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💥 No limits for Lido!
Also, read about the Lummis-Gillibrand Bill, how to get Sepolia testnet, and Arbitrum
After four days of voting, LDO holders voted not to limit Lido’s own growth. Lido, the largest liquid staking protocol on the Ethereum network, is now responsible for almost 32% of Beacon Chain’s validators. Does it represent a risk to Ethereum PoS? Well, this discussion has many different points of view and risk analyses.
According to key members of the Ethereum ecosystem, like Vitalik and Danny Ryan, the consensus layer would be in danger when ~22% of validators reach dominance.
But for something like that to happen, validators selected by the Lido DAO would have to act as a coordinated group, a cartel of sorts. Key defenders of the protocol assure that there are not enough incentives for that to happen. In a recent podcast episode with Camila Russa, Hasu, strategic advisor at Lido, affirmed:
There's a lot of rules that the Lido DAO tries to enforce as the entry [requirements] for new node operators to join. So they don't act as one entity, but it's sort of a protocol that fungibilizes the stake from many node operators. That is the first lens.
There are also people (and I share this point of view) that recognizes Lido’s dominance risks but think that self-limiting is not the path to minimizing this risk. Take a look at which provider is at 2nd place in validators dominance. Do you really think they will limit themselves?
So what can be done? Well, if I were to point ETH holders willing to enter the liquid staking world (and they had exhausted the possibilities of solo staking) somewhere, I think our friends from Bankless are leading by example here:
Being a solo staker, liquid staker, or just a long term Ethereum supporter, I believe it’s important to understand these nuances that guarantee the health of the network. Get ready folks, the Merge is coming! - DeFinn, Content at DeFi Pulse
Looking to grow your crypto network? Don't miss these events in July:
Jul 1 – Data Availability Sampling proposals due
Jul 6-8 – ETHBarcelona
Jul 8 – ETH Seattle summit
Jul 18 – Devcon
Jul 19-21 – EthCC 5 (Paris)
🎯 The Sector Pulse
Crypto market sentiment through Scalara’s indices.
📈 DeFi Pulse Index (DPI): $80.65 (+9%)
📈 MATIC 2x Flexible Leverage Index (MATIC2X-FLI-P) - $4.90 (+49.85%)
💲PONY Index (PONY) - $1.11
I am excited about the launch of $PONY, the token representation of PONY Index, as it solves several problems that many of us in DeFi face: It simplifies the time-consuming and costly task of earning an attractive stablecoin yield by bringing back yield opportunities from multiple chains to Ethereum, accessible as a single token. And it does so while still providing full transparency – all holdings and exposures can be verified at all times on the blockchain. - Christoph Gackstatter, Indices Lead at Scalara
🐼 Getting Ready for the Merge
What makes Sepolia testnet unique and how to get Sepolia ETH?
Developers of decentralized applications (dApps) can test their programs on Sepolia, a proof-of-work (PoW) testnet. In contrast to testnets like Kovan, where only 4 sets of validators are approved, Sepolia is a public testnet run mostly by public validators. This makes Sepolia different from other Ethereum testnets.
Sepolia is one of the best testnets to see how dApps will perform under the worst circumstances. The public validators, who have not undergone any background checks or capability testing by network participants, may not have the necessary hardware and software to stay connected to the testnet at all times.
Follow the steps below to start utilizing Sepolia:
You must first visit the Sepolia Faucet to obtain Sepolia ETH, the testnet's token, before utilizing Sepolia;
In the field, type your wallet's address or ENS name;
Complete the captcha;
Tap "Request funds." With the amount of Sepolia ETH sent to your wallet, a popup will display "Transaction sent.";
Now, you are ready to begin testing your nodes and smart contracts on Sepolia.
You can look up your transaction hash on Otterscan, a Sepolia testnet block explorer, to view the transaction fee, the date and time, the amount of gas used, and other transaction details.
🧠 Upskilling During a Down Market
Let’s help you understand various tax considerations as per the Responsible Financial Innovation Act (Lummis-Gillibrand Bill) by the United States.
The Lummis-Gillibrand Responsible Financial Innovation Act (the "Bill") was introduced on June 7, 2022, by Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY). It outlines a comprehensive framework for regulating digital assets in the United States. It addresses issues that have long been of concern to those working in the sector, such as asset managers.
Subject to certain restrictions, including payments of financial interest, dividends, etc., the Bill gives the Commodity Futures Trading Commission (CFTC) sole jurisdiction over digital assets. The Securities and Exchange Commission (SEC) has authority over the restricted assets. Additionally, non-fungible digital assets are not subject to the CFTC's jurisdiction. Additionally, most stablecoins issued by banks and other depository institutions are not subject to the CFTC's regulation.
Various tax considerations according the Bill are listed below:
Tax-wise, the Bill includes a de minimis exception that, like the current $200 exclusion for the sale of foreign currency in personal transactions, excludes income capital gains from the disposition of "virtual currency," a subset of digital assets, in personal transactions that do not exceed $200.
