In this week’s issue of The Protocol, we’ve got the crypto angle on Tuesday’s presidential debate – just as weird and ridiculous as you might imagine.
Ethereum Foundation’s shrinking wallet.
Friend.Tech in low places.
Coinbase’s Base relies on special formula to vault toward top of Ethereum layer-2 rankings. (Spoiler alert: It ain’t the tech.)
Nearly $50 million of blockchain project fundraisings.
Tether, flush with cash, expands global empire.
Top picks from the past week’s Protocol Village column: Livepeer, Polygon Labs, Tron, Tether, Snapshot Labs, Starknet, Fractal Bitcoin.
Polymarket bettors had an extra screen to keep an eye on during Tuesday’s debate. (Sam Reynolds)
GREAT DWEBATE: It was entertaining enough to tune into Tuesday night’s U.S. presidential debate between former President Donald Trump and Vice President Kamala Harris. But it was nearly as rollicking just monitoring the action on prediction-betting site Polymarket and all the memecoins popping up on the token launchpad Pump.fun. Over the course of the debate, the Polymarket odds clearly drifted toward the conclusion that Harris was winning the tête-à-tête. “Trump just getting destroyed,” the crypto-friendly money manager and former Trump White House communications director Anthony Scaramucci wrote on X roughly 40 minutes into the face-off, attaching a Polymarket screenshot.
But there were also plenty of side bets at stake – and scads of memecoins launched including DWEBATE, DOMALA TRUMPIS, PEPEDENTIAL DEBATES and WW3, which sprung up to satirize the entire spectacle, or to document some of the more memorable zingers. (Many of the memecoin names were not remotely safe for a PG-rated blockchain tech newsletter.) Some Polymarket wagers paid off handsomely when Trump claimed – falsely, according to the Wall Street Journal – that migrants are “eating the dogs” in Springfield, Ohio. (That also sparked a few new memecoins, including EATING DOGS AND CATS.)
Anyone coming to the debate hungry for a crypto policy discussion went home hungry, for what it’s worth: There wasn’t a single mention of Bitcoin or digital assets. That didn’t stop crypto twitterati from sounding off.
The Ethereum Foundation, the main non-profit organization supporting the Ethereum blockchain, is set to release an updated financial report “soon,” according to a top official who also revealed that the organization’s main Ethereum wallet currently holds about $650 million. Justin Drake, a prominent researcher at the Ethereum Foundation (EF), wrote during a typed ask-me-anything – on an Ethereum subreddit under the handle “bobthesponge1” – that the EF spends roughly $100 million per year and currently has roughly a 10-year runway, depending on the price of ether (ETH), the blockchain’s native token. The last time the EF released insights on its financial holdings was in March 2022, at which point the EF treasury reported a balance of about $1.6 billion. That included $1.3 billion of ETH and about $11 million of “other crypto.”
Friend.Tech, the Web3 social network that turned heads as a crypto sensation when it launched last year on Coinbase’s Ethereum layer-2 network, Base, shared on Sept. 8 that it was transferring the ownership of its smart contracts to an Ethereum null address, permanently removing developers’ control over them.
A recent chart from on-chain data provider Token Terminal shows the network accelerating in recent months while other layer 2s were experiencing a dropoff. (Token Terminal)
Among the rapidly growing ranks of layer-2 blockchains built atop Ethereum, the U.S. crypto exchange Coinbase’s own version, Base, hardly stands out as a technological pioneer. The entire project was built and launched last year using code borrowed from another team – Optimism, with its OP Stack framework for easily spinning up new layer-2 networks.
That’s partly why it’s so remarkable that Base has shot to the No. 2 spot on the key industry leaderboard L2Beat, with an 18% market share of 74 active layer-2 networks. Top-ranked Arbitrum’s Arbitrum One dominates with a 40% share, but Base has shot past older, competing projects from teams with hard-fought reputations for cutting-edge development, including Starknet, Polygon, even Optimism itself.
But it turns out that the race for blockchain supremacy, just as in broader industry, is reliant to a large extent on marketing savvy and an ample warchest to spend on attracting new customers – not just whoever has the best tech. And Coinbase has helped to fuel Base’s growth through its own advertising campaigns and promotional events, including the recently concluded “Onchain Summer.”
The question now is whether the activity is sustainable. Are the accounts bona fide users with on-chain needs, or just a flurry of tire-kicking beta testers curious to try out the various protocols built atop Base? Are they opportunistic “degen” crypto traders taking advantage of one-time promotions and quests to collect extra riches, or racking up usage in hopes of eventually collecting tokens rewards?
Fundraisings
Vibhu Norby, CEO and co-founder DRiP (DRiP)
DRiP, a creator engagement platform on Solana, has raised $8 million in seed funding led by NFX, with participation from Progression (founded by ex-TikTok exec) and Coinbase Ventures. The funding will support mobile app development, creator tools and user growth, according to the team.
