politics. In May, the House and Senate, with bipartisan support, passed the first-ever crypto-related legislation with Joint Resolution 109, which sought to overturn the SEC’s staff accounting bulletin (SAB) 121. 



President Joe Biden later vetoed the legislation, and the House opted to uphold the decision. 



Also in May, the House passed the Financial

Sens. Lummis, Scott say Republican sweep in November is the push crypto needs 

Swiss-based Laser Digital, the digital asset subsidiary of Japanese investment bank Nomura, is reportedly planning to introduce an alternative to spot ETH ETFs.



Unlike the nine ether ETFs launched three days ago, Laser Digital’s ETH fund would generate yield and accrue rewards from the underlying Ethereum blockchain network, according to Bloomberg.



These rewards are made up of the same token emissions and maximal extractable value (MEV) that is accrued by Ethereum validators running their own node, or users staking ETH with a liquid staking platform like Lido. It’s a notably absent element with the current ETH ETFs.



Read more: Proposed ether ETFs would not stake their ETH, new filings clarify



According to Bloomberg, Galaxy Digital will potentially assist Laser Digital in running the validator nodes that generate the yield for investors.



The product is planned to be available only to non-US accredited investors in early September. Nomura previously launched an ETH-focused fund in late 2023. 



The firm wasn’t immediately available to comment when reached. 



Interest in crypto by traditional finance investors has been slowly but steadily increasing. In a recent EY survey, 55% of 270+ institutional investors claimed they planned to allocate capital to crypto over the next two to three years.



Laser Digital’s suite of crypto products already includes a Bitcoin Adoption Fund, Ethereum Adoption Fund and Polygon Adoption Fund — all institutional products for accredited investors to gain BTC/ETH/MATIC exposure.







Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.



The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff

Nomura’s crypto unit to offer yield-bearing ETH fund: Report

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Welcome to the On the Margin Newsletter, brought to you by Ben Strack and Casey Wagner. Here’s what you’ll find in today’s edition:




A by-the-numbers look at days 1-3 of US spot ETH ETF trading.



Hello from Nashville: Casey Wagner details the initial vibes of Bitcoin 2024.



Let’s talk the PCE numbers drop, and other data points you might have missed.








Make it make sense: The ETH ETF debut



US spot ether ETFs now have a three-day track record, and the net flow number (in the red) may be a head-scratcher to those not as familiar with the dynamics at play.



A deeper look at the first three days of ETH fund category flow data may offer some clarity, but of course this remains an early-going snapshot. Note: In parentheses are the negative figures posted by Grayscale’s higher-priced Ethereum Trust ETF (ETHE).  




Day 1 (July 23): +$107 million (ETHE, -$484 million)Day 2: -$133 million (ETHE, -$327 million)



Day 3: -$152 million (ETHE, -$346 million)




And here’s the US spot BTC fund segment’s flow totals early on (with the Grayscale Bitcoin Trust ETF, or GBTC, separated).




Day 1 (Jan. 11): +$655 million (GBTC, -$95 million)



Day 2: +$203 million (GBTC, -$484 million)



Day 3: -$52.7 million (GBTC, -$594 million)




Quickly comparing the initial three-day totals for the spot ETH and BTC offerings, we get:




ETH ETFs: -$179 million



BTC ETFs: +$806 million   




If we add up the outflows from ETHE and GBTC in their first three days on the market, they are nearly identical, at just under $1.2 billion. Industry watchers expected large outflows from the Grayscale products — given these were pre-existing trusts with sizable asset bases and price points well above those of their ETF peers.  



CoinShares research head James Butterfill told Blockworks in an email

On the Margin Newsletter: The ETH ETF debut data takeaways

As the US election season heats up, expect to see volumes and total value locked (TVL) on the leading crypto-based prediction market, Polymarket, continue to rise.



Polymarket growth has gone parabolic this year, with TVL doubling over the last 30 days alone.



For most financial assets, derivatives markets are usually orders of magnitudes larger than the underlying spot markets. That’s not yet the case in crypto, much less onchain — the vast majority of futures trading is still done on centralized exchanges today.



But the fully onchain derivatives platform D8X wants to marry the two growing crypto-native phenomenon: prediction markets and perpetual futures.



D8X co-founder Caspar Sauter sees the impending launch of leveraged prediction markets via orderbook-based futures as a natural evolution of the concept.



“As an economist, I love the fact that you can actually have a market to get predictions,” Sauter told Blockworks. “I love [Polymarket], my co-founder loves the product, and we love perps — so the natural next step was to think, ‘can we do leverage?’”



