Ethereum Supply Drops By 5,500 ETH, Any Implications?

The Ethereum network completed one of its most talked about upgrades (the Merge) last month. The Merge saw the network switch from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS). However, the blockchain has experienced deflationary situations after the Merge.

Many crypto experts predicted the drop in Ethereum after the Merge. While their predictions have come true, there have also been changes to Ethereum supply circulation following the Merge. Data from crypto analytics firm, UltraSound Money, states that there has been a drop in the daily amount of ETH in supply circulation.

The data claims that the drop hit nearly 90 percent since the upgrade. The switch to a PoS network could be the reason for the decline, as Ether is no longer mined.

Burning Mechanism And Drop In Ethereum Supply Circulation

Ethereum supply circulation has been dropping steadily in the last five days. Within this period, multiple data estimated a decline of nearly 5,500 ETH in the supply circulation of the second-largest digital asset. Some analysts attribute the drop to the EIP-1559 and the coin’s burning mechanism.

The burning mechanism makes it mandatory to burn a percentage of the charges for ETH transactions. The Merge also means that the network no longer pays its miners any amount for the ecosystem’s security or transaction processing.

That wasn’t the case before the PoS switch, where miners were receiving nearly 13,000 ETH as rewards from the Ethereum network. Following the Merge, the network now issues about 1,600 ETH as daily rewards to validators. It burns the base fees for ETH transaction processing. Consequently, Ethereum will become deflationary, especially with an increase in usage.

About 7,525 ETH is now available on the market in new token supply. This value represents a drastic drop, given that the amount would have been nearly 340,000 ETH if ETH was still a PoW network. Ethereum’s burning mechanism needs to remove more ETH tokens from circulation.

The network’s foundation estimated that if its gas price reaches 15 Gwei, then ETH would become deflationary. Ethereum supply would keep declining since the amount of burnt tokens is significantly larger than the rewards for stakers.

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Crypto Cross-Chain Bridges Prove To Be Serious Infrastructural Weakness That Hackers Exploit

The crypto market has been plagued with some of the worst hacks that the market has seen in years. While the crypto space has always seen its fairs share of bad actors, the sheer volume and frequency with which these hacks have started taking place is turning away many new investors.

Of course, the frequency with which these attacks have increased means that hackers have found a weak link in the system, which they are using to steal money from various apps and companies.

The weak link in question here is the crypto cross-chain bridge that nearly every major crypto firm makes use of. And since it is a major part of the overall system, even the largest firms are struggling to find a reasonable solution to stop people from taking advantage of this.

Why are Cross-Chain Bridges so Important

Cross-chain bridges are some of the most vital parts of the crypto framework, as they help transfer coins at a rapid pace. The major selling point of cryptocurrencies, its speed, very much relies on these bridges.

A better way to visualize a cross-chain bridge is that it is a highway that connects major crypto apps, companies, and services. However, despite being an integral part of the crypto framework, they are also very vulnerable to bad actors who can intercept a transaction.

More specifically, hackers are able to use an exploit that allows them to steal tokens when they are in transit, without being traced. And it took one of the biggest exchanges in the country getting hacked for people to start taking notice.

The Binance Hack

Binance has recently fallen victim to a major hack as well, with the firm losing $100 million. While the firm was able to locate the cause of the hack as well as how it happened, their “solution” was to suspend all transactions.

Unfortunately, the most concerning thing about the Binance hack was that even the biggest cryptocurrency exchange in the world was unable to find a dedicated solution to this problem. Their most recent solution was to suspend various high-profile transactions.

This is not an effective fix for the issue, and the company will have to work fast if they want to keep its investors happy. But most importantly, if they can’t do it, then who can?

Other Solutions to the Problem

Of course, there can be other solutions to this problem, but many of the companies who are responsible for coming up with the solutions will likely struggle since they will also have to suspend operations.

These hacks didn’t just affect many companies, but they have also deeply affected investors, as they no longer feel safe investing in crypto, further contributing to the downfall of the market.

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Despite Worries Of Crypto Winter, Cryptocurrency Exchanges Continue To See Record Growth

The crypto market, similar to most other types of financial markets at the time, is struggling with dropping prices. The market saw three major crypto projects from two different firms fail, wiping away billions from the market. If that wasn’t bad enough, worsening socio-economic conditions meant that investors were not as willing to take on more risk.

Therefore, many investors in the market were quick to let go of cryptocurrencies, as the market crashed to record lows. Plenty of traditional financial institutes believe that this is the time for a crypto winter. But despite what most major banks or investment firms have to say about the current state of cryptocurrencies, the truth is that they are still growing.

Despite how bad the market is looking; many are still showing an interest in the market and are still trying to learn more about it.

