Are we failing at decentralization?
Are we failing at decentralization?
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🪂 Solana's latest airdrops have created billions of dollars in wealth overnight with projects like Wormhole, Parcl, Jito, Tensor, and Jupiter. Here at Stay on-chain we crafted a guide on what we’re farming, piecing together our list of top picks among under-farmed protocols with huge treasuries. Want to get it? Get one friend to subscribe to our newsletter, and we’ll deliver it straight to your inbox.
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We’re so back! BTC ETFs have been funneling an immense amount of liquidity the past few days, June 4th being the #2 biggest inflow day at 886.75M. The ETFs now hold a total an all-time high of $62.56B.
This, coupled with inflation lowering worldwide and central banks starting to cut rates one by one (ECB and BoC have cut 25 bps, down to 3.75% and 4.75%, joining Sweden and Switzerland) sets expectations for a more lax monetary policy and a risk-on scenario where risky assets (such as crypto) benefit in the next 6 to 12 months.
..It could take a while, though, as Bitcoin’s still trapped in the $70K range, just a few thousand dollars short of ATH. Markets overall seem healthy, quickly reactive to positive news as if everyone’s waiting for the right moment to pull the trigger and run it back turbo. Special mention goes to BNB, incredibly setting new highs after its former CEO started his prison sentence in the U.S.
On a side note, NOT has been the top weekly gainer for the past two weeks. As airdrop farmers rushed to sell their tokens sending it as low as $0.00485, the token soared as much as 500% reaching the $0.03 mark.
European MiCA rules to regulate stablecoins
MiCA, the first noteworthy set of regulations for Europe, becomes law (or at least, part of it) on the 30th of June. The implications are considerable, since it’ll reinforce the definition of e-money for the crypto markets — this way, regulated stablecoins can be considered equivalent to holding FIAT money, like EUR or USD.
This gives greater financial clarity in the field, but also brings issues as the requirements to become e-money are strict: while Circle’s USDC seems likely to become e-money along the way, Tether’s USDT is unlikely to do so in the foreseeable future. One of the reasons is the way collateral should be held, requiring issuers to forego the juicy yield in T-Bills and such.
Binance took the lead, stating that unauthorized stablecoins such as USDT and USDC are going to be phased out as MiCA comes into effect, with most of the products (most importantly, futures) becoming unavailable with the exception of spot trading.
We expect other centralized exchanges to take on a similar approach, and a greater development of MiCA-compliant stablecoins in the field.
Linea halts block production to stop exploiter: are we okay with that?
Velocore, a known decentralized exchange, suffered an attack on their liquidity pools leading to $6.8M Ether tokens being withdrawn by the attacker on ZkSync Era & Linea, then bridged to Ethereum and deposited on Tornado.cash.
Whilst the exploit per se is not that big, what made news is the fact that Linea — an L2 blockchain backed by the same entity behind Metamask, Consensys — decided to halt block production to censor potential further attacks from the hacker as they could not get ahold of the Velocore team. Later on, the team stated they stand by their goals of decentralizing Linea over time.
The matter is setting an important legal precedent: if Linea is in fact able to halt the chain at their will, why shouldn’t they every time there’s an issue? More so, users could go as far as suing them if they don’t do it causing them “losses”. This remains a difficult trade-off: on the one hand, you could save millions lost to an exploiter, on the other you could cause even greater damage by halting the chain and messing with liquidations and other financial products relying on external data. To not mention the socio-economic implications of centralization in an industry that pleads to go in the other way.
The GameStop frenzy spreads to Solana
There’s this phenomenon where everything happening in the real world is translated, and exaggerated, with on-chain financial instruments — e.g. meme coins. Besides Celebrities, this week we have the GameStop frenzy: a Reddit user turned $50K to $290M going against the shorting tide on GME (a traditional stock) since 2021, and has now come back to double down on June, 2nd. The traditional GME went up an incredible 105%, guess what the GME meme coin did on Solana? 651.37%.
The question comes naturally: is this just an efficient, unregulated, on-chain casino?
Sanctum’s bold approach to the $CLOUD launch
Sanctum has been grinding its way up for months to become the premier liquid staking protocol on Solana, and upon reaching $1B in TVL they’ve now ended their ‘Wonderland’ S1 and announced they’re gearing up to launch their token CLOUD. With over 300,000 wallets using the protocol, Sanctum has committed to a bold mission: launching CLOUD in a fair way.
The protocol raised $6.1M in total, most of it at a $50M valuation, which is precisely the valuation CLOUD tokens will begin trading at on Jupiter’s launchpad. You heard that right, you’ll get a chance to invest at the same price investors did three years ago. Combining airdrop allocation for those participating in S1 (10%), and launch liquidity (8%), 18% of the total supply will be available at launch, with a total supply of 1B CLOUD tokens.