Read more: D8X protocol brings novel futures exchange to Arbitrum



It turns out to be a rather difficult task, akin to the problems with perp markets on very low-cap crypto assets colloquially known as “alts” or “shitcoins.” Except, it’s worse.



Prediction markets have intrinsic features, like a price bound from $0-1. Sudden, violent moves driven by external events make them unlike highly liquid perps markets such as bitcoin.



For instance, as regards Polymarket’s most liquid offering — the US presidential election winner, with $391 million bet to date — a breaking news headline can potentially change the outcome in an instant.



Try to throw a perp on a spot market that’s highly illiquid and prone to explosive volatility and “you’ll get wrecked, like, from day one,” Sauter said, noting “the difficulties, from a financial engineering point of view,

Leveraged Polymarket bet derivatives are coming

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Howdy!



Happy Friday afternoon to the cheeky pint guy, who I think about at least once every Friday.



“Don’t go home until you’re proud… a-bosh!” 



But before then, what should we make of this Jito restaking news?







Jito is building restaking, and markets like it



For some time, it was something of an open secret that the major Solana protocol Jito was working on a restaking platform that would bring something akin to Ethereum’s EigenLayer to Solana.



The liquid staking and maximal extractible value (MEV) specialist finally confirmed the rumors yesterday when Jito released the code for Jito restaking. Markets seemed to like the move, with JTO climbing 8% and SOL up 9% over the past 24 hours, according to CoinGecko. 



Restaking is the term coined by EigenLayer for taking assets staked to secure blockchains and staking them a second time to secure additional apps and services. For instance, if you staked ETH and received Lido’s stETH, you could take that liquid staking token and deposit it on EigenLayer, where it could be used to secure “actively validated services” (AVSs) such as EigenDA, an in-house developed piece of crypto infrastructure. 



This makes stETH more useful, and it extends the use of Ethereum’s security, at least in theory. This could all be done on Solana, too. 



But I bet markets are also partly excited about the liquidity that could be coming. EigenLayer has been extraordinarily successful at drawing deposits, even if its ability to generate meaningful yield is something of an open question. EigenLayer is already the second-largest crypto protocol in total value locked (TVL), with over $15 billion in assets held on the platform, according to DeFiLlama. 



Much of this investment came in the leadup to EigenLayer’s training wheels launch as

Lightspeed Newsletter: Jito is building a restaking product

Mt. Gox trustees have sent out billions of dollars in bitcoin over the past three weeks, and prices are doing just fine.



Affected users are being credited their long-lost bitcoin to their exchange accounts, 10 years after the platform initially went bust. 



So, trustees must send bitcoin to those platforms in batches, the first of which was coincidentally sent right at the pico bottom for bitcoin prices: $54,000. 



Almost 54,910 BTC ($3.69 billion) has been forwarded to crypto exchanges on behalf of creditors since July 5. 



Read more: Mt. Gox customers to receive crypto assets after 10-year wait



The latest batch of repayments was made in the very early hours Wednesday ET, when 2,361 BTC ($158.25 million) was sent to Bitstamp.





The bigger and darker the bubbles, the bigger the transfer to participating crypto exchanges



Markets had anticipated the first Mt. Gox repayments for weeks, but exactly when they would begin was unknown.



The first transfer, 1,544.7 BTC to Japanese platform Bitbank, was worth $84.9 million at the time. Bitcoin has however since recovered by 22%, so the same sum would fetch $103.85 million right now.



There was 141,490 BTC ($9.5 billion at current prices) to distribute to creditors, and now there’s 86,580.2 BTC ($5.37 billion) remaining in Mt. Gox’s wallets, per Arkham Intelligence data. An additional amount in bitcoin cash is also to be distributed, although it would be worth much less in terms of dollar value.





The government of German state Saxony has already dumped all of its bitcoin, which was a far smaller stash than Mt. Gox



That means the repayment process is now 39% complete. Last week, it was 36% of the way through.



Payments are expected to wind up completely within the next two and a half months, but it could be that transfers to crypto exchanges accelerate from here on out.







Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire

Gox Watch: Repayments now 39% complete with $5.4B left to go

Crypto firm Ledger unveiled a new security offering during this year’s Bitcoin Conference, continuing the company’s product lineup refresh in 2024. 



Called Ledger Flex, the hardware wallet — featuring a touchscreen — is the Paris-based company’s second new product of the year. It introduced Ledger Stax earlier this year.



“Ledger devices already secure more than 20% of the world’s digital assets, and our new secure touchscreen category will make self-custody more accessible than ever before for more consumers and enterprises,” Ledger CEO Pascal Gauthier said in a statement. 



