GizmoLab Report: Cutting-Edge Developments in Web3📈

A Quick TL;DR:

- Hyperliquid Airdrops $1.2B in HYPE Tokens Amid Market Surge

- Ethena, Securitize Join Sky’s $1B Tokenization Challenge

- Player Beats AI, Wins $47,000 in Crypto

- Taiwan Tightens AML Rules for Crypto Exchanges

- Bitcoin May Gain $2T Investment as Money Supply Expands

- Ether Set to Surpass $4K by January

Hyperliquid Airdrops Over $1.2 Billion Worth of Tokens as HYPE Hits $4 Billion Fully Diluted Valuation 

Hyperliquid, a decentralized perpetual trading platform and Layer 1 chain, launched its native token, HYPE, with remarkable market reception. Following the token generation event earlier today, HYPE surged by over 11%, reaching a price of $4.2. This price spike elevated the token’s fully diluted valuation (FDV) to $4.2 billion. Currently, approximately 333 million tokens are in circulation out of a capped total supply of 1 billion, giving HYPE a market capitalization of around $1.4 billion. As part of its launch, Hyperliquid distributed 310 million tokens, or 31% of the total supply, through an airdrop to community users. Eligibility for the airdrop was based on reward points accumulated over six months ending in May 2024, with each point translating into 5 tokens. This distribution event alone accounted for over $1.2 billion worth of tokens, marking a significant windfall for early users.

Despite typical sell pressure often seen after airdrops, HYPE demand has outpaced supply, driving trading volume past $250 million within 24 hours of launch. Positive market sentiment continues to support strong upward momentum. Some recipients have shared substantial gains on social media, with one user reporting profits exceeding $300,000, while another posted earnings of over $18,000 from their allocation. HYPE serves as a cornerstone of the Hyperliquid ecosystem, enhancing both utility and decentralization. It can be staked to secure HyperBFT, the platform’s optimized proof-of-stake consensus mechanism, and acts as the native gas token for HyperEVM, facilitating transaction fees within the network’s execution environment. Hyperliquid’s successful airdrop and robust demand highlight the platform’s growing prominence in the decentralized trading landscape.

Ethena and Securitize Partner to Compete in Sky’s $1 Billion Tokenization Contest

Stablecoin issuer Ethena has partnered with tokenization platform Securitize to submit a joint application for Sky’s $1 billion tokenization contest. The competition, initiated by Sky (formerly MakerDAO), seeks innovative solutions to bring $1 billion in tokenized public securities to its lending protocol, Spark. Ethena and Securitize’s proposal focuses on incorporating USDtb, a stablecoin backed by tokenized U.S. treasuries, as a key reserve asset in Sky’s ecosystem. Their plan leverages BlackRock’s tokenized U.S. treasuries fund, BUIDL, the largest of its kind by market cap, launched in March 2024. BUIDL is envisioned as a central component of their strategy in the Tokenization Grand Prix. Beyond USDtb, Ethena and Securitize have proposed a swap facility for Ethena’s other stablecoin, USDe, enabling seamless asset reallocation between the two stablecoins based on Sky’s interest rate cycles.

Ethena Labs highlighted the flexibility of this approach, noting that if crypto funding increases, Sky could efficiently shift between USDtb and USDe holdings. Sky’s Spark protocol announced the competition in June 2024, opening applications in August. The contest offers real-world asset issuers an opportunity to secure up to $1 billion in liquidity. Ethena already plays a significant role in Sky’s ecosystem, contributing approximately $120 million to its annual revenue, which represents nearly 30% of the platform’s total earnings. Despite this, Ethena’s collateral backing allocation remains relatively low at 13%, signaling potential for expansion. This collaboration underscores Ethena and Securitize’s commitment to driving innovation in decentralized finance (DeFi) by integrating tokenized real-world assets into blockchain ecosystems. If successful, their proposal could enhance asset management efficiency and further establish Sky as a leader in DeFi tokenization initiatives.

Human Player Outsmarts Freysa AI Agent to Secure $47,000 Crypto Prize in Groundbreaking Game

A crypto player managed to outsmart Freysa, an AI agent, to win $47,000 in cryptocurrency during a unique challenge involving 195 participants and 482 attempts. Known as the "world’s first adversarial agent game," the competition tasked players with convincing Freysa to transfer funds under its control, despite being programmed never to do so under any circumstances. Freysa’s strict instruction stated that approving a transfer would result in failure, making the task seem insurmountable. Players tried inventive tactics, such as posing as security auditors or appealing to Freysa’s logic, but none succeeded until a user named p0pular.eth found a creative loophole. The winner tricked Freysa into misinterpreting its "approveTransfer" function, intended only for transferring funds when convinced, as a mechanism for authorizing incoming donations.

