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The total value of ether pending withdrawal has fallen below $1 billion as the leading smart-contract protocol burns its supply at an increasing rate.

The total amount of ether confirmed and queued to withdraw is approximately 488,470 coins, worth less than $900 million at current prices — significantly less than the more than $3 billion pending withdrawal in mid-April — according to data tracking website Token Unlocks.

Over the next 22 hours, approximately $7 million in ether is slated to be withdrawn.

The Shapella upgrade on Ethereum occurred just before 6:30 p.m. ET on April 12, effectively opening up staked ether withdrawals and marking the first major upgrade since The Merge transitioned the protocol to proof-of-stake last year.

Ethereum’s net staking balance is balancing out

Once significantly weighted on the withdrawal side, Ethereum net staking balance — the total amount of ether withdrawn compared to deposited — is slowly approaching parity.

Yesterday saw a net staking increase of roughly 20,960 coins, bringing the total net staking balance to -344,470 coins, or -$671.23 million, since Shanghai went live.

According to Token Unlocks, the amount of ether deposited is roughly 17.74 million, worth more than $32.5 billion.

Memecoin activity burns more ether

While Ethereum withdrawals slow down amid an increasing percentage of the total supply being staked, network activity drives burn rates even higher than in recent weeks. 

Over the past 30 days, the ether supply has decreased yearly by .611% — significantly higher than the total post-Merge burn rate of .179% per year — according to supply tracking website Ultra Sound Money.

Over the past week, the burn rate has grown even hotter at .884% per year. That means more than 20,400 ether has been burned over the last seven days — or nearly $37.9 million.

Driving the higher-than-normal burns are traders using decentralized exchanges to trade memecoins, such as PEPE and WOJACK. “Over the past week, Uniswap has consistently been the largest ETH burner due to its increased usage by memecoin traders,” The Block Research Director Steven Zheng noted.

© 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 spike triggered a series of liquidations on the exchange.

ConsenSys-built Layer 2 network Linea is introducing a loyalty NFT campaign to boost activity on its testnet.

The program will reward users with NFTs for performing certain tasks related to using the testnet, according to a blog post. The plan aims to help stress the network and test activities at scale ahead of the network’s mainnet launch expected in the coming months. 

The weekly challenges will involve using bridging protocols built on the Linea testnet including Hop Protocol, Celer Network, Multichain and Connext. Bridging refers to the transfer of digital assets across different networks.

The campaign follows similar ones run by Layer 2 networks Arbitrum, Optimism and Polygon that all used the loyalty platform Galxe, which will also be used by Linea.

Layer 2 loyalty campaigns 

The campaigns have often resulted in large increases in activity on Layer 2 networks, sometimes causing congestion on the network. Arbitrum’s Odyssey campaign even resulted in fees temporarily rising higher than on the Ethereum mainnet, a suboptimal result for a supposed scaling solution. 

The programs have been targeted by airdrop farmers who use networks in the hope of meeting requirements to receive valuable tokens in the future. While the campaigns have not been directly used as criteria for receiving airdrops, using the networks to do the outlined tasks may have boosted chances of getting them.

Layer 2 networks including Optimism and, most recently, Arbitrum, have conducted airdrops that resulted in windfalls for some earlier users.

© 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.

Bitcoin spot trading volume declined sharply last month mainly as crypto exchange behemoth Binance ended its zero-fee program.

The volume plunged by over 10 million bitcoin in BTC terms or by $265 billion in USD terms in April, dropping more than 65% from March in BTC terms, on exchanges tracked on The Block’s Data Dashboard. The volume dropped as Binance added back fees on bitcoin pairs, according to The Block’s data research analyst Rebecca Stevens.

“Binance’s move strongly impacts market makers and traders, whose strategies strongly depend on how many basis points they pay for every trade,” said Simon Cousaert, director of data at The Block.

Binance ended its zero-fee spot trading campaign in March after introducing it last July to celebrate its fifth anniversary. The zero-fee trading was offered for 13 bitcoin pairs, including BTC/USDT, BTC/BUSD and BTC/EUR.

Binance users can still trade bitcoin against stablecoin TrueUSD (TUSD) for free, according to its website.

 

Binance’s trading volume declined, too

The end of the zero-fee campaign also affected Binance’s total spot trading volume last month.

It plummeted by $217 billion in USD terms to $102 billion in April from the previous month. As a result, Binance’s spot market share slipped below 50% — a level not seen before July 2022 — according to The Block’s Data Dashboard.

Overall, crypto spot trading volume fell in April 

Binance’s underperformance also affected overall crypto spot trading volume in April, declining around 44% compared to March.

