Morning Minute is a daily newsletter authored by Tyler Warner. The views expressed are his own and do not necessarily represent those of Decrypt. For more updates, check out our daily news show, 'FOMO HOUR', which covers the latest stories and market trends.
Good morning!
Here are today’s highlights:
- Major cryptocurrencies see a 2-3% increase despite rising yields; Bitcoin trades at $84.5k
- Alternative coins like Ondo and BP experience significant gains due to the tokenization trend
- SEC Commissioner Hester Peirce advocates for zkProofs to replace traditional KYC processes
- BitGet reveals a $350 million theft, while Magic Eden also faces a security breach
- OpenSea introduces a hub for physical collectibles
🧱 BlackRock's Tokenization Strategy Takes Shape
The concept of tokenization remains consistent: digitize existing assets and enhance their transaction speed via blockchain technology. Recently, BlackRock made strides in this area by developing three distinct portfolio strategies for Ondo, each represented as a single token that encompasses a complete allocation, self-rebalances, and facilitates peer-to-peer transfers. This innovation is unique in the brokerage space.
This marks a continuation of BlackRock's involvement in tokenization, having previously launched a money market fund on-chain in March 2024. In July, Ondo also tokenized BlackRock’s iShares Core S&P 500 ETF and shares of Micron. Unlike previous instances that focused on individual instruments, these new tokens combine various assets designed for ongoing rebalancing, with all holdings and adjustments visible on the blockchain. This represents a significant shift from merely digitizing products to creating entirely new offerings tailored for the blockchain environment.
The three tokens introduced are BLKHIon for high income, BLKDIGon for diversified growth, and BLKGRWon for high growth, accessible to eligible investors outside the US. Following this announcement, ONDO's value surged by around 30%.
This new structure exemplifies how traditional institutions can engage with blockchain technology. While BlackRock provided the strategies and branding for the tokens, Ondo's disclosures clarify that BlackRock does not serve as the adviser, manager, sponsor, promoter, underwriter, marketer, or distributor, and it has no operational or regulatory oversight, indicating a potential conflict of interest. Thus, the leading asset manager has licensed its intellectual property for a crypto product without assuming any operational responsibilities.
The arrangement allows BlackRock to leverage its brand and expertise while Ondo manages the infrastructure, distribution, and associated liabilities. This model seems likely to be adopted by other asset managers in the future. With recent approvals from the SEC and CFTC, an influx of similar initiatives can be anticipated.
🌎 Crypto and Market Overview
- Major cryptocurrencies are in the green, rising between 2-6%; BTC +1% at $84.5k; ETH +3% at $2,720; SOL +7% at $121; HYPE +3% at $93.50; ZEC +8% at $1,605
- Top-performing altcoins include QNT (+25%), Ondo (+21%), FET (+20%), and ENA (+16%)
- Oil prices declined by 1% to $92; Gold increased by 1% to $4,345
- Stock futures are positive despite rising yields; DOW +0.3%, Nasdaq +0.7%
- New York has filed a lawsuit against Polymarket over alleged illegal gambling and underage trading, seeking to prohibit the platform from operating within the state
- SEC Commissioner Hester Peirce has advocated for zero-knowledge proofs to replace what she describes as the KYC panopticon, enabling users to demonstrate their eligibility without disclosing personal information
- The Solana Foundation has appointed Binance’s former global CMO to spearhead an institutional initiative
- Bitget has confirmed approximately $351.6 million was drained from its hot and warm wallets, as initial reports indicated a theft of about $183 million. Withdrawals have been halted, and CEO Gracy Chen stated that a $464 million user fund would cover the losses
- The Federal Reserve has proposed two new stablecoin regulations requiring full backing in short-term Treasuries, with operational-risk capital charges decreasing from 2% on the first $20 billion outstanding to 1% for amounts exceeding $50 billion
Corporate Treasuries & ETFs
- Bitcoin ETFs saw a net inflow of $191 million on Thursday; Ethereum ETFs experienced $66 million in inflows
Meme Coin Tracker
- Meme leaders showed a slight increase of 5-7%; DOGE +7%, SHIB +6%, PEPE +6%, PENGU +3%, TRUMP +7%, SPX +5%, and BONK +6%
- Robinhood chain leaders rebounded between 6-20%; Pons rose by 7% to $450 million; AI also gained 7% at $242 million; Cashcat surged by 20% to $176 million; Shroom increased by 74%, Agrippa by 120%, and Juggernaut by 30% among the top movers
- In Solana, top performers included BP with a 60% increase, Textit up 30%, Collect rising by 28x, NPCs by 10x, Neet by 40%, and Jeanphil by 90%; Ansem rose by 15% to $171 million
💰 Token, Airdrop & Protocol Tracker
- Hyperliquid led on-chain protocols in revenue with $2.8 million, followed by Pump at $1.88 million, Stonk at $929k, and Pons at $258k
- Pump.fun founder Alon discussed how Pump values the longevity of memecoins and rewards holders, hinting at more developments in Q4
- Stonk recorded its seventh consecutive day of revenue exceeding $1 million, with total token buybacks now surpassing 18%
🚚 NFT Developments
- NFT leaders experienced minor declines; Punks fell by 1% to 33.69 ETH, BAYC remained stable at 6.89 ETH, and Pudgy dropped by 3% to 3.41 ETH
- Identity MD (+10%) and Quotrons (+50%) were the top movers
- OpenSea has launched a hub for physical collectibles aggregating graded trading cards from partner platforms across various categories including Pokémon, sports, and One Piece, with partners managing grading, vaulting, and insuring the cards while OpenSea oversees trading
- Magic Eden is thought to have a security flaw that enables the theft of NFTs from wallets that approved a specific contract; white hat hackers managed to relocate thousands of NFTs before they could be stolen