Celestia: Inspired by Satoshi Nakamoto and Vitalik Buterin
Weekly News Recap: 🚀 SEC ends stablecoin probe, 💼 Celsius sues users, 💸 Polychain's internal drama, and more!
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How Satoshi Nakamoto and Vitalik Buterin Inspired Key Parts of Celestia
Mustafa Al-Bassam, cofounder of Celestia, shares his most vivid stories of his early days of hacking, the next steps for Celestia, and what he’s cautious about.
Mustafa Al-Bassam was a teenage hacktivist who outsmarted a US government contractor, shamed the Westboro Baptist Church, hacked Sony a record number of times and eventually got arrested—though his 80 transgressions got halved for a funny reason.
At the Modular Summit in Brussels, Laura had a fireside chat with Mustafa to discuss how he went from his teenage years as the head of LulzSec and member of Anonymous to founding Celestia, a project aiming to solve key issues in blockchain scalability by going with a modular approach.
He also discussed data availability sampling, why he believes Celestia has achieved significant product-market fit since its launch, and the three key components of Celestia’s roadmap.
Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.
Weekly News Recap
SEC Ends Stablecoin Probe, Marking a Win for the Crypto Industry
The Securities and Exchange Commission (SEC) ended its investigation into New York-based stablecoin issuer Paxos, marking a significant win for the crypto industry. Fortune reported that the SEC's acting chief of the crypto assets and cyber unit, Jorge Tenreiro, informed Paxos that no enforcement action would be recommended, citing a letter shared with the news outlet. This decision comes over a year after Paxos received a Wells notice regarding its dollar-backed BUSD stablecoin, which was issued in partnership with Binance.
This development follows the SEC's recent partial defeat in a lawsuit against Binance, with a federal judge dismissing a charge that stated sales of BUSD were securities offerings. Paxos' head of strategy, Walter Hessert, expressed relief, noting that the end of the investigation should provide the stablecoin market with more certainty.
Celsius Sues Users Who Made Large Withdrawals Pre-Bankruptcy
Bankrupt crypto lender Celsius initiated lawsuits against thousands of creditors who withdrew over $100,000 from the platform shortly before it declared bankruptcy. On July 1, Celsius' litigation administrator filed these complaints in the U.S. Bankruptcy Court for the Southern District of New York, targeting funds that were transferred out within the 90 days preceding Celsius’ Chapter 11 filing.
Litigation administrator Mohsin Meghji stated that those who withdrew funds before the bankruptcy “unfairly benefitted at the expense of other account holders.” Previously, Celsius settled with 1,500 account holders, recovering $100 million from those with preference liabilities.
The Litigation Oversight Committee (LOC) emphasized that non-settling account holders should expect aggressive efforts to reclaim the full value of their withdrawals. An account holder, known as “medx0” on social media platform X, criticized the lawsuit, noting that Celsius is seeking recovery based on current cryptocurrency values, not the values at the time of the withdrawals in 2022.
Crypto lawyer and Delphi Labs former general counsel Gabriel Shapiro commented "gotta love the way these crypto bankruptcies are shaping up, money they owe you --> priced at market bottoms, money you fake-owe them --> priced at market tops, unfettered bullshit, I tell you."
Celsius, which once managed over $20 billion in assets from 1.7 million users, faced significant challenges following the collapse of the Terra ecosystem. The company froze withdrawals in June 2022 and filed for bankruptcy in July, citing liquidity issues.
Polychain Accuses Ex-Partner of Secret Deal with Portfolio Company
CoinDesk reported that Polychain Capital has accused its former general partner, Niraj Pant, of making an undisclosed deal with its portfolio company Eclipse Labs, which violated the firm's policies. Former Eclipse CEO Neel Somani allegedly allocated Pant 5% of Eclipse tokens, later reduced to 1.33%, as an incentive for securing Polychain's investment.
Pant confirmed he received "adviser" tokens but claimed the deal was finalized post-investment. Polychain, however, the investment firm states they were unaware of this financial relationship until after Pant's departure. Despite this, Polychain's investment in Eclipse has reportedly increased in value tenfold since 2022.
Vijay Chetty, the current CEO of Eclipse Labs who stepped in after its former CEO faced allegations of sexual misconduct, wrote on X: “Eclipse Labs' history has been messy. I stepped up as CEO to clean up this company and chart us on a new path forward.” Somani denied the allegations.
Senate Crypto Hearing Spurs Legislative Push
Unchained reported on Monday that an upcoming Senate Agriculture Committee hearing could signal a Democratic push to engage crypto voters. On Wednesday, during this hearing, Committee Chairwoman Debbie Stabenow (D-MI) indicated her intent to share the language of a new crypto bill with fellow members by the end of the week. This proposed legislation aims to grant the Commodity Futures Trading Commission (CFTC) regulatory authority over digital commodities.
Stabenow emphasized the need for clear regulations to foster innovation while protecting consumers from bad actors in the crypto market. She highlighted the urgency of establishing comprehensive federal legislation, noting that global counterparts have already recognized the importance of such measures.
Committee Ranking Member John Boozman (R-AR) has collaborated with Stabenow, but expressed concerns about stakeholder support for the bill as it currently stands. The proposed legislation seeks to ensure crypto firms hold sufficient capital reserves, maintain strict cybersecurity standards, and provide accurate information to retail customers. Additionally, it aims to secure permanent funding for the CFTC to oversee the digital commodity market.
