CoinDesk Crypto

Elon Musk urged lawmakers considering the Senate infrastructure bill’s crypto tax provision not “to pick technology winners or losers in cryptocurrency technology” in a tweet responding to Coinbase CEO Brian Armstrong on Friday.

• “There is no crisis that compels hasty legislation,” the Tesla CEO and crypto influencer tweeted after Armstrong called the most recent proposed amendment to the contentious tax provision “disastrous.”
• The amendment submitted late Thursday by Senators Rob Portman (R-Ohio), who wrote the original tax provision, and Mark Warner (D-Va.) was meant to water down the provision by excluding proof-of-work mining and entities involved in the selling of hardware or software that gives individuals control of private keys for digital assets. Lawmakers are expected to vote on the $1 trillion infrastructure bill Saturday.
• Armstrong has been among the most vocal critics of the tax provision. In a 10-tweet series, his second in two days, he largely directed his ire at the Portman-Warner amendment. “At the 11th hour, @MarkWarner has proposed an amendment that would decide which foundational technologies are OK and which are not in crypto,” Armstrong wrote. “This is disastrous.”
• Armstrong urged readers to reject the Portman-Warner amendment and vote for an earlier proposed change by Senators Ron Wyden (D-Ore.), Pat Toomey (R-Pa.) and Cynthia Lummis (R-Wyo.), which he praised in a Wednesday tweet thread for narrowing the definition of “intermediaries who have the capacity to report.”
• He believes that the bill could threaten the development of crypto in the U.S. and drive innovation in the industry to other countries by saddling miners, validators, smart contracts, open source developers and others with “massive reporting obligations.”
• These requirements would require Coinbase and other exchanges “to surveil” their customers’ transactions more closely than traditional financial services organizations, Armstrong wrote and urged readers to ask their representatives to remove the surveillance language.

Related Stories

• Market Wrap: Bitcoin Rallies Above $42K as Bull Market Continues
• The US Senate Goes to War Over Crypto Taxation
• Janet Yellen Has Been Lobbying Against Wyden-Lummis-Toomey Crypto Amendment: Report
• Senator Who Wrote Controversial Crypto Tax Rule Proposes Modest Revision

Since the activation of Ethereum Improvement Proposal (EIP) 1559, the network has removed from circulation, or “burned,” over 5,000 ETH, worth roughly $14 million. This represents 36% of total new coin issuance over the same time period. 

Average fees on Ethereum have increased slightly since the upgrade went live on Thursday at 12:33 (UTC), rising from 0.003 ETH to 0.005 ETH. In addition block sizes, measured on Ethereum in units of gas, have been trending as anticipated toward the block gas target of 15 million gas. 

At first glance, EIP 1559 seems to be working effectively, burning fees and pricing block space on Ethereum dynamically so that block sizes on average hit a healthy target. However, upon closer examination, there is evidence that EIP 1559 may not be so effective in its main aim to make fees on the network more predictable for users. 

Block size variation

Related: Market Wrap: Bitcoin Rallies Above $42K as Bull Market Continues

Under EIP 1559, blocks being mined on Ethereum oscillate dramatically from being 100% full to empty. The reason for this, according to Tim Beiko, thechair of the bi-weekly All Core Developers meeting, is because the pool of transactions eligible to be included in a block gets smaller and larger depending on the minimum fee, or “base fee,” decided by the network. 

“Say you have a block that raises the base fee because it’s full,” said Beiko in an interview with CoinDesk. “It’s possible that by the time the next block shows up, there’s just not been that many new transactions who are willing to pay this higher price.” 

Pseudonymous Ethereum user “Face Shaver” called this a “misalignment of incentives” that can lead to a number of problems, first and foremost being a lack of fee predictability and stability for the average user. 

“It’s not that easy for the average user to predict what the fee will be for the next one or two minutes,” said Shaver in an interview with CoinDesk. “If you are [trying] to get in, either in this block or the next block, the most [fee] volatility you face is ⅛ of the current base fee, but if you think of the average user as someone who is price sensitive, and so is willing to wait one, or even something like three minutes for their transaction to go through … then you have to consider what happens to the fee in next three minutes.” 

Related: Rising Ether-Bitcoin Price Ratio Shows Crypto Risk Appetite

Anticipating what the optimal transaction fee on Ethereum will be in three minutes or more is just as difficult with EIP 1559 as it was before EIP 1559, according to Shaver and Beiko. EIP 1559 helps price transactions for users in the moment, but it does not help users predict or anticipate what fees will be in the next moment because the supply and demand dynamics for block space fluctuate with each block.  

According to Beiko, such oscillations impacting block sizes and base fees were always expected from EIP 1559. However, Beiko argues the average user can still benefit from knowing the optimized base fee of sending a transaction on Ethereum in the moment, without having to guess or anticipate fees of future blocks. 

