September 1, 2021 | Issue #184

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MUST READS

Finding Financial Freedom In Afghanistan

Roya Mahboob is a cypherpunk that has been using and promoting Bitcoin in Afghanistan since 2013. Today, Roya says Bitcoin is more critical than ever for Afghans. Here is her story.

It's a simple process... Alex Gladstein writes something. We read it... And you should too.

Ether Surges 10% In The Past 24 Hours

Ether climbed to a three-month high today (up ~10% in the past 24 at the time of publishing) likely due to a multitude of reasons...

1.) Ethereum set a new record for daily coin burn.

The latest move higher represents a bullish continuation of the Ethereum Improvement Proposal (EIP) 1559-driven rally. One key element of the EIP-1559 upgrade was a change in how the network handles transaction fees, which are now “burned” or removed from circulation. This new deflationary element could potentially boost the long-term value of Ethereum by gradually reducing the total supply.

Related: This week, Coin Metrics released data on new EIP-1559 metrics, miner flows, valuation ratios, and payment metrics to help analyze BTC and ETH.

2.) The market sentiment may have received a boost from Offchain Lab’s rollout of Arbitrum One and raise of $120 million.

3.) Ethereum’s latest price action also comes after an impressive month for the NFT market, which has experienced a resurgence following the initial early-year boom.

The Crypto Dons of Beirut

Over the last two years, Lebanon has been gripped by an economic crisis, resulting from years of government corruption and mismanagement.

Electricity supply has collapsed, pharmacies and gas stations are empty, and the Lebanese pound has lost more than 90% of its value. Savings, pensions, and salaries have evaporated, and much of the country’s previously affluent middle class has found itself struggling to pay basic bills. People who were already poor are now struggling to afford food as the monthly min. wage in Lebanon is now the equivalent of just $33.

So where can citizens turn?

Enter cryptocurrency... and the complex and legally murky ecosystem that may just change Lebanon's future.

The FOMO Continues

In the latest round-up of crypto adoption news...

The flagship fund offered by noted hedge fund manager and bitcoin bull Bill Miller, the Miller Opportunity Trust, disclosed in an Aug. 27 SEC filing a $44.7 million stake in the Grayscale Bitcoin Investment Trust (GBTC).
According to SEC filings from Morgan Stanley, the bank bought upwards of 6.5 million shares of Grayscale Bitcoin Trust (GBTC) across more than a dozen funds. With each share trading at $37.82, that's about $240 million in GBTC... and would make the investment bank the second-largest known holder of GBTC after Cathie Wood's ARK Investment Management, which owns over 9 million shares.

Digital currency in your 401(k)? Now you can and why you should

How much of your digital currency profits will go to capital gains taxes? Probably too much, but now you have a choice. You can eliminate capital gains taxes on digital currency profits with the Alt401(k) from ForUsAll and Coinbase.

By using after-tax contributions for your digital currency investments, you can buy, hold, and trade those assets in a retirement plan, making future gains tax-free. That can mean a big boost for your retirement.

The Alt401(k) adds potentially higher growth than traditional retirement investments, like stocks and bonds, without significantly adding risk. That’s because, historically, digital currencies haven’t gone up and down at the same time as stocks and bonds. And because digital assets in the Alt401(k) are held in offline cold storage, they’re safe from online hacking.

Read the eBook to learn more.

DEEP DIVE

DeFi Is Back

NFTs aren't the only things blowing up (again) over the past few weeks. Decentralized Finance (DeFi), also known as the universe of crypto-based saving, trading, and lending apps is roaring back with vengeance. For example, this week, Total Value Locked (TVL) - the total amount of money traders have put to work on various DeFi platforms - just broke its previous all-time high of $156 billion from May.

What's causing this corner of the market to surge again? Let's take a closer look:

Institutions are beginning to join the party
Square, JPM, and BlackRock are the latest giants to show signs of interest. According to the Chainalysis Global DeFi Adoption Index (covered last week), the share of DeFi transaction volume conducted by large institutional traders rose from less than 10% in mid-2020 to over 60% in the Q2 of this year.
Celo, Aave, Curve, Sushi launch $100 million DeFi initiative
Popular DeFi apps have banded together with the goal of bringing DeFi to “the 6 billon smartphone users around the world.” Using a crypto platform called Celo, the group aims to increase crypto adoption in developing economies.
Aave will launch a dedicated lending platform for institutions “within weeks”
Aave's goal is to provide a more comfortable risk appetite for institutions to participate in decentralized finance. With $15.18 billion TVL, just about everyone has their eyes on Aave, the largest DeFi application... including Bitwise, the world’s largest crypto-index-fund manager, who recently announced the creation of the Bitwise Aave Fund.
MetaMask has seen its user count soar 1,800% this year
The popular wallet option for DeFi now boasts more than 10 million users, up from around 600,000 last summer, and 5 million in April.

FTX-US acquires crypto derivatives exchange LedgerX

FTX-US, the US affiliate of FTX, has agreed to buy LedgerX, a derivatives exchange and clearinghouse regulated by the Commodity Futures Trading Commission (CFTC).

The acquisition will provide FTX-US with the ability to offer derivatives, such as options and futures contracts on Bitcoin and Ethereum.

The majority of global crypto volume trades through derivatives, with more than $23 trillion having been traded so far this year compared to traditional crypto spot trading volumes of over $13 trillion.

Related: FTX provides $120M in debt financing to Liquid; Blockchain.com currently has "4 M&A deals in progress right now"

Square's Plan to Build a Decentralized Bitcoin Exchange

Last month, the CEO of Square and Twitter, Jack Dorsey, announced a new Bitcoin-centric business called TBD. This week he revealed what it’s going to be: a Decentralized Exchange (DEX), of sorts.

DEXs such as Ethereum’s Uniswap and SushiSwap give users the ability to directly swap/trade tokens, rather than having to use a centralized exchange such as Coinbase. The problem though is that DEXs, in their current form, don't allow for on-ramps using fiat.

TBD intends to change that by creating a DEX built around Bitcoin, that provides users a wide array of on-ramps for exchanging fiat currency for BTC.

A DAO Primer

Decentralized Autonomous Organizations (DAOs) are simultaneously brilliantly simple and immensely complex.

Behind this incompatibility lies endless opportunities for building, failure, iteration, and exploration. In this deep dive, Clay Robbins provides a brief summary of the current state of DAOs and makes a few observations about these opportunities.

REGULATORY FRONT

Cuba To Recognize And Regulate Cryptocurrencies

Last week, the Cuban government published a resolution to recognize and regulate cryptocurrencies, citing “reasons of socio-economic interest.”

The document doesn’t specify making crypto legal tender, as El Salvador is doing with Bitcoin. Instead, it references “licenses” for virtual-asset service providers, and outlines the central bank’s broader regulatory intentions. Some citizens are optimistic about what the resolution could mean: “This is bigger than just making money. This is really freedom.”

This summer, thousands of Cubans took to the streets in rare mass protests over a pandemic-era economic crisis — including a shortage of food and medicine. The country’s $3 billion annual revenue from remittances — expats sending money home to family— has also shrunk as over 400 Western Union locations shuttered, further limiting access to cash. In response, many Cubans have turned to crypto as a cheaper and more reliable way to send and save money. Get the inside scoop of Cuba's Bitcoin revolution here.

SEC Signs Deal To Investigate DeFi Transactions

The SEC has been keen to get its hands in DeFi as it rapidly grows. So much so that they've partnered with AnChain.AI, a blockchain analytics firm, to further assist in monitoring and regulating DeFi transactions.