The Weekly Wrap - 09 July 2021
Jul 9, 2021 - 4 min read
1. Ethereum London upgrade on August 4
The Facts:
- The London hard fork of Ethereum is likely take place on August 4.
- It includes several Ethereum Improvement Proposals, such as EIP-1559.
- The upgrade has already been implemented on several Ethereum testnets.
Why it’s important:
- The London upgrade is highly anticipated in the community. It is expected to improve the user experience for Ethereum through, for example, more predictable gas prices.
- EIP-1559 also burns part of the ETH paid as transaction fees and might put pressure on the supply of ETH if network activity and demand for block space remains high.
2. Circle goes public
The Facts:
- Circle has announced to go public via a merger at a valuation of $4.5 billion.
- It is the company behind the USD-pegged stablecoin USDC, which currently has a market cap of $26 billion.
- Circle raised $440 million in late May in a private round.
Why it’s important:
- USDC is the second largest stablecoin after Tether (USDT). It is widely used in DeFi and as a means to transfer value to and from exchanges.
- Circle is one of the largest crypto companies to go public after Coinbase’s IPO in April.
3. FATF and DeFi
The Facts:
- Crypto lobbyists around the globe have proposed six ways to regulate DeFi.
- The open letter urges to consider the specific properties of public blockchains, such as fully transparency and traceability of transactions.
- It also mentions the challenges to overcome, such as the global nature of crypto and hence, need for international coordination between industry partners and regulators.
Why it’s important:
- A clear-cut regulatory framework for DeFi is still missing in most parts of the world. Multiple proposals have been put forward – the Outlook 2021 report mentioned some regulatory thoughts on DeFi.
- The challenges related to DeFi are especially crucial since it is a new type of financial infrastructure with unique properties and thus requires careful assessment and potentially the adaption of existing frameworks.
NFTs want to radically transform areas such as collectibles, gaming and more, DAOs want to disrupt and replace as many forms of human coordination as possible, web3 wants to decentralize the internet and things like “social tokens” want to supercharge communities.
4. The Binance story continues
The Facts:
- The Cayman Islands Monetary Authority is investigating Binance’s potential operations from the country.
- The Monetary Authority of Singapore is reviewing Binance’s status as a provider of digital payment token services.
- Binance also temporarily suspended payments on the EU’s SEPA network.
Why it’s important:
Number of the Week
NFT of the presidential oath handed out to Israel’s new president
5. PBoC enforces regulations
The Facts:
- The Chinese central bank has shut down a software maker suspected of activities related to cryptocurrencies.
- Bitcoin miners in China were also forced to move elsewhere.
- This led to a large drop in the hash rate mining Bitcoin.
Why it’s important:
- China appears to be actively enforcing its policies regarding cryptocurrencies now, which might represent a shift from its previous stance.
- All venues that either advertise or conduct cryptocurrency businesses might face a similar fate or, at least, increased scrutiny over the coming months.