GM friends.
This week, in a conference room somewhere in the world, a blockchain developer said, “f#%k it, we’re moving to Ethereum!”
Get a fresh pot of coffee started because this is your mid-week crypto update. ☕️📰
Here’s what’s in today’s issue:
- David shares his thoughts on Canto (L1) becoming an Ethereal L2, Japan’s largest investment bank launching a Bitcoin fund, Balancer is under a DNS attack & a US + UK legislation update.
- Rekt Capital has the latest technical analysis for you on the market.
- Erik has an article on MetaMask Snaps
- In case you missed it by Rebecca.
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L1 Canto to Become an Ethereum L2
It’s happened again folks.
News dropped Monday that the L1 blockchain Canto will be transitioning to become an Ethereum L2.
Canto and Polygon issued a joint announcement, as the former will be using the latter’s chain development kit to make the transaction.
As an Ethereum L2, Canto developers say the blockchain will focus on bringing real world assets on-chain, which Canto is calling “neofinance”. Canto started as a DeFi-focused L1 with a launch in the Cosmos ecosystem in mid-2022.
Canto’s announcement comes on the heels of a similar one made by Celo, where community members overwhelmingly voted over the summer to transition the L1 into an Ethereum L2.
What this Means for Ethereum
The significance of these transitions isn’t so much about how these blockchains benefit Ethereum (Canto and Celo are small with total market caps at $54M and $235M, respectively), but rather what they say about how Ethereum is doing in the L1 competition to become the internet’s “commerce” blockchain.
When competitors are saying to Etheruem, “I can’t beat you, so I’ll join you”, that means Ethereum is dominating.
In fact, when taking a step back and looking at the entire crypto ecosystem, the data shows that Ethereum is crypto’s blackhole, because every time a project tips over its event horizon, Ethereum’s network effect becomes even stronger.
So what about the data?
For starters, Ethereum commands 20% dominance over the entire crypto market. An impressive statistic considering the amount of competitors out for blood. And that’s not accounting for any of Ethereum’s L2 market caps.
When we look at the total value locked (TVL) on all Ethereum L2 (except for Polygon), we see this number basically ranging near its all time high (ATH).
And speaking of ATHs, so are the transactions per second (TPS) for all Ethereum’s L2s (again not including Polygon), which is currently at 67, with an Ethereum scaling factor of 5.65x.
Looking ahead, if Ethereum continues to pull competing L1s into its orbit, big projects keep onboarding as L2s, and the upcoming “danksharding” upgrade indeed scales Ethereum to over 100K TPS, then it’s hard to see how Ethereum does not become the internet’s “commerce” blockchain.
What do you think about Ethereum’s growing L2 network? Reply to this email, and let me know. I’d love to hear your thoughts.
Japan’s Largest Investment Bank is Launching a Bitcoin Fund for Institutions
More big news concerning the institutional adoption of bitcoin.
On Tuesday it was announced that Laser Digital is launching a long-only bitcoin fund for institutional investors.
Laser Digital is a subsidiary of Nomura, Japan’s largest investment bank and brokerage, with $437 billion (USD) in assets under management and $9.4 billion in annual revenue.
The plan is for Laser Digital’s “Bitcoin Adoption Fund” to be the first of multiple crypto asset funds to be tailored for institutions. Laser Digital’s bitcoin fund will operate as a mutual fund under the regulation of the Cayman Islands Regulatory Authority.
The subsidiary also received an operating license from Dubai’s Virtual Asset Regulatory Authority in August.
Balancer is Under a DNS Attack
Balancer is in the midst of a DNS hacking attack.
On Tuesday evening, the Ethereum protocol posted on X that the web front end was under attack, and warned all users to not interact with the protocol until further notice.
At the time of this writing, it appears that the hack is still ongoing.
If a user tries to pull up Balancer’s web address, they are being diverted to a malicious website where their funds can be stolen. On-chain evidence indicates that the hacker has likely stolen about $200,000 thus far. Balancer currently has about $700M locked on the protocol.
If you have funds on Balancer, don’t interact with the protocol until the development team gives the all-clear notice.
The balancer hack comes just after the high profile hacks against Mark Cuban and Vitalik Buterin.
US & UK Legislation and Rules Round-Up
We’ve got multiple news stories coming out this week concerning crypto legislation, regulation, and rules in the US and UK. Here’s what you need to know.
- Senator Elizabeth Warren’s proposed Digital Asset Anti-Money Laundering Act has gained the support of some powerful senators, including Dick Durbin (D. Ill.) and Gary Peters (D. Mich.). It’s uncertain if Warren’s bill will ever become law, but if it does it’s going to be a disaster as it would extend anti-money-laundering requirements over crypto wallet providers, miners, validators, and others. The bill is moving through Senate committees now.
- In the other chamber, members of the US House Financial Services Committee, led by Chair Patrick McHenry (R. NC), are working on two bills that would prevent the Federal Reserve from ever issuing a CBDC. One bill bars the Fed from running CBDC pilot programs while the other issues a flat-out prohibition. If the bills get through the committee, they’ll move to the House floor for debate.
- David Hirsch, who heads the SEC’s crypto enforcement division, said on Tuesday that more charges are coming for various crypto exchanges, token and DeFi projects, and others in the space. Hirsch made the battle cry at the Securities Enforcement Forum conference in Chicago.
- The New York Division of Financial Services (NYDFS) is asking for public feedback on a set of stricter criteria for the regulator’s token “greenlist”, which is a list of tokens that the regulator allows licensed crypto firms in New York to engage with. The NYDFS regulates some big players (e.g. Gemini, eTore, etc.), and some major tokens (e.g. BTC, ETH, PYUSD, etc.) are already on the list. So the stricter criteria appears to be aimed at combating future FTX style blow-ups from smaller or more speculative assets.