Founded in 2014, Ledger has sold roughly six million devices over those 10 years. Its Stax product was designed by Tony Fadell, a tech executive known for being instrumental in overseeing the iPod’s development. 



Read more: Ledger rolls out ‘Crypto Life’ debit card across UK and Europe



The differentiation of these new offerings lies in touchscreens that offer proof-of-humanity and proof-of-identity features, the company noted Friday. Such features can help guard against a blurring of reality and fiction accelerated by the growth of AI, according to Ledger.



A new app for the Flex and Stax products — called Ledger Security Key — offers two-factor authentication and passkey capabilities.  



Gauthier noted in a May blog that the company had begun shipping Ledger Stax devices. Ledger Flex is set to start shipping to customers immediately. The “first-of-its-kind display” on the Stax was more difficult to bring to mass production than anticipated, Ledger’s CEO added in May.   



“Within the next few years, the crypto revolution will reshape how hundreds of millions of people own and manage all value,” the CEO noted at the time. “But as I’ve said on multiple occasions, our smartphones and laptops lack fundamental security features to let us onboard this era.” 



The product launches come after Ledger endured a “supply chain attack” on

Ledger doubles down with second touchscreen-focused product

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The age of adoption



55%. 



That’s how many surveyed institutional investors plan to up their crypto allocations in the next two to three years alone. 



The survey, conducted by EY earlier this summer, gives insight into how the institutions are approaching the crypto space. And, mind you, this was conducted before we even knew that ETH ETFs were on the table.



“We may look back on 2023 as the year digital assets firmly planted roots in the challenging soil of traditional finance,” EY wrote.



Fast forward to now, and Wisconsin’s pension fund now includes millions of dollars worth of bitcoin ETFs. In case you’re not ‘boots on the ground’ in Nashville, Jersey City Mayor Steven Fulop on Thursday announced that there was no question that both crypto and bitcoin were “here to stay” and that the two “won” over the doubters. 



Most importantly though: Jersey City’s pension fund is following in Wisconsin’s footsteps and plans to allocate a similar amount by the end of the summer (Wisconsin’s is at 2%).



“I do believe blockchain is amongst the most important new technology innovations since the internet,” Fulop added. 



So let’s focus on the funds those pension funds are buying — and by that I mean the bitcoin ETFs. EY’s survey had 68% of respondents say they plan to buy them, and just over 60% want exposure to crypto through registered vehicles versus spot products. 



Source: EY-Parthenon



To put these percentages in perspective: EY surveyed over 270 institutional investors. The majority were either institutional asset managers and asset managers, but there were some RIAs and hedge funds surveyed as well. 



“To date, while 62% of investors have allocated greater than 1% of their assets to crypto, the survey shows that percentage increasing to 81% two-to-three

Empire Newsletter: Crypto’s next wave of smart money

Solana’s biggest liquid staking project is taking the plunge into restaking.



Earlier today, the Jito Foundation announced in a blog post that it had released the code for Jito restaking. This move places the Jito Foundation ahead in the race to build restaking on Solana, as the network's fast and low-cost DeFi ecosystem continues to expand.



Restaking refers to using staked crypto to secure other blockchain apps and services, theoretically extending the security of the blockchain’s base layer. In theory, this should put unproductive staked assets to use and make proof-of-stake systems more efficient. 



Read more: Lightspeed Newsletter: Solana’s DeFi activity keeps expanding



Eigen Labs pioneered the concept on Ethereum with EigenLayer, which has drawn billions in deposits on top of a $100 million investment from a16z.



Restaking is yet to go live on Solana, though Jito releasing its codebase represents a noteworthy step forward. One major competitor is Solayer, which has drawn significant interest during the brief periods where it has accepted deposits. Solayer’s GitHub doesn’t contain code for its restaking product.



Jito’s restaking pivot pairs one of the Solana ecosystem’s most notable pillars with one of crypto’s buzziest narratives. Jito runs a fork of the original Solana Labs validator client with some modifications to allow for maximal extractible value (MEV). This MEV can be quite lucrative for validators running the Jito-Solana client. Earlier today, one validator earned a $311,000 tip on a transaction, Jito co-founder Lucas Bruder said on X.



Read more: MEV collected by validators is now higher on Solana than on Ethereum



Users who stake their Solana tokens with Jito’s liquid staking pool can receive liquid JitoSOL. This pool is the network’s largest by a wide margin, and JitoSOL can be used elsewhere in DeFi while also earning staking and MEV rewards. Since launching in November 2022, JitoSOL has become Solana’s

Jito unveils code for Solana restaking network

Monoswap, a small DEX on the Ethereum rollup Blast, announced today that it had been hacked under questionable circumstances. The team attributed the loss of funds from the DEX’s staked liquidity pools to a phishing attack that installed malware on a single developer’s computer.