Incentivizing volatility and Ethereum burns

Savvy users will be careful not to spend more in fees than absolutely necessary.

If users are confident that fees will increase during the next block, there is a financial incentive to include more transactions in the current block than the next. However, if users are confident that fees will decrease during the next block, there is a financial incentive to include more transactions in the next block than the current one. 

These natural oscillations between heavy and light blocks, according to Mojtaba Tefagh, assistant professor at Sharif University of Technology, may mean the amount of gas used in each block will trend over the long term above the block gas target, which can create difficulties for network node operators responsible for propagating and maintaining transaction data. 

“If the variability in block size is high, people can send more transactions, on average. So if you just adapt the extreme oscillation of alternating between a full block and also an empty block, you can spend much more gas than the target and still the [base fee] would not go up,” said Tefagh in an interview with CoinDesk. “We are incentivizing people to create volatility and as they create volatility, we let them spend more gas.” 

For now, both developers and researchers like Moj are taking a wait-and-see approach to assess the full impacts of EIP 1559 on the usability of Ethereum for users and dapps. 

According to blockchain analytics firm Dune Analytics, over 90% of transactions on Ethereum have not leveraged the benefits of EIP 1559 two days into the upgrade’s activation. 

Related Stories

• Binance Smart Chain Beats Ethereum by Some Metrics Thanks to Latest ‘GameFi’ Craze
• Philipp Plein Becomes First Major Fashion Brand to Accept Crypto Payments

Bitcoin rallied near $43,000 on Friday as short positions continue to unwind from the second quarter sell-off. The world’s largest cryptocurrency by market valu is up about 1% over the past week compared to a 17% gain in ether over the same period. 

Some analysts are optimistic about the broad crypto rally and see further upside, especially for ether. On Thursday, ether rallied past $2,600 as the latest hard fork upgrade, which was dubbed “London,” officially activated on the Ethereum blockchain network.

“A mood of optimism appears to have returned to cryptocurrency markets,” wrote Paolo Ardoino, CTO of Bitfinex, in an email to CoinDesk. “Still, the turbulence that we’ve seen in crypto markets over recent weeks is unlikely to subside.”

Latest prices

Related: Ethereum Burns 36% of New Coin Issuance Over 2 Days

Cryptocurrencies:

• Bitcoin (BTC) $42,815 +4.53%
• Ether (ETH) $2,924.1 +4.57%

Traditional markets:

• S&P 500: 4436.5 +0.17%
• Gold: $1761 -2.41%
• 10-year Treasury yield closed at 1.309%, compared with 1.219% on Thursday.

“BTC is also showing strength, which is expected to carry on next week, as it broke out of a downtrend today which dated all the way back to the previous all-time highs in April,” wrote Marcus Sotiriou, trader at the U.K.-based digital asset broker GlobalBlock, in an email to CoinDesk.

From a technical perspective, bitcoin’s rally above $42,000 is an encouraging sign. Friday’s strong price action is an attempt to break above the intermediate-term downtrend, which, if confirmed, could yield further upside towards $50,000 to $55,000 resistance. 

Related: Chainlink Integrates Weather Data From the Google Cloud

“The market has been oversold for quite some time,” said Kevin Kang, founding principal of crypto hedge fund BKCoin Capital, in an interview with CoinDesk. “ I think we are resuming the bull market in the coming months.”

Ether bullish activity

The bulk of ether options activity has been concentrated in the higher strike, longer duration calls, or bullish bets.

Data provided by Switzerland-based Laevitas shows ether volumes on Deribit, the largest crypto options exchange, have increased by more than 50,000 ETH to 153,000 ETH ($424 million) in the past 24 hours. That takes it to the highest level since the end of May. On Deribit, one ether options contract represents 1 ETH.

Overall, call options have registered higher activity than puts, and the most popular options have been calls expiring March 2022 with strike prices of $50,000 and $40,000, wrote CoinDesk’s Omkar Godbole.

Recent bullish activity surrounding the Ethereum network upgrade contributed to ether’s outperformance relative to bitcoin, albeit with greater volatility. The chart below shows that ether tends to be more volatile than bitcoin.

Bitcoin transaction volume

Bitcoin’s total transfer volume (entity-adjusted) has grown to $7.48 billion a day over the past 14 days, indicating greater activity on the blockchain as the cryptocurrency’s price rises, according to Glassnode. 

Transactions over $1 million in size, which represents roughly 46.5% of total transaction volume, (approx. 25 $BTC), were rising, Glassnode noted.

“Entity-adjustment” is a methodology Glassnode developed to measure on-chain volume that actually changed hands. “Entities are defined as a cluster of addresses that are controlled by the same network entity and are estimated through advanced heuristics and Glassnode’s proprietary clustering algorithms,” Glassnode wrote. (Read more here.)