Over 180 Active Crypto Exchange-Traded Funds

Despite the massive drop in the market with assets spiraling down by 70%, many firms have just recently brought up their ETFs and ETPs. Of the 180 active ETFs in the market right now, over half of them are just recent additions after Bitcoin’s very sharp decline. Therefore, it goes to show that the market is still growing, and it will not stay down for long.

Report from Morgan Stanely

Wall Street has long had a bone to pick with cryptocurrencies, especially because they can function without no real oversight. However, even one of the oldest and biggest Wall Street firms, Morgan Stanely, had to acknowledge the tenacity of the crypto market.

They were quick to point out that crypto exchange products have continued to grow, even after facing multiple setbacks. Despite seeing trillions fly off the market in a matter of months, financial companies, asset managers, and customers in general still haven’t given up on the market.

Finding New Ways to Bring in More Clients

The difficult situation that has come as a result of various socio-political factors has allowed various firms in the crypto space to adapt and adjust to tough times. Not only have they become better at presenting the possibilities that come with cryptocurrencies, but they have also become more competitive.

Various exchange firms have even gone as far as to take a page out of various other types of finance companies. Exchanges are charging less in fees to ensure people that don’t have to worry about paying too much. Of course, these companies will never take a loss, since they can rely on these same customers by pivoting them towards better and more lucrative investments.

And as clients become more comfortable, offering them new crypto assets to choose from can be much easier.

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Terraform Labs Exec Responsible For $60 Billion Crash Has Passport Frozen

The Terra and Luna crashes remain two of the biggest crashes in Cryptocurrency history. In its little over a decade of history, the market as a whole saw $60 billion wash away and crippled the industry, the effects of which many companies and investors have yet to recover from.

However, even if many investors have lost hope and are no longer holding out hope to retrieve their funds, the South Korean authorities are still very much out to get the top exec responsible for Terraform Labs.

Not only are the relevant authorities looking to arrest Do Kwon, top exec at Terraform Labs, but they are also looking for other individuals who might be involved with the incident. The police have already arrested one of the people who had ties to Kwon and his company’s operations.

The Foreign Ministry of South Korea has also ordered that Kwon return their passport by the designated date, or it will be canceled.

The Saga of South Korean Authorities vs. Do Kwon

Kwon’s company made history by having two assets that both contributed to possibly the biggest crypto collapse in the market, with billions of dollars wiped away in an instant. His company, Terraform Labs, was operating out of South Korea, and since then is on “Red Notice.”

South Korean authorities will often reserve the Red Notice for individuals who are on the run and are avoiding prosecution or their sentence. Considering the loss that he was responsible; it only makes sense that they would be on high alert for him.

However, despite saying that he is not on the run from the authorities, his whereabouts still remain unknown. The Seoul Southern District prosecutors’ office has found Kwon and his associates of violating various capital markets laws and committing fraud.

The Effects of the Terra and Luna Crashes

The crypto market as a whole is infamous for its volatility, but some even see it as a major benefit. Since the market is very volatile, it is more than likely that companies will also skyrocket in popularity, which could even lead to people making a lot more money.

However, following the crash, people started to have second thoughts about the DeFi space, which would even lead to investors cashing out of other cryptocurrencies and leaving.

Freezing His Assets

In an effort to bring out Do Kwon, the authorities have freeze various assets and are even looking to freeze his passport. They sent out an official request to two other cryptocurrency exchanges, OKX and KuCoin. The request was to freeze more than $60 million that he had in Bitcoin. They will also be looking into withholding nearly $40 million worth of digital assets that belong to him.

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The EU Decides On Legal Text For The MiCA Landmark Crypto Law

Regulating the crypto market might seem like a herculean task, but the EU is well on its way to deciding the text of its major Crypto law. This historic law is one of the first major efforts by a collective of countries looking to regulate cryptocurrencies.

While the idea for this monumental bill did start floating around in early July, the law did not start to take shape. The country’s bloc dedicated to drafting the bill has finally settled on its text, which will address major concerns that individuals had about the crypto market. More specifically, the best thing about the new law is that it would finally hold many crypto firms accountable.

Accountability was a major concern for many people, as the anonymity of everyone using the service meant that fraud was rampant. And companies that would start up with promises to do amazing things would eventually settle and go bust in a matter of weeks or months.

The First Licensing Regime Dedicated to Crypto

The MiCA will be the first law dedicated to licensing and regulating various crypto firms. If cryptocurrencies want to operate in any country throughout the EU, they will have to follow the legal text that the bloc has signed off on.

Although most of the details have yet to be finalized, one of the major requirements that they are bringing is that the stablecoins will need to meet a reserved quota before they can receive their license. Following the catastrophic collapse of Terra, one of the largest stablecoins in the market, the bloc adding this requirement shows that they are in touch with the market.

This clause will essentially make sure that all investors are reimbursed if the company fails or shuts down.

Checking Customer Identity

Although the bloc responsible for the MiCA is not responsible for this law, they are working with the team that is. The new law will mandate that crypto exchanges go through the necessary motions to check the identity of their users.