The team urged users to withdraw any remaining funds and to avoid using the protocol while they work on deploying new smart contracts.




At the moment, we are deploying new contracts for all features immediately to avoid further attacks from the hackers.All deposit methods, including MonoChest, Lottery, Farm, Dividends were disabled.Users can unstake xMONO and MonoPass as usual. MONO can be redeemed for xMONO…— MonoSwap (@monoswapio) July 25, 2024




The security lapse decimated the exchange's already paltry total value locked (TVL), which peaked at $2.8 million back in April.



As described, some have indicated that the attack seemed easily preventable. The Monoswap team will need to explain how its contracts were so fragile in the first place.




To show you how low quality this dev is if you search “Kakaocall” on X you would have seen many posts warning about a meeting call scam with the exact same name from as early as May 2024. pic.twitter.com/2lbgmHPGVx— ZachXBT (@zachxbt) July 25, 2024




The alleged level of incompetence on display naturally has some suspecting an inside job, although there’s nothing clearly pointing to that conclusion for now.



Read more: Blast dapp hack was an inside job, and it could have been worse



Blast Phase 1 claims end



The past couple months have not been kind to Blast. Chain-wide TVL has halved, and activity is down about 35% from its June peak, indicating an exodus of capital and users lured by airdrop farming.



For the early users of the rollup, a fork of Optimism — “Phase 1” — concluded June 26 with a token airdrop, claimable for 30 days.



Read more: Blast launch leaves users confused about withdrawals



BLAST

Blast incentives aim to attract strong devs, as value leaks

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Welcome to the On the Margin Newsletter, brought to you by Ben Strack, Casey Wagner and Felix Jauvin. Here’s what you’ll find in today’s edition:




A look at what the Treasury department is up to, and how it’s impacting markets.



New economic data has dropped, and it features a “real shocker.”



The top asset-gathering ETH ETFs after two days of trading, and which are well positioned going forward.  








Is the Treasury manipulating the yield curve?



If you missed the most recent episode of the Forward Guidance podcast, you may be unaware that a seminal piece of work related to the tug of war between fiscal and monetary policy was published this week.



Written by renowned economists Nouriel Roubini and Stephen Miran, the economic paper discusses the recent rise of what they call activist Treasury issuance, or ATI.



“By adjusting the maturity profile of its debt issuance, [the] Treasury is dynamically managing financial conditions and through them, the economy — usurping core functions of the Federal Reserve,” the economists wrote.“By manipulating the amount of interest rate risk owned by investors, ATI works through the same channels as the Fed’s quantitative easing programs,” they added. 



Simply put, despite the most aggressive rate hiking cycle in history, the economy has been staying afloat and markets keep hitting new highs each week. This is because the Treasury is doing “hidden QE” by restricting supply of available long duration debt, making for less duration that the market needs to absorb. 



Whereas QE through the Fed works on the demand side, ATI reduces supply of duration at the onset. 



The Treasury department has done this by tilting its maturity profile towards short-dated T-bills. It is effectively running policy often used during

On the Margin Newsletter: Behind the most important economic paper of the year

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Howdy!



Happy (merry?) Christmas in July to all who celebrate. I know I’m in the minority for celebrating here, but I’m pushing for it nonetheless, because who would turn their nose up at a second Christmas?



I hope your email reading is merry and bright. Anyways:







What’s the deal with zk compression?



As blockchains grow in size, they become increasingly expensive to manage and maintain.



Several million Solana accounts are created every day, according to Blockworks Research. Many of these accounts may not even be actively used, but developers and users of the blockchain shoulder the cost of what’s referred to as “state” — basically the most updated look at things like how much currency is in different accounts. Storing state is expensive, because thousands of distributed validators all have to have access to the most current copy of it at all times. 



Keeping track of a lot of data costs a lot of money, so Solana has turned at times to something called “compression” — or putting a unique string of letters and numbers called a hash on the blockchain’s state space, rather than posting all of the data itself. 



The most recent instance of this is zk compression, a new tool being developed by Light Protocol and Helius that compresses Solana state while still being part of the layer-1. The tool puts underlying state data in Solana’s ledger space, which is cheaper than its state space.



A successful rollout could make rent much cheaper on the blockchain — by an order of up to 5,000 times, Light claims.



Yesterday, the infrastructure went live on Solana’s devnet, which lets developers run test transactions on Solana. Light Protocol’s co-founder Swen Schaeferjohann told me he hopes to bring the technology to mainnet by the time of the Solana Breakpoint