- On the pond’s other side, the UK’s Economic Crime and Corporate Transparency Bill is soon set to become law. This bill gives UK police the ability to freeze crypto assets from suspected criminals even before any arrest has been made. The bill is meant to counter suspected criminals’ movement of crypto assets when they sense law enforcement getting close.
In today’s edition of the Rekt Capital Newsletter, the following cryptocurrencies will be analysed and discussed:
- Chainlink (LINK)
- Woo Network (WOO)
- TomoChain (TOMO)
- Bitcoin Cash (BCH)
- Cosmos (ATOM)
- Ocean Protocol (OCEAN)
Let’s dive in.
Chainlink — LINK/USDT
Over the past few weeks, we have periodically shared updates on LINK starting on August 16th where we assumed price would drop an additiona -17% to the downside to revisit the Range Low support:
On August 23rd LINK has successfully retested the Range Low as support once again:
And here is today’s update:
LINK has successfully now reversed from the Range Low area, rallying +20% to the upside.
With time, it’s possible that LINK will revisit the Range High resistance.
Woo Network — WOO/USDT
During 2023, WOO deviated below the blue triangle via downside wicks before managing to secure a Weekly Close above the base of the pattern so as to position itself for a revisit of the top of the market structure.
However a few weeks ago WOO performed a series of Weekly Closes below the pattern, losing the structure but revisiting the same black dashed support from which previous downside wicks had also touched and reversed from.
Right now, for WOO to continue enjoying continuation from this point — it needs to reclaim the bottom of this pattern as support.
Because the danger is that if this triangle base turns into new resistance, price could get rejected again and even revisit the black dashed support again.
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What are MetaMask Snaps?
MetaMask is spreading beyond the Ethereum ecosystem and becoming a platform.
The most popular crypto wallet has made a big step in boosting innovation in its ecosystem, called Snaps.
View them as ‘browser extensions’ or plugin for your MetaMask app, adding functionality.
Snaps let developers of other protocols build plugins for MetaMask.
Keeping people safe is one of the big goals, moving between chains another.
TO READ THE REST OF THIS ARTICLE, CLICK HERE – “What are MetaMask Snaps?“
Crypto Market News
- Telegram has launched a crypto wallet over three years after announcing its plans to build a Web3 ecosystem. Source
- Deutsche Bank has announced it’s working to establish digital asset custody and tokenization services. Source
- The production company behind Stoner Cats, a web series, has been sued for $1M by the Securities and Exchange Commission (SEC) for selling royalty generating NFTs. Source
- Coinbase has launched zero-fee trading for UK customers through Advanced Trade until October 7. Source
- Bybit is expecting to exit the UK market as new regulations are coming into effect soon. Source
- DeFi activity dropped 15% in August to $52.8 billion according to VanEck. Source
- Mark Cuban has lost $870K from his MetaMask wallet in a phishing hack. Source
Coins and Projects
- Bitgo and Swan Bitcoin have unveiled plans to create a Bitcoin-only trust company pending regulatory approval. Source
- Nasdaq executive says Bitcoin’s BlackRock ETF rejection was “purely procedural” but not a final decision. Source
- Paxos has been identified as the culprit behind the accidental $500K Bitcoin transaction fee. Source
- Coinbase CEO Brian Armstrong has confirmed that the exchange will add support for the Bitcoin Lightning network. Source
- Ethereum developers failed to launch its new testnet Holesky due to a misconfiguration in one of the genesis files of the network and has been postponed for two weeks. Source
- Polygon has released 3 proposals that will kick off the transition to Polygon 2.0 including the conversion of MATIC to POL. Source
- Nasdaq has filed an application for a mixed Ethereum ETF in partnership with Brazilian asset manager Hashdex. Source
- Lido’s Staked ETH tokens will soon be brought to the Cosmos ecosystem via a bridging project. Source
- Google Cloud has become an oracle provider on the LayerZero network. Source
- Coinbase’s Base network hit a record 1.88M daily transactions on September 14, surpassing Optimism and Arbitrum. Source
- USDC has launched on the Polkadot network and is issued natively on Polkadot Asset Hub. Source
- Tether has authorized (not issued) $1 billion USDT to replenish the Tron network. Source
- Optimism has issued a community airdrop of OP tokens worth $27M. Source
- Sui network has launched Google, Twitch, and Facebook logins for its dApps via a zk feature. Source
- Cosmos Hub has been upgraded to enable its new liquid staking module. Source
- BNB Smart Chain has launched its Optimism powered Layer-2 called opBNB on the mainnet. Source
- Binance’s Bitcoin trading volume has massively dropped by 57% due to the increased regulatory pressure. Source
- Magic Eden has integrated support for Solana’s compressed NFTs into its marketplace. Source
- Canto blockchain will migrate to a Layer-2 zk-rollup on Ethereum after Polkadot project Astar announced similar plans. Source
Macro News
- US inflation for August came in higher than expected after rising from 3.2% to 3.7% due to higher energy prices. Source
- The European Central Bank (ECB) hiked its interest rate to a record 4% and has hinted this is a possible peak. Source
- SWIFT has announced 3 central banks have joined the beta phase of the platform’s CBDC project. Source
- The UK House of Lords have passed a bill to seize stolen crypto and is in the final stages of approval. Source
- Citigroup has launched a private and permissioned blockchain for institutions offering cross-border payments, liquidity, and automated trade finance solutions. Source
Thank you so much for your support, and I truly hope that today’s issue will give you insights needed to help you master your wealth.
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Wealth Mastery (Lark Davis, and the Wealth Mastery writing team) are not providing you individually tailored investment advice. Nor is Wealth Mastery registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. Wealth Mastery is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.
You can find a full disclosure of all my crypto & venture investments here.
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