Easily the most controversial law regarding cryptocurrencies, it is trying to cut out money laundering from the market entirely. Since cryptocurrencies have always had to deal with the bad reputation that comes with money laundering throughout the market. By taking a step to mitigate money laundering, however, it is very likely that the community might be opposed to the idea since it infringes on the freedom of anonymity.

Still a Long Time Before Taking Effect

While MiCA remains one of the most progressive laws to regulate cryptocurrencies, it still has a long time until it comes into effect. Most likely, EU lawmakers estimate that the law will come into effect by 2024.

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Retail and Institutional Investors to Gain Access to Web3 ETF Provided by Bitwise

Bitwise Asset Management had a major announcement to make on October 3 for both retail and institutional investors.

Bitwise Launches a New ETF

Bitwise has announced that it has launched a new exchange-traded fund (ETF). Both the retail and the institutional investors would be able to benefit from Bitwise’s latest move.

This way, Bitwise is gaining more ground in cryptocurrency and becoming more adaptable for retail and institutional investors.

Through the new ETF, investors will be able to gain and benefit from Web3 technology. These investors would get to see how the Web3 industry is growing and will continue to grow, and how they will be able to generate benefits from their interactions.

Retail and institutional investors would also be able to get their companies to gain access to Web 3 technology and its growth.

The investors interacting with the ETF would be able to position themselves better in the world of Web3 technology.

Statement by Bitwise Asset Management

Bitwise also issued a statement following the launch of their ETF. It stated that the future of the internet would eventually shift to the platforms and projects being launched through Web3 technology.

Through Web3, none of the users would be required to provide their personal or financial information. Instead, the users can interact with Web3 just like they interact with decentralized platforms.

The users can have full authority over their personal and financial information without being bound to share it with anyone else.

Information on the ETF

Bitwise has announced that the ticker for their new ETF is BWEB, which reportedly tracks the Bitwise Web3 Equities Index.

Out of the total exposure, the companies would gain, 85% of exposure that the companies would be able to gain would be for activities involved in Web3 business.

The companies and investors would be able to gain access to a creator economy that would be enabled by Web3. The users would also gain access to digital worlds, metaverse enabled with Web3, finance, and Web3 infrastructure.

Statement by Hunter Horsley

The CEO of Bitwise, Hunter Horsely was glad to talk about their company’s latest offering to all kinds of investors. As mainstream crypto adoption is in the crawling phase, it is the best opportunity for them to adopt it and offer it to the institutional sector.

Being able to offer such a utility to the institutions in the early stage of mainstream crypto adoption would help their company gain strong ground in the sector.

This would further strengthen the foundation of the cryptocurrency industry making it convenient for institutional investors to adopt crypto.

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MetaMask Has Expanded Its Product Portfolio Launching A New Decentralized Application (DApp

MetaMask, one of the most popular cryptocurrency wallets in the market has made a new announcement about the launch of a new application.

According to MetaMask officials, they have launched a new decentralized application (DApp) that would offer great help and utility to the users.

The new decentralized application would let the users manage their cryptocurrency portfolio all at once. The best part of the application is that it would let the users manage a large number of cryptocurrencies in a single go.

The users would be able to manage the cryptocurrencies in their portfolio and wallet from a single application.

Users to Manage More than Just Crypto

The officials at MetaMask have confirmed that the application would offer a wide range of services to users.

Using the application, the users will be to manage their non-fungible tokens (NFTs) as well. MetaMask has provided all the information surrounding the new application through a blog post.

MetaMask has been around for many years offering the best wallet and custodial services to the users. It has been a huge breakthrough in the world of cryptocurrencies and blockchains. It connects to multiple blockchains in a single go.

The wallets offered by MetaMask come in multiple ways as they can be accessed via a smartphone application or an extension for the browser.

MetaMask has Answered Customer Demand

According to MetaMask officials, they had been receiving multiple requests from their customers wanting to have an application offering such a feature.

They wanted an application offered through the decentralized platform allowing them to view all of their cryptocurrency portfolios from a single dashboard.

As the demand continued to grow, MetaMask realized it was important to work on such an application. Finally, MetaMask decided to work on an application that would be same the purpose.

MetaMask did realize that they were not offering such a feature or convenience to its users. The users had to use external sources and platforms to view their portfolios in cryptocurrencies.

Now they have access to the application that would let them view their crypto portfolios from a single platform. They will not be required to log into third-party platforms in order to view their crypto portfolios.

Users will be able to View All their Portfolios

Using the new application, the users would be able to access not just the cryptocurrencies but also tokens based on the decentralized finance network.

Additionally, the users would be able to access the non-fungible tokens, which is something that was unachievable in the past.

With the new feature, MetaMask would grow more convenient for users to adopt and use when interacting with cryptocurrencies.

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