How is Crypto Fighting Back Against Regulators?
zkSync Era | IPOR Labs Power Tokens | This Week's News
GM Intels, this is your Daily Bolt briefing.
Todays research includes the latest on the developing regulatory problems crypto is facing. American regulators are cracking down on both CeFi and DeFi, adding another complex variable to consider in addition to the current macro conditions.
We also bring expanded research on IPOR Labs' Power Tokens model, which aims to solve the problems present in liquidity mining. And if you haven't heard: many suspect zkSync will be implementing an airdrop for users of it's recently launched mainnet.
Learn more from our notes below.
Over and out.
Key Discussions Happening Today
1/ Bankless - zkSync Era Mainnet Launch & NEW zkEVM
Preview: In this episode, David and Ryan are joined by Alex Gluchowski, the Co-founder and CEO of Matter Labs and the creator of zkSync, and Anthony Rose, the head of engineering at Matter Labs and ex-SpaceX, to discuss the zkSync’s massive announcement, what zk unlocks, the difference between zkEVM vs Optimistic Rollups, what builders need to know, and wen token?! Click here to listen to the full episode.
Length: 66 mins | OUR NOTE: 5 mins
zkSync Era and the zkEVM solution are now open to users, which is a significant moment for Ethereum.
The new brand for zkSync is the zkSync Era, a new era for humanity where individuals can fully own themselves, their assets, their identity, and transactions without barriers or intermediaries.
The zkEVM solution uses ZK(zero-knowledge) proofs or proofs of computational integrity to scale Ethereum which is a trustless way of verifying transactions without introducing new trust assumptions.
Users can go to ecosystem.zksync.io to see the status of projects that are live or launching.
zkSync has been added to the drop-down menu in Metamask, alongside other Layer 2 solutions like Arbitrum and Optimism.
2/ DeFi Raiders - IPOR Labs, Power Tokens and Liquidity Mining
Preview: In this episode, DeFi Raiders invites IPOR Labs to discuss Power Tokens, how it solves the problems in liquidity mining and the potential impact of IPOR Labs in the DeFi space. Click here to listen to the full episode.
Length: 80 mins | OUR NOTE: 4 min
Here are some key takeaways:
IPOR Labs is a DeFi protocol that aims to solve the liquidity mining problems faced in DeFi by introducing Power Token.
IPOR Labs also offers a suite of DeFi primitives like interest rate swaps and liquidity pools.
The goal of IPOR Labs is to create a decentralized organization where everyone who contributes to the protocol owns a part of it, aligning the incentives of all the different segments of DeFi.
Power Token is a novel liquidity mining token design introduced by IPOR Labs, a DeFi protocol.
It is a more flexible alternative to traditional liquidity mining programs, which have fixed token issuance schedules and don't adjust to changes in market conditions.
3/ Coin Bureau - Weekly Crypto News ft. Benjamin Cowen - Mar. 27, 23
Preview: In this episode, Guy talks about crypto market chop, SEC, east Asian advantage, interest rates and Benjamin Cowen’s market analysis. Click here to listen to the full episode.
Length: 22 mins | OUR NOTE: 4 mins
Here are some key takeaways:
Last week, the crypto market chopped sideways after experiencing a massive rally the week before.
The recent collapse of Swiss’ megabank Credit Suisse has led to concerns that other big European banks could go under.
The Biden Administration released its economic report for 2023 and for the first time, it included a section about cryptocurrencies and it was about as negative as people would expect.
One of the crypto projects that the SEC pounced on last week was SushiSwap.
Hong Kong is one step ahead having announced that it plans to start legalizing crypto this summer and over 80 crypto companies have expressed interest in expanding their operations in Hong Kong.
The market hasn’t seen the blue chip dominance this high since August of 2021.
On the Revelo Intel platform, we’ve summarized these 3 episodes and in total, would have saved you: 2 hours and 35 minutes!
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Note of the Day
Empire - Crypto's End Game : Coinbase vs the SEC
In this episode of Empire, Santiago and Jason explore the implications for Coinbase, BTC's opportunity, and why crypto isn't going anywhere.
Read our notes below to learn more.
Intro
The timeline for crypto is becoming increasingly surreal and unpredictable.
The financial system as a whole is experiencing crazy times.
DC has become increasingly important in the crypto space, and regulatory activity has been increasing with more enforcement actions.
Coinbase receives SEC Wells Notice
Coinbase has received a Wells notice from the SEC, which precedes an enforcement action, targeting its spot market, staking service, wallet, and Coinbase Prime.
The SEC previously approved Coinbase's IPO, but now appears to be changing its mind on what is allowed without explanation.
Coinbase has met with the SEC over 30 times in the past nine months, and last year filed a petition with the SEC calling for more regulatory clarity.
The lawsuit could take years to resolve, and the hope is that it will expedite regulatory clarity for the crypto industry.
There are conspiracy theories suggesting that this is part of a broader attack on the crypto industry, as regional banks and crypto are seen as the two biggest risks to centralize financial control and CBDC implementation in the US.
