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Decentralized exchange Curve Finance is currently voting on a governance proposal to accept Wrapped Ether as collateral for minting and borrowing its decentralized stablecoin, crvUSD.

If approved, the measure will enable platform users to utilize WETH as collateral and mint a corresponding amount in the exchange’s native crvUSD stablecoin. The WETH token represents tokenized Ether on the Ethereum blockchain, and the value of WETH is pegged to the value of ETH one-to-one.

The debt ceiling for WETH collateral is set at $200 million, meaning that only 200 million crvUSD stablecoins can be minted with WETH as collateral.

Curve collateral

Curve currently accepts Wrapped Staked Ether and Staked Frax Ether as collateral for minting its stablecoin. Both are Ethereum derivatives.

The crvUSD stablecoin was first launched on the Ethereum mainnet last month by Curve Finance developers. Employing a token design akin to MakerDAO’s DAI stablecoin, crvUSD does not rely on dollar reserves, but rather is over-collateralized by supported crypto assets that surpass the value of issued crvUSD.

Much like DAI, crypto users can mint crvUSD stablecoins through over-collateralized loans on the Curve platform. Curve Finance developers first deployed crvUSD on the Ethereum mainnet in May.

This stablecoin is underpinned by an algorithm called Lending-Liquidating AMM that works by continuously liquidating and automatically depositing collateral. Known as LLAMMA, it manages the risk associated with the stablecoin while maintaining its peg to the U.S. dollar.

© 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.

Hong Kong-based web3 startup Animoca Brands, known for its investments in the metaverse, gaming, and education sectors, announced a strategic partnership with Mitsui & Co. that will include an undisclosed investment from the Japanese conglomerate.

The deal comes at a time when the Japanese government is calling for the adoption of web3 as a national strategy.

“Mitsui and Animoca Brands aim to create new business that contributes to innovation and the uptake of web3 in the Japan market, by utilizing Mitsui’s extensive assets ranging from industrial businesses to consumer businesses, as well as its extensive partner and customer networks,” Animoca Brands said in a statement.

Blockchain technology

The two companies will work on projects that include the application of blockchain technology in wellness and decarbonization, according to the statement. 

The Japanese conglomerate has already invested in decarbonization and blockchain tokenization initiatives, such as a plastic recycling consortium in collaboration with Mitsui Chemicals, IBM, and Nomura Research. A subsidiary called Mitsui & Co Digital Assets also launched Alterna, a retail-focused platform selling tokenized and fractionalized real estate directly to consumers.

The collaboration will complement a previous investment of $22.5m in Animoca’s Japanese subsidiary by Japan’s largest bank, MUFG.

© 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 tool is meant for informational purposes only, Etherscan said.

A former advisor to the U.S. Securities and Exchange Commission is shedding light on a legal doctrine that challenges the authority of regulatory agencies and could potentially put an end to SEC Chairman Gary Gensler’s crypto crackdown. 

J.W. Verret, associate professor of law at George Mason and former advisory committee member to Gensler and other SEC commissioners, broke down the importance of the major questions doctrine in the latest episode of The Scoop podcast. The conversation centered around the recent lawsuits brought by the SEC against Binance and Coinbase over alleged securities law violations.

The major questions doctrine relates to “how courts look at what executive agencies do in the so-called independent agencies and consider how much deference to give the things that they do,” Verret said. These agencies, such as the SEC, receive broad mandates from Congress to regulate certain areas. However, the specifics are often left vague, which has resulted in a significant expansion of regulations through agency rulemaking over the years, he added.

Historically, the Chevron doctrine, a fairly deferential approach to agency actions in Verret’s view, provided a framework for courts to grant agencies broad discretion. However, the major questions doctrine — seen as a competing doctrine — has gained traction among conservative and libertarian-minded judges, Verret suggested. It argues that if an agency seeks to regulate a matter without specific authorization from Congress, especially if it involves national, economic or political importance, it must first obtain explicit approval from Congress.

