Author: Michelle Lazo

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Ethereum core developers have announced that the highly anticipated Pectra upgrade will be launched by the end of Q1 2025. This decision follows the successful deployment of the Dencun upgrade in March 2024 and aims to avoid rushing the release, allowing for the inclusion of more impactful user features.

Strategic Planning for Pectra Upgrade

Developers have considered various timelines for the Pectra upgrade, ultimately deciding to delay it until after the Devcon developer summit in November 2024 in Bangkok. This strategic delay will provide a more measured development process and enable the addition of features that enhance user experience.

In a recent document, Ethereum developers expressed their preference for a Q1 2025 release, noting that delaying the upgrade has minimal impact on users and allows for an expanded scope to include more significant features.

The Dencun upgrade deployment on the Goerli testnet highlighted the importance of timing and thorough preparation. Developers faced challenges achieving consensus within the expected timeframe but ultimately resolved these issues, emphasizing the need for careful planning for the Pectra upgrade.

Focus Areas for Pectra Upgrade

The Pectra upgrade will enhance both the consensus and execution layers of Ethereum. A key improvement will be the integration of PeerDAS, which aims to boost Ethereum’s data availability capacity ahead of the Osaka upgrade.

The Osaka upgrade, a future hard fork, is expected to include features initially planned for Pectra, such as Verkle Trees, a new data structure designed to improve Ethereum’s scalability and decentralization.

During the Execution Layer Meeting, developers discussed supporting longstanding authorization use cases in Ethereum’s account management system, including mechanisms to keep authorizations active during transactions and potential replacements for EIP-3074 with EIP-7702 to achieve better account abstraction compatibility.

The team also considered including the Ethereum Object Format to enhance smart contract security and the developer experience. They decided to include EIP-7702 in the next development net and remove EIP-3074, while also discussing the implementation status of various other Ethereum Improvement Proposals.

Ethereum Layer 2 Networks Reach New TVL High

According to L2BEAT, the total value locked in Ethereum Layer 2 networks has reached a record high of $47.45 billion. Arbitrum One leads with a TVL of $19.3 billion, followed by OP Mainnet at $7.88 billion and Base at $6.94 billion. Other blockchains with over $1 billion in TVL include Blast, Mantle, Linea, and Starknet. Overall, Ethereum Layer 2 TVL has surged by 17.39% in the past week.

This bullish trend is driven by the U.S. Securities and Exchange Commission’s approval of spot Ethereum exchange-traded funds on May 23, along with ETF applications from issuers such as BlackRock (NYSE:BLK), Fidelity, Grayscale, and VanEck. This marks the second spot digital asset ETF approval in the U.S., following the spot Bitcoin ETFs in January. These issuers are currently submitting S-1 forms, with launches expected within weeks.

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Traditional banks may still lead the financial industry in terms of assets, but credit unions are gaining popularity among eligible Americans.

Recent data reveals approximately 4,600 credit unions in the United States. A September 2023 report from the National Credit Union Administration  highlighted that nearly 139 million Americans were members of federally insured credit unions, marking a 20% increase over the past five years.

Additionally, the credit union market size measured by revenue totaled $126.2 billion last year.

John Wingate, CEO of financial platform BankSocial, explained to Cryptonews that a credit union operates as a member-owned bank. “Unlike for-profit banks owned by shareholders, credit unions are owned by the members, one member, one share, one vote,” said Wingate. “This aligns perfectly with the decentralized finance ethos.”

Despite this alignment, credit unions face challenges that could hinder future growth. Kyle Hauptman, Vice Chairman of the NCUA, noted that credit unions often engage in a cumbersome process called ‘loan participations,’ where ownership interests in a loan are divided and sold. This process can be complex, as the credit union purchasing a participation stake may not know if payments have been made or if the selling credit union will pay the required portion.

Hauptman suggested that tokenizing smaller loans could address these challenges. “A smart contract would automatically pay the buying credit union their share,” he said, eliminating the need for the purchasing credit union to inquire about payments.

Ravi de Silva, Managing Partner at de Risk Partners, mentioned that tokenization could enhance compliance risk management by providing greater transparency, security, and efficiency. He pointed out that tokenization could be beneficial for Anti-Money Laundering (AML) purposes by enabling efficient analysis of transactional data and improving customer due diligence processes.

