Token Chronicle - Week 4 October 2024

Top cryptos

Meme of the week

Market update: Strong increases this week with BTC reaching up to $73K and generally holding in the $70K range before a slight correction today around $69K due to profit-taking. Most other assets followed suit, except for ETH, which remains lagging (more patience will be needed, but I expect ETH to revisit its ATH and possibly go higher in the coming months). The entire ecosystem will have its eyes on the upcoming U.S. election next week. A victory for D. Trump could potentially push BTC strongly to a range of $80-100K by year-end, given his pro-crypto stance, including plans for U.S. BTC reserves and replacing Gary Gensler. On the other hand, a win for Kamala Harris, whose agenda is less crypto-focused, might indicate a short-term pullback and slower growth toward year-end. However, regardless of the outcome, the tide is turning in the U.S., and the next Congress is expected to be much more pro-crypto than it is today. This could lead to significant regulatory improvements to stimulate innovation in the ecosystem. Other countries will closely watch developments in the U.S., as it remains a leader in innovation; the establishment of clear regulations for the crypto ecosystem could encourage many other countries to follow suit.

Main points this week:

International:

1. The city of Buenos Aires has launched an identity verification service based on blockchain and ZKsync technology. This integration of QuarkID, a decentralized identity verification platform on ZKsync, will enable decentralized identity verification for Buenos Aires residents. The services are available via miBA, the government platform that provides access to various documents and services. Decentralized digital identities (DID) are stored through the ZKsync Era layer 2, which operates on Ethereum (ETH).

2. Ripple Labs co-founder donates $10 million in XRP to support Kamala Harris: Although the crypto ecosystem has mostly aligned with Donald Trump in recent months, several major figures in the sector have shown support for Kamala Harris. Among them is Chris Larsen, co-founder of Ripple (XRP), with a multimillion-dollar donation. Last September, Larsen was one of 88 business leaders who signed an open letter supporting Harris. He had previously donated $10 million to the Democratic candidate’s campaign, according to the New York Times. This week, he made a second donation of the same amount to her campaign.

3. Hong Kong aspires to become a cryptocurrency haven in the medium term. However, before becoming a market stronghold, the region acknowledges it must establish regulations. By the end of the year, Hong Kong authorities have promised to issue licenses to multiple crypto platforms. In 2024, exchanges between Hong Kong regulators and crypto platforms have intensified after preliminary inspections in June revealed "unsatisfactory practices" in some companies. In 2025, the regulator plans to establish a consultative panel with all licensed crypto platforms to promote "healthy collaboration between authorities and crypto companies," according to the SFC.

4. For BRICS+ countries, the keyword is dedollarization. Some countries are already progressing on this theme, as highlighted by statements from the Shanghai Cooperation Organization (SCO). A working group composed of central banks and finance ministers has been created, potentially leading to a common payment system—a significant project requiring both political and economic cooperation. It’s a key issue for the coming decades, with central bank digital currencies (CBDCs) expected to see a 2,430% increase in payments by 2031.

5. Bitcoin becomes (almost) legal tender in Lugano—An experience report on the European capital of BTC: Since late 2023, Lugano has allowed its residents to pay in Bitcoin, attracting thousands of BTC users thanks to an initiative supported by Plan B and Tether. During our visit, we observed that over 250 merchants now accept BTC, confirming Lugano's status as a true European Bitcoin capital. The municipality allows residents to pay taxes in Bitcoin, and nearly 250 merchants are trained to accept payments via the Lightning Network.

6. In a Norwegian village, Sazmining is launching a Bitcoin mining operation whose heat will warm buildings and support the local economy. This unique project could redefine mining as a sustainable energy player in the polar circle. Planned for December 1, the 350-square-meter installation will use an innovative model where the mining equipment's heat will warm a local building. It will also contribute to drying fish, a key activity in the regional economy. "Heat is an essential resource here," explains Kent Halliburton, CEO of Sazmining, highlighting the polar winters at -20°C typical of the region. By integrating a Bitcoin mining infrastructure into an existing building, Sazmining replaces an energy-intensive oil boiler and demonstrates that BTC mining can mean circular economy and energy efficiency.

