Crypto Weekly 🗞️ July 20th, 2023

KEYS

• Uniswap announces UniswapX

• Chainlink launches the Chainlink Cross-Chain Interoperability Protocol (CCIP)

• US House Republicans introduce a new crypto oversight bill

• Aave successfully released GHO stablecoin on Ethereum

• Lens Protocol announced Lens V2

• SEC formally accepts BlackRock’s Bitcoin Spot ETF Application

UniswapX

On July 17th, Uniswap announced UniswapX, a new permissionless, open-source, dutch auction-based protocol for trading across AMMs & other liquidity sources.

Better prices

UniswapX creates a competitive marketplace where third-party fillers will compete to fill swaps using on-chain liquidity like AMM pools or their own private inventory. All orders are backstopped by the Uniswap Smart Order Router, which forces fillers to compete with Uniswap v1, v2, v3 and, once it launches, v4.

Gas-Free Swapping and No Cost for Failed Transactions

UniswapX enables swappers to sign offchain orders, executed onchain by fillers, covering gas costs. This eliminates the need for swappers to own network tokens (i.e. ETH) or bear the cost of failed transactions. Fillers include the gas fee in the swap price and can reduce costs by batching orders for competitive pricing.

MEV Protection

UniswapX enhances swapper prices by reclaiming MEV usually taken by arbitrage and safeguards users from explicitly extractive MEV. It ensures orders using fillers' inventory are unsandwichable and motivates fillers to use private transaction relays for on-chain liquidity venues.

Gas-free cross-chain swaps

Uniswap also announced that later this year, they plan to introduce a cross-chain version of UniswapX that combines swapping and bridging into one seamless action. Swappers will be able to swap between chains in seconds and also choose which assets they receive on the destination chain, instead of a bridge-specific token.

In this interview with Bankless, Hayden Adams, founder of Uniswap, dives deep into UniswapX and its purpose:

Chainlink Cross-Chain Interoperability Protocol (CCIP)

On July 17th, Chainlink announced that CCIP has officially launched on Avalanche, Ethereum, Optimism, and Polygon mainnets.

CCIP's aim is to become a global open-source messaging standard, bringing better interoperability to the Web3 ecosystem by allowing data and value to move seamlessly between chains while removing the current risks of cross-chain bridges.

Simplified Token Transfers

CCIP provides a plug-and-play solution for transferring any tokens cross-chain, both burn-and-mint (native transfers) and lock-and-mint (wrapped tokens) methods are supported. Token sponsors maintain full control over their Token Pool contracts.

Programmable Token Transfers

When using CCIP to transfer tokens cross-chain, additional instructions can be included about their intended use on the destination chain

Ex. Send USDC from Ethereum to Optimism, swap to ETH, and deposit as collateral in a lending market.

Arbitrary Messaging

CCIP can be used to send any arbitrary data from one blockchain to another, enabling the creation of native cross-chain smart contracts.

Ex. Use a token as collateral on one blockchain to borrow stablecoins from another chain (cross-chain lending).

Security Features

The Active Risk Management (ARM) Network is an independent, secondary network of nodes that verifies the behavior of the primary CCIP networks. ARM can stop transactions if erroneous activity is detected.

CCIP supports configurable rate limits on the amount of tokens that can be transferred cross-chain within a given period. This additional protection means, even in the worst-case scenario, CCIP token pools are protected against being completely drained.

To learn more, read Chainlink’s announcement blog post.

New US Regulatory Bill on Crypto Introduced

On Thursday, July 20th, US House Republicans introduced new legislation with claims of dispelling regulatory uncertainty for cryptocurrency.

The bill seeks to establish new definitions, covers digital asset exemptions, and outlines a path for digital asset intermediaries like cryptocurrency exchanges to register with both the Securities and Exchange Commission and the Commodities Futures Trading Commission.

The proposed bill offers a certification process for blockchains to be recognized as decentralized, with the SEC having the opportunity to challenge such assertions. It mandates digital asset issuers to abide by a new disclosure regime, revealing project details like economics, development plan, source code, and other risk factors.

The bill also proposes amendments to U.S. securities laws, requiring the SEC to consider "innovation" while issuing new rules. Bitcoin and payment stablecoins would not be classified as securities under this bill. The SEC would gain authority over payment stablecoins on SEC-registered platforms but without control over their design, structure, or operation.

Aave Stablecoin: GHO

On July 15th, Aave announced the successful launch of GHO on Ethereum Mainnet. In a recent blog post, Aave described GHO as a decentralized and over-collateralized asset. The stablecoin is backed by a diverse range of digital assets, including Ethereum’s native currency ETH and Aave’s native token AAVE.

Aave claims that what sets GHO apart from centralized stablecoins like Tether’s USDT is its transparency. Aave ensures that the assets backing GHO are both verifiable and transparent, with on-chain data enabling confirmation of reserves.

In its first 48 hours after launch, over $2M in GHO was minted.

To learn more, read Aave’s announcement blog post.

Lens V2

Lens is a protocol providing infrastructure for people to build social web3 applications. Lens V1 went live in February 2022 and has since been a launchpad for many successful social media applications. On July 17th, Lens announced V2.

The standout feature of Lens version 2 is the introduction of “Open Actions,” which empowers users to execute external smart contract actions directly within their content posts on Lens.

For instance, this functionality enables users to create non-fungible tokens (NFTs) on an OpenSea contract directly from the content they publish on Lens.

Other examples of uses for Open Actions:

• Follow (directly on publication)

• Mint external NFTs directly on Lens

• Buy and Sell ERC-20s or NFTs

• Join a DAO

To learn more, read Len’s announcement blog post.

BlackRock’s Spot Bitcoin ETF Application Accepted

BlackRock's proposal for a spot Bitcoin ETF has advanced in the Securities and Exchange Commission's (SEC) proposed rule change process. After the SEC initially flagged the application as deficient, BlackRock filed a revised version with a "surveillance sharing" clause that engages Coinbase to monitor and report potential illicit activities. Similar modifications have been made by Valkyrie, Fidelity, and ARK Invest. The iShares Bitcoin Trust, if approved, would track the value of Bitcoin and could be traded on traditional stock exchanges, providing an alternative to owning the digital asset directly.

The SEC's official docketing of BlackRock's application initiates a 21-day public comment period. Meanwhile, the SEC added four other applications to its docket related to the Cboe BZX Exchange, which was the first to apply for a Bitcoin ETF in March 2021. These include proposals from Wise Origin Bitcoin Trust, WisdomTree Bitcoin Trust, VanEck Bitcoin Trust, and Invesco Galaxy Bitcoin ETF, all of which also enter a three-week commentary period. Despite the progress, the approval of a spot Bitcoin ETF - considered the "holy grail" for the crypto industry - remains uncertain due to the SEC's history of rejections.

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