Daily Digest - 10 February 2023

Headlines

▌JPMorgan Chase: Ethereum’s Shanghai upgrade will increase its pledge rate

JPMorgan Chase (JPM) said in a research report on Wednesday that the Ethereum Shanghai upgrade scheduled for mid-March will increase the pledge rate of the blockchain in the medium term, taking into account other Proof of Stake (PoS) network is roughly four times the average, so the 14% figure has plenty of room to grow. Analyst Nikolaos Panigirtzoglou said, “Assuming the staking rate converges over time to the 60% average of other major PoS networks, the number of validators could increase from 500,000 to 2.2 million, and the rate of return would drop from the current 7.4% to around 5%.” JPMorgan said a significant portion of future staking increases could shift to liquid staking protocols such as Lido.

Policies

▌U.S., U.K. sanction Russian cybercriminal gang Trickbot

The United States and the United Kingdom imposed joint sanctions on seven members of the Russian cybercriminal group Trickbot on Thursday. While the U.S. has taken action against Russian cybercriminals before, the Trickbot sanctions are the first of their kind in the UK. A press release from the UK government on Thursday said the Trickbot sanctions were part of the first wave of new coordinated action against international cybercrime. Trickbot is a notorious Russian cybercrime gang with close ties to Russian intelligence. Trickbot has been coordinating its attacks to align with "Russian state objectives," including attacks against the U.S. government, according to the U.S. Treasury Department. According to Chainalysis, Trickbot raked in at least $724 million in cryptocurrency, making it the second-most profitable cybercriminal gang behind North Korea's Lazarus Group.

Cryptocurrency

▌New York regulators are investigating stablecoin issuer Paxos

The New York Department of Financial Services (NYDFS) is investigating stablecoin issuer Paxos. The full extent of the investigation is not yet known. Paxos' stablecoins include Pax Dollar (USDP) and Binance USD (BUSD), a Binance-branded stablecoin offered through a white label service. A NYDFS spokesman said the agency was unable to comment on ongoing investigations. An ongoing investigation by New York state regulators suggests the firm, which received a provisional banking license from the OCC in 2021, has indeed come under greater scrutiny than its peers. Paxos also holds BitLicenses virtual currency licenses issued by NYDFS. According to previous news, NYDFS issued stablecoin guidelines in June 2022, instructing issuers to ensure that their stablecoins are fully backed by assets that are segregated from the issuer's funds and regularly certified. The guide, released after the collapse of the Terra/Luna stablecoin ecosystem, focuses on asset-backed stablecoins.

▌Zhu Su: Crypto Claims Trading and Derivatives Exchange Waitlist Now Open

Zhu Su, the co-founder of Three Arrows Capital, said on social media that June and July “are dark for me, Kyle and our creditors, because our bet on accelerating the adoption of encryption has proved to be fatal. We are overwhelmed by the way markets crash and our false beliefs lead to pain. In response, we are preparing to launch a public market for crypto claims trading and derivatives, built on top of a fully transparent exchange, so that real-time public crypto audits can confirm that every balance, liquidation, withdrawal, deposit, transaction is correct. Yes, all user funds are provably unaffected. We will start with claims trading/derivatives market, then build fully decentralized custody/clearing in the next few months, then stocks/foreign exchange and innovative products, defi and cefi are the best combination. Additionally, the claims waitlist is now open and website UI/UX beta testing is coming soon. FLEX will be the new exchange.”

▌MakerDAO integrates Chainlink Oracle to help maintain DAI stability

DeFi lending protocol MakerDAO community passed a governance proposal to integrate Chainlink’s decentralized oracle (Oracle) into a framework that helps maintain the stability of its DAI stablecoin. MakerDAO can now add Chainlink Automation to its Keeper Network. MakerDAO’s Keeper Network is responsible for ensuring DAI’s stability, a network of bots that control parameters like price and debt ceiling to ensure DAI remains at parity with the U.S. dollar. Chainlink Automation becomes the latest third-party protocol to be added to the tech stack running the DAI stablecoin. Chainlink oracles will be used for functions such as price updates, liquidity rebalancing, and DAI-backed debt ceiling upgrades.