Weekly Newsletter – 5 Aug 2022

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Weekly Summary

  • The total crypto market cap continued trading sideways as it hovered above $1.05 trillion for the week.
  • Speaker of the United States House of Representatives Nancy Pelosi’s visit to Taiwan spooked the financial markets as worries about the escalating geopolitical tensions between China and the US spread. – A bipartisan group of US senators put forward a new bill for identifying and classifying “digital commodities” that would place them under the jurisdiction of the CFTC.
  • A pair of crypto hacks totaling nearly $200 million in losses and probably affecting more than 10,000 users has prompted industry community backlash.
  • Ethereum moves into the final phase of testing before the big Merge.
  • Prominent bitcoin supporter, Michael Saylor is stepping down from his role as MicroStrategy CEO to focus his efforts on greater bitcoin adoption.
  • Aave is launching its own decentralized over-collateralized stablecoin, $GHO, after a governance proposal was approved.

Industry Stories

Pelosi‘s Taiwan trip sent ripples in the markets: Nancy Pelosi’s arrival in Taiwan brought jitters to the markets as China condemned the highest-level US visit in 25 years as a threat to peace and stability in the Taiwan Strait. The S&P 500 index fell 1.5% and bitcoin fell 2.5% but the knee-jerk reactions in the markets quickly recovered after Pelosi left Taiwan. A number of leading think tanks, analysts, and financial strategists have suggested that the longer-term impact of the visit are yet to be felt.

Proposed legislation to make CFTC responsible for policing BTC and ETH: A new bill was proposed to redefine the definition of “digital commodity.” Under the new senate committee plan, the Commodities Futures Trading Commission (CFTC) would become the primary crypto regulator with exclusive jurisdiction over cryptocurrency trades that meet commodities law — which was met with widespread approvals within the crypto community.

Solana and Nomad exploits surface: We have seen 2 major hacks in 2 days! Around 9,000 wallets were affected in an exploit estimated to be $8m on the Solana network. Solana wallet provider Slope has been identified as the root cause of the hack, relieving the Solana community’s fears that there was a bug in the network’s core code. However, it is still unclear on how hackers were able to access private keys of the wallets and investigations are still ongoing.
Nomad — a bridge protocol for transferring crypto tokens across blockchains — lost $190 million in a security exploit due to a software bug. After the initial hack, many other exploiters including MEV bots, flashbots and independent exploiters replicated the attack. So far, around $9 million has been recovered, representing about 4.75% of the total loss so far.

Ethereum Merge moves into its final testing phase: News around the big Merge continued, with just a few more tests remaining to ensure that Ethereum’s PoW protocol effectively transitions to its Beacon PoS blockchain. This is one of the most hotly anticipated events for Ethereum, with the merge moving into its third and final test network environment called Goerli, before deployment on Mainnet. This will be the largest community merge of its kind.

MSFT shares surge as Michael Saylor leaves to focus on bitcoin: MicroStrategy stock increased almost 15% after news that Michael Saylor was stepping down as CEO to become the company’s executive chairman. His main focus in the new role will be driving strategies for corporate bitcoin adoption. As of last quarter, Microstrategy recorded a $917.8 million impairment loss on their bitcoin holdings.

Moving into a new era of protocol-stablecoin: Aave’s proposal to issue a decentralized over-collateralized stablecoin “$GHO” has been unanimously approved. $GHO will be launched on the Aave Protocol, allowing users to mint $GHO against their supplied collaterals. Curve Finance also plans on launching a native stablecoin (crvUSD) that founder Michael Egorov claims will be over collateralized, and feature a revolutionary liquidation mechanism. The whitepaper has not been released yet, so we are left to speculate on its design and implications.

Matrixport Stories

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Matrixport News

– This week, Matrixport announced a new partnership with professional esports house, RSG. This joint initiative aims to empower the esports and gaming community to take ownership of their personal financial journey and achieve their dreams. To kickstart the fun with attractive prizes to be won, join in on the Matrixport giveaway here.

– Coindesk published an article from Matrixport on how crypto prime brokerage services play an important role for institutional investors looking to explore yield opportunities in DeFi.

– Matrixport announced its participation in @OrBit Markets’ $4.6M angel funding round, to develop more exotic options and structured products in digital assets as the demand from institutions continues to grow.

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