Bitfinity Weekly: Alignment & Incentives
Welcome to Issue #120 of Bitfinity Weekly for our #BITFINIANS community. If this newsletter was forwarded to you, sign up here.
What's in Today's Email?
- Global Crypto News
- This Week in our Blog
- NFT Market Bytes
- Tweet of the Week
- Meme Time
- A Matter of Opinion
Global Crypto News
Restaking Layer: EigenLayer, the largest Ethereum restaking platform by TVL (total value locked), is implementing permissionless token support. This upgrade will allow any ERC-20 token to be used as a restakable asset. While already accessible on testnet, mainnet deployment of this new feature is scheduled to go live net week.
Laundry Service: Binance is facing a new class action lawsuit in the U.S. that accuses the company of facilitating money laundering by willfully ignoring regulatory safeguards. The lawsuit alleges that the exchange knowingly provided services to illicit actors under founder Changpeng Zhao's direction. This lawsuit comes during a time of mounting legal scrutiny of the international crypto exchange.
See & Tell: China has updated its anti-money laundering (AML) laws to explicitly classify "virtual asset" transactions as a method for money laundering. This legal change increases scrutiny on financial institutions and payment providers to self report suspicious activities. China has had a fluctuating approach to crypto, first banning ICOs in 2017 and crypto transactions in 2021.
Native Narrative: Bitcoin tx fees saw a sharp spike on Thursday as Babylon Labs opened up the first phase of its "Bitcoin Staking Mainnet", a self-custodial Bitcoin staking service. Although billed as native staking, Babylon Labs will be launching a proof-of-stake (POS) blockchain using the Bitcoin deposited by participants in Phase 1, eventually allowing stakers to earn rewards by using their deposits to secure multiple POS chains.
Partnership Party: Nubit - By integrating Nubit's scalable data layer with Bitfinity's robust cross-chain capabilities, we are setting a new standard for efficiency, security, and innovation in the blockchain space. Sweep n' Flip - NFT liquidity protocol that's helping in the decentralized exchange of digital assets. Bitname - User-friendly Bitcoin naming system, perfect partner in the Bitfinity ecosystem. Iron Chain Bank - enhances its blockchain operations with ZK-Rollup technology and the BRC-20 standard, ensuring secure and efficient transactions on Bitcoin's robust foundation.
This Week in our Blog
Stablecoins are a critical component of any DeFi ecosystem. Their role as liquidity facilitators cannot be understated. Take a deep dive with us as we explore the advent of stablecoins in Bitcoin's emerging landscape:
Hans
Relive the excitement of Bitfinity’s Blockchain Bash: 2nd Edition, where innovation, networking, and the future of blockchain technology took center stage!
Fred
NFT Market Bytes
Token Strategy: Leading NFT marketplace Magic Eden is changing their previous token launch plans. Though the initial announcement declared that an ME token would be done in collaboration with an unknown organization called the Non-Fungible DAO, the upcoming token will be a solo venture. Speculators assume that marketplace points (called Diamonds) will lead to an airdrop allocation, though no concrete distribution plan has been revealed yet.
Shaq Fu'd: A class action against former basketball star Shaquille O'Neal was partially dismissed last Friday, though the legal battle over his "Astrals" NFT project is still under progress. The decision is expected to have a significant impact on other crypto-related class action lawsuits, particularly involving celebrity endorsements, as well as cases related to failed exchange FTX and failed crypto brokerage Voyager Digital.
Gathering Blue: CryptoPunk #5822, which set a record in 2022 as the most expensive CryptoPunk ever sold, has been sold for an undisclosed sum. On Monday, former owner Deepak Thapliyal announced that the NFT has been sold for an undisclosed sum. The private sale comes at a time of historic lows for CryptoPunks, long regarded as a "blue chip" collection. Punk #5822 now resides in an anonymous Ethereum wallet, in which #5822 is the sole asset.
Tweet of the Week
Are you interested in the Bitfinity ecosystem and will like to flex your creativity?😎
— Bitfinity Network (@bitfinitynet) August 22, 2024
We're having a Meme contest in our Discord throughout this week. This is an opportunity for you to come up with creative memes and get rewarded. 🎁
➡️The memes can should revolve around:… pic.twitter.com/2rWsSSRIHr
Meme Time
A Matter of Opinion
Last month Compound DAO underwent a governance attack, almost costing the lending protocol $25m. Although disaster was averted thanks to community outrage and action by Compound leadership, voter participation is shaping up to be a pain point for many DAOs.
Decentralized Autonomous Organizations (DAOs) represent one of the most revolutionary concepts in DeFi—placing control in the hands of users through token-based voting systems. However, as these organizations evolve, they face a critical challenge: voter apathy. Participation in DAO governance is increasingly low, despite many managing treasuries worth billions. This disengagement threatens the decentralized ideals DAOs are built upon and raises questions about the future of community-driven governance.
Voter apathy in DAOs isn’t just a minor issue—it’s a potential existential threat. When a small, active minority holds disproportionate sway in decision-making, the concept of decentralization becomes compromised. In many cases, voter turnout rates hover around single digits, with only a handful of participants deciding critical proposals. The implications are significant; low participation could lead to governance decisions that don’t reflect the broader community’s needs, potentially jeopardizing the long-term sustainability and security of these protocols.
To address this issue, DAOs must rethink their approach to governance. One solution could lie in creating more user-friendly voting mechanisms and lowering the barriers to entry for participation. Simplifying the voting process and providing clear, concise information on proposals can empower more token holders to engage. Additionally, experimenting with incentive structures, such as rewarding active voters with tokens or other benefits, could help boost turnout.
DAOs have the potential to redefine governance in the digital age, but this promise can only be fulfilled if the community actively participates. Without addressing voter apathy, DAOs risk drifting away from their core ethos of decentralization, opening the door to bad actors with misaligned incentives.
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