LINK, MATIC, ETH volumes rise

There has been a steady increase in LINK’s volume on Coinbase, according to the exchange. The number has grown by 35% since the protocol released its smart contract kit v0.10.10 on July 25, which includes full support for Optimism. The volume in MATIC declined this week. 

Meanwhile, on Aug. 4, one day ahead of EIP 1559, ether’s volume outpaced that of bitcoin by 61%.  

Altcoin and DeFi roundup

• Binance Smart Chain Beats Ethereum by Some Metrics: In the latest episode of blockchain competition, Binance Smart Chain, the public blockchain supported by Binance, the world’s biggest centralized crypto exchange by trading volume, surpassed the Ethereum blockchain in daily transactions, again. BSC previously flipped Ethereum on the number of transactions because of the success of PancakeSwap, a decentralized exchange on BSC that was popular in the midst of the decentralized finance (DeFi) craze. This time, however, Binance’s success came thanks to a relatively little-known game on BSC called “CryptoBlades.”
• SEC Charges So-Called DeFi Company for Allegedly Fraudulent $30M Offering: The U.S. Securities and Exchange Commission (SEC) has charged what it described as a decentralized finance lender, Blockchain Credit Partners (d/b/a DeFi Money Market), and two of its top executives for raising $30 million through allegedly fraudulent offerings. The case is the agency’s first involving securities using DeFi technology, according to the SEC.

Relevant news:

• Binance to Wind Down Hong Kong Derivatives Trading in Switch to ‘Proactive’ Compliance Stance
• Senator Who Wrote Controversial Crypto Tax Rule Proposes Modest Revision
• Janet Yellen Has Been Lobbying Against Wyden-Lummis-Toomey Crypto Amendment: Report
• Philipp Plein Becomes First Major Fashion Brand to Accept Crypto Payments

Other markets

Most digital assets on CoinDesk 20 ended higher on Friday. In fact, everything was in the green except for dollar-linked stablecoins.

Notable winners of 21:00 UTC (4:00 p.m. ET):

filecoin (FIL) +8.88%

polkadot (DOT) +8.12%

uniswap (UNI) +6.32%

Related Stories

• Bitcoin Surges Above $43K for First Time Since May
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Brian Brooks announced on Twitter Friday afternoon that he’s resigned as Binance.US CEO after just four months on the job.

Brooks confirmed in an email to CoinDesk that his account was not hacked. In the tweet, Brooks cited “differences over strategic direction” between him and his colleagues.

Before joining the U.S. arm of the Binance global crypto exchange, Brooks helmed the Office of the Comptroller of the Currency (OCC), the regulator for national banks, under U.S. President Donald Trump.

Related: Binance to Wind Down Hong Kong Derivatives Trading in Switch to ‘Proactive’ Compliance Stance

In a statement, Binance CEO Changpeng “CZ” Zhao (Binance.US’ chairman) said he is “confident in Binance.US’s business and its commitment to serve its customers.”

Brooks’ departure, CZ added, would not affect Binance.US customers “in any way.”

Neither he nor Brooks elaborated on why they parted ways. No word on a successor, even an interim one, either.

“Brian’s work for Binance.US has been invaluable and we hope he will continue to be an integral part of the crypto industry’s growth, advocating for regulations that move our industry forward,” Zhao said in a separate statement provided to CoinDesk. “We wish him the very best in his future endeavors.”

Related: Chinese Crypto Traders Remain Confident in Binance Despite Regulatory Woes

That well-wishing contrasted with the way Binance.US dealt with Brooks’ predecessor Catherine Coley; the exchange didn’t even mention her when it hired Brooks in April.

During his time as acting comptroller of the currency, Brooks pursued an aggressively crypto-friendly reform agenda and met often with members of the digital asset industry – from corporate CEOs to bleeding-edge entrepreneurs from the decentralized finance (DeFi) space.

Read more: Who in Crypto Met With Brian Brooks When He Ran OCC? Here’s His Calendar

UPDATE (AUG. 6, 22:40 UTC): Adds comments from Binance CEO, background on Brooks.

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Brian Brooks announced on Twitter Friday afternoon that he’s resigned as Binance.US CEO after just four months on the job.

Brooks confirmed in an email to CoinDesk that his account was not hacked. In the tweet, Brooks cited “differences over strategic direction” between him and his colleagues.

Before joining the U.S. arm of the Binance global crypto exchange, Brooks helmed the Office of the Comptroller of the Currency (OCC), the regulator for national banks, under U.S. President Donald Trump.

Related: Binance to Wind Down Hong Kong Derivatives Trading in Switch to ‘Proactive’ Compliance Stance

In a statement, Binance CEO Changpeng “CZ” Zhao (Binance.US’ chairman) said he is “confident in Binance.US’s business and its commitment to serve its customers.”

