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1. Ethereum London upgrade goes live

The Facts:

  • The London hard fork on Ethereum happened at block no. 12’965’000.
  • It brings various changes to the mainnet, with the major one being EIP-1559.
  • EIP-1559 changes the fee market on Ethereum – users will no longer need to “guess” the correct gas price to get a transaction included in the chain, but instead know the price (a “BaseFee” plus tip to the miner) in advance.

Why it’s important:

  • While EIP-1559 mainly focuses on improving the user experience of Ethereum by transforming volatility of gas prices into volatility of block sizes, it also burns part of the transaction fees and as such establishes a connection between ETH and the demand for block space/transactions.
  • Holders of ETH do not need to take action, but users of Ethereum might notice changes to the gas pricing in ETH wallets after those adopt the new standard.
S01E23_EIP1559
Source: The Daily GWei

 

2. Exchanges restrict leverage

The Facts:

  • Binance has restricted access to futures and derivatives products in the EU.
  • Users from EU countries are unable to open new positions and have 90 days to close any currently open positions.
  • FTX has reduced the maximum leverage available on the platform from 101x down to 20x.

Why it’s important:

  • As crypto exchanges move into the focus of regulators, they take action to comply with new or clarified requirements.
  • The reduction of leverage down to 20x is unlikely to directly impact market volatility – according to exchange spokespersons, most traders employ 3-5x leverage to speculate or enhance capital efficiency.

 

3. U.S. infrastructure bill includes crypto

The Facts:

  • The U.S. infrastructure bill contains sections dealing with crypto and digital assets related to reporting and the definition of “broker”.
  • The additions are expected to produce $28 billion in previously untapped tax revenue to help pay for other expenses in the bill.
  • A more crypto-friendly amendment to change the language in the bill has been proposed.

Why it’s important:

  • The original version of the sections related to crypto in the bill would have far-reaching consequences with respect to the reporting requirements for almost any industry participants and possibly also be unenforceable.
  • The amendment suggests exclusion of industry participants such as miners and software developers, which often would not have been able to meet the requirements – a miner, for example, has little to no chance at knowing the identities of transaction senders.
  • (…) existing securities laws don't work well for certain aspects of crypto & people's freedom to interact using new technology has produced the innovation at the core of our prosperity.
    Hester Peirce

 

4. More Chainlink nodes launched

The Facts:

  • AccuWeather, a weather data provider, will launch a Chainlink node to provide weather data to the decentralized oracle network.
  • Information about temperature, wind speed, precipitation, windchill and tropical storm categories and more will be made available.
  • Swisscom will also launch a Chainlink node to provide digital asset price data to the network.

Why it’s important:

  • Having access to trustworthy real-life data is one of the key challenges of open blockchains, and many smart contracts rely on such data – for example, a DeFi lending protocol needs to know the value of collateral deposited with the protocol by a borrower.
  • Reliable data about weather or natural disasters could also help to further propel the decentralized insurance
  • Number of the Week
    3’400 ETH
    Average daily transaction fees over the past 30 days

 

5. Gensler comments on crypto regulation

The Facts:

  • SEC chairman Gary Gensler has indicated that the SEC is looking closely at how to regulate crypto trends such as DeFi or stablecoins.
  • He stressed that there is “not enough investor protection” in crypto right now.
  • Gensler also commented on a potential Bitcoin ETF, saying that those purely focusing on CME bitcoin futures had a better chance of getting the regulatory approval.

Why it’s important:

  • Gensler is well-versed in the topic of cryptocurrencies, which brings hope to the crypto community that a reasonable regulatory framework can be established in the near future.
  • He also included DeFi in his speech – many DeFi protocols have been anticipating additional requirements and launched permissioned versions or limited access to certain tokens.

 

In other news

  • Uruguay lawmaker proposes crypto bill (via CoinDesk)
  • South Korean regulator shuts down 11 crypto exchanges (via CoinTelegraph)
  • Google allows crypto ads for exchanges and wallets (via The Block)
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