By proposing a $100 donation to the treasury, they triggered the function and secured the entire prize. Query fees for each interaction with Freysa started at $10 and rose exponentially, with 70% of these fees contributing to the prize pool. This mechanism inflated the total reward to $47,316.05 in ETH. After the funds were transferred, Freysa posted on X: “Humanity has prevailed. After 482 riveting back-and-forth chats, Freysa met a persuasive human. Transfer was approved.” This challenge highlights the unpredictable dynamics between human ingenuity and AI systems, as well as the risks associated with adversarial testing in blockchain and AI environments.

Taiwan Enforces Stricter AML Registration Mandate for Crypto Providers, Accelerating Compliance Deadline

Taiwan has accelerated its new Anti-Money Laundering (AML) regulations for cryptocurrency businesses, moving the compliance deadline from January 1, 2025, to November 30, 2024. The move follows recent fines levied against crypto exchanges MaiCoin and BitoPro for violations related to customer due diligence and suspicious transaction reporting. The Financial Supervisory Commission (FSC) now mandates all virtual asset service providers (VASPs), including those previously registered, to comply with the AML registration requirements. Noncompliance could lead to fines of up to 5 million New Taiwan dollars ($155,900) or a two-year prison sentence. To comply, crypto businesses must submit a detailed one-page form about their operations and report any changes to Taiwan’s Securities Over-the-Counter Trading Center within five business days.

Providers are also required to implement systems for transaction monitoring and establish quality management frameworks for accounting and auditing. The FSC has provided a checklist to help providers identify suspicious transactions, including indicators such as multiple accounts linked to the same IP address, frequent changes in customer information, and fragmented fund movements. This regulatory tightening aims to enhance oversight in Taiwan’s growing crypto sector and ensure robust safeguards against money laundering. The FSC noted that no crypto businesses have yet completed the necessary AML registration under the new guidelines. Additionally, Taiwan plans to expand its crypto regulatory framework further, with a trial for crypto custody services via local banks scheduled for 2025.

Bitcoin Could Attract $2 Trillion in Investments by 2025 Amid $20 Trillion Global Money Supply Increase

Bitcoin is projected to attract $2 trillion in investments in 2025 as the global money supply (M2) is forecasted to grow by $20 trillion, reaching $127 trillion. Jamie Coutts, chief crypto analyst at Real Vision, highlighted that past trends show Bitcoin capturing 10% of newly created liquidity, signaling a bullish outlook for the cryptocurrency. Between Q4 2022 and late 2023, Bitcoin’s market cap quintupled as the M2 supply increased by $11 trillion. This historical performance strengthens its position as a hedge against monetary debasement, with Bitcoin’s annual returns outperforming traditional assets at 113%.

Analysts predict that the growing money supply, coupled with potential U.S. dollar weakness, could push Bitcoin's price to new highs by mid-2025. Projections range from $118,928 to $150,000, with VanEck estimating an even higher target of over $180,000 within the next 18 months. Bitcoin’s rally could accelerate institutional adoption, supported by macroeconomic trends and robust technical indicators. However, short-term resistance remains at $98,300, with over $1.04 billion in leveraged short positions at risk of liquidation if breached. The global M2 money supply is expected to peak in January 2026, potentially fueling further interest in Bitcoin as an emerging global reserve asset, according to Coutts.

Ether Poised to Exceed $4,000 Before Trump’s Inauguration, Backed by Rising ETF Flows and Futures Yield Advantage

Ether (ETH) is projected to rally above $4,000 before Jan. 20, driven by increasing institutional inflows and outperforming Bitcoin (BTC) in futures yields. With $8.9 billion in open interest compared to Bitcoin’s $6.7 billion, Ether has gained significant traction among investors. The futures market shows a strongly inverted implied-yield curve, with short-term contracts trading 25% above spot prices annually. This reflects robust institutional activity, especially in U.S. spot Ether exchange-traded funds (ETFs), which have amassed over $90 million in assets over a four-day streak ending Nov. 27. Investor demand for leveraged Ether ETFs has risen 160% since Donald Trump’s electoral victory, signaling bullish sentiment.

Analysts at Bybit predict Ether will breach $4,000 before Trump’s inauguration, supported by consistent ETF inflows and favorable market conditions. Regulatory optimism has also bolstered confidence after SEC Chair Gary Gensler announced his departure, effective Jan. 20. This development, coupled with Ether’s recent 34% price surge over the past month (outpacing Bitcoin’s 31%), has positioned Ether as a key beneficiary of institutional interest. Social media activity around Ether soared by 282% as of Nov. 28, with over 1.1 million posts discussing the cryptocurrency. These indicators highlight growing market enthusiasm and Ether’s strengthening position ahead of Trump’s inauguration, with some analysts even suggesting the possibility of surpassing the $4,000 mark before the milestone date.

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