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The Uniswap Foundation has shared details on the timeline for the upcoming launch of Uniswap’s version 4 (v4) protocol.

Erin Koen, the governance lead at the Uniswap Foundation, stated in a post on the Uniswap governance forum that the launch is projected to take place within the next four months. This timeframe hinges on the successful implementation of Ethereum’s upcoming Cancun upgrade (targeted by the end of September) and the finalization of a comprehensive audit process that may also take up to four months.

Reinventing Uniswap: introduction of “hooks” in version 4

Uniswap, the largest decentralized exchange protocol, is preparing for its next significant evolution with the release of version 4 (v4). Its draft code released on June 13 indicates a shift towards a more modular exchange structure, predominantly through the incorporation of “hooks.” These hooks are smart contracts that will facilitate additional customization in Uniswap’s liquidity pools using methods such as dynamic fees, on-chain limit orders, and customized on-chain oracles.

The v4 release will also introduce a “flash accounting” system that will result in lower fees for liquidity providers. This system differs from the v3 model, which transferred assets into and out of pools after each swap. Instead, the new method transfers only net balances.

Uniswap’s team anticipates that flash accounting will lead to considerable gas savings in v4. The mechanism relies on “transient storage,” which will be activated by the proposed EIP-1153 change in Ethereum’s protocol, due to be integrated in the upcoming Cancun upgrade.

In this context, Koen said that the next phase in the v4 development process is the ‘protocol code frozen’ stage. This stage includes the incorporation of EIP-1153 into the code. Hence the launch is contingent upon the successful integration of EIP-1153 into the Cancun upgrade, which Koen stated could occur as early as September.

In the meantime, the v4 code is undergoing an audit process. According to Koen, this audit, estimated to take between one and four months, must be completed prior to the official launch of the v4 protocol.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

In its latest bitcoin report for June, asset management firm Ark Invest highlighted growing support from strong holders and improved institutional sentiment toward the leading cryptocurrency.

According to Ark’s analysis, nearly 70% of the circulating supply of bitcoin has not been moved for at least a year, indicating a strengthening holder base and the confidence of long-term bitcoin investors, Ark said.

In June, bitcoin closed at $30,460, reflecting an 11.9% increase for the month. The cryptocurrency found strong technical support at its 200-week moving average, closing the month 14% above it, Ark reported. 

Improved institutional sentiment

Since BlackRock filed for its spot Bitcoin ETF on June 15, the discount to net asset value (NAV)  — meaning the market price of each share is lower than the value of the bitcoin it represents — of the Grayscale Bitcoin Trust (GBTC) reduced from 42% to 30% — a one-year low. The narrowing discount potentially indicates the market’s anticipation of a bitcoin spot ETF approval — increasing the odds of GBTC’s conversion into an ETF, according to Ark’s report. 

Last week, Ark said BlackRock’s ETF filing could be a “turning point” for bitcoin. Days later, Cboe amended a filing for Ark’s own bitcoin ETF submission to include a BlackRock-like surveillance sharing agreement to deter fraud and market manipulation. Ark also said it was first in line in the renewed race for a spot bitcoin ETF — including applications from Invesco, Valkyrie and Fidelity — as it initially filed in April, Bloomberg reported.

Meanwhile, the balance of bitcoin held on over-the-counter (OTC) desks, which serves as a proxy for institutional activity, reached a one-year high in June, with the OTC bitcoin balance increasing 60% by the end of the quarter. This rise suggests that institutions and large capital allocators are increasingly focused on bitcoin as an investment option, Ark said.

Stablecoin trends

The report also highlighted a divergence in trends between USDC and Tether. While USDC has experienced a 37% decrease in supply year-to-date, Tether has seen a 25% increase, reaching an all-time high in June. Ark said this divergence can be attributed to the uncertain regulatory environment in the U.S., pushing some crypto activity offshore, and the brief depegging of USDC in March following issuer Circle’s disclosure it held $3.3 billion of USDC’s reserves at the failed Silicon Valley Bank.

Despite the positive indicators for bitcoin, Ark’s report warned of economic challenges ahead, with data from the manufacturing sector indicating a decline in new orders in the Purchasing Managers’ Index. Additionally, the U.S. Gross Domestic Income (GDI) is contracting sequentially, implying a possible recession, Ark said.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Observers call for spot-based bitcoin ETF as the bull market raises cost of pre-expiry rollover of positions for futures-based ETFs.

Virtual worlds will need international engagement to stay open and secure, a leaked European Commission strategy paper said.

Abracadabra DAO, the governance body behind the Magic Internet Money and Spell tokens, has unveiled a proposal for a legal framework to transition from a decentralized to a more centralized structure.

The proposal suggests appointing a trustee or attorney specializing in intellectual property rights to safeguard the DAO’s trademarks and manage server expenses, with crucial decisions still governed by Spell token holders, according to a forum post by the Abracadabra project lead yesterday.

Currently, the Abracadabra protocol relies on community members privately funding essential services like hosting and domains, the post said. However, this decentralized structure has posed challenges in defending intellectual property rights, as demonstrated by the forced migration of the DAO’s blog due to a “baseless copyright claim,” the project lead added.

Magic Internet Money is a USD-pegged stablecoin backed by yield-bearing crypto assets with a market cap of around $87 million, according to CoinGecko data. Spell is the governance token of Abracadabra’s DeFi lending platform. Its market cap stands at around $59 million.

