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Quick Take

• In this weekly series, we dive into some of the most interesting data and developments across the Layer 1 blockchain landscape, from DeFi and bridges to network activity and funding
• Liquid-staking derivatives are set to arrive in the Cosmos ecosystem, adding to the continued growth of this class of DeFi protocols over the past year
• Exploits continue to plague protocols throughout L1 ecosystems. On Solana, MEV attacks are becoming a growing concern

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Thursday was quite a positive day for bitcoin miners on the stock market, with many going up by double digits.

After dipping below $21,000 for the past two weeks, bitcoin prices shot past it and closer to $22,000 on Thursday. Prices were close to $21,800 as of press time, according to TradingView.

Marathon’s stock was up by 24.07%, followed by Digihost (+18.10%) and Greenidge Generation (+16.87% ).

Several miners published updates on Thursday about last month’s operations. Argo sold 637 bitcoin in June, Hive Blockchain reported 278.5 BTC mined in June and Iris Energy announced revenues down 27% in June.

Their stocks rose by 7.19% (on Nasdaq), 12.38% (on the Toronto Stock Exchange) and 10.30%, respectively.

Here’s how crypto mining companies performed on Thursday, July 7:

© 2022 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 mining company Compass Mining is letting go of 15% of its team.

The miner is also cutting salaries and spending, according to a statement on Thursday. Pay cuts to senior employees and the executive team were up to 50%.

“While painful, these changes will enable Compass to stay agile and well-positioned in this evolving market, which has challenged many of our industry peers,” the statement from co-founders and interim CEOs Thomas Heller and Paul Gosker said.

The company recently announced the resignation of its CEO and CFO, citing “multiple setbacks and disappointments.” Around that same time, a conflict with one of its hosting providers over claims of missed payments became known to the public.

Compass said Thursday that it grew too quickly while its service is “not nearly where it needs to be.” It also pointed to the recent market downturn and anticipated future market conditions.

“When we launched, we were amazed by the level of demand for our services, and as a result, we tried to address the operational, financial, and technology bottlenecks faced by all growing companies by hiring more people,” the statement read.

Compass will also rein in marketing spending. “We will spend more time diligencing (sic) content providers, and partner with those with high integrity, that care about companies they accept dollars from,” the statement said.

© 2022 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 Treasury has given the White House its framework for future international cooperation on crypto. 

As the department announced on July 7, it has responded to the provisions of US president Joe Biden’s March executive order on digital assets, which called on agencies to create a series of reports. 

Today’s framework was a response to a request for an international framework within 120 days that “should reflect ongoing leadership by the Secretary of the Treasury and financial regulators in relevant international financial standards bodies, and should elevate United States engagement on digital assets issues in technical standards bodies and other international fora to promote the development of digital asset and CBDC technologies consistent with our values.”

The fact sheet points to a series of international organizations, including the G7, G20, FSB, FATF, World Bank, IMF and OECD, as venues to promote the US approach to digital assets abroad. 

The Treasury did not publicize the actual framework and representatives would not provide it to The Block when contacted. The Executive Order tasks the Treasury with producing a follow-up report on actions taken pursuant to the framework, which will be due in a year.  

The Treasury worked with the Secretary of State, the Secretary of Commerce and the Administrator of the US Agency for International Development. 

© 2022 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.

Teller Finance, a decentralized finance (DeFi) lending platform, has launched a new feature allowing a ‘buy now pay later’ (BNLP) for non-fungible tokens, according to a report from Decrypt. 

As of right now, the NFT projects Teller supports are Bored Ape Yacht Club, Mutant Ape Yacht Club, Moonbirds, Doodles, Cool Cats, Azuki, Meebits, Adidas Originals: Into the Metaverse, and RTFKT-MNLTH and Murakami.Flowers Seed.

Teller’s NFT BNLP service is called “Ape Now, Pay Later” and is built on the Polygon network.

Teller Finance itches the same impulse that other firms such as Fractional have done in the past: letting users pay for expensive NFTs without forking over the thousand-dollar list price upfront. Unlike Fractional, which ‘fractionalized’ NFTs into smaller and more affordable parts that multiple people can own, Teller Finance permits one individual to pay a down payment on an NFT and pay the rest of the cost later. 

BNLP allows users to own an item while only paying a portion of the total cost upfront. The buyer then pays for the item in its entirety over time — often with interest, as is the case with BNLP platform Klarna. 

© 2022 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.

Government employees who own digital assets like cryptocurrencies or stablecoins may not work on matters that could have a “direct and predictable effect” on the value of their assets, according to a new legal advisory from the US Office of Government Ethics.

The Office of Government Ethics oversees the executive branch ethics program across more than 130 agencies. The legal opinion comes as cryptocurrency gains mainstream popularity, and Washington eyes regulating digital assets. 

Cryptocurrencies and stablecoins do not meet the office’s definition of “publicly traded securities, according to the advisory, which was penned by Office of Government Ethics Director Emory A. Rounds III and published on Tuesday. 

