The biggest crypto news and ideas of the day |
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Welcome to The Node! This is Marc Hochstein to take you through the latest crypto news. In today's news: Polygon to buy $5M of servers with chips devoted to zero-knowledge cryptography; Tron, Tether and TRM Labs start financial crime fighting force; Nansen buys StakeWithUs, expanding beyond data provision into crypto investment; and Bitcoin ETFs post $28.7M in inflows after record losing streak. The Takeaway: The success of Coinbase's layer-2 network Base shows the power of marketing can be more important than cutting-edge tech, CoinDesk's Ian Allison and Brad Keoun write.👇 |
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Polygon Labs, a major developer of Ethereum layer-2 networks, said Tuesday it is unveiling a new type of computer chip that's optimized for zero-knowledge cryptography processing, built by hardware maker Fabric specifically for Polygon's interoperability solution, AggLayer. The news comes as Fabric announced last month a $33 million series A round, which Polygon Labs participated in, to create "verifiable processing units," or VPUs, a custom chip designed for cryptography and blockchains. The team also said Tuesday that Polygon Labs will acquire $5 million worth of VPU-based server systems in order to accelerate ZK-proof generation projects on the AggLayer. |
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'Open Up! It's the T3 Financial Crime Unit!' |
A 2023 report from TRM Labs showed that the Tron blockchain was home to nearly 45% of all illicit crypto volume. Now, the blockchain founded by Justin Sun is working with TRM Labs and USDT issuer Tether in a task force created to fight financial crime. The task force, the T3 Financial Crime Unit (T3 FCU), will combat illicit activity involving USDT, the largest stablecoin, on Tron. Data from Tether shows there’s $60.7 billion of USDT issued on Tron, $53.9 billion on the Ethereum blockchain and $712 million on Solana. The T3 FCU said it has already frozen $12 million in USDT tied to blackmail scams and investment fraud. |
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M&A Deal Expands Nansen's Remit |
Blockchain data provider Nansen said it bought staking platform StakeWithUs as CEO Alex Svanevik looks to expand beyond data provision into offering investment services for institutions and retail traders. While the purchase price was not disclosed, a spokesperson for the company said it was a seven figure sum. StakeWithUs, which is backed by the Singapore government's innovation project SGinnovate, provides staking across multiple blockchains. Following its integration, Nansen will offer non-custodial staking for over 20 assets, including SOL, SUI, OSMO and ATOM, according to an emailed announcement on Tuesday. |
A Bullish Signal in a Bearish Season |
Spot bitcoin (BTC) exchange-traded funds (ETFs) listed in the U.S. posted just over $28.7 million in net inflows on Monday, ending a record outflow streak worth $1.2 billion, data shows. The ETFs had lost assets since Aug. 27, and Monday was the first day of net inflows in September – a month that traders have previously warned could be bearish for the leading cryptocurrency. Outflows from ETFs signal a lack of new demand among professional investors. The outflows have taken net inflows since inception to under the $17 billion mark, back to levels last seen in July. Meanwhile, BTC prices are down nearly 15% in the past two weeks – or 25% below March’s lifetime peak of $73,300. |
The Takeaway: When Marketing Trumps Tech |
By Ian Allison and Brad Keoun Among the rapidly growing ranks of layer-2 blockchains built atop Ethereum, the U.S. crypto exchange Coinbase's own version, Base, hardly stands out as a technological pioneer. The entire project was built and launched last year using code borrowed from another team – Optimism, with its OP Stack framework for easily spinning up new layer-2 networks. That's partly why it's so remarkable that Base has shot to the No. 2 spot on the key industry leaderboard L2Beat, with an 18% market share of 74 active layer-2 networks. Top-ranked Arbitrum's Arbitrum One dominates with a 40% share, but Base has shot past older, competing projects from teams with hard-fought reputations for cutting-edge development, including Starknet, Polygon, even Optimism itself. Sometimes referred to as rollups, layer 2s have become a key element of the broader Ethereum ecosystem's roadmap for scaling toward a world where more, or maybe someday, most, of finance takes place on the digital rails. But it turns out that the race for blockchain supremacy, just as in broader industry, is reliant to a large extent on marketing savvy and an ample war chest to spend on attracting new customers – not just whoever has the best tech. And Coinbase has helped to fuel Base's growth through its own advertising campaigns and promotional events, including the recently concluded "Onchain Summer." The company said Monday that the three-month Onchain Summer event saw participation of over 2 million unique wallets (compared to about 268,000 in 2023), resulting in over $5 million in mint revenue to creators. A quick glance at Coinbase's most-recent quarterly report, filed with the U.S. Securities and Exchange Commission, shows that the crypto exchange spent over $165 million on sales and marketing during the three months ending June 30, more than double the amount spent during the same period a year earlier. The question now is whether the activity on Base is sustainable. Read the rest. |
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