DAO legal precedent

Such a move contradicts the original ethos of a decentralized autonomous organizations, though the project lead still emphasized the importance of Abracadabra’s commitment to decentralization.

“Despite our commitment to decentralization, we’ve recognized the importance of introducing a certain degree of centralized legal structure,” the post said. “The purpose here is not to disrupt the decentralized nature of Abracadabra; in fact, it’s to protect it. Every crucial decision will continue to be governed by the Spell token holders as it has always been.”

The U.S. Commodity Futures Trading Commission’s win in the Ooki DAO case last month set a precedent that DAOs can be held liable, adding pressure to the need for legal frameworks, even if that means sacrificing at least some level of decentralization. Sushi DAO also agreed to implement a new corporate legal structure in October.

Multi-phase voting process

The proposed “transition of power” to a centralized entity will be determined through a multi-phase voting process involving Spell token holders. The first phase involves selecting the jurisdiction for the new entity, with Switzerland, Singapore, Malta and Bermuda as the proposed choices. The subsequent phases will seek to define the roles and operations of the new entity before a final vote.

The Spell token has fallen around 3% since the proposal was posted, according to CoinGecko.

In November, Magic Internet Money temporarily lost its dollar parity over fears a portion of its value was backed by FTT — the native token of the collapsed FTX crypto exchange.

 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Bakkt CEO Gavin Michael said the company is eyeing Hong Kong, the UK and the EU for international expansion — as the U.S. continues to lack a clear regulatory framework.

“We’ve said quite clearly that whilst we’re committed to the U.S. market, we’re looking for markets where there’s traction and using those markets as a way to fuel growth,” said Michael at the Piper Sandler Global Exchange & FinTech Conference last month, according to a transcript that was made available today.

“We’re particularly focused on Hong Kong, the UK and parts of the EU because we see partners wanting to move into those spaces and we want to be able to support them,” he added.

Michael said that its international plans are supported by its recent acquisition of U.S.-based integrated crypto-trading platform Apex Crypto from Apex Fintech Solutions in April 2023. He said the company expects to use Apex’s existing partnerships with companies like Webull, M1, Public.com and Stash to expand internationally. 

As these companies establish themselves internationally to offer U.S. equities trading, Bakkt can add crypto trading alongside them, he claimed, resulting in a low barrier to entry. That said, Bakkt has already hit some hurdles, having delisted 25 tokens on the platform due to regulatory concerns.

Other markets providing more regulatory clarity

The Bakkt CEO said there’s more traction in crypto markets outside the U.S. since they’re moving faster in terms of regulatory clarity.

“And when you pull back further from the U.S. and you look at what’s happening in other markets, we see them moving slightly ahead of where we are,” he said. He noted that the UK is moving forward with clear crypto regulation, that Hong Kong is allowing trading in certain cryptocurrencies and that the EU has passed its MiCA framework for crypto regulation.

Michael said that he supports the recent regulatory actions in the U.S. but added that the country needs to go further in providing clear regulatory clarity, particularly at the federal level.

This perceived murkiness has had an impact on Bakkt’s ability to work with companies in the U.S., he said. While Bakkt launched with a number of large partnerships — with companies such as Microsoft and Starbucks — Michael said many firms are waiting for regulatory clarity before moving into the space. 

Michael also noted that while its custody service seen a lot of traction, trading is moving at a slower pace.

“When we think about trading, trading is really heavily influenced by regulatory clarity. We’ve seen that in the overseas markets where regulatory clarity has led to a change in consumer sentiment. It’s really helped provide the operating rules for folks who are supporting trading platforms,” he said.

Michael also noted that Bakkt is exploring the use of the Bitcoin Layer 2 Lightning Network for custody and settlement, explaining that it can be used for financial services like cross-border payments.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Centralized exchange giant Binance announced today that it is rolling out a comprehensive upgrade of its wallet infrastructure. The upgrade, aimed at offering “better efficiency and fund security,” will lead to the retirement of selected deposit addresses and memos.

That means Binance users will have to set up new wallet addresses in the coming months. 

The transition process will be carried out in phases across various cryptocurrency networks including Bitcoin (BTC), Ripple (XRP), Solana (SOL), Litecoin (LTC), Polkadot (DOT), Avalanche (AVAX), Cardano (ADA) and many others, according to the announcement. Users who transact in the listed cryptocurrencies will be individually notified via email. After that, they will have to generate new addresses and memos (if applicable).

Migration timeline: third quarter of 2023

Binance has scheduled the migration for the third quarter of 2023. Nevertheless, users are advised to continue using their current deposit addresses until they receive an official notification from Binance indicating that it’s time to switch to a new address and memo.

Binance reassured its users that funds deposited into expired addresses will not be lost. Instead, these deposits can be manually credited by users through the “transaction history” page on Binance. The new system will result in deposits made into expired addresses not being automatically credited as before. Users can obtain new deposit addresses and memos by logging into their accounts via the official Binance app or website, the exchange added.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The state’s financial regulator accused the U.S. firm of violating multiple state laws, and was looking to explore settlement avenues, court filings show.

Multiple defunct crypto companies are now scrambling to resolve complex financial ties as they seek to repay creditors and customers

The bullish forecast is consistent with bitcoin’s tendency to chalk out sharp uptrends in months after the mining reward halving. The fourth halving is due in early 2024.