Tim Beiko, the Ethereum Foundation’s core-dev facilitator, made waves this week in a series of tweets that suggested the Ethereum merge will not happen until the latter half of 2022, despite previous hints that it could happen as soon as June. The Ethereum Merge is keenly awaited since the proof-of-work smart contract blockchain will finally transition to a proof-of-stake consensus mechanism, “It won't be June, but likely in the few months after. No firm date yet, but we're definitely in the final chapter of PoW on Ethereum.” In the same thread, Beiko added that he “would strongly suggest not investing more in mining equipment at this point.”
On this Friday's episode of Unchained, Beiko said that Ethereum doesn't give a date for when this transition will happen, because, "It's impossible to predict these things because there are so many unknown unknowns. No one has done this -- ever."
Be sure to check out the full episode to learn how "shadow forks" rather than test nets are being used to prepare for the merge, and why it won't do much, if anything, to lower gas fees.
This week, the Depository Trust and Clearing Corporation, a private financial markets infrastructure company, announced a central bank digital currency pilot program.
Dubbed “Project Lithium,” the DTCC will be working with the Digital Dollar Project to explore how it might use blockchain technology.
According to a press release, Project Lithium hopes that its program will help provide clarity as to how a CBDC may reduce trapped liquidity, increase capital efficiency, solidify delivery guarantees, and add regulatory transparency, and provide other benefits, to the settlement process.
“A CBDC could improve time and cost efficiencies, provide broader accessibility to central bank money and payments, and all while emulating the features of physical cash in an increasingly digital world,” explained former CFTC chairman Christopher Giancarlo, aka CryptoDad, who spearheads the Digital Dollar Project.
Although the announcement came weeks after President Biden’s executive order announcing research on a central bank digital currency, the DTCC and Digital Dollar Project are private sector entities that are not part of Biden’s executive order. In his book, CryptoDad: The Fight for the Future of Money, Giancarlo wrote, “[M]oney - especially digital money - is too important to be left to central bankers."
At Bitcoin 2022 in Miami, Adam Back, the CEO of Blockstream, announced a pilot crypto mine in Texas that, in partnership with Jack Dorsey’s Block, will be powered by Tesla solar and storage technology. The project is expected to be completely offline, with Tesla’s solar array powering the mine during the day and Tesla batteries powering the mining facility at night.
The partnership will be small to start, with just 1 megawatt of energy capacity. The $12 million in development costs will be split between Block and Blockstream. The pilot project is expected to be up and running within months. Data regarding the program’s energy consumption and hashrate will be publicly available.
“People like to debate about the different factors to do with bitcoin mining. We figured, let’s just prove it. Have an open dashboard so people can play along, maybe it can inform other players to participate,” Back explained to CNBC.
Thirty-nine-year-old former Ethereum developer Virgil Griffith was sentenced to five-and-a-quarter years in prison after pleading guilty to conspiracy to violate the International Emergency Economic Powers Act last September.
Griffith was originally arrested in 2019 after giving a presentation on cryptocurrency in Pyongyang, the capital of North Korea, despite being denied permission by the Department of State to do so. Prosecutors allege that Griffith gave North Korea information that he knew could be used to “evade and avoid US sanctions” and “fund its nuclear weapons program.” Specifically, the Department of Justice says that “Griffith and his co-conspirators also answered specific questions about blockchain and cryptocurrency technologies for the DPRK audience, including individuals whom Griffith understood worked for the North Korean government.”
In addition to his 63-month sentence, Griffith was also fined $100,000.
Speaking of North Korea, the US Treasury Department is alleging that Lazarus, a North Korean hacking group, is tied to the $600 million hack of the Ronin bridge from earlier this month. The Treasury Department has added a wallet holding 148,000 ETH to its sanctions list.
US regulators continue to force crypto companies to halt offerings of retail-based crypto yield.
This week’s mark was Celsius, a crypto rewards platform that, much like BlockFi, offers an Earn platform where users can deposit crypto tokens and accumulate yield at a rate between .65% and 18.63% per year. According to a Celsius blog post this week, non-accredited US customers will no longer have access to its yield product starting April 15th due to regulatory uncertainty.