7. Big news from the UAE! RAK DAO will unveil a framework for DAOs, allowing global participants to register remotely & open bank accounts. A game-changer for decentralized governance & crypto innovation!

8. Denmark's tax authority is proposing a mark-to-market crypto tax, potentially hitting investors with up to 42% on unrealized gains. The new rules aim to balance crypto gains/losses and could start in 2026, affecting assets dating back to 2009.

9. Vietnam just unveiled a bold national blockchain strategy to become a regional tech hub by 2030! Backed by a 5-part plan, it covers legal frameworks & international cooperation. Big players, including the Vietnam Blockchain Association, are on board!

10. Hong Kong just approved its 3rd crypto exchange, joining OSL and HashKey! With 11 more platforms under review, the race for a slice of Hong Kong's retail investor market is heating up. These licenses have only been available since June 2023!

11. Hong Kong police just dismantled a crypto scam ring that used AI and deepfake tech to pull off a $46M romance fraud. In a 4,000-sq-ft fraud factory, 27 suspects in their 20s-30s crafted fake personas, tricking victims via video chats with deepfakes.

Traditional Finance:

1. In a bid to bridge the gap between traditional finance and blockchain technology, Visa and Coinbase have announced a partnership to reduce waiting times for buying and selling cryptocurrencies. Visa debit cardholders will soon be able to buy and sell crypto instantly. This Tuesday, the payment giant partnered with the exchange Coinbase. Users in the US and the EU will benefit from “real-time funding delivery from their account” for eligible Visa debit cardholders.

2. VanEck enables Solana (SOL) staking through a partnership with Kiln: By teaming up with Kiln, a French cryptocurrency staking specialist, VanEck allows users to earn rewards by staking their Solana (SOL) tokens. VanEck aims to enhance the appeal of its Solana-linked financial products while enabling ETN SOL holders to access staking rewards, similar to those who stake their SOL natively.

3. $42 billion, or 2.7% of the total Bitcoin supply: That’s the amount MicroStrategy plans to invest in BTC over the next three years by raising funds. The company unveiled its “21/21 Plan,” aiming to raise $42 billion over three years, with half coming from stocks and half from fixed-income securities.

4. Traditional finance (TradFi) dives further into crypto as Wellington Management partners with a blockchain project to offer 24/7 redemption access. This gives investors continuous control over their positions—a rare flexibility in DeFi!

5. Ripple's Brad Garlinghouse revealed that Citibank debanked him due to his prominent role in crypto. He cited increased scrutiny from federal regulators as a factor in the decision.

Regulation/Justice:

1. After being arrested by Nigerian authorities, detained for months in one of the country’s strictest prisons, and undergoing a grueling trial, Tigran Gambaryan, Binance’s head of compliance for financial crime, is finally seeing the end of the ordeal. The Nigerian justice system has ordered the release of Binance’s financial crime compliance officer.

2. The French crypto wallet manufacturer Ledger may be required to pay a €750,000 fine following a sanction from the CNIL. The reason is successive data breaches affecting its clients in 2020. It’s a somber memory for the French unicorn: in July 2020, it suffered a security breach through Shopify, leading to the data of approximately one million customers being leaked.

3. FTX is preparing to distribute $12.6 billion to its defrauded customers after signing an agreement with Bybit, allowing it to reclaim nearly $230 million. FTX initiated this process last year, claiming that some Bybit-affiliated accounts had transferred significant sums—up to $327 million—from FTX to Bybit just before the platform collapsed in November 2022.

Hacks/Cyber:

1. Data from more than 92,000 Transak customers leaked: Following a data breach, personal information from over 92,000 clients of the cryptocurrency purchase service Transak was accessed by a hacker. The device of one of the company’s employees was compromised due to a phishing attack, allowing the attacker to access the system of a Know Your Customer (KYC) verification provider. With the obtained information, hackers could conduct personalized phishing campaigns, making potential targets more susceptible.

