Bitcoin, Ethereum, Cosmos and More Week 43 2024

Keeping you updated on crypto, web3 and blockchain

October 29, 2024

TL;DR

  • Microsoft's BTC Investment Proposal Set for Shareholder Vote

  • Denmark Introduces 42% Unrealized Gains Tax on Bitcoin

  • Vitalik’s Decentralization Proposal for Ethereum

  • Chainlink Launches privacy-focused blockchain solutions

  • CoinGecko and MANTRA Launches Grant for dApps

  • Rujira App Layer Launches on THORChain

  • Charges Dropped Against Binance Executive in Nigeria

  • U.S. Government Crypto Wallet Hacked for $20M

and much more!

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Bitcoin Highlights of the Week

Microsoft has placed a proposal to explore investing in Bitcoin on the agenda for its upcoming shareholder meeting on Dec. 10. The proposal, introduced by The National Center for Public Policy Research, is advised against by Microsoft’s board, which considers the measure “unnecessary” as it already monitors various assets, including cryptocurrencies.

The company’s Global Treasury team highlighted that cryptocurrency volatility remains a significant factor, though Bitcoin has previously been evaluated as a diversification option. If approved, Microsoft would become the largest public Bitcoin investor, surpassing companies like MicroStrategy and Tesla, potentially impacting its $3.157 trillion market cap.

As of October 18, open interest (OI) on Bitcoin futures at the Chicago Mercantile Exchange (CME) hit a record high of $12.26 billion, marking a 36% increase in the past two weeks and a 3.5% rise from its previous peak in April.

This surge reflects heightened institutional interest, with firms like hedge funds and asset managers favoring CME's regulated market. Rising OI suggests that institutional players are building positions, likely anticipating further Bitcoin price volatility or appreciation. This record-setting activity at CME highlights the growing institutional adoption of Bitcoin as a strategic asset.

Chainlink has entered the Bitcoin ecosystem through a new partnership with Spiderchain, a Layer 2 network built by Botanix Labs. By joining Chainlink’s Scale program, Spiderchain gains access to Chainlink’s oracle services and Cross-Chain Interoperability Protocol (CCIP), enhancing Bitcoin’s ability to support Ethereum-compatible applications.

This integration enables Bitcoin to host Ethereum Virtual Machine (EVM) layers, a significant shift for a blockchain previously lacking in L2 and smart contract support. As Chainlink’s proven oracle solutions integrate with Spiderchain, this move promises broader application potential for Bitcoin.

MicroStrategy CEO Michael Saylor ignited controversy with his stance that Bitcoin ownership in state custody may be more secure than personal custody. Speaking on the "Markets with Madison" podcast, Saylor criticized self-custody and highlighted the role of public markets and state entities in Bitcoin adoption.

Saylor’s perspective suggests that Bitcoin’s future may lie in regulated markets, where companies like MicroStrategy serve as Bitcoin exposure vehicles. He argues that this approach could broaden retail and institutional access, potentially reducing anti-Bitcoin legislation. While divisive, Saylor’s comments reflect a growing debate on Bitcoin’s custodial models.

Starting January 2026, Denmark plans to tax unrealized gains on Bitcoin at 42%, marking a significant shift in cryptocurrency taxation. This move means investors will owe taxes on annual value increases, even without asset sales. The Danish government aims to align Bitcoin with existing financial asset taxes, promoting consistency and simplifying tax reporting.

However, this unprecedented tax could burden long-term holders, who may face liquidity challenges if forced to sell assets solely to cover taxes. With similar actions in Italy and mounting European regulatory scrutiny, Denmark’s tax plan raises concerns about its impact on Bitcoin’s attractiveness as an investment.

Ethereum Highlights of the Week

Vitalik Buterin recently proposed measures to counter Ethereum's growing staking and block production centralization. With two entities controlling nearly 88% of Ethereum blocks, Buterin emphasized the risk of censorship and weakened network security due to economic pressures pushing smaller staking pools into larger ones.

His solution includes capping individual Ether staking amounts and limiting penalties to 12.5% to maintain decentralization. Buterin also suggested a two-tier model with “slashable” and “unslashable” staking categories. For block production, he recommended a “fork-choice-enforced inclusion list” or the “BRAID” model to distribute block-building roles, minimizing centralization risks without compromising Ethereum’s functionality.

Ethereum founder Vitalik Buterin recently criticized MicroStrategy's Michael Saylor for his comments dismissing Bitcoin self-custody as a concern of "paranoid crypto anarchists." Saylor suggested that regulated custody reduces risks and avoids government interference, favoring third-party custodians.

Buterin countered, calling these views "batshit insane" and warned that they promote regulatory capture, undermining decentralization. Bitcoin expert Jameson Lopp also chimed in, noting that centralized custody weakens network security.

Lido DAO has launched its Community Staking Module (CSM) on the Ethereum mainnet, allowing Ethereum stakers to become solo validators with just 2.4 ETH, a significant reduction from the typical 32 ETH requirement. Initially, the module is limited to curated community stakers in its “Early Adoption” phase, with a fully permissionless phase planned soon.

The CSM, which enhances Ethereum’s decentralization, simplifies staking by reducing technical and financial barriers. Built on Lido’s Staking Router architecture, the module invites broader participation and was developed after a successful testnet trial, engaging over 370 node operators.