“An employee who holds any amount of a cryptocurrency or stablecoin may not participate in a particular matter if the employee knows that particular matter could have a direct and predictable effect on the value of their cryptocurrency or stablecoins,” the advisory says.

The Office of Government Ethics did not respond to a request for comment. 

The advisory also addressed employee stock interests in public and private companies. Regulatory exemptions do cover “publicly traded securities” companies that develop cryptocurrency or stablecoins, but do not apply to equity ownership in private companies.

The executive branch ethics program aims to “prevent financial conflicts of interest to help ensure government decisions are made free from personal financial bias,” according to the Office of Government Ethics website.

An employee who owns a mutual fund with “a stated purpose of concentrating investments in cryptocurrencies, stablecoins, cryptocurrency or stablecoin derivatives, or cryptocurrency or stablecoin services” may only participate in a matter that affects one or more of its holdings if the employee has less than $50,000 in all mutual funds that concentrate in the same financial services sector, according to the advisory.

Government agencies should look closely at crypto- or stablecoin-related funds to determine how to move ahead with employees, the advisory warned. 

“Although it is sometimes possible to identify whether a fund is a diversified or sector fund based on the fund name, a number of similarly named blockchain and digital asset funds have adopted widely divergent investment strategies, resulting in some qualifying as sector funds and some as diversified funds,” the advisory said.

© 2022 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 Bitcoin network mining difficulty has fallen by 1.41%, according to BTC.com.

The drop follows another 2.35% dip in difficulty at the end of June. Before that, in early June, it increased by 1.29%.

Mining difficulty refers to the complexity of the mathematical process behind mining, during which miners are repeatedly trying to find a hash below a set level. Miners that “discover” this hash win the reward for the next transaction block. Mining difficulty adjusts every 2,016 blocks (roughly every two weeks) in sync with the network’s hash rate.

Meanwhile, the network’s hash rate has increased by about 2.4% since July 22, the date of the last update, according to data compiled by The Block Research.

© 2022 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.

Iris Energy reported a mining revenue of $3,546,000 for the month of June — down roughly 27% from the previous month.

The company’s average hash rate remained at the same level (1.165 exahash per second), while revenue from each bitcoin mined went from $32,264 in May to $23,925.

Bitcoin lost about a third of its value last month, and was trading at roughly $21,000 at the time of publication, according to Coinbase data.

Iris Energy mined a total of 148 BTC in June. The company said that it intends to continue liquidating daily bitcoin mined, pointing out that that has been its strategy since the start.

The also company expects to reach 4.3 EH/s by the end of 2022 but has also said that plans to expand beyond that goal might be delayed due to current market conditions.

Per the statement, Iris will “defer major additional capital expenditure until the current market uncertainty subsides and financing terms improve.”

The company has a series of sites under development, two in Canada and one in Texas.

© 2022 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.

Quick Take

• Pegaxy is a Polygon-based horse racing game in which players can buy at least one horse NFT and race it against other players.
• Pegaxy’s growth slows down as its dual-token model proves unsustainable due to the strong inflationary pressure of its in-game currency, VIS.
• Its countermeasure against the declining floor price of its horse NFT, Pega, appears ineffective and worsens VIS’s mint-burn ratio.

This research piece is available exclusively to
members of The Block Research.
You can continue reading
this Research content on The Block Research.

Crypto mining firm Hive Blockchain produced 278.5 BTC and 2,542 ETH in June.

The company currently holds  3,239 bitcoin and 7,667 ether, according to a statement on Thursday.

Hive increased its bitcoin mining hash rate from 2.17 exahash per second (EH/s) to 2.24 EH/s. Ethereum mining capacity went from 6.26 (TH/s) at the beginning of the month to 6.0 TH/s, as some miners were taken offline temporarily for layout optimization due to higher summer temperatures, per the statement.

Hive CEO Frank Holmes said that has been able to manage the market volatility recently, as it has weathered “crypto winters” before. Per Holmes, the company has strived to “maintain a strong balance sheet of Bitcoin and Ethereum which is completely unlevered.”

The CEO also said that the business remains cash flow positive and has no “significant debt,” aside from a long-term real estate mortgage from Canadian bank with less than 4% interest.

“We are cautious, seeking out opportunities and remain firm in our belief that Bitcoin and Ethereum will survive to thrive again after all the over-leveraged players are forced out of business,” Holmes said.

The company plans to fund its expansion going forward by selling the current production of bitcoin and ether while “striving to maintain” bitcoin inventory levels.

“We are able to undertake this strategy and maintain coin inventory levels as a result of keeping a strong balance sheet position and never having entered into any agreements whereby our coin holdings have been staked, put up as collateral, or otherwise put at risk of being called by another party to cover a position due to the current decline in the price of crypto currency,” said Hive CFO Darcy Daubaras.

Last month, some of the miners who typically hold on to their mined bitcoin reported having sold a large portion of their holdings, including Bitfarms, Core Scientific and Argo.

© 2022 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.