Given these benefits, some credit unions have begun implementing tokenization solutions. BankSocial is working with several credit unions to tokenize identity and transactional data through hashing. Wingate noted that BankSocial’s solutions use Hedera Hashgraph’s distributed ledger technology  to tokenize payments and deposits for peer-to-peer transactions on the Hedera network.

Additionally, Metallicus, through its Metal blockchain, is collaborating with credit unions like Vibrant, Meritrust Credit Union, and Fairwinds to develop blockchain-based solutions. According to Marshall Hayner, COO of Metallicus, the Metal blockchain enables financial institutions to create interoperable ledgers for seamless communication.

Despite these advancements, regulatory concerns persist. Hauptman mentioned that credit unions are uncertain whether tokens might be deemed securities. While the NCUA has provided guidance for tokenization use, other regulatory concerns remain, including KYC processes and the custodianship of tokens.

Nevertheless, Hauptman believes that U.S. credit unions are better positioned to implement tokenization compared to banks, thanks to NCUA’s regulatory clarity. For example, in July 2021, the NCUA published a “Request for Information and Comment on Digital Assets and Related Technologies” report, followed by guidance documents on digital assets and distributed ledger technologies.

De Silva emphasized the importance of credit unions working closely with compliance teams to adopt industry best practices for tokenization. “It’s crucial to establish a robust framework that aligns tokenization practices with regulations while prioritizing the security and privacy of customer data,” he said.

With continued collaboration and adherence to regulatory guidelines, credit unions can successfully navigate the complexities of tokenization and harness its potential benefits.

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Popular canine-themed meme coins, Dogecoin (DOGE) and Shiba Inu (SHIB), experienced a significant spike on Friday following a tweet from Elon Musk about the passing of Kabosu, the dog that inspired these tokens.

DOGE surged by as much as 5%, reaching a session high of 17.3 cents within minutes of Musk’s tweet, while SHIB increased nearly 3% during the same timeframe. Despite these gains being short-lived, with both cryptos pulling back, DOGE remained up 6% and SHIB up 1% over the past 24 hours, outperforming the mostly flat CoinDesk 20 Index.

This market activity highlights Musk’s influential impact on memecoins, sparking speculation among crypto enthusiasts about his potential role as one of the largest Dogecoin holders and the possibility of integrating the token into a payment system for X (formerly known as Twitter, now owned by Musk).

Kabosu, the Shiba Inu that became the face of Dogecoin and other meme tokens, passed away early Friday, according to a blog post by her owner. Kabosu was over 17 years old.

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The adoption of cryptocurrency is significantly bolstered when large funds, such as pensions and endowments, begin investing. Notable among these are university endowments, which manage substantial assets for their respective institutions.

The University of Michigan is actively participating in cryptocurrency investments through the CNK Fund I, L.P., managed by Andreessen Horowitz. This fund targets “cryptonetwork technology companies across various stages, from seed to growth.” In June 2018, the University of Michigan’s endowment made an initial investment of $3 million into this fund. As of June 2023, the endowment’s total value was $17.9 billion.

Recent communications to the university’s Regents indicated additional investments in this fund, although the exact amount remains undisclosed, it is presumed to be in the millions.

The university’s rationale for this investment is based on the belief that “crypto has become an important area of innovation and entrepreneurship that warrants focused attention,” and as the opportunities related to cryptonetworks become more defined, the need for a separate thematic fund may diminish.

The University of Michigan is not alone in this venture. Yale University, with an endowment valued at $40.7 billion as of June 2023, contributed to a $400 million capital raise for a crypto fund from Coinbase (NASDAQ:COIN) and Pantera Capital in 2018.

Similarly, the Harvard endowment, the largest at over $50.7 billion as of June 2023, has also invested in cryptocurrency funds. As early as 2018, Harvard disclosed investments in “at least one cryptocurrency fund.”

Other prominent universities, including Stanford University, Massachusetts Institute of Technology, Dartmouth College, and the University of North Carolina, have also allocated funds to crypto or crypto-related investments.

Despite the initial wave of investments in 2018, follow-on investments and additional commitments have been made in subsequent years. As the cryptocurrency market evolves and becomes more accessible through avenues like spot ETFs, it is likely that endowments and large funds will continue to increase their crypto investments.

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For cryptocurrency to gain more value, wider ownership is crucial. Institutions investing directly in bitcoin or indirectly through spot ETFs, launched in January, can drive this growth. Some entities, like MicroStrategy (NASDAQ:MSTR), invest directly in bitcoin, while others, like the State of Wisconsin, invest indirectly. This trend is positive for cryptocurrency as it increases exposure to the asset class.

