📝SEC Targets Kraken With Latest Lawsuit Targeting Crypto
The SEC sued Kraken in its latest attack targeting the web3 industry. The lawsuit accuses Kraken of offering unlicensed securities and commingling customer assets, with the exchange vowing to fight the charges.
Plus, dYdX is attracting backlash over its handling of a $9M hack, JustLend has overtaken Aave, Ethereum validators are queuing to exit the network, and Polkadot is planning a major overhaul of its parachain mechanism.
✍️ In today’s newsletter:
- Kraken to fight SEC lawsuit
- DYdX hack and aftermath
- JustLend emerges as top lending protocol
- Ethereum validators queue to exit
- Pyth token and airdrop are live
- Polkadot to revamp parachains
- Fren Pet drives up Base activity
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SEC Sues Kraken Alleging Unlicensed Securities Trades and ‘Commingling’ of Customer Funds
TLDR The SEC filed a lawsuit against Kraken, the popular U.S.-based exchange, alleging the platform facilitated trade in unlicensed securities and commingling billions in customer assets. Kraken vowed to fight the lawsuit, adding that it will continue operating as usual despite the complaint.
SO WHAT The lawsuit is the latest chapter in the SEC's campaign of regulation-by-enforcement, with the agency levying similar complaints against Coinbase and Binance earlier this year. However, U.S. courts have recently sided against the SEC regarding the regulator's lawsuits against Ripple and Grayscale.
Web3 Community Slams dYdX For ‘Centralized’ Response to Alleged Market Manipulation Attack
TLDR DYdX, the leading perpetuals DEX, i attracting criticism for its response to a $9M "market manipulation" attack. The team promised rewards to sleuths who help uncover the identity of the attack's perpetrator and said it is reporting the incident to the FBI.
SO WHAT Decentralization devotees accuse dYdX of responding to the attack in a centralized fashion, with dYdX also moving to make up the $9M shortfall with assets from its insurance fund without consulting governance. However, dYdX said it is progressively moving towards decentralization, and that its insurance fund is explicitly mobilized automatically.
Tron’s JustLend Surpasses Aave As Largest Web3 Lending Market
TLDR The Tron-based JustLend protocol has overtaken Aave to rank as the largest web3 money market with a $6B TVL. The milestone follows 30-day growth of 12% for JustLend.
SO WHAT JustLend's newfound dominance over the lending sector is the latest sign of Tron's increasing web3 market share. The network now overshadows BNB Chain's TVL by more than double and hosts more stablecoin volume than any other chain.
Vertex Protocol is a hybrid-orderbook AMM DEX that launched on the Arbitrum mainnet in April 2023. Vertex aims to attract users from centralized exchanges to the DeFi space by offering a high-performance trading experience. Users can earn their share of up to 3M ARB tokens recently allocated for trading incentives.
Read more: What is Vertex Protocol?
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Ethereum Validators Are Now Queuing To Exit The Network
TLDR Ethereum validators are now queuing up to offboard the network while the waitlist for native stakers coming online is empty. Despite the trend emerging in recent weeks, the number of live validators on Ethereum taged a new all-time high on Nov. 19
SO WHAT Ethereum's validator waitlists completely emptied for the first time last month. The news comes in stark contract to recent warnings that Ehtereum's staking layer could absorb half of circulating Ether by and trigger a supply shock by next May.
Pyth Network Token Goes Live With $75M Airdrop For DeFi Users
TLDR Pyth Network, a web3 oracle provider, has launched its long-awaited airdrop and token. More than 90,000 wallets across 27 chains that interacted with protocols secured by Pyth can claim PYTH tokens.
SO WHAT Pyth's goal of distributing its token to a wide variety of crypto users appears to be paying off, with PYTH already trading at a fully-diluted valuation of $3B. However, airdropped tokens are notorious for producing violent post-launch retracements, meaning the sustainability of its current valuation remains to be seen.
dYdX doubles down on decentralization with the mainnet launch of the dYdX Chain!
You can bridge and stake DYDX to secure the chain, whilst earning trading fees in USDC on a per block basis.
Check out the new dYdX Chain platform at https://dydx.trade/ and don’t forget to read our short-forum how-to-bridge and how-to-stake guides
Shoutout to the dYdX Ecosystem for empowering the community and helping to lead the future of decentralized finance
Polkadot is About to "Fundamentally Change," Said Web3 Foundation's New CEO
TLDR Polkadot, the "Layer 0" network from Ethereum co-founder, Gavin Wood, is set to overhaul its core parachain system. In an exclusive interview with The Defiant, Fabian Gompf, the Web3 Foundation's new CEO, said Polkadot will establish a marketplace for parachain blockspace.
SO WHAT Polkadot originally sought to enable high transaction throughput by securing up to 100 Layer 1 "parachains" by leveraging the expansive staking ecosystem for its Layer 0 "relay chain." The forthcoming upgrade will allow projects to bid on parachain blockspace moving forward.
Tomagotchi-Like Fren Pet is Crushing it on Coinbase's Base Network
TLDR Fren Pet, a Tomagotchi-inspired game on Base, is driving a resurgence in activity on Coinbase's Layer 2 network. The project's native token is half of the network's fourth-most-traded pairing following a rally of 3,700% over the weekend.
SO WHAT Base quickly emerged as a leading Layer 2 following its August launch, but has since tumbled down the L2 rankings. Fren Pet's growth follows the explosive success of the SocialFi application, Friend Tech.