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HomeEthereumEthereum’s Sept. 19 Merge: Risks and opportunity

Ethereum’s Sept. 19 Merge: Risks and opportunity

Good morning and welcome to Protocol Fintech. This Wednesday: Merge on track, Gensler’s crypto regulation efforts and Stripe’s markdown.

off the chains

I know credit cards have loyalty programs but this is ridiculous. Ryan Deffenbaugh pointed out several tweets that show the corporate card rivalry is escalating. “It’s 1 a.m. in Santa Monica. On the street he hears two guys yelling about Brex vs. Rump,” said Anduril’s Luke He Metro reportI was ready to attribute it to the LA Tech Week incident, but then ScienceIO’s Will Manidis shared this: “Men used to go to war, but now they’re debating whether Brex or Ramp offers better perks in Sweetgreen NoMad.” I will leave it to you. Characters of “French Dispatch”.

— Owen Thomas (e-mail | | twitter)

keep the merge on track

In cryptography, simply “merge” is an important milestone as major industry players move to a new system of verifying transactions.

On September 19th, Ethereum will make the long-awaited transition, leaping from its original Proof of Work system to a new layer based on a Proof of Stake mechanism.

The switch is said to turn Ethereum into a more scalable, secure and green network. However, it involves a complex process with risks, according to experts, and could cause serious disruption to his second-largest ecosystem of cryptocurrencies.

There’s fear around Marge, but there’s also excitement. Prime Trust Chief Product Officer Sara Xi likens Merge to moving two trains while moving cargo from one train to another.

  • This change could increase Ethereum’s credibility as a greener ecosystem than Bitcoin, for example. Blockchain abandons a system of “mining” that has long been accused of excessive energy use. ethereum says Merge reduces network energy consumption by 99.95%.
  • According to LVL Chief Compliance Officer Mike Fasanello, the merger is also expected to strengthen the value and market position of Ethereum’s native cryptocurrency, Ether. Even after the crypto market crash, Ether’s current market capitalization has reached nearly $200 billion, making him the second most valuable cryptocurrency after Bitcoin worth $410 billion. is.
  • Ethereum, which also supports other cryptocurrencies, plays a key role in crypto as the industry’s dominant blockchain for smart contracts. A merge could cement its position, Xi said.

One of the big concerns is fraud. The Ethereum Foundation has seen scammers trick investors into thinking they need to upgrade to “ETH2” (an abbreviation developers use to refer to the new network) or swap their current tokens for new ones. I am afraid that

  • “There is no ‘ETH2’ token. Nothing is needed to keep your funds safe.” ethereum he said.

Another important question: what will happen to Ethereum miners? Andy Long, CEO of White Rock Management, said that for miners, the Merge means “the end of the super-normal returns they’ve been enjoying lately.”

  • The proof-of-work Ethereum network, known as Mainnet, has relied on miners to validate blockchain transactions. Ethereum’s proof-of-stake layer, known as the Beacon Chain, relies on builders that bundle transactions together and validators whose ability to select and validate transaction blocks depends on the amount of cryptocurrency they own.
  • There is speculation that Ethereum miners chose to continue on their own, leading to the creation of forks similar to those created. ethereum classic It can cause confusion and potentially devalue Ether.

A technical glitch could also affect the rollout of Merge and damage Ethereum’s reputation among investors and smart contract developers. But Xi said there were still plenty of reasons to be optimistic that “trains won’t collide.” Marge has a lot on board.

— Benjamin Pimentel (e-mail | | twitter)

A version of this story first appeared on read here.

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on the money

Stripe has been discounted by another big investor. a Submissions to regulatory authorities reported by Axios The T. Rowe Price Global Technology Index Fund has dropped Stripe stock to $23.04 as of June 30, down 64% since the end of 2021. already cut Internal ratings used for employee stock compensation this summer.

Celsius is suing his former money manager (he was already suing Celsius). The crypto lender, which filed for bankruptcy in July, KeyFi accused Incompetent asset management. KeyFi had Sued Celsius last monthalleging that he was not paid for the work, and that Celsius had mismanaged the client’s funds.

President Biden is set to announce plans for student loan debt. of washington post reports that Biden is considering allowing some borrowers $10,000 while extending the suspension of payments. SoFi’s leadership in providing private loans and refinancing federal loans recently said The company expects the suspension to be extended.

Mt. Gox payouts are approaching and could cause cryptocurrency turmoil. It remains to be seen how much bitcoin will hit the market (and when) after the trustees of the failed exchange hand over the recovered cryptocurrencies to creditors. Bitcoin inflow It could shake cryptocurrency prices in an already tough year for digital assets.

OG fintech company acquired in private deal for $1.6 billion. Computer Services Inc. (CSI) is a 57-year-old provider of payment processing and regulatory compliance services. Purchased Private equity firms Centerbridge Partners and Bridgeport Partners.

Brian Armstrong said Coinbase will continue to cut costs as the crypto winter drags on. Coinbase CEO said CNBC The company continues to reduce fixed costs and shift its revenue mix towards subscriptions and services.


Sam Bankman-Fried I’m not worried about losing $75 million to back up Voyager before it goes bankrupt. “We want to do what we can to stop the contagion, and that means trying to help when sometimes that’s not enough. he Said Wall Street Journal. “If that doesn’t happen, we’ll feel too conservative.”

SEC Chair Gary Gensler I have a message about ciphers: “The SEC acts as a beat cop.” In a WSJ op-ed, he said Said investor protection “Come standard” like a car seat belt.

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Thanks for reading — see you tomorrow!


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