Brooks’ departure, CZ added, would not affect Binance.US customers “in any way.”

Neither he nor Brooks elaborated on why they parted ways. No word on a successor, even an interim one, either.

“Brian’s work for Binance.US has been invaluable and we hope he will continue to be an integral part of the crypto industry’s growth, advocating for regulations that move our industry forward,” CZ said in a separate statement provided to CoinDesk. “We wish him the very best in his future endeavors.”

Related: Chinese Crypto Traders Remain Confident in Binance Despite Regulatory Woes

That well-wishing contrasted with the way Binance.US dealt with Brooks’ predecessor Catherine Coley; the exchange didn’t even mention her when it hired Brooks in April.

During his time as acting comptroller of the currency, Brooks pursued an aggressively crypto-friendly reform agenda and met often with members of the digital asset industry — from corporate CEOs to bleeding-edge entrepreneurs from the decentralized finance (DeFi) space.

Read more: Who in Crypto Met With Brian Brooks When He Ran OCC? Here’s His Calendar

UPDATE (AUG. 6, 22:40 UTC): Adds comments from Binance CEO, background on Brooks.

Related Stories

• Binance Pay Bringing Crypto Payments to Shopify, Others
• HSBC UK Blocks Payments to Binance Exchange

 Chainlink, a leading provider of data feeds to blockchain-based smart contracts, has now fully added decentralized weather data from the Google Cloud.

• Google Cloud and Chainlink have been collaborating since 2019 to allow Chainlink to incorporate Google Cloud data.
• Chainlink pipes in data from Google Cloud’s Big Query, which hosts weather data from the U.S. National Oceanic and Atmospheric Administration (NOAA) and other sources.
• “The reason weather data is important is because it powers decentralized insurance around weather,” Chainlink co-founder Sergey Nazarov told CoinDesk.
• The Google integration with Chainlink uses an oracle node that continuously sends data from the outside world into the Chainlink network, where it is then merged and made available in aggregated form for blockchain applications.
• “Unexpected adverse weather events lead to economic losses across a wide range of industries, and these events are becoming more common as we experience climate change,” noted Allen Day, a Google spokesperson, in a blog post.
• Earlier this week, Swisscom, Switzerland’s largest telecommunications provider, launched a Chainlink oracle node to provide data for decentralized finance (DeFi).

Related Stories

• Market Wrap: Bitcoin Rallies Above $42K as Bull Market Continues
• Chainlink Unveils Crypto ‘Keepers’ and Anti-Fraud Blockchain Bridges
• Telecoms Giant Swisscom Launches Chainlink Node for DeFi Data
• Aave, Chainlink Lead Altcoin Rally as Bitcoin Soars Most in 6 Weeks

 Chainlink, a leading provider of data feeds to blockchain-based smart contracts, has now fully added decentralized weather data to the Google Cloud.

• Google and Chainlink signed an agreement in 2019 that allowed Google to integrate Chainlink’s data.
• Chainlink pipes in data from the U.S. National Oceanic and Atmospheric Administration (NOAA) and other sources.
• “The reason weather data is important is because it powers decentralized insurance around weather,” Chainlink co-founder Sergey Nazarov told CoinDesk.
• The Google integration with Chainlink uses an oracle node that continuously sends data from the outside world into the Chainlink network, where it is then merged and made available in aggregated form for blockchain applications.
• “Unexpected adverse weather events lead to economic losses across a wide range of industries, and these events are becoming more common as we experience climate change,” noted Allen Day, a Google spokesperson, in a blog post.
• Earlier this week, Swisscom, Switzerland’s largest telecommunications provider, launched a Chainlink oracle node to provide data for decentralized finance (DeFi).

Related Stories

• Market Wrap: Bitcoin Rallies Above $42K as Bull Market Continues
• Chainlink Unveils Crypto ‘Keepers’ and Anti-Fraud Blockchain Bridges
• Telecoms Giant Swisscom Launches Chainlink Node for DeFi Data
• Aave, Chainlink Lead Altcoin Rally as Bitcoin Soars Most in 6 Weeks

The price of bitcoin rose above $43,000 for the first time since May.

As of press time, the largest cryptocurrency by market value was changing hands at around $42,901, up 4.9% over the past 24 hours.

The latest rally took bitcoin’s year-to-date return to 48%, far exceeding the Standard & Poor’s 18% gain.

Related: Market Wrap: Bitcoin Rallies Above $42K as Bull Market Continues

Cryptocurrency traders and analyst say a risk-taking mood has returned to digital-asset markets after a bear market that saw prices fall below $30,000 from an all-time high in April near $65,000.