Chainlink has launched privacy-focused blockchain solutions to help financial institutions like ANZ Bank securely transact across public and private chains. Announced on October 22, these innovations include the Blockchain Privacy Manager for integrating private chains with the public Chainlink platform and the CCIP Private Transactions protocol for encrypted data transfers.

ANZ Bank will test the technology for tokenized real-world asset settlements under Singapore's Project Guardian. Chainlink’s solutions address institutional privacy needs, complying with regulations like GDPR, which mandate secure, private cross-chain transactions. This development aims to drive broader blockchain adoption among financial institutions.

Uniswap has launched permissionless bridging across nine major networks, powered by Across Protocol, simplifying cross-chain asset transfers. This new feature, accessible through the Uniswap interface and wallet, supports Ethereum, Base, Arbitrum, Polygon, OP Mainnet, Zora, Blast, World Chain, and ZKsync.

Designed to address the complexities and delays users face when moving assets between chains, Uniswap’s bridging aims to enhance usability amid its recent market share decline. According to Uniswap Labs, bridging was the platform’s top user-requested feature, following a community poll conducted in July, just ahead of limit orders on Layer 2.

Cosmos Highlights of the Week

MANTRA has officially launched its Mainnet, aiming to enhance the tokenization of real-world assets (RWAs) and position itself as a leading compliant ledger for these assets. Users can bridge $OM tokens from ERC-20 to the MANTRA Mainnet to access future RWA drops, stake $OM for network security while earning on-chain rewards, and complete missions to earn KARMA.

CEO JP Mullin emphasized the project's commitment to collaboration, stating, "Together, we'll unlock what can be a multi-trillion dollar real-world asset economy," highlighting the potential for significant growth in the RWA sector.

Dymension's latest upgrade features Initial RollApp Offerings (IRO), enabling users to create and trade RollApp tokens before their official launch. This pre-launch phase allows creators to allocate a portion of their token supply for early trading, using the funds raised to seed liquidity upon launch.

IRO tokens serve as futures, exchanged on a 1:1 basis for native tokens when the RollApp goes live. Creators select bonding curve functions, like Fixed Price or Exponential Growth, to set token pricing. The IRO process fosters community alignment and liquidity, offering a comprehensive toolkit for creators to develop their ecosystems successfully.

CoinGecko has announced a partnership with MANTRA to provide a Blockchain Builder Grant for innovative dApps on the MANTRA chain. This grant offers access to the CoinGecko API at a discounted rate for annual subscriptions and marketing support from both organizations.

Eligible projects can renew their subscription at the same discounted rate next year. However, this opportunity is limited to the first 25 approved projects, so interested developers are encouraged to apply quickly to accelerate their projects on the MANTRA chain.

Persistence One is integrating LayerZero to enhance its BTC cross-chain interoperability solution, enabling seamless, near-instant BTC swaps. This integration allows Persistence One to use LayerZero’s omnichain protocol to securely transmit data between separate blockchains, which is critical for completing BTC swaps through "intents."

Intents simplify cross-chain swaps by letting users specify swap outcomes while "solvers" handle execution. In this setup, LayerZero’s messaging layer confirms swap completion, triggering escrow releases on the source chain for a smooth transaction.

The Rujira App Layer, built on THORChain's base layer with contributions from Codehans1, Pluto9r, Strangelove Labs, and JpThor, provides essential infrastructure for decentralized apps (dApps) deployment. The roll-out will include a reskinned interface developed by Cryptoslang1, featuring a React UI framework for cohesive user experience across apps.

Key components include RUJI Trade, an on-chain orderbook DEX promising low fees and optimized trade execution; RUJI Pools, which offers both concentrated liquidity and XYK strategies; RUJI Perps, enabling fully collateralized trading with 50x leverage; RUJI Lending, a native BTC lending platform; and RUJI Liquidations, a marketplace allowing public bidding on at-risk collateral to maintain solvency.

Other Highlights of the Week

A Nigerian court has dropped money laundering charges against Tigran Gambaryan, Binance's head of financial crime compliance, leading to his release after months of detention due to deteriorating health conditions. Gambaryan, a U.S. citizen, was held since February, raising concerns over Nigeria's judicial handling of the case.

While the Economic and Financial Crimes Commission (EFCC) plans to continue pursuing allegations against Binance for allegedly laundering over $35 million, this situation has prompted 18 U.S. attorneys general to label Gambaryan a hostage. His release highlights the need for scrutiny regarding the operational challenges faced by American firms in Nigeria.

On October 24, a wallet linked to the U.S. government was compromised, resulting in the theft of $20 million, primarily from funds seized during the 2016 Bitfinex hack. The analytics firm Arkham Intelligence reported that the hacker transferred assets to a wallet holding approximately $13 million, including stablecoins like USD Coin (USDC) and Tether (USDT), and began converting these into Ether (ETH) while laundering the funds through various addresses.

This breach raises concerns about the security of government-held crypto assets, particularly as Ilya Lichtenstein and Heather Morgan, arrested for the original Bitfinex hack, face sentencing in November for related crimes.

Yuichiro Tamaki, leader of Japan's Democratic Party for the People (DPP), has announced a plan to reduce the tax on cryptocurrency gains to 20% if elected. This proposal aims to categorize crypto profits similarly to stock market gains, currently taxed between 15% and 55% based on income.

Tamaki's plan also includes eliminating tax events when exchanging crypto assets. While he envisions making Japan a leader in the Web3 space, the DPP holds only seven out of 465 seats in the House of Representatives, indicating significant challenges ahead. Japan's elections are scheduled for October 27.

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