| Brought to you by: | | | The rise of bitcoin-backed derivatives like SolvBTC and LBTC has opened new avenues for DeFi, but concerns over transparency, unbacked reserves and liquidity risks persist. One thing is clear: Users are aping into a variety of new forms of wrapped, staked and restaked bitcoin that they may not fully understand. | | | Ethereum wants bigger blocks: | | The gas limit size of an Ethereum block today is 30 million gas, the cap to which was raised in the August 2021 London hard fork. | In the last 30 days, Ethereum validators signaling a gas limit rise beyond 30 million has grown from 3.3% to about 31.5% today. Should it pass at a modest increment of 36 million, as per pumpthegas.org, this would entail a 20% higher daily transaction load for Ethereum. | However, it comes with trade-offs regarding network decentralization that the Ethereum community has been historically reluctant to make, such as implementing a higher hardware burden on validators due to larger state storage. | Samuel Chong, a solo staking community builder and Lido community lifeguard, told Blockworks: "These concerns can be mitigated by hardware costs decreasing (due to Moore's law) and increasing opportunities to amplify rewards for solo stakers via bonded validators, e.g. Lido CSM, Rocketpool, Puffer, Diva, Stader." | — Donovan Choy | | Brought to you by: | | SKALE, the gas-free invisible blockchain, is "Built Different" for mass adoption: high-throughput, scalable, and fair. As a network of interoperable EVM-compatible L1s, SKALE's user experience focus has accelerated a strong ecosystem across gaming, AI, and more. Due to SKALE's gas-free nature, blockchain can be integrated invisibly, creating accessible Web2-like experiences for users and developers. | SKALE has: | | Dive in to learn more. | | | Risks and transparency in BTC-backed derivatives | The rise of "Bitcoin DeFi" on new networks looking to scale Bitcoin has primarily come through bitcoin-backed derivatives like SolvBTC.BBN and LBTC. These derivatives receive staking rewards from Babylon, offering new avenues for liquidity and yield generation. However, concerns about the transparency of these platforms, particularly regarding the management of bitcoin reserves, have sparked debate within the Bitcoin community. | A recent article by the co-founder of Nubit, known online as Hans, raised alarms about the potential for unbacked reserves and the inflation of total value locked (TVL) in platforms like Solv. These concerns highlight broader risks in the bitcoin-backed derivatives space, especially as market volatility persists. | SolvBTC is minted by depositing either BTC or flavors of wrapped bitcoin so that solvBTC tokens mirror the value of the BTC held in reserves 1:1. | But after that, solvBTC can be moved freely across chains and apps, making it challenging to track TVL. That's led to allegations of double-counting solvBTC issuance. | Solv co-founder Ryan Chow called the claims "a smear campaign, coordinated and orchestrated" by Solv's competitors. | SolvBTC.BBN suffers from a liquidity discount which deepened to 7% last week following a hack of the protocol's X account. | Solv has pledged to reimburse user funds lost as a result of the hack. | Despite these clarifications, the core issue remains that Solv, like other bitcoin-backed derivatives platforms, introduces additional layers of trust. While some transparency improvements are being made, the underlying reliance on centralized mechanisms to mint and manage bitcoin-backed derivatives adds risk for users. As @0xTindorr pointed out in an X thread defending Solv, any bitcoin liquid staking tokens (LSTs) inherently carry additional risk. | As the bitcoin-backed derivatives market continues to expand, ensuring these platforms are genuinely backed by reserves and thus remaining transparent will be crucial to maintaining trust and mitigating risks. Users must remain cautious, understanding that the promise of liquidity and yield often comes with hidden risks, especially when the backing of assets is unclear. | Solv Protocol's native token, SOLV, is set to list Thursday on Binance with a total supply of 9.66 billion and an initial circulating supply of approximately 1.48 billion at time of listing. The token's launch, which followed a points campaign, adds a new layer to the growing ecosystem of bitcoin-backed derivatives. It will be revealing to monitor performance in this space in light of the potential risks associated with Solv's expanding offerings. | Other bitcoin derivative issuers, including Lombard and Bedrock, have been using points programs to entice deposits, often a prelude to launching a token. | — Macauley Peterson | | | Can ETH rally? | | What is the bull case for ETH? | Marc Arjoon: It doesn't seem like the case for ETH will be based on REV or cash flows, so it might have to be on the ETH asset side. The bull case for ETH is ETH as a store-of-value money, as unlikely as it is. On ETH's demand side, the ETFs have added to it in such a big way, especially in 2025. On the supply side, if ETH can return to negative inflation, it will be super important to get the "money" narrative going. | What is the value driver for ETH? | Dan Smith: ETH people always point to the amount of ETH held on L2s but it's not a super compelling number to me. Okay, it's sitting there, but what is it doing? If the answer is that it's parked in Aave, that is just circular and there's nothing driving value to it. Also, collateral rapidly degrades in quality when the price decreases. So that also gets a little bit of a chink in the armor of the narrative there as well. So this is why I'm left scratching my head with what is going to be the thing that drives it forward. | Moreover, L2s like Coinbase are offering gas rebates on transactions that use USDC, though it's a small percentage (1%) of activity today. But the point is that they're incentivized because they want USDC onchain and ETH is [decreasingly used] as gas. Even the hottest app on Base right now, Virtuals, pairs AI agent tokens with its own native token, not ETH. | | | This June, Permissionless IV in Brooklyn is bringing together developers, creators, and problem-solvers driving the next wave of onchain development. It's a space to exchange ideas, tackle challenges, and collaborate on the tools and protocols shaping tomorrow. | June 24-26, 2025 | Brooklyn, NY | A transformation is happening now. Be part of it. | | | |  | Polygon (※,※) @0xPolygon |  |
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Big news. Polygon Labs is joining forces with India's largest telecom company for its web3 debut. @reliancejio will onboard 450+ million users by adding blockchain capabilities via Polygon PoS to select apps and services. | |  | | | 4:00 AM • Jan 16, 2025 | | | | | | 2.88K Likes 649 Retweets | 209 Replies |
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|  | Alice, The Bitcoin Reply Gal @BitcoinReplyGal | |
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93% of the BTC supply on alternative blockchains is held by centralized exchanges retardio | |     | | | 2:17 PM • Jan 16, 2025 | | | | | | 16 Likes 4 Retweets | 3 Replies |
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|  | Yano 🟪 @JasonYanowitz | |
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The evolution of Coinbase loans: 2017: Buy BTC with credit cards
2021: Borrow against your Bitcoin offchain
2025: Borrow again your Bitcoin onchain via Morpho Progress. | | | 3:06 PM • Jan 16, 2025 | | | | | | 59 Likes 3 Retweets | 8 Replies |
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|  | Simanta Gautam @simanta_gautam | |
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"the future of finance is onchain" then where are these benefits of being onchain? - reduced reliance on intermediaries
- accessibility (truly global reach)
- censorship resistance i'm sure this product will be successful and morpho is awesome, but we can & must do better. |  Coinbase 🛡️ @coinbase
Bitcoin-backed loans are here. Borrow USDC against bitcoin, without selling it. Rolling out to US users (ex. NY) starting now. More collateral assets and regions to come. Powered by @MorphoLabs and built on @base. The future of finance is onchain. Learn more:… x.com/i/web/status/1… |
| | | 4:01 PM • Jan 16, 2025 | | | | | | 9 Likes 2 Retweets | 1 Reply |
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