An upcoming vape-to-earn project wants to use token incentives and blockchain-enabled vapes to make nicotine addictions additions go up in smoke. Called Puffpaw, the project intends to sell specialty vapes that record their user’s smoking habits on the blockchain. It will reward them in their tokens for gradually reducing their nicotine intake. The quit-smoking project raised $6 million in seed funding led by Lemniscap Ventures.
Others (please see details in Protocol Village column): PIN AI ($10M), Nytro Lab ($8M), Fountain ($3.5M), Blocksense ($4M), Ammalgam ($2.5M), Cork Protocol ($2.15M), DeFi.Gold ($2.22M)
Deals and grants
Sonic SVM, a project to scale the Solana blockchain to gaming-quality speed and throughput, plans to sell as much as $12.8 million worth of validator nodes in its HyperGrid, a decentralized framework designed to support new application-specific networks. The sale, scheduled for the week of Sept. 16, will be the first in the Solana blockchain ecosystem and will include 50,000 “Hyperfuse nodes” in 20 pricing tiers, according to the team. Proceeds will go into the project’s treasury for general purposes, including supporting the development team and grants, CEO and co-founder Chris Zhu said in an interview.
Blockchain data provider Nansen said it bought staking platform StakeWithUs, as CEO Alex Svanevik looks to expand beyond data provision into offering investment services for institutions and retail traders. While the purchase price was not disclosed, a spokesperson for the company said it was a seven-figure sum.
Blockstream Mining Raises Fresh Round of Note That Offers Exposure to Bitcoin Hashrate
Data and Tokens
Regulatory and Policy
Top picks of the past week from our Protocol Village column, highlighting key blockchain tech upgrades and news.
Livepeer, a decentralized video-streaming project, powered a livestream for the Burning Man webcast team at the recently concluded event in the Nevada desert. According to the team, the project offered “a more reliable and cost-effective solution than traditional cloud providers.
Polygon Labs, a major developer of Ethereum layer-2 networks, shared Tuesday it is unveiling a new type of computer chip that’s optimized for zero-knowledge cryptography processing, built by hardware maker Fabric specifically for Polygon’s interoperability solution, AggLayer. The team also shared that Polygon Labs will acquire $5 million worth of VPU-based server systems as part of today’s announcement, in order to accelerate ZK-proof generation projects on the AggLayer.
Tron, the blockchain founded by Justin Sun, is working with TRM Labs and USDT issuer Tether in a task force created to fight financial crime. The task force, the T3 Financial Crime Unit (T3 FCU), will combat illicit activity involving USDT, the largest stablecoin, on Tron. Sun said in a press release: “By collaborating with TRM Labs and Tether, TRON is helping to ensure that blockchain technology is used to make our world a better place, and sends a clear message that illicit activity is not welcome in our industry.”
Snapshot Labs, developer of an off-chain voting platform used by 96% of decentralized autonomous organizations (DAOs) including those overseeing leading DeFi projects Lido and Aave, is adding a blockchain-based option, built on the Ethereum layer-2 network Starknet.
Fractal Bitcoin, describing itself as “the only Bitcoin native scaling solution that uses the Bitcoin Core code itself to recursively scale unlimited layers on top,” launched its mainnet on Monday. According to the team: “Using recursive virtualization of Bitcoin core software, Fractal scales Bitcoin’s capacity infinitely while maintaining complete network consensus. It supports Bitcoin-native protocols like BRC-20 and introduces the OP_CAT opcode for on-chain innovation.
Sept. 12-13: Global Blockchain Congress, Southeast Asia Edition, Singapore.
Sept. 18-19: Token2049 Singapore.
Sept. 19-21: Solana Breakpoint, Singapore.
Sept. 25-26: European Blockchain Convention, Barcelona
Sept. 30-Oct. 2: Messari Mainnet, New York.
Oct. 1-2: CV Summit, Zug, Switzerland.
Oct. 9-11: Permissionless, Salt Lake City.
Oct. 9-10: Bitcoin Amsterdam.
Oct. 10-12: Bitcoin++ mints ecash: Berlin.
Oct. 15-17: Meridian, London.
Oct. 18-19: Pacific Bitcoin Festival, Los Angeles.
Oct. 21-22: Cosmoverse, Dubai.
Oct. 23-24: Cardano Summit, Dubai.
Oct. 25-26: Plan B Forum, Lugano.
Oct. 30-31: Chainlink SmartCon, Hong Kong.
Nov. 9-11: NEAR Protocol’s [REDACTED], Bangkok.
Nov. 10: OP_NEXT Bitcoin scaling conference, Boston.
Nov. 11-14: Websummit, Lisbon.
Nov 12-14: Devcon 7, Bangkok.
Nov. 15-16: Adopting Bitcoin, San Salvador, El Salvador.
Nov. 20-21: North American Blockchain Summit, Dallas.
Dec. 5-6: Emergence, Prague
Jan. 21-25: WAGMI conference, Miami.
Feb. 19-20, 2025: ConsensusHK, Hong Kong.
May 14-16: Consensus, Toronto.
May 27-29: Bitcoin 2025, Las Vegas.