Related Stories

• Rising Ether-Bitcoin Price Ratio Shows Crypto Risk Appetite
• Bitcoin Returns Above $40K; Faces Resistance at $45K-$50K
• Market Wrap: Ethereum Hard Fork Rally Outperforms Bitcoin

The second-largest cryptocurrency Ethereum (ETH) experienced the biggest software upgrade since 2015 on Thursday.

The Bundesliga has partnered with non-fungible token (NFT) platform ToppsNFT.com to release an exclusive collection of NFT trading cards.

• The NFT collection is the first for the German football league, and will feature top players, rising stars and highlights from the 2020-2021 season. 
• ToppsNFT.com is owned by legacy trading card company Topps, and is built on the Avalanche blockchain.
• “Our vision is to create a fun, easy-to-use collecting experience on the Blockchain that appeals to all fans whether they have experience with NFTs or not,” Tobin Lent, VP & General Manager of Topps Digital Sports & Entertainment said in a press statement.
• The NFT collection will go live on August 10 at 1 pm EST, and will be available for purchase via credit card.

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• British Fashion Brand Burberry Releases First NFTs
• MakersPlace Raises $30M in Funding Round Led by Pantera Capital and Bessemer Venture
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Un senador uruguayo presentó un proyecto de ley para permitir el uso de criptomonedas como medio de pago en contratos legales y regular su en ese país latinoamericano.

El proyecto de ley, que fue presentado el martes por el senador Juan Sartori, busca brindar “seguridad jurídica, financiera y fiscal en los negocios derivados de la producción y comercialización” de las criptomonedas. 

“Los activos virtuales o criptoactivos serán reconocidos y aceptados por la ley y aplicables en cualquier negocio jurídico. Se considerarán un medio de pago válido, sumado a los incluidos en la ley de inclusión financiera siempre que cumplan con las normas que la ley y la norma reglamentaria prevea”, dice el proyecto. 

Related: Market Wrap: Bitcoin Rallies Above $42K as Bull Market Continues

Read this article in English.

La propuesta de Sartori establece que las criptomonedas “son productos de libre venta por aquellas entidades e individuos que lo deseen comercializar”, y establece que cualquier persona física o jurídica comprendida en la ley “podrá recibir y/o enviar fondos en moneda de curso legal desde y hacia sus propias cuentas bancarias propias o de empresas con licencias otorgadas bajo la presente ley”. 

Sin embargo, el proyecto de ley no contempla la inclusión de criptomonedas como de curso legal dentro del país, dijo Sartori a CoinDesk. 

Si el proyecto se convirtiera en ley, el gobierno emitiría una primera licencia que permitiría a las empresas comerciar con criptoactivos en exchanges, una segunda licencia permitiría “almacenar, guardar o custodiar criptoactivos”, mientras que una tercera se utilizaría para emitir criptoactivos o tokens de utilidad con “características financieras”.

Related: Bitcoin Returns Above $40K; Faces Resistance at $45K-$50K

Según el proyecto de ley, el Poder Ejecutivo uruguayo otorgaría las licencias a las entidades que cumplan con la Secretaría Nacional para la Lucha contra el Lavado de Activos y el Financiamiento del Terrorismo (Senaclaft) y el Banco Central del Uruguay. Para el resto de las operaciones, la “utilización de todos estos instrumentos será libre y no requerirá consentimiento, permisos o licencias previas”. 

El proyecto de ley de Sartori también estipula la regulación de la minería de criptomonedas. Los mineros no necesitarían una licencia especial, pero sí permisos del Ministerio de Industria, Energía y Minería de Uruguay para poder operar.

La medida también incluye la “capacitación técnica de los ingenieros eléctricos, civiles e informáticos en la generación de activos virtuales”.

Según el proyecto de ley, la Senaclaft llevará un registro de prestadores de servicios de activos virtuales y de aquellas personas físicas o jurídicas que deseen realizar actividades de generación y comercialización de activos virtuales.

Sartori pertenece al gobernante Partido Nacional y por ese partido se presentó como precandidato a presidente de Uruguay en 2019. 

En el Senado, el Partido Nacional y sus aliados, que forman una coalición llamada Coalición Multicolor, tienen la mayoría, con 17 de los 30 escaños.

Related Stories

• Philipp Plein Becomes First Major Fashion Brand to Accept Crypto Payments
• Market Wrap: Ethereum Hard Fork Rally Outperforms Bitcoin

Crypto investors have thrown caution to the wind, as evidenced by the recent rise in the ether–bitcoin (ETH/BTC) price ratio, and the trend looks set to continue. 

“ETH/BTC shows a bullish breakout, and that’s a sign of market-wide risk-on where alternative cryptocurrencies tend to outperform BTC,” Katie Stockton, founder and managing partner at Fairlead Strategies, said. 

Some crypto investors see bitcoin, the biggest cryptocurrency by market value, and stablecoins as safe-haven assets within cryptocurrency markets – a go-to place during times of stress similar to Japanese yen, Swiss franc, or U.S. Treasurys in traditional markets. After all, bitcoin is the biggest cryptocurrency by market value and most liquid market in the digital-asset space along with stablecoins like tether. 