“As we previously have acknowledged, Celsius has been working closely with regulators around the world. It is our intention to be as transparent with our community as possible,” Celsius wrote. “More specifically, we have been in ongoing discussions with United States regulators regarding our Earn product. As a result, there will be changes to the way our Earn product will work for users based in the United States.”
This means that Celsius customers who make less than $200,000 a year or do not have a net worth of $1 million will be barred from earning interest on the platform. Celsius customers who had deposited tokens before Friday, April 15th will be grandfathered into Celsius’s Earn program and can continue to obtain yield on their investments.
The news is not surprising to anyone who has kept up with the crypto yield space. Notably, Celsius has been under scrutiny from US regulators since 2021 and has faced obstacles in New Jersey, Texas, and Alabama. Furthermore, Celsius’ major competitor, BlockFi, paid a $100 million fine to the SEC and state regulators for offering a lending product, which the SEC believes is a securities product, to US citizens without registering. Additionally, the SEC threatened to sue Coinbase after the exchange announced its intent to launch a crypto-interest-bearing product for US citizens.
In an effort to increase transparency on token listings, Coinbase published a blog post revealing 50 tokens for which the exchange is considering offering support. The decision seems to have backfired.
First of all, the list of tokens being considered was met with skepticism on Twitter. @PastryEth was one of the more vocal voices and cited certain red flags with some of the tokens on Coinbase’s list. For example, $BOTTO has a market cap of $4 million, $KROM is at roughly $10 million, $MONA is less than $4 million, and $RAC is about $2 million – with zero volume.
“Out of all the assets mentioned in the blog post by Coinbase, I have heard of maybe 10 of them,” PastryEth wrote. “Additionally, nearly half of them are under 20m market cap and some as low as even $5m,” PastryEth then wondered, “Is Coinbase just stupid? Or is there something else going on..?”
Secondly, in a move that has sparked insider information debates, an Ethereum wallet purchased more than $400,000 worth of tokens from the list three minutes before the list was public knowledge. However, while the tokens briefly spiked in the hours after the announcement, it does not appear that the trader was able to turn a profit, as the wallet address holds less than $400,000 despite hitting $550k+ at one point.
In related news, Robinhood announced four new tokens on its platform. Customers now have access to COMP, MATIC, SOL, and SHIB.
Circle, the company behind the stablecoin USDC, announced a $400 million funding round this week as well as a partnership with BlackRock, the world’s largest asset manager.
According to a press release from Circle, BlackRock will be the “primary asset manager of USDC cash reserves” and will be exploring “capital market applications for USDC.”
There is currently over $50 billion worth of USDC in circulation.
ERC 721R is a new token standard that could change the way NFT sales work. The standard is a riff on ERC 721, which is the standard most Ethereum NFTs follow, with one significant difference: the R stands for “return” – meaning NFT purchasers have 30 days to request a refund after a mint.
On its website, ERC 721R claims that the 30-day period will prevent quick rug pulls, promote accountability, protect floor prices, and lower the risk of purchasing. Currently, there are four different projects utilizing the token standard.
Terraform Labs gifted $880 million worth of LUNA (or 2.3% of LUNA’s market cap) to Luna Foundation Guard to help continue building a backstop for Terra’s algorithmic stablecoin UST. Since February, LFG has purchased over 42,000 BTC, worth $1.7 billion, and has also announced plans to acquire $100 million in AVAX.
TerraForm Labs founder Do Kwon has stated that LFG’s goal is to build UST’s reserve to $3 billion in the short term and $10 billion long-term.
Bored and Hungry, a Bored Ape Yacht Club-themed pop-up restaurant, launched on 7th street in Long Beach last week. Spearheaded by Kevin Seo and Andy Nguyen, the owner of Bored Ape #6184, the smash-burger-themed concept restaurant accepted ETH and APE for its burger and fries and will continue to do so for three months.
Speaking of Bored Apes, Coinbase announced a trilogy of Bored Ape Yacht Club-themed films called “The Degen Trilogy.” Ape owners chosen in the casting process will get a licensing fee of $10,000 in APE or BTC. The first film should go out in June.
Elon Musk offered to buy Twitter for $41.3 billion on Thursday. Although this isn’t a crypto story, it does bear mentioning given that Crypto Twitter is essentially crypto’s town square. As is the case with Elon, everything is a meme, and his offer equates to a share price of $54.20…
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