The State of Wisconsin Investment Board has invested over $160 million in spot bitcoin ETFs, allocating $98 million to BlackRock’s iShares Bitcoin Trust and $63 million to Grayscale’s spot bitcoin ETF. Although this is a small fraction of the board’s $156 billion in assets, it is significant since few large institutions invest in bitcoin.

The approval of these ETFs in January allows equity investors to gain exposure to bitcoin’s price movements without directly buying the cryptocurrency. The ETF sponsors purchase bitcoins and package them into shares, which are then sold to the public.

Bloomberg ETF analyst Eric Balchunas commented on the investment on X, noting that it is unusual for large institutions to invest in new ETFs so quickly. “Normally, you don’t see big institutions in the 13Fs for a year or so until the ETF gains more liquidity. These are not ordinary launches. This is a good sign, expect more institutions to follow, as they often move in herds.”

Balchunas speculates that more funds might invest soon, with Florida and Wyoming being likely candidates. These states are known for their pro-crypto stance and could lead their pension funds to invest in bitcoin or other cryptocurrencies.

The news coincides with increasing discussions about a spot Ethereum ETF, which, if approved, could further ease regulatory concerns and reinforce cryptocurrency’s stability as an investment.

This development marks a pivotal moment for crypto, suggesting that increased institutional interest could lead to broader adoption and a new era for the digital asset class.

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The Fantasy Top collection surged to the top of CryptoSlam’s daily non-fungible token sales chart on Wednesday, exceeding $1 million in transactions for the first time this week.

The leading Blast collection reported 7,467 transactions involving 2,246 unique buyers and 2,749 sellers.

Meanwhile, the Ethereum blockchain outperformed other platforms on the same day, recording sales of $6.25 million, although this represented a 22.3% decline from the previous day’s $8.15 million. In the NFT rankings, Bitcoin’s NodeMonkes collection secured the second spot with sales of $908,671, up from the previous day’s $571,992.

NodeMonkes currently ranks 26th in CryptoSlam’s all-time list with total historic sales of $224.5 million, just $2.5 million short of surpassing Crabada, an Avalanche collection.

The third-ranking collection for the day was Mocaverse on the Ethereum chain, which achieved $830,873 in sales, a significant increase from the previous day’s $193,042. On Wednesday, Mocaverse released additional details about its upcoming NFT airdrops.

DMarket from Mythos claimed the fourth position with daily sales of $711,025, a slight dip from the previous day’s $734,617. The collection saw a high volume of activity with 28,120 transactions conducted by 3,635 unique buyers and 3,231 sellers.

Following closely were Solana’s Mad Lads and Ethereum’s The Captainz, ranking fifth and sixth, respectively. Mad Lads recorded $613,391 in sales from 50 transactions, while The Captainz generated $567,277 from 50 transactions as well.

The Bored Ape Yacht Club, a regular feature in CryptoSlam’s daily NFT charts, ranked seventh with $530,359 in sales from just 11 transactions, reflecting the high value of assets within the collection.

Rounding out the top ten were Immutable’s Guild of Guardians Avatars, Polygon’s SKGirl, and Bitcoin’s SOL BRC-20 NFTs, with sales of $514,252, $301,171, and $209,525, respectively.

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AI-generated content poses a significant online disinformation threat, but blockchain technology can help verify and authenticate the truth, according to William Ogden Moore, Research Analyst at Grayscale Investments.

As AI integrates more into daily life, its impact on sectors like finance has been profound, facilitating smarter investments and market analysis. However, the rise of generative AI has also introduced risks, notably the creation of “deepfakes.” These highly realistic digital forgeries use AI to manipulate or generate visual and audio content, such as the deepfake video of Barack Obama created by comedian Jordan Peele to highlight the technology’s potential dangers.

The prevalence of deepfakes is increasing rapidly. A report by Sumsub Research noted that between 2022 and the first half of 2023, deepfakes as a proportion of content in the U.S. surged from 0.2% to 2.6%. Experts warn that deepfakes could sway public opinion and influence events like elections, posing a threat to democracies worldwide.

Public blockchains like Ethereum offer a potential solution. Their transparency, decentralized nature, and focus on network security and immutability make them well-suited to verify content authenticity. Public blockchains record information transparently and accessibly, allowing anyone to verify its validity, such as the creator or timestamp. This decentralized structure reduces the risk of manipulation and ensures tamper-resistant records.

