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The rise in ether (ETH) staking since the Merge and Shanghai upgrades has come at a cost to Ethereum as the network has become more centralized and the overall staking yield has fallen, JPMorgan (JPM) said in a research report on Thursday.

Many in the crypto community had seen Lido, a decentralized liquid staking platform as a better alternative compared to the centralized liquid staking platforms associated with centralized exchanges, analysts led by Nikolaos Panigirtzoglou wrote.

Lido has been adding more node operators to contain the number of staked ether being controlled by any single operator, to address centralization concerns, the Wall Street bank noted.

Still, centralization by any entity or protocol creates risks for Ethereum as a concentrated number of liquidity providers or node operators could act as a single point of failure or become targets for attacks or collude to create an oligopoly that would promote their own interests at the expense of the interests of the community, the report added.

An added risk from the rise of liquid staking is rehypothecation, the bank said. This is when liquidity tokens are reused as collateral across numerous decentralized finance (DeFi) protocols at the same time. DeFi is an umbrella term used for lending, trading and other financial activities carried out on a blockchain.

Rehypothecation could then result in a cascade of liquidations if a staked asset drops sharply in value or is hacked or slashed due to malicious attack or a protocol error, the note said.

The increase in staking has also reduced the appeal of ether from a yield perspective, especially given the backdrop of rising yields in traditional financial assets, the report added. The total staking yield has dropped from 7.3% before the Shanghai upgrade to about 5.5%.

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Ethereum Has Become More Centralized Since the Merge and Shanghai Upgrades: JPMorgan - CoinDesk

Circle stablecoin issuer has unveiled its latest initiative of minting USD Coin (USDC) directly on the Ethereum layer-2 scaling protocol, Polygon. This development simplifies the process for users and developers, eliminating the need to bridge the stablecoin from Ethereum to another blockchain.

With this new offering, Circles Mint and developer APIs now seamlessly support Polygon-based USDC. Consequently, businesses and developers can now craft decentralized applications using USDC on Polygon. Moreover, this integration promises near-instant transactions with minimal fees. Such capabilities are crucial for a range of applications, from payments and remittances to trading, borrowing, and lending.

Before this announcement, users relied on bridged USDC (USDC.e) from the Ethereum blockchain. However, this token wasnt issued by Circle. In contrast, the newly introduced offering guarantees redemption at a 1:1 ratio with the United States dollar. Additionally, Circle had previously facilitated deposits and withdrawals for USDC.e on Polygon through Circle Mint and its APIs. However, Circle will end this service on Nov. 10. They caution users that sending USDC.e to Circle Mint accounts after this date might make their assets irretrievable.

Circles integration with Polygon is poised to revolutionize the decentralized finance (DeFi) landscape. By providing native Polygon USDC, Circle is paving the way for affordable global payments and remittances. Additionally, it ensures easier access to prominent DeFi protocols like Aave, Compound, Curve, Uniswap, and QuickSwap.

Furthermore, Circle has plans in the pipeline to introduce a cross-chain transfer protocol on Polygon. This will foster interoperability with other blockchain networks, significantly enabling Polygon-based USDC transfers to and from the Ethereum blockchain.

In related news, Circle made headlines in September by announcing native stablecoin liquidity access on the NEAR protocol ecosystem. Circle Account and Circle APIs now offer USDC NEAR access, marking a significant step in expanding the stablecoins usability and accessibility across various blockchain networks.

Read Also: SBF Trial: Recap of First Week of Broken Trusts as SBF Loyalists Testify

Read more:

Circle Mints USDC Directly on Ethereums Polygon Protocol - CoinGape

10/10 update below. This post was originally published on October 8

BitcoinBTCalongside other major cryptocurrencies ethereum and XRPXRPhave lost momentum after surging into 2023 (though a surprise leak from a major tech company could mean that's about to change).

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The bitcoin price has lost around 60% since peaking at almost $70,000 per bitcoin in late 2021, wiping around $2 trillion from the price of ethereum, XRP and the rest of the crypto marketeven as a BlackRock insider primes the market for a $17.7 trillion earthquake.

Now, as the Federal Reserve grapples with a $33 trillion U.S. "debt death spiral," Jefferies' analysts have warned the Fed will be forced to restart its money printerpotentially collapsing the U.S. dollar and fueling a bitcoin price boom to rival gold.

