Research Summary
This report covers a range of developments in the cryptocurrency and blockchain space from August 27 to September 3, 2023. Key topics include Ethena Labs’ partnership with Copper and ByBit, SEC’s charge against Impact Theory, Magic Eden’s collaboration with Polygon, 1inch’s purchase of ETH, Mantle’s proposal for treasury deployment, Grayscale’s win against SEC, Twitter’s acquisition of a payments license, Rune Christensen’s purchase of MKR, digital asset outflows, friendtech’s earnings, ETF analysis, Prisma Finance’s launch, SEC’s delay of ETFs, and trending assets.
Key Takeaways
Ethena Labs’ Partnership and Stablecoin Integration
- End-to-end integration: Ethena Labs, aiming to provide global access to a decentralized financial system, has integrated its stablecoin USDe with Bybit, Lido, and Copper. This allows users to exchange USD/ETH/stETH for USDe, which earns the sum of stETH yield and the funding for the short leg.
- Reduced counterparty risk: The integration with Copper allows Ethena to hold the collateral for the short leg of the stablecoin position in a permissioned/self-custodied off-exchange wallet, reducing counterparty risk.
- Stablecoin creation: USDe is a stablecoin created via a delta neutral position; long stETH, short ETH perpetual future on a CEX.
SEC’s Charge Against Impact Theory
- Unregistered offering of NFTs: The SEC has charged Impact Theory for the unregistered offering of NFTs, imposing a fine of $6.1 million. The SEC found that the NFTs offered and sold to investors were investment contracts and therefore securities.
- Investor encouragement: Impact Theory allegedly encouraged potential investors to purchase the NFT as an investment into the business, promising profits if Impact Theory was successful.
- Regulatory implications: This case highlights the SEC’s ongoing scrutiny of the cryptocurrency and NFT space, and the potential legal consequences for companies that do not comply with securities laws.
Grayscale’s Win Against SEC
- Court ruling: The United States Court of Appeals rejected the SEC’s decision to deny the conversion of Grayscale’s Bitcoin Trust to an ETF, siding with Grayscale and stating that the denial was “arbitrary and capricious”.
- Future implications: While this is a significant win for Grayscale, it does not guarantee that the ETF will be approved. However, it sets a new precedent and points towards the successful coming of a Bitcoin ETF in the near future.
- Market response: The crypto community responded positively to the ruling, with Bitcoin’s price increasing by 7.3% to $28,000.
Actionable Insights
- Monitor Ethena Labs’ progress: The partnership and integration of Ethena Labs’ stablecoin USDe with Bybit, Lido, and Copper could have significant implications for the decentralized finance space. Stakeholders should monitor the progress of this integration and its impact on the stablecoin market.
- Understand regulatory landscape: The SEC’s charge against Impact Theory underscores the importance of understanding and complying with securities laws in the cryptocurrency and NFT space. Companies in this space should ensure they are aware of the regulatory landscape and take steps to comply with relevant laws.
- Watch Grayscale’s next steps: Following its court win against the SEC, Grayscale may move forward with its Bitcoin ETF. Stakeholders should watch for further developments in this area, as the approval of a Bitcoin ETF could have significant implications for the cryptocurrency market.
