Tether CEO’s MiCA concerns, Buterin to ‘Purge’ Ethereum inefficiencies: Finance Redefined

As a seasoned researcher with years of experience in the ever-evolving world of blockchain and cryptocurrencies, I find myself constantly intrigued by the latest developments in this dynamic space. This week’s news has been particularly captivating, with the EU MiCA rules posing significant risks for stablecoin issuers and Vitalik Buterin’s plan to streamline Ethereum’s protocol, dubbed “The Purge.

there’s growing apprehension about the potential impact of the forthcoming cryptocurrency regulatory law in Europe. Although it represents a major advancement for the sector, the European guidelines could present substantial banking risks for entities issuing stablecoins, as highlighted by Tether CEO Paolo Ardoino in an interview with CryptoMoon.

As a cryptocurrency analyst, I recently learned about Vitalik Buterin’s proposed plan to streamline Ethereum, the world’s second-largest blockchain network. This initiative, dubbed “The Purge,” focuses on reducing data congestion and simplifying the protocol for improved efficiency. The goal is to create a leaner, more effective system within the broader crypto landscape.

EU MiCA rules pose “systemic” banking risks for stablecoins — Tether CEO

The upcoming regulatory structure in Europe may bring banking challenges for stablecoin publishers, potentially endangering the overall stability within the cryptocurrency market, as suggested by Paulo Ardoino.

The Markets in Crypto-Assets Regulation (MiCA) represents the first all-encompassing regulatory structure for the crypto sector and is scheduled to take full force on December 30th. As per MiCA, stablecoin issuers will be mandated to maintain a minimum of 60% of their reserve assets within banks based in Europe.

According to Ardoino, CEO of Tether, it’s worth noting that banks can lend up to 90% of their reserves. This could potentially create “systemic risks” for stablecoin issuers, as the issuer of the world’s largest stablecoin, USDt (USDT), has a market capitalization exceeding $120 billion.

Ardoino shared his concerns with CryptoMoon during an interview at Plan B Lugano in Switzerland:

“If you have 10 billion euros under management, you have to put 6 billion euros in cash deposits. That is 60% of 10 billion euros. We know that banks can lend out 90% of their balance sheet. So of the 6 billion euros, they lend out 5.4 billion euros to people […] 600 million euros will remain in the bank balance sheet.”

The “Purge” — Vitalik’s plan to reduce Ethereum’s bloat

Vitalik Buterin, one of the co-founders of Ethereum, recently published the fifth installment in his blog series about Ethereum’s future direction called “The Purge.” This new post focuses on reducing unnecessary data buildup and streamlining the Ethereum protocol.

The main goal of The Purge is streamlining Ethereum by removing excess data storage and discarding obsolete elements, all while maintaining the “permanent” nature of the blockchain for maximum efficiency.

The Purge won’t specifically affect Ethereum’s gas fees right away. But, it could potentially boost the network’s efficiency and cut down on operational expenses.

Radiant Capital $58 million hack an expensive “lesson” for DeFi

After the hack which led to a loss of approximately $58 million in digital assets, Shining Capital restarted its Ethereum loan operations once more.

As an analyst, I’m sharing an update: On November 1st, the lending protocol announced enhancements they’ve made, one of which involves transferring ownership into a timelock contract. This change introduces a compulsory 72-hour waiting period for any modifications, thereby bolstering the security measures at Radiant Capital.

Additionally, the team set up an emergency administrative function that operates on a multi-signature system. This role has the authority to temporarily halt and resume operations in the lending platform’s markets when deemed necessary.

Crypto surges in Eastern Europe: DeFi drives 33% of transactions

The use of decentralized finance is growing in Eastern Europe, indicating a persistent trend in the adoption of cryptocurrencies, as suggested by the data from the blockchain analysis firm, Chainalysis.

Eastern Europe received over $499 billion worth of cryptocurrency between July 2023 and June 2024.

In the recent Chainalysis crypto adoption report published on October 30, it was stated that approximately one-third of the region’s cryptocurrency transactions were related to Decentralized Finance (DeFi), amounting to over $165 billion in value.

Solana flips Ethereum in daily fees, surpasses $2.5 million in 24 hours

It’s been observed that Solana is now generating more daily network fees than Ethereum, which suggests an increase in user engagement on the globe’s third-biggest blockchain.

In a span of 24 hours, Solana accumulated approximately $2.54 million in fees, outperforming Ethereum’s $2.07 million from October 28th, thereby placing Solana fifth among the highest fee-generating cryptocurrency protocols, as indicated by DefiLlama statistics.

On Solana’s bustling decentralized exchange, Raydium, there’s a strong link between the rising trading volume and the steep increase in transaction fees. In just one day, Raydium managed to accrue a staggering $3.41 million in fees on the Solana blockchain.

DeFi market overview

Based on information from CryptoMoon Markets Pro and TradingView, it appears that the majority of the top 100 cryptocurrencies, as ranked by market capitalization, closed out the week with a decrease in value.

Among the top 100 tokens, Celestia’s TIA dropped by approximately 19%, ranking as the week’s largest decliner. In second place was Immutable’s IMX token, which also experienced a decrease of around 19% during the past seven days.