In USD terms, the overall volume hit $400.5 billion in April, compared to $712.6 billion in March, according to The Block’s Data Dashboard.

Still, Binance remained a volume leader in spot trading in April. The exchange also held steady on its dominance in the share of bitcoin futures open interest despite the U.S. Commodity Futures Trading Commission sued Binance and its CEO, Changpeng “CZ” Zhao, for allegedly operating an “illegal” exchange and a “sham” compliance program.

Zhao, at the time, called the suit “unexpected and disappointing” and said, “We do not agree with the characterization of many of the issues alleged in the complaint.”

© 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.

Sports Illustrated’s ticketing marketplace SI Tickets has developed “Box Office” in partnership with Ethereum software company ConsenSys.

The crypto conglomerate also paid off a $350 million senior secured term loan, which was issued by a lender syndicate led by Eldridge.

PEPE, the meme token that sprouted out of the Pepe the frog meme, has rocketed to a $500 million market cap following a 2,100% rise since it was issued last month.

The clash between U.S. regulators and crypto “could be the best thing that ever happened to the industry” as it roots out bad actors, according to Bloomberg Opinion’s editorial board. 

The Securities and Exchange Commission’s crackdown on the sector “could all but shut the door on crypto” in the U.S., according to the column. Yet this risks rejecting a technology with the potential to develop better forms of money, more efficient financial tools and novel ways of governing enterprises. 

“With proper identification requirements, blockchain networks could even be a lot more transparent, and less conducive to crime, than the existing banking system,” the editorial argued. 

The SEC, under Chair Gary Gensler, has been leading a charge against crypto firms in recent months. The agency filed a lawsuit against Bittrex last month, alleging it was operating as an “unregistered national securities exchange, broker, and clearing agency.” In March, the SEC issued Coinbase a Wells Notice regarding aspects of its exchange, staking service Coinbase Earn and Coinbase Wallet.

Is ether a security?

To avoid losing the potential benefits of crypto technology, U.S. authorities should carve out venues where financial instruments that don’t fall into existing buckets like securities or derivatives can be legally traded, the editorial said. Bloomberg named bitcoin and ether as two such instruments. 

Disclosure requirements could be mandated by Congress or by an industry-funded body along the lines of the Financial Industry Regulatory Authority.

“Such a framework would grant the SEC and the Commodity Futures Trading Commission broad powers to quickly rid the market of thousands of bad actors, without getting bogged down in definitional details — and without diminishing their authority in their traditional jurisdictions,” the opinion piece concluded. “Speculators would still make bets that go wrong, as they do in any market. But the general reduction in scamminess would provide genuine innovators with the best possible shot at achieving something consequential. Crypto’s true believers could hardly ask for more.”

© 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.

Crypto exchange Coinbase is officially entering the crypto perps market.

The firm, which has made headlines in recent weeks for its brouhahas with U.S. regulators and its plans to set up shop overseas, said Tuesday that it would enable international users to trade so-called perpetual futures out of Bermuda through a new platform. 

Dubbed Coinbase International Exchange, the platform touts a robust trading experience delivered in partnership with a number of external market makers ready to provide liquidity, as well as a liquidation framework that “meets rigorous compliance standards,” according to marketing materials shared with The Block.

“Coinbase International Exchange will enable institutional users based in eligible jurisdictions outside of the U.S., to trade perpetual futures,” the firm said. “Perpetual futures accounted for nearly 75% of global crypto trading volume in 2022, creating highly-liquid markets and offering traders additional versatility in their trading strategies.”

Coinbase plans to start business with bitcoin and ether derivatives “with additional listings to come in the future,” a spokeswoman said. Initially, it will offer traders 5x leverage.

Shaky stateside regulatory environment

As The Block previously reported, the firm has long been eyeing the build out of an offshore derivatives business to compete with behemoths like OKX and Binance. It was a business in which now defunct crypto exchange FTX had secured a large market share.

Coinbase isn’t alone. Rival Gemini recently announced that it would offer derivatives trading to customers across 30 jurisdictions.

The push by Coinbase and Gemini reflect the opportunity for firms to capitalize on the gap left by their fallen rival FTX, while also illustrating the uncertain regulatory environment stateside.

Coinbase recently escalated its own tussle with the Securities and Exchange Commission through the threat of a lawsuit following the agency’s issuance of a Wells Notice against the firm in March.

The firm announced last month that it would operate its new international exchange under Bermuda’s regulatory framework.

© 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.

Coinbase International Exchange will offer trading of perpetual futures for bitcoin and ether.