2. North Korean Lazarus hackers exploited Google Chrome vulnerabilities to control victims’ computers by using a Web3 video game as bait. It was a multiplayer tank game involving NFTs to attract crypto investors. Although the game itself was functional and harmless, visiting the website was dangerous. While the game used as bait was operational, it was actually a copy of another project’s source code, called DeFiTankLand, and the team’s cold wallet was hacked by Lazarus to steal $20,000 worth of tokens. Google quickly responded by releasing a patch two days after being informed of the situation.

3. Following suspicious activity detected by Arkham on addresses, it seems the US government was robbed of $20 million in cryptocurrency. $20 million in USDC, USDT, aUSDC, and ETH was moved suspiciously from an address to an attacker. The funds were transferred to wallet 0x348, which began selling them for ETH. It is believed the attacker has started laundering the proceeds through addresses linked to a money-laundering service. A July 2023 court document indicated that funds on the original address came from nine addresses related to the Bitfinex hack in 2016.

4. A hacker exploited the recent popularity of Andy Ayrey and his AI Terminal Truth, which gave memecoin GOAT a reputation, to orchestrate a crypto scam and hit the jackpot. Due to the success of ToT, some investors assumed Ayrey was knowledgeable about crypto and provided sound advice. This led them to blindly trust the crypto scammer impersonating Ayrey by investing in this cryptocurrency. Within days, the market cap of the IB token soared to $25 million. The scammer had acquired a large quantity of tokens, which they sold at the highest price, netting over $600,000 through the scam.

5. The crypto sector faced $1.4B in losses from 179 hacks and scams in 2024. October saw a dip to $55.1M in losses (down from $126.9M in Sept), hacks on DeFi protocols like Radiant Capital and Tapioca DAO remain high. BNB Chain led in attacks, while Immunefi paid $100M+ to whitehats.

Tech Innovations:

1. Kraken, a historic cryptocurrency exchange platform, follows the trend by announcing the upcoming release of "Ink," its own layer 2 solution. Built on Optimism's Superchain, it will be entirely dedicated to decentralized finance (DeFi). It was revealed this week that this decision comes with a $42 million grant from Optimism. Kraken’s layer 2, called “Ink,” is built on the OP Stack, a toolkit for building layer-2 solutions with Optimism. Dedicated to DeFi, it will launch on December 11. Optimism has already attracted significant industry players. Its “Superchain” now brings together the layer 2 solutions of Coinbase, Sony, and the decentralized exchange platform Uniswap.

2. The future of cryptocurrencies may partly depend on artificial intelligence (AI): Coinbase has launched a new tool to create AI agents that help users manage their portfolios. With these personalized agents, users can trade cryptocurrencies, stake tokens, integrate with smart contracts, and more. Coinbase has also integrated an API linked to X (formerly Twitter), enabling AI agents to function as bots on the social network. To access this AI agent creation tool, users need an API key from Coinbase’s developer program and an OpenAI key, upon which some of this functionality is based.

3. Lido DAO democratizes solo staking on Ethereum (ETH): To make solo staking more accessible, the decentralized autonomous organization (DAO) of Lido has introduced a new feature that lowers the validator deployment cost. Through a community staking module (CSM), individuals can now launch their own solo validator node with "limited" resources. Instead of the initial 32 ETH required, the new minimum ranges from 1.3 to 2.4 ETH, depending on the number of validators deployed.

4. Enhancing Ethereum's (ETH) blockchain security: Vitalik Buterin has unveiled several new proposals aimed at improving Ethereum’s performance and resilience against quantum threats. The Ethereum co-founder envisions the Ethereum Virtual Machine (EVM) achieving a stable and highly efficient final state. To realize this, he plans to integrate account abstraction to enhance user experience and optimize transaction fee structures. Ethereum’s next update, Pectra, expected in late 2024 or early 2025, will introduce the first step of this enhancement plan for the EVM. A new EVM Object Format (EOF) will separate code and data, easing code processing for Ethereum-based layer 2s. To improve transaction fee structures, Buterin presented the concept of "multidimensional gas" pricing, which assigns distinct prices and limits for various resources, reducing network pressure and optimizing blockchain resource utilization.

