Saturday, December 2, 2023

🏦Treasury Says Most DeFi Protocols Ought to Be Thought-about Monetary Establishments

GM Defiers!

The US Treasury Division says the rising use of cryptocurrency to pay for items and providers is a risk to authorities makes an attempt to restrict cash laundering, and argues that almost all DeFi protocols ought to be regulated as monetary establishments. Layer 2 community Arbitrum is trying to salvage this week’s governance debacle with a set of latest proposals promising elevated transparency and oversight. In the meantime, the Euler hacker has returned practically all of the stolen funds, and we’ve received some unique insights from a negotiator concerned within the restoration. Lastly, we dive into the lofty valuations of Layer 2 tokens and ask buyers in the event that they’re justified.

✍️ In right this moment’s e-newsletter:

  • Treasury Report On Prison Use Of DeFi Argues Most Protocols Are Topic to Financial institution Secrecy Act
  • Arbitrum Amends Basis Proposal After Failed Vote
  • Unique Interview With Negotiator Who Helped Euler Get well $230M

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  • Do Rollup Tokens’ Use-cases Justify Their Valuations?

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📈 Markets in final 24 hrs:






Watch our video on the implications of $33B price of ETH being unlocked in per week, and our podcast with Carl and Trent of the Ethereum Basis



Treasury: ZK Proofs Can Be Boon Or Bane Of AML Compliance

TLDR A brand new report by the US Treasury Division highlights the rising use of cryptocurrency for funds as a risk to AML efforts and suggests the usage of privacy-enhancing tech, similar to zero-knowledge proofs, to confirm compliance with anti-money laundering laws with out broadcasting private info.

SO WHAT The report additionally famous that almost all self-proclaimed DeFi companies within the U.S. — even these which might be actually decentralized, with little to no skill to switch or management a protocol after its launch — are monetary establishments topic to the Financial institution Secrecy Act and, in flip, anti-money laundering obligations.


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DAO Governance

Arbitrum Amends Basis Proposal After Failed Vote

TLDR Arbitrum, the main Ethereum Layer 2 community, has proposed new measures to restrict the spending capabilities of its Basis after the failure of its first governance proposal. The brand new proposals embrace a token vesting schedule, operational bills, and ecosystem funding initiatives, together with outlining the Basis’s $36M annual funds.

SO WHAT Whereas many applauded the transfer as a step in the best path, some neighborhood members are nonetheless skeptical concerning the proposed funds, demanding a extra detailed breakdown of payroll and bills.

Unique Interview

Euler Hacker Was ‘Only a Common Man’

TLDR A pseudonymous unbiased safety researcher named Ogle helped to barter the return of over $200M in stolen crypto, and in an interview with The Defiant, shared details about the “wacky” hacker, the negotiation course of, and errors that firms typically make when attempting to get better stolen crypto.

SO WHAT Euler has recovered virtually all the cash stolen within the hack and claimed it as one of many largest recoveries in DeFi historical past. The hacker was not a complicated group or state-backed actor, however relatively simply a person who noticed a chance.

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What’s Governance Value? Ethereum Scaling Tokens Say Billions

TLDR The market worth of two of the most important Ethereum scaling tokens, ARB and OP, has surpassed $2 billion collectively. Nonetheless, the first use case of those tokens is governance, as they neither safe the scaling options’ networks nor do customers pay for transaction charges denominated in them.

SO WHAT Buyers are questioning the billion-dollar valuations of those governance tokens as their worth proposition is unclear. With the potential for elevated competitors amongst Layer 2s, groups will likely be below much more stress to substantiate the worth of their tokens. Rollups might already be worthwhile, however how tokens accrue worth from that revenue remains to be unclear.

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