Related: Binance Smart Chain Beats Ethereum by Some Metrics Thanks to Latest ‘GameFi’ Craze

Meanwhile, ether and alternative cryptocurrencies are seen as relatively risky bets similar to growth-sensitive assets like copper, gold, stock markets, Australian dollar. 

So a rising ETH/BTC could reflect improved risk appetite in crypto markets. That has been the case in the past and in recent weeks. 

For example, bitcoin rallied 12% last week but underperformed almost all crypto sub-sectors, including non-fungible tokens and Web 3.0 tokens. During the same timeframe, ETH/BTC rose over 3%. A similar action was seen from the mid-April to mid-May period.

On Thursday, ether-bitcoin jumped to a two-month high of 0.073, confirming a descending triangle breakout on the daily chart. 

Related: Bitcoin Returns Above $40K; Faces Resistance at $45K-$50K

The breakout indicates that the consolidation has ended, and the bigger bull run from March lows near 0.03 has resumed. 

“ETH/BTC has broken out of a two-month consolidation given recent strength in ether,” chartered market technician and CoinDesk reporter Damanick Dantes said. “It’s a bullish continuation pattern. Next resistance is seen around 0.8.”

In other words, ether and other altcoins could continue to outshine bitcoin in the near term. The technical picture gels well with the narrative that the crypto market is evolving, with investors beginning to bypass bitcoin and going directly into other industry sub-sectors. 

The path of least resistance for ether-bitcoin appears to be on the higher side in the wake of the London hard fork implemented on Thursday.

“The notion of ether becoming a deflationary cryptocurrency in the future is now tangible, and the effects on Ethereum’s valuation could be profound,” Martin Gaspar, research analyst at CrossTower told CoinDesk. 

With the hard fork implemented, Ethereum now burns a portion of the fees paid to miners, thereby causing a net reduction in the issuance. For example, the blockchain has already burnt or destroyed more than 5,000 ETH since the upgrade took effect Thursday, offsetting about 40% of the 12,000-plus coins mined during the period. 

“Ethereum will likely become the favored crypto trade on Wall Street and could see limited resistance towards the $3,000 level,” Edward Moya, senior market analyst for the Americas at brokerage firm Oanda, wrote Friday in an email.

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Sphere 3D, a Nasdaq-listed data-management company that’s being bought by Gryphon Digital Mining, has acquired exclusive rights to the bitcoin mining assets of Hertford Advisors.

• Hertford is a privately held company that provides a wide range of financial management services.
• The deal gives Sphere 3D a six-month exclusive right to some of Hertford’s bitcoin mining agreements.
• Toronto-based Sphere 3D Corp. said it has completed its first agreement and bought 60,000 new bitcoin mining machines. Delivery will start in November and take 10 months.
• Other milestones in the contract include the purchase of an additional 160,000 mining machines and securing a long-term contract for a 200,000-square-foot crypto mining facility.
• While the company didn’t give a value for the transaction, it said it will issue 4.5 million shares to Hertford once those two targets are achieved. Based on Sphere 3D’s closing price on Thursday, that would be $15.5 million. It will also issue shares in a new series of preferred stock, and further “consideration” will be issued as the relationship progresses.
• In June, Sphere 3D agreed to be acquired by Gryphon Digital Mining in a reverse takeover. That deal is due to be completed in the fourth quarter, the company said.
• Sphere 3D shares rose as much as 78% to $6.13 Friday, and at press time were trading up 30% at $4.50.

Read more: Gryphon Digital Mining to Become Publicly Traded on Nasdaq Via Merger With Sphere 3D

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The man who's been nicknamed Mr. Wonderful once called cryptocurrency "garbage." Now the Chairman of O'Shares ETFs, Shark Tank judge, author, and politician spends 80% of his day on Bitcoin and crypto.

It wasn’t long ago when every public blockchain attempted to challenge Ethereum’s dominance in the sizzling decentralized finance (DeFi) sector. After Ethereum-based video game “Axie Infinity” became an instant success, blockchains have blossomed in the $100 billion gaming industry. 

In the latest episode of the blockchain competition – just like what happened with  DeFi – Binance Smart Chain, the public blockchain supported by Binance, the world’s biggest centralized crypto exchange by trading volume, surpassed the Ethereum blockchain in daily transactions, again.

BSC previously flipped Ethereum on the number of transactions because of the success of PancakeSwap, a decentralized exchange on BSC in the midst of a DeFi craze. This time, however, Binance’s success came thanks to a relatively little known game on BSC called “CryptoBlades.”