What catches the eye is an additional statement by the team: they’re committing to not pay a single cent in CEX listing fees, focusing on making Sanctum and CLOUD viable on-chain — and if any CEX is willing to list them anyway, they’re free to do so. While this approach is admirable and spreads crypto ethos, it’s not free money. Sure, the token could have a great performance over time, but mind you, the launch will probably see huge swings in price and high bot activity. Don’t get burned.
Paxos unveils yield-bearing stablecoin
The Lift Dollar, or USDL by Paxos, is issued in the UAE and will be regulated by the financial authority of Abu Dhabi. While there are already plenty of regulated stablecoins, USDL is one of the first of its kind offering a 5% yield generated by the stablecoin collateral held in short-term U.S. government securities (e.g. T-Bills). This is a huge shift in the stablecoin industry as to date the biggest issuers, such as Circle and Tether with USDC/T, are pocketing as much as $7B combined annually thanks to the high interest rates environment — while Paxos is looking to redistribute that to the holders, retaining a mere 0.2% management fee.
The product will initially focus on Argentina, and won’t be available in the U.S. and Europe for lack of regulations. Paxos currently offers other stablecoins as well, such as PayPal’s PYUSD and USDP — another notable yield-bearing stablecoin is USDM, which recently raised $8M.
Happens on-chain
Galxe is launching its L1 — The Block
Uniswap is delaying the Fee Switch proposal — 𝕏/UniswapFDN
Phantom Wallet Bitcoin support exits beta — 𝕏/phantom
Arbitrum funds 28.6M ARB incentives for the STIP program — arbitrum.foundation
Optimism allocated 600,000 OP for its on-chain summer program — 𝕏/Optimism
CoW swap has launched on Arbitrum — 𝕏/CoWSwap
Traditional rails
Robinhood set to acquire crypto exchange Bitstamp for $200M — The Block
Tether buys $100M worth of Bitdeer shares — CoinDesk
Tether invests in XREX group to facilitate cross-border payments and launch Gold-backed stablecoin XAU1 — Tether.io
Binance’s former CEO CZ will be serving its sentence in Californian low-security federal prison Lompoc — Cnbc
Matter Labs drops ZK trademark application — 𝕏/the_matter_labs
ex-FTX exec Ryan Salame is writing a book — 𝕏/rsalame7926
FTX tries to settle IRS’ $24B tax claim — The Block
Worldcoin’s Spain ban has been extended until the end of 2024 — The Block
El Salvador’s Pro-Bitcoin Nayib Bukele started his second presidential term — Reuters
Gary Gensler says it’ll take “some time” for Ether ETFs to begin trading — 𝕏/EleanorTerrett
Paolo Ardoino says a prominent vendor used for crypto mailing lists might’ve been compromised — 𝕏/paoloardoino
Binance resumes Mastercard payments and deposits — CoinDesk
Tech go up
StarkWare plans to bring ZK scaling to Bitcoin — The Block
Web3 toolkit vfat is back with many additions — 𝕏/vfat_io
Paradigm introduces “MEV taxes” — 𝕏/danrobinson
Coinbase lunches smart wallets — 𝕏/CoinbaseWallet
Taiko takes a step to sequencer decentralization — The Block
The Cosmos Hub stopped producing blocks for ~ 4 hours — 𝕏/cosmoshub
VCs go brrr
Avail secures $43M Series A Round — 𝕏/AvailProject
M^0, a network for minting digital dollars, raised $35M Series A round led by Bain Capital — 𝕏/m0foundation
The Sandbox raised $20M in convertible debt at a $1B valuation — venturebeat.com
Airdrops
Taiko airdrop claim is live — claim.taiko.xyz
Rabby Wallet hints at snapshot — 𝕏/Rabby_io
Bitget launched its BWB token — bitget.com
Upcoming events
June, 10: target week to launch Friend Tech’s competitor Stars Arena token on Avalanche — Decrypt
June, 13: target date to launch $AO
June, 13: target date to finalize $ASI merger
June, 15: STRK to unlock 5.60% of its circulating supply
June, 26: Blast airdrop
June, 27: Biden-Trump debate
September, 18-19: Token2049 in Singapore
September, 20-21: Solana Breakpoint in Singapore
Q1 2025: Ethereum’s Pectra upgrade
Stargate released its V2, and APYs are JUICY! USDC single-sided on Aurora (Near’s EVM compatible blockchain) is paying 30.23% APY, while WETH single-sided on Metis is paying a 20.82% APY.
Aptos aficionado? Say no more. By looping your USDC on Aries, you can achieve up to a 60% APY, paid in USDC and APT.
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Disclosure: Authors may own crypto assets named in this newsletter. Stay on-chain is meant for informational and educational purposes only. It is not meant to serve as investment advice. Please consult your investment, tax, or legal advisor before making investment decisions.