Blockchain technology has already proven its ability to authenticate content, as seen with digital art in the form of non-fungible tokens. Blockchain can similarly authenticate videos, images, and text, laying the foundation for tools to combat deepfakes, such as OpenAI’s Worldcoin, Irys, and Numbers Protocol.

With AI-generated content expected to dominate the internet in the future, protecting against deepfakes is critical. Public blockchains, operated collectively by users, offer promising features to address these challenges. However, the technology is still in its early stages, and widespread adoption remains a challenge.

To uphold truth and transparency, society must remain committed to developing and implementing blockchain solutions as we navigate the risks posed by emerging technologies.

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Cryptocurrency is quickly becoming an election issue, with Ethereum (ETH-USD) emerging as a significant beneficiary. From Monday to Tuesday, Ether surged 21%, marking its best two-day performance since January 2021.

This rally occurred despite initial concerns about the prospects for the next big crypto surge. The government’s hesitation to approve a suite of spot Ether ETFs had dampened enthusiasm. This hesitation contrasted with the excitement over Bitcoin ETFs, which had revitalized the crypto market late last year and sustained its momentum into this year.

The general expectation was that widely available crypto ETFs would facilitate crypto adoption among latecomers, allowing less crypto-savvy investors to allocate a “responsible” portion of their 401(k)s to these new ETFs. However, Jim Bianco of Bianco Research cast doubt on this theory, especially with the Securities and Exchange Commission showing no signs of approving spot Ether ETFs as a crucial deadline approached.

Then, according to Anthony Pompliano in the Pomp Letter, “the game changed.” On Monday, Bloomberg’s Eric Balchunas and James Seyffart increased their odds of spot Ether ETF approval to 75% from 25%, citing “chatter that the SEC could be doing a 180 on this increasingly political issue.”

This sudden shift in the SEC’s stance led to a surge in Ether prices. Matt Hogan, Chief Investment Officer at Bitwise Asset Management, highlighted this development on Yahoo Finance’s Market Domination. He noted a “real sea change in Washington around crypto,” with recent bipartisan crypto legislation and a growing coalition around stablecoins.

Hogan emphasized that “Washington has gotten the message that crypto is good for America and popular with American voters.” This change in sentiment was also reflected in former President Donald Trump’s recent pro-crypto stance.

Whether or not the SEC’s apparent change of heart is related, crypto enthusiasts are energized by the prospect of political support. Pompliano articulated this optimism, stating, “A bunch of people on the internet created a $2.6 trillion industry in the face of government pressure. Imagine what happens when the government is now actively courting these individuals and companies, along with embracing the technology. The headwind becomes a tailwind quickly.”

Spoken like a true crypto bull.

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Morgan Stanley (NYSE:MS)  disclosed a substantial stake in Grayscale’s Bitcoin Trust , totaling nearly $270 million as of March 31, according to a recent 13F filing.

This investment, along with similar disclosures from banking giants like JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), and UBS (NYSE:UBS), underscores growing institutional interest in cryptocurrency among wealth management clients.

It’s worth noting that these holdings likely represent investments made on behalf of clients, rather than a direct bet on Bitcoin by the banks themselves.

Following the approval of spot Bitcoin exchange-traded funds in January, Morgan Stanley began offering allocations to its clients, albeit on an unsolicited basis. This means that clients had to propose the investment to the broker, reflecting the cautious approach taken by financial institutions towards cryptocurrency investments.

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The Internet Computer-based Bitfinity platform introduces its Ethereum Virtual Machine, facilitating smart contract execution for Bitcoin protocols and enabling Bitcoin DeFi applications with Runes support.

Built on the Internet Computer protocol, Bitfinity integrates with the Bitcoin network, offering asset bridging to other blockchains. Leveraging Ethereum’s smart contract language Solidity, developers can access Bitcoin-based tokens, including BTC, Ordinals, and Runes.

The Bitfinity EVM enables the deployment of Bitcoin-based Solidity smart contracts, expanding functionality for transferring assets. As an Ethereum Virtual Machine, it serves as the backbone for executing smart contracts, akin to an operating system for Ethereum.

With Runes gaining traction since its launch alongside the Bitcoin halving event, Bitfinity aims to tap into this momentum by enabling smart contract capabilities, facilitating the development of Bitcoin DeFi applications. Despite a initial surge in activity, Runes’ network fees have stabilized following the launch frenzy.

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