Related: Rising Ether-Bitcoin Price Ratio Shows Crypto Risk Appetite

Data from DeFi data tracking firm DappRadar shows that more than 621,000 users were on “CryptoBlades” in the past 30 days, while that number for “Axie Infinity” is a little above 271,000.

On July 31, Binance CEO Changpeng “CZ” Zhao tweeted: “#BinanceSmartChain handled 10M+ transactions yesterday. #Ethereum handled 1.2M.”

“#DeFi and #GameFi are growing,” he wrote in a second tweet. And in response to a question whether BSC is ready to handle 20 million transactions per day, Zhao wrote: “Not an expert. But I think we will find out soon enough.”

The series of tweets reflected Zhao’s excitement about crypto gaming’s growth on BSC, as someone who has rarely acknowledged BSC’s ambition to challenge Ethereum.

Related: Philipp Plein Becomes First Major Fashion Brand to Accept Crypto Payments

But what is “GameFi” and why are blockchains rushing to the sector?

“GameFi,” which combines gaming and DeFi into one word, is the gamification of financial mechanisms where users can earn profits by playing games. Another popular term for this sector is the “play-to-earn” model.

On the surface, the keyword is “gaming,” but at the core, “finance” is what matters the most for blockchains.

Both BNB, the utility token for Binance and BSC, and BUSD, a U.S. dollar-pegged stablecoin powered by Binance play an important role in crypto games on BSC.

For example, to buy “CryptoBlades’” native SKILL token, gamers must buy BNB first and swap their BNB for SKILL on ApeSwap, a decentralized exchange on BSC. That is a huge boost for BNB demand as well as for liquidity on ApeSwap.

Any transactions made on “CryptoBlades,” such as trading game characters and weapons, will require gamers to pay a certain amount of gas fee with BNB.

In an interview with CoinDesk, Samsul Karim, ecosystem coordinator at Binance Smart Chain, said that BNB is used in many crypto games on BSC, but he also emphasized that game developers need to understand that users should be able to choose between different assets – whether it is BNB or BUSD.

Rather than adding financial value to BSC, Karim said that crypto gaming is bringing BSC “culture value.”

“Similar to how you would value an artwork, for example, like that piece of artwork, what is the economic output that it’s contributing towards society or any particular economy?” Karim said. “It can’t be compared in the same way as a DeFi lending protocol or a bank or something like that. it is producing cultural value.”

An executive from Polygon, a layer 2 product protocol for Ethereum, also appeared to minimize the economic value that gaming brings to Polygon. The India-based product recently launched a unit called Polygon Studios to focus on blockchain gaming and non-fungible tokens (NFTs).

Shreyansh Singh, head of gaming and NFTs at Polygon Studios, said that the usage of MATIC token, the governance token of Polygon, on NFT and gaming powered by Polygon is not intentional; instead, it comes naturally as gamers in Ethereum-based games seek faster, less costly alternatives.

Binance and Polygon are not the only two eyeing the huge potential of a blockchain-based gaming industry.. Other crypto companies and blockchains are also taking big steps in this direction. 

Crypto exchange FTX recently announced several NFT gaming-related investments, including a sponsorship deal with decentralized gaming startup Yield Guild Games (YGG).

A perfect match

But to most people in crypto, the combination of gaming and crypto seems like a perfect marriage.

“Crypto has been looking for a mass market use case,” Andrew Tu, an executive at quantitative trading firm Efficient Frontier, told CoinDesk. “Gaming is a sector that people have been hyping up for a long time. It’s the first area of crypto where the average Joe without a huge understanding of crypto or blockchain can participate.”

Indeed, “Axie Infinity,” the popular crypto gaming platform on Ethereum, has generated more than $220 million revenue in the past 30 days, making it the top revenue generator among all DeFi protocols and blockchains, Ethereum included, according to data from Token Terminal.

“’Axie Infinity’ also demonstrates a working use case for blockchain-based games, which paves the way for new entrants into the space,” Justin Barlow, a research analyst at digital asset data analysis firm The Tie, said. “With ‘Axie’s’ success it is likely we see major gaming conglomerates like Activision Blizzard or EA (Electronic Arts) entering the space in the coming years, bringing blockchain gaming to the masses.”

There are also risks for the hot GameFi industry, given how rapidly it has grown.

“With Yield Guild Games (YGG) token sale netting $12.5 million in 30 seconds, [it] shows that market participants will not hesitate to switch from one hot toy to another, no different to yield farming craze earlier in the year,” Denis Vinokourov, head of research at Synergia Capital, told CoinDesk, adding that the market is still too “nascent” to make any conclusions.

Read More: Gone in 30 Seconds: Yield Guild Games’ $12.5M Token Sale Sells Out Fast

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The U.S. Securities and Exchange Commission (SEC) has charged what it described as a decentralized finance (DeFi) lender, Blockchain Credit Partners (d/b/a DeFi Money Market), and two of its top executives for raising $30 million through allegedly fraudulent offerings.