Implications for crypto regulation

The major questions doctrine could have significant implications for the SEC’s regulatory actions in the crypto space. While agencies like the SEC derive their authority from broad mandates, the major questions doctrine demands clear congressional authorization for major regulatory decisions. It could challenge the SEC’s reach and authority in regulating digital assets that operate on decentralized blockchains, Verret said.

Drawing on examples where regulatory actions went “a step beyond what Congress intended,” Verret highlighted the Howey Test as a good analogy. The test determines whether a financial instrument qualifies as a security. It dates back to 1946, relating to the Howey Company’s sale of citrus groves to buyers who would then lease back the land to Howey — long before the advent of decentralized crypto networks. 

Similarly, the major questions doctrine challenges the SEC’s jurisdiction on cryptocurrencies existing solely on decentralized blockchains, Verret said. “I think it’s an argument that Coinbase and Binance are going to run with.”

The major questions doctrine is not likely to be discussed until the SEC’s lawsuits against Coinbase and Binance.US reach the appellate courts, which could be a long way away, Verret said, “but it’s one of the things that looms over these cases, without a doubt.”

Verret ended the interview by saying he would continue to trade on Coinbase, despite the SEC’s action against it.

“I mostly trade on DeFi now, but Coinbase was a part of my early journey into crypto and I’m not going to stop,” he said. In fact, I’m excited to trade more on Coinbase now as a result of this.”

© 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 Financial Services and Markets Bill stands to recognize crypto as a regulated activity and stablecoins as a means of payment.

Ethereum blockchain explorer Etherscan has unveiled a new AI tool that will use OpenAI’s large language model to help users learn about the source code of any smart contract.

Dubbed “Code Reader,” Etherscan said the beta tool can be used to “gain deeper insights into the code by generating AI prompts for specific code sections or functions that you want to understand better.” It added that targeted questions will produce AI-generated explanations for specific smart contract code, thereby “enabling you to delve into the inner workings of the code.”

“This feature is particularly valuable when interacting with a smart contract for the first time, as it provides a thorough understanding of its operations and functionality,” Etherscan added.

Code Reader’s use cases

Among other use cases, Etherscan said the tool can be used to obtain a comprehensive list of smart contract functions related to reading and writing Ethereum data. The tool can be used to explore code to integrate a smart contract with decentralized applications.

Etherscan posted a disclaimer stating that an OpenAI API key with sufficient usage limits will be required to use the AI service on its website. It also advised users not to assume that all answers are correct. To get started, a user can insert the API key, enter a contract address, select a source file to interact with, and then begin asking questions.

“Don’t assume answers are correct!” Etherscan warned on Twitter. “This is very much a *Beta* release – please let us know what you’d like us to add or improve!”

© 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.

A bill covering privacy and distribution of the central bank digital currency, originally scheduled for June 28, will be delayed

Altcoins witnessed inflows totalling $2.4 million, according to the report.

Financial firm Republic and U.S.-regulated broker-dealer INX are joining forces to build blockchain-based infrastructure and expand asset tokenization for primary and secondary markets.

As part of a deal announced Monday, Republic will invest $5.25 million in INX at a pre-money valuation of $50 million. After the transaction, Republic will own about 9.5% of the outstanding shares of INX, the companies said in a statement. 

Republic and INX have also committed to enter into a non-binding term sheet that outlines a deal in which Republic will acquire 100% of INX common equity at a valuation of up to $120 million.

Primary and secondary markets

“By combining their expertise and resources in both TradFi (traditional finance) and DeFi (decentralized finance), both companies are poised to introduce a wide range of compliant solutions that cater to both primary and secondary markets while also building the underlying retail-focused infrastructure to support the needs of a booming digital economy,” the companies said in the statement.

As part of the collaboration agreement, INX will offer tokenized asset services to Republic’s portfolio of companies.

© 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.

Republic will acquire around a 9.5% stake in INX following the initial investment, with a commitment to acquire of 100% of equity at a valuation of $120 million as early as Q3 this year..