Polygon's Next Phase
Dear Bankless Nation,
Crypto markets are surging on the back of a Bitcoin boost and Gary Gensler can't do anything about it.
For our weekly recap, we dig into:
- Polygon wants to go zero-knowledge
- Crypto markets surge, led by BTC
- More Bitcoin ETF action
- Binance whips up Lightning nodes
- Do Kwon is going to jail
- Bankless team
📅 Weekly Recap
1. Polygon wants to go zero-knowledge
Polygon's co-founder wants to shake up the PoS blockchain network, proposing plans this week to transition the sidechain to what's called a zkEVM validium. If approved, the network would transition to a technical infrastructure that relies on zero-knowledge proofs to increase the network's security.
Polygon has been leaning more heavily into zero-knowledge tech as it aims to stay competitive with other networks like Optimism and Arbitrum. The network is dealing with regulatory headaches after the SEC took aim at its native MATIC token, which has subsequently been delisted by several exchanges.
Polygon just launched its separate zkEVM network in March, but this proposed shift to its main proof-of-stake chain would rely on a different structure which would mean lower transaction fees and some security tradeoffs. There's a lot of technical fine print around how validiums differ from your classic zk-rollup, but the gist is that validiums execute transactions offchain and maintain their data via zero-knowledge proofs offchain, too.
2. Crypto markets surge, led by BTC
After a brutal early June, the crypto markets are enjoying some auspiciously timed price action with Bitcoin breaking the $30k barrier, briefly resting at 2023 highs on Friday.
At the moment, ETH is hovering around $1,900.
Perhaps more notable has been the resurgence in the token prices of a number of SEC targets which regulators specifically called out as unregistered securities. SOL, ADA, and MATIC are each up roughly 10% week-over-week.
The cause for the pump? We'll get into some deeper analysis Monday, but it sure seems that institutional interest in BTC has taken crypto out of the doldrums.
3. More Bitcoin ETF action
Last week, we discussed BlackRock's surprising BTC spot ETF proposal. This week, Volatility Shares announced it is launching a leveraged bitcoin futures exchange-traded fund called the 2x Bitcoin Strategy ETF.
This is critically still a futures ETF rather than a spot ETF, meaning there are still no redemptions possible. We're all still waiting to see how regulators respond to BlackRock's application which could trigger another wave of BTC-focused financial products.
4. Binance whips up Lightning nodes
Following an SEC altcoin crackdown, more crypto institutions are investing in Bitcoin services, including Binance which is, of course, currently dealing with its own regulatory headaches.
This week, the company confirmed that it has begun running its own nodes on the Bitcoin Lightning network as the start of an early effort to integrate the network for deposits and withdrawals.
5. Do Kwon is going to jail
Well, Do Kwon is going behind bars, but it's not for the crime you might expect...
The former CEO of Terra Labs was found guilty of using a fake Costa Rican passport to try and leave Montenegro back in March. Do Kwon has been sentenced to four months in jail.
If this feels like a light sentence, you should know that his legal woes are far from over as South Korea is still trying their best to get their hands on him through the extradition process.
📺 Bankless Weekly Roll-Up
Other news:
- Crypto Ban May Not Be Best Approach to Balance Risk, Demand: IMF
- SEC to Forego BlockFi’s Outstanding $30 Million Penalty—For Now
- Ethereum CryptoPunks NFT burned and reborn on Bitcoin network
- Starknet Foundation appoints former Facebook director as CEO
- PEPE's 79% Weekly Gains Lead Meme Coin Surge
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