Trump’s GOP Platform Pledges to Halt ‘Crypto Crackdown'
It’s not only Democrats who are making a push for crypto voters. The Republican National Committee has officially adopted a platform that aims to support cryptocurrency innovation. The document, reflecting former U.S. President Donald Trump’s increasing interest in digital assets, pledges to end the Democrats' "unlawful and unAmerican Crypto crackdown" and oppose the creation of a Central Bank Digital Currency (CBDC). It also defends the right to mine Bitcoin and self-custody digital assets.
Trump, who has launched several branded NFT sets and accepts crypto donations, has reversed his previous skepticism towards cryptocurrency and is now showing strong support for the sector. He is set to speak at the Bitcoin 2024 conference in Nashville later this month.
StarkWare Proposes Incremental Staking Plan for Starknet
StarkWare announced a phased approach to introducing staking for its layer 2 network, Starknet. On Wednesday, the company submitted the Starknet Net Improvement Proposal (SNIP) to the network’s GitHub page, outlining plans to enhance network resilience and decentralization. In the initial stage, stakers will run a full node, interact with staking smart contracts, and adhere to StarkWare’s rules.
The process will require community approval through a governance vote, as stated by StarkWare spokesperson Nathan Jeffay. Future stages will demand additional validating software for sequencing and proving activities. StarkWare aims to balance economic incentives while maintaining a sustainable inflation rate. Staking rewards will adjust dynamically based on the amount of STRK locked.
Aave DAO Criticizes MakerDAO Over Spark Profit Sharing Deal
Tensions have arisen between DeFi giants Aave and MakerDAO regarding a profit-sharing agreement for the Spark Lend protocol. Marc Zeller, founder of Aave Chan Initiative, accused MakerDAO of "creative accounting" that reduces Aave’s profit share from the agreed 10% to around 1%.
Spark Lend, a fork of Aave v3, generated $42 million in revenue over the past year, according to Messari. Despite Spark’s total value locked (TVL) reaching $2.8 billion, Aave claims they are underpaid.
Aave DAO is currently voting on three options to resolve the situation: declaring Spark in breach of agreement, approving new terms, or maintaining the current arrangement. MakerDAO founder Rune Christensen expressed disappointment over the contentious reset of the relationship.
Cambodian Ruling Family Linked to $11B Crypto Scam
A firm linked to Cambodia's ruling family is allegedly running an $11 billion crypto scam operation, according to Elliptic. The blockchain analytics firm alleges that Huione Guarantee, an online marketplace, facilitates crypto scams and money laundering services. Elliptic revealed that Hun To, a cousin of Cambodia's Prime Minister Hun Manet, is a director for one of Huione's units connected to these illicit activities.
Since 2021, Huione-associated crypto wallets have received over $11 billion. The firm operates various services, including a payments app called Huione Pay. Elliptic’s report suggests that the majority of transactions on Huione Guarantee are tied to illegal activities, including money laundering and fraud.
Solana's Firedancer Builds First Testnet Block
On Wednesday, Jump Crypto's Firedancer, a high-performance validator client for Solana, successfully built its first block on the Solana testnet. Under development since 2022, Firedancer aims to boost Solana’s transaction processing capabilities with its implementation of the C++ programming language and sharding support.
Helius Labs CEO Mert Mumtaz praised Firedancer as "one of the most performant pieces of open-source software ever created." Solana has relied on a single validator client until now, unlike Ethereum, which has multiple. The addition of Firedancer enhances Solana's security and decentralization. Firedancer promises significant advancements over Solana’s current throughput of around 3,000 TPS.
BONK Reclaims Top Solana Memecoin Spot from WIF
BONK has overtaken WIF to become the most valuable memecoin in the Solana ecosystem. In the past week, BONK's price surged by 20%, boosting its market cap to $1.73 billion, while WIF's value dropped by 11.2%, reducing its market cap to $1.63 billion. Despite having similar market caps, BONK boasts 741,352 holders compared to WIF’s 163,683, according to Solscan.
BONK DAO is currently voting to burn nearly $2.2 million worth of BONK, a move expected to drive up the value of the remaining tokens. Together, BONK and WIF account for about 7.6% of the total memecoin market cap, which stands at nearly $3.4 billion.
BlackRock’s BUIDL Fund Reaches $500 Million Milestone
BlackRock’s tokenized treasury fund, BUIDL, achieved a market value of over $500 million on Tuesday, becoming the first fund of its kind to surpass the half-billion-dollar mark. Launched in March on the Ethereum blockchain through a partnership with Securitize Markets, BUIDL offers institutional investors yields on tokenized U.S. Treasuries. The tokenized treasury market has grown significantly, reaching a total value of $1.8 billion this year.
BlackRock’s BUIDL fund is among the six real-world asset products that Arbitrum DAO voted to invest $25 million worth of ARB tokens into to diversify its treasury.
In related news, Wall Street titan Goldman Sachs will launch three tokenization projects by the end of the year, according to Matthew McDermott, Goldman Sachs' global head of digital assets. These initiatives will focus on issuing real-world assets on blockchains, marking a significant expansion in the bank's crypto offerings.
Fun Bits: Worldcoin's Billion User Dream Falls 994 Million Short
Worldcoin set an ambitious goal of onboarding one billion users by 2023 but fell short by a mere 994 million! As of July 2024, they've verified 6 million users. At this rate, they’ll need to scan the eyes of 2,734 people daily to hit their goal by 2026. No pressure, right?
Founded by OpenAI’s Sam Altman, Worldcoin is facing an orb shortage with only 300-500 orbs in action. They claim to have 2,000 orbs, but even then, each orb needs to scan 700 people daily to make it happen.
Despite their grand plans, global restrictions and curious investigations are slowing things down. But hey, at least operations are back on in Kenya and South Korea! Keep those orbs rolling, Worldcoin!