The case is the agency’s first involving securities using DeFi technology, according to the SEC.

Florida residents Gregory Keough and Derek Acree, along with Cayman Islands-based Blockchain Credit Partners have been accused of selling unregistered securities through their company DeFi Money Market (DMM) – mTokens that yielded 6.25% interest and governance tokens that offered voting rights and other perks in DMM’s decentralized autonomous organization (DAO) – from February 2020 to February 2021. 

Related: Gensler’s Preference for Bitcoin Futures Products Is Likely Bad News for a Spot BTC ETF

Though DMM was purportedly decentralized, Keough and Acree’s 50/50 leadership split calls the claim into question. Additionally, the SEC’s order indicates that governance token holders had “no role in running DMM’s core business.”

According to a tweet from DMM’s DAO on Feb. 9th, the company received a subpoena from the SEC in December 2020. Blockchain Credit Partners shut down operations in February and set up a token redemption program that allowed all mToken holders to redeem their tokens for principal and interest owed.

The SEC alleges that Keough, Acree and Blockchain Credit Partners misled investors to believe that investor assets would be used to purchase income-generating assets such as car loans to generate returns for token purchases, and, when they realized that token volatility made this impossible, used personal funds and funds from a separate company to make principal and interest payments for the mTokens.

The respondents agreed to a cease-and-desist order including disgorgement of $12.8 million and penalties of $125,000 for both Keough and Acree. In addition, Keough and Acree will be unable to participate in any offering of a digital asset security for five years. 

Related: CFTC Commissioner Says SEC Lacks Authority Over Commodities, Including ‘Crypto Assets’

UPDATE (August 6, 16:03 UTC): Updated with new information throughout.

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U.S. Treasury Secretary Janet Yellen has been lobbying against cryptocurrency legislation being proposed by Sen. Ron Wyden (D-Ore.) and other senators as part of the bipartisan infrastructure bill, according to a Washington Post report published on Friday.

• Yellen spoke with Wyden on Thursday to push back against the attempt to limit a proposal in the bill that would increase federal regulation of cryptocurrencies, according to the publication, citing two people familiar with the matter. 
• Senators Wyden, Cynthia Lummis (R-Wyo.) and Pat Toomey (R-Pa.) proposed their amendment on Wednesday to ensure that miners, node operators, developers and other non-custodial crypto industry participants are exempt from the crypto tax reporting provision.
• The White House is officially supporting a competing amendment sponsored by Senators Mark Warner (D-Va.) and Rob Portman (R-Ohio) that excludes proof-of-work miners from the reporting provision.
• “We believe that the alternative amendment put forward by Senator Warner, Portman and Cinema strikes the right balance and makes an important step forward in promoting tax compliance,” the White House said in a tweet Thursday evening.
• Senators had hoped to pass the bipartisan bill on Thursday night, but debate continued and issues remained unresolved around the cryptocurrency regulations.
• A Treasury spokesperson declined to comment on the matter when contacted by CoinDesk. 

UPDATE (August 6, 14:31 UTC): Updated with additional details in the third and fourth bullet points.

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Binance, one of the world's largest cryptocurrency exchanges, said on Friday it would restrict Hong Kong users from trading derivative products, the latest in a series of changes the exchange has made to improve compliance standards.

U.S. jobs rose by 943,000 in July, above the consensus estimate for a gain of 845,000 jobs, the Labor Department reported Friday. 

The unemployment rate fell to 5.4%, a post-pandemic low, from 5.9% in June.

The government also revised the June jobs growth figure to 983,000, up from the initially reported 850,000 jobs. 

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On average, since January 2021 the U.S. has added 540,000 jobs per month and the employment trend has been strengthening but is still somewhat unpredictable, making it difficult for economists to use any single month’s data to extrapolate what the future might look like. 

The positive July report could encourage the Federal Reserve to taper its $120-billion-a-month of ongoing asset purchases – a form of monetary stimulus – more quickly, with a debate over the pace currently ongoing within the central bank.

Assuming the tapering starts sooner, bitcoiners would no longer be able to count on the Fed bringing more liquidity to the markets through quantitative easing and giving investors the liquidity to invest more in riskier assets.

The labor force participation rate – the percentage of the American population that is either working or actively looking for work – ticked up slightly to 61.7% from 61.6% in June.

Related: Market Wrap: Bitcoin Hits Two-Month High After Late-Day Surge

The employment-to-population ratio, which measures the number of people employed against the total working-age population, changed little month to month at 58.4% from 58% in June.

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Binance Coin (BNB) is currently the fourth biggest cryptocurrency by market capitalization according to data from CoinMarketCap. Its swift rise in popularity is down to the growth of the Binance exchange and the development of the Binance Smart Chain.