5. Chainlink launched its major Chainlink Runtime Environment (CRE) upgrade at SmartCon2024, aiming to scale across “thousands of blockchains.” CRE's modular architecture allows custom workflows, appealing to finance and web3. Rollout begins with the CCIP.

Founding & partnership:

1. Privacy-focused blockchain project Nillion raises $25M in a round led by Hack VC, with support from backers tied to Arbitrum, Worldcoin, and Sei. Nillion’s “blind computing” aims to power apps that handle data securely, ideal for blockchain-AI synergies.

2. Tokenization platform Stokr raised €7.4M ($8M) to establish one of Europe’s first corporate Bitcoin treasuries, led by Fulgur Ventures. 💼🚀 Stokr plans to launch Bitcoin-based tokenized assets and expand infrastructure using Layer 2 tech like the Liquid Network.

Takeaway: Enterprises need DePIN (by Coindesk, the Node)

Introduction
As digital transformation accelerates, corporations face increasing pressure to manage and secure physical infrastructure cost-effectively. Traditionally, infrastructure like energy grids, telecom networks, and transportation systems has relied on centralized management, which, while efficient in some ways, introduces significant risks and limitations. Cyber threats, single points of failure, high operational costs, and limited flexibility to scale quickly have all become pressing concerns. Enter Decentralized Physical Infrastructure Networks (DePINs), a groundbreaking blockchain-driven model that decentralizes control, incentivizes community participation, and provides a new framework for corporate infrastructure management. By leveraging decentralized nodes and token-based incentives, DePINs enable businesses to access infrastructure that is more secure, cost-efficient, and adaptable to their growing needs.

Decentralization for Enhanced Security
Traditional, centralized models of infrastructure management carry significant vulnerabilities, from cyber-attacks to single points of failure, as demonstrated by the recent Crowdstrike breach, which heavily impacted the airline industry. DePIN, using blockchain's decentralized and immutable features, mitigates these risks. By distributing infrastructure across a decentralized network, DePIN introduces a robust security model with each node holding transaction histories, creating redundancy and limiting unauthorized access. This decentralization also minimizes geopolitical and political risks by keeping infrastructure out of the hands of single monolithic entities, which is particularly advantageous for corporations concerned with safeguarding critical operations.

Cost Efficiency and Operational Scalability
For corporations, cost is a key consideration. DePIN technology enables companies to cut operational expenses by reducing intermediaries and adopting a token-driven model that can be community-sustained. With its scalable, pay-as-you-go infrastructure, DePIN makes it possible for enterprises to expand without significant upfront investments. In sectors like AI, gaming, and other data-heavy industries, decentralized infrastructure offers both efficiency and affordability. By tapping into markets with previously prohibitive infrastructure costs, companies can reach more users and offer services like localized computing and data storage in underserved areas.

Corporate Role in DePIN’s Growth
The adoption of DePIN by major corporations such as Lufthansa and Deutsche Telekom, both of which are launching initiatives on the Peaq network, serves as a strong endorsement for the technology. These companies aren’t just embracing DePIN to improve their own operations; they’re helping to set industry standards and showing other sectors the value of decentralized infrastructure. Such corporate involvement drives further integration and signals the dawn of a “DePIN era” where more organizations may pivot toward decentralized models.

Conclusion
As businesses seek resilient and scalable infrastructure solutions, DePIN stands out as a transformative model. By addressing security concerns, reducing operational costs, and enabling on-demand scalability, DePIN empowers enterprises to reimagine their approach to managing critical infrastructure. Early adopters like Helium, Filecoin, and Peaq have shown the viability and benefits of DePIN for industries ranging from telecom to AI, setting a precedent that is likely to inspire further innovation and adoption. For companies aiming to stay competitive in the evolving digital landscape, DePIN isn’t just an alternative—it’s an imperative.

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Disclaimer: The information disclosed here does not constitute an investment advice ; it is for informational purposes only and does not constitute investment advice. You should do your own research while investing in crypto and only invest money you are ready to lose.