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"G7 central banks, including most importantly the Federal Reserve, will not be able to exit from unconventional monetary policy in a benign manner and will ultimately remain committed to ongoing central bank balance-sheet expansion in one form or another," Christopher Wood, global head of equity strategy at Jefferies, wrote in a note to clients seen by CNBC, calling bitcoin and gold "critical hedges" against the return of inflation.

The Fed began the laborious task of shrinking its swollen near-$9 trillion balance sheet in the spring of 2022 following huge expansion though the Covid-19 pandemic and economically disastrous lockdowns. So-called quantitative tightening sees the Fed suck liquidity out the financial system, passing on the burden of freshly issued debt to the private sector.

As well as reducing its balance sheet, the Fed has been hiking interest rates at a historic clip as it struggles to bring soaring inflation under control, creating what some fear could become a counter-intuitive "death spiral" for the U.S. dollar that ultimately pushes up the bitcoin price.

10/10 update: Analysts at Wall Street giant Deutsche Bank have warned the world could be headed for 1970s stagflation, where inflation remains elevated alongside a lack of economic growth.

"So given inflation is still above its pre-pandemic levels, it is important not to get complacent about its path," macro strategist Henry Allen and research analyst Cassidy Ainsworth-Grace of Deutsche Bank wrote in a note seen by MarketWatch. "After all, if there is another shock and inflation remains above target into a third or even a fourth year, it is increasingly difficult to imagine that long-term expectations will repeatedly stay lower than actual inflation."

The analysts pointed to soaring oil prices following the outbreak of war between Israel and the Palestinian militant group Hamas, as well as an increase in worker strikes this year and meteorological trouble brewing for commodity prices thanks to the El Nio weather pattern.

The Fed could be forced to suddenly flip dovish in the face of a U.S. recession due to a larger-than-usual lag in the Fed's inflation reducing interest rate hikes following the money supply explosion through 2020 and 2021, according to Wood.

"Such a failure to exit from unorthodox monetary policy in a benign manner is likely to culminate in the collapse of the U.S.-dollar paper standard to the benefit of both gold bullion owners and also owners of bitcoin," Wood wrote.

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Meanwhile, bitcoinand to a lesser extent other major cryptocurrencies such as ethereum and XRPhave seen a sharp rise in institutional interest, led by the world's largest asset manager BlackRock.

"Bitcoin has now become investible for institutions, with custodian arrangements in place for digital assets, and represents an alternative store of value to gold," Wood wrote.

In June, BlackRock sparked a Wall Street rush toward bitcoin and crypto, with its legendary chief executive Larry Fink flipping bullish on bitcoin after years of skepticism.

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk I reported on how technology is changing business, political trends, and the latest culture and lifestyle. I have covered the rise of bitcoin and cryptocurrency since 2012 and have charted its emergence as a niche technology into the greatest threat to the established financial system the world has ever seen and the most important new technology since the internet itself. I have worked and written for CityAM, the Financial Times, and the New Statesman, amongst others. Follow me on Twitter @billybambrough or email me on billyATbillybambrough.com.Disclosure: I occasionally hold some small amount of bitcoin and other cryptocurrencies.

Originally posted here:

U.S. Dollar CollapseShock $8 Trillion Predicted Fed Inflation Flip To Spark A Critical Bitcoin, Ethereum, XRP And Crypto Price Boom To Rival Gold -...

Ethereum, the second-largest blockchain network, suffered a substantial setback through a sandwich attack, losing over $9K.

This data underscores an increasing problem of sandwich attacks in the crypto sphere, with over $1.3 million lost through such schemes in the past 30 days on the Ethereum chain.

According to Eigenphis data, on Oct. 9, the Ethereum network experienced a significant sandwich attack by the MEV bot (0x006B40), resulting in a profit of approximately $4,060 after factoring in costs.

MEV bots are well-known for extracting miner-extractable value in blockchain transactions.

Various blockchain analysts, including EigenPhi, promptly identified this recent incident. Network data reveals that this sudden attack followed an Ethereum foundation attempt to sell 1.7K Ethereum tokens through Uniswap V3. The foundation aimed to exchange these tokens for 2.738 million USDC via Uniswap.

Data charts illustrate a series of transactions involving multiple tokens such as WETH, USDC, ETH, aUSDC, aWETH, and variable WETH, enabling the attacker to ultimately secure profits. The MEV bot generated approximately 5.616 ETH in revenue during these transactions, accumulating 3.111 ETH after deducting costs after the incident.