Forks and airdrops are not considered taxable under the Bill unless they are explicitly claimed and disposed of.
The Bill explains how mining and staking are treated as the production of property, meaning that digital assets produced through these activities are not taxed until they are sold. The Bill also stipulates that agreements for the lending of digital assets are generally not treated as taxable events, which is similar to how lending transactions for securities are already handled.
Additionally, it requires brokers to disclose transfers of digital assets to individuals they have reason to believe are not brokers. Compliance won't be necessary until 2026, and the reporting format will be decided at a later time.
Still thinking of a bearish market? Don’t worry Gray skies are gonna clear up, Put on a happy face😊
🤝 Sharing is Caring: What crypto podcasts are you currently listening to? Drop them here!
🗓️ Planning Long-term
Greed on your mind? Don’t forget: “Bulls Make Money, Bears Make Money, and Pigs Get Slaughtered”!
The above is an old investment saying and book title, referencing the behaviors of a ‘Pig’ investor. Pig investors have one goal — to make the most money as quickly as possible. This eye for greed impairs their ability to properly assess risk leading to a higher likelihood of losing money. Meanwhile, their Bull and Bear counterparts benefit from holding true to their market beliefs and not taking on additional risk in already tumultuous markets.
Here are some tips to help you navigate current market conditions:
Invest & Trade with Confidence.
Risk Management is the Key.
Due Diligence may help Mitigate the Risk.
Think for the Years. Not for the Days.
Don’t Chase the Market. Instead, wait for it!
Preparation + Opportunity = Success.
📌 Key crypto and DeFi regulatory updates
Arbitrum Odyssey has started as an 8-week-long program rewarding Arbitrum protocol users with NFTs
TLDR: Users can explore the L2 network (and associated projects) while winning exclusive NFTs made just for this event through the Arbitrum Odyssey, an online crypto-event;
TLDR: Ethereum Foundation Fellowhsip Program, a 6-month, self-driven program is about finding and supporting unique and talented individuals who help to enable Ethereum’s relevance and break down barriers to entry for those underrepresented people and communities that will become the future of web3.
TLDR: The dYdX Chain will feature a fully decentralized off-chain orderbook and matching engine, which can support low latency trading with extremely high throughput
The University of Cincinnati has added crypto courses to the curriculum.
TLDR: The Ohio-based university will add a lab space dedicated to cryptocurrency partnerships.
With UNIQ, interesting statistics on projects can be used to enter and depart positions. This application stands out in a sea of imitations since it is free, allows tracking 25,000+ collections, and offers some unique, intriguing data points such as percentage of Unique owners, Never sold since mint, Listed below the purchase price, etc.
What is Arbitrum? Everything you need to know about the Ethereum scaling solution.
Ethereum has become the dominant settlement layer for the crypto-economy over the past couple of years as DeFi and NFTs have exploded in popularity. In this hyperactive environment, users routinely congest the Ethereum blockchain in jockeying for inclusion within the network’s limited block space. These bouts of congestion lead to poor UX, as users face expensive and often slower transactions during periods of enormous demand. To address this problem, the Ethereum community is earnestly embracing both on-chain and off-chain scaling methods.
The community’s long-term scaling strategy is on-chain sharding, or splitting the Ethereum network into multiple “shards.” To help with scaling now, builders are turning to off-chain solutions like layer-two (L2) rollups, which are built on top of Ethereum and have started hitting the limelight in 2021. Developed by Offchain Labs, Arbitrum is one such L2 rollup technology that’s quickly gaining major traction. Sounds exciting? Read more here!
Crypto is not a cozy friends’ room anymore
Most of us who have been around since the early days probably have this feeling: the crypto ecosystem is not just a gathering of close friends anymore. It has grown to a vast network comprised by various niches, different beliefs, and lots of discussions.
Unlike what most naysayers believe, not all of those groups share the same values and goals. Each crypto group is trying to solve different problems (or even the same problems in different ways) and more specialization and deep understanding will be required from people looking to make this a living.
This is a paradigm shift from those who have been around for a long time. Big tech SF companies are already making their moves (and acquisitions), and it might feel like we’re losing our closeness. But this is a natural part of the growing process. It might feel different than it has been before, but it's okay.
Regardless of which community/company you decide to dedicate your time to, instead of focusing on what are they doing, instead ask why they are doing it. Being connected and aligned to a greater mission will help you find your path in this huge, crazy metaverse. - DeFinn
All info in this newsletter is purely educational and should only be used as research. DeFi Pulse is not offering investment advice, endorsement of any project or approach, or promising any outcome. This post is prepared using public information (which does not account for specific goals or financial situations) and links provided to third-party sites are for informational purposes. Such sites are not under the control of DeFi Pulse, so DeFi Pulse or the author are not responsible for the accuracy of the content on such third-party sites. Be careful and keep up the honest work!
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