BTC’s path to mass adoption
There's something going on with many banks, and people are waking up to the idea of what happens when they deposit money in a bank and how trust can degrade quickly.
Regional banks have a problem with the duration mismatch, and their holding of zero percent treasuries, while treasuries are now at three or four percent.
The global Reserve currency transitioning to Bitcoin won't be a smooth transition.
The US may have to choose between keeping its banking system and keeping the US dollar from runaway inflation.
Regulator activity will continue to increase.
If there is a version where there's mass adoption, it's probably going to happen first with Bitcoin and then flow into other projects.
Ethereum gets mass adoption if we can adopt crypto in a way that is good for the world, while Bitcoin gets mass adoption if we are forced to opt out of the financial system and store our capital in a digital bank that doesn't have collateral risk.
Santi rotated out of some alts and ETH into cash.
The ETH to Bitcoin ratio is currently 70:30.
Santi is looking to increase the ratio more towards Bitcoin by rotating cash into Bitcoin.
Self-custody, regulation & crypto’s staying power
American crypto investors should actively distrust the current administration and holding crypto on a custody exchange is getting risky.
However, the US legal system has a robust system of checks and balances, and one should have faith in it.
The legal system's interpretation of the SEC's actions will be important, and it may take years for cases to be resolved.
Wallets will be essential in the future, and account abstractions are making it easier and more intuitive for people to self-custody their own assets.
Coinbase is impressive and refreshing in its roadmap and willingness to push the space forward, and it has embraced the on-chain mentality.
Good governments have a robust system where not a single entity can change core principles and rules.
The harm in the crypto space is misunderstood, and it should be a fair and transparent market.
The US legal system is trustworthy, and crypto will become an essential topic of conversation in the next election cycle.
Crypto's fundamental use case is digital property and immutability, and it should be marketed as such to onboard people into the space.
Crypto is a general-purpose technology with immense potential but also new challenges, and it is important for policymakers, regulators, and politicians to remain tech-neutral and not play venture capitalist.
The French government's state-run service called Minitel was a successful video tax online service prior to the World Wide Web but shut down because they didn't adopt the internet.
It is hard to predict the future, and betting against human creativity and innovation is not a good idea, especially in an open-source context.
Open-source in web 2 is challenging to agree on contributions and sustain their sustainability. Crypto is uniquely enabled by open source and expedites innovation by trial and error.
Wikipedia is an open-source example, and cryptocurrency solves the problem of constantly asking for donations as the token represents the balance in the market, and contributors are rewarded.
Crypto networks have taxation systems, and it sets them up for long-term viability without an enforcement central government.
The last year's crypto history has been compressed and as important as the last 10 years, and people who have been through it are OGs.
Arbitrum’s airdrop
The Arbitrum airdrop just went live, and as of Thursday at 1 pm Eastern, the fully diluted valuation is $13.76 billion.
The total airdrop current value is sitting at $1.75 billion, and the latest price update is $1.38.
There are 182,000 people who have claimed the airdrop and the biggest holders are the Dow and Bybit.
The airdrop feels different from other airdrops because users who started using blur and GMX for the Arbitrum airdrop are expected to stick around since the products are getting better in the crypto ecosystem.
Wild Euler x Ronin hacker story
Euler Finance was hacked on Tuesday for around $200 million in crypto.
The Euler hacker received a message from the Ronin hacker containing an on-chain note with an encrypted message and a link to a GitHub repository with a security vulnerability.
The Euler team advised the hacker to be careful with the encryption tool, as the private key could have been compromised.
The hacker had been in talks with Euler through on-chain messages discussing the return of around $190 million worth of crypto.
Last week, the Euler hacker sent 100 ETH to the Ronin hacker's wallet, which created confusion over potential links between them.
Speculation suggests that the Ronin hacker may be the Lazarus Group.
The plot is confusing and has sparked speculation about the motivations and potential connections between the hackers.
Defi Llama Drama
DeFi Llama drama: Charlie created DeFi Llama, funded it, and planned to monetize it with a token, but 0xngmi opposed it.
The disagreement resulted in two factions of the company, with some employees taking sides.
The forked code created by 0ngmi for Lamafi has been canceled, and the website will continue on a single domain.
The lack of clarity in ownership in crypto is highlighted in this case.
A token could serve as a coordination mechanism and provide a clear distribution of ownership.
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Sushi subpoena, Do Kwon and Justin Sun
Sushiswap and other DeFi projects have received subpoenas from the SEC, but it's important to understand what information is being requested and whether smart contracts can be frozen or upgraded.
Sushiswap created a legal entity to reduce liability but it was subpoenaed, prompting Erik Voorhees to warn against incorporation unless you want to be a corporation.
There are rumors that Do Kwon was arrested in Montenegro, but this hasn't been confirmed by mainstream media or the police.
Justin Sun is being sued by the SEC for selling billions of unregistered Tron and manipulating the secondary market through wash trading.
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