At the time of the attack, Ethereum was trading in the $1,600-$1,618 range. This implies that the MEV bot obtained revenue of approximately $9,101, with actual profits amounting to $4,060. Consequently, the attack resulted in a $9,101 loss for the Ethereum Foundation.

Despite this significant setback, the foundations address retains substantial assets, including 240.68 ETH, 3.238 million USDC, 49,700 DAI, and 10,000 ARB, totaling $3.687 million.

A closer examination of Eigenphis analysis suggests that there has been significant activity from sandwich attackers recently. Within 24 hours prior to the reports, 85 sandwich attackers managed to generate profits totaling $22.9K.

Over the past seven days, approximately 20.4K victims have been reported, with 123 attackers accumulating profits of $239.4K. In the last 30 days alone, attackers have profited a minimum of $1.38 million through sandwich attacks.

Although the Ethereum chain remains the primary target, BSC chains closely follow suit, with attackers earning $497.4K in the past 30 days.

These recent incidents serve as a clear reminder of the significant risks associated with the blockchain ecosystem, which can impact anyone.

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Ethereum Foundation Falls Victim to MEV Bot Attack - CryptoPotato

BitcoinBTC and other major cryptocurrencies, including ethereum and Ripple's XRPXRP, have been rocked by the Federal Reserve this yearcreating what could become a bitcoin price nightmare.

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The bitcoin price, up almost 70% so far this year, helped by BlackRockBLK, the world's largest fund manager that looks after around $10 trillion worth of assets, driving a surge of Wall Street bitcoin and crypto interest.

Now, a former BlackRock managing director has predicted it's only a matter of months until the U.S. Securities and Exchange Commission (SEC) approves a long-awaited bitcoin spot exchange-traded fund (ETF), giving funds that manage $17.7 trillion worth of assets the green light.

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"The SEC will probably approve [all spot bitcoin ETF applications] at the same time; I dont think they want to give anybody first mover advantage," former BlackRock managing director Steven Schoenfield said this week at a London conference, it was reported by Decrypt.

Schoenfield gave the SEC "three to six months" until it approves a bitcoin spot ETF.

Last month, $1.5 trillion manager Franklin Templeton filed with the SEC for a bitcoin spot ETF, joining a flurry of applications that was kicked off by the world's largest asset manager BlackRock in June and includes Wall Street giants Fidelity, Invesco Galaxy, WisdomTree.

Schoenfield pointed to a recent decision by the SEC to delay until early next year at the latest decisions on a handful of prominent bitcoin spot ETF applications as accelerating the process.

"Instead of completely rejecting the whole list, they've asked for comments, which is a marginal but significant improvement in the dialogue," Shoenfield said.

Meanwhile, the SEC has been instructed by U.S. lawmakers to reexamine crypto asset manager Greyscale's application to convert its flagship bitcoin trust to a fully-fledged bitcoin spot ETF. "[The SEC is] most likely going to have to allow the Grayscale Bitcoin Trust to be converted into an ETF," Schoenfield said.

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The bitcoin price and wider crypto market have, however, lost ground since surging higher in the aftermath of BlackRock's landmark bitcoin spot ETF filing.

"The entire crypto market appears to be holding its breath while it waits for the U.S. SEC to begin approving bitcoin spot ETFs," Swarm Markets co-founder Timo Lehes said in emailed comments.

"But in the meantime it would appear asset managers are already beginning to adapt their offerings depending on what happens next in the market. There is evidently an increasing move from smaller providers such as Valkyrie and VanEck to diversify out of bitcoin and into ethereum. This will give them an added selling point once the big institutional players are unleashed onto the bitcoin ETF market."

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk I reported on how technology is changing business, political trends, and the latest culture and lifestyle. I have covered the rise of bitcoin and cryptocurrency since 2012 and have charted its emergence as a niche technology into the greatest threat to the established financial system the world has ever seen and the most important new technology since the internet itself. I have worked and written for CityAM, the Financial Times, and the New Statesman, amongst others. Follow me on Twitter @billybambrough or email me on billyATbillybambrough.com.Disclosure: I occasionally hold some small amount of bitcoin and other cryptocurrencies.

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BlackRock Insider Primes Crypto For A Huge $17.7 Trillion Wall Street Earthquake That Could Be About To Hit The Price Of Bitcoin, Ethereum And XRP -...