GizmoLab Report: Cutting-Edge Developments in Web3s 📈

A Quick TL;DR: 

- Bittensor Soars 31% as AI Tokens Surge

- Ethereum Eyes February for Split Pectra Upgrade

- Circle Foresees Stablecoins as Mainstream Global Payments

- Deaton: SEC’s Crypto Approach Led to $15B Losses for Small Investors

- Polygon Buys $5M in Zero-Knowledge Servers to Accelerate AggLayer

Bittensor Leads Weekly Crypto Gains with 31% Surge as Nvidia’s Stock Rally Boosts AI Tokens 

Bittensor (TAO), a decentralized AI project, became the top gainer among the top 100 cryptocurrencies, surging 31% over the past week. Its market cap climbed to $2.51 billion, with the price rising 8.87% to $313.59 in the last 24 hours. This rally comes in the wake of Nvidia's 13.5% stock surge, which pushed its market cap to $2.92 trillion. Nvidia’s stock has skyrocketed by 140.5% in 2024, lifting AI-focused cryptocurrencies like TAO. The total AI crypto market cap now stands at $23.9 billion.

Analysts point to strong technical indicators, with TAO trading between $268 and $357, and the Moving Average Convergence Divergence (MACD) signaling upward momentum. The Relative Strength Index (RSI) suggests further room for growth, with TAO potentially reaching key resistance at $400. Some market experts predict TAO could rise to $3,000–$5,000 during this bull run, driven by the expanding AI narrative and major developments like Apple’s generative AI announcement at its iPhone 16 event.

Ethereum Developers Consider Splitting Pectra Upgrade for February Launch, Warn of Setback if Delayed Past June 2025

Ethereum developers are contemplating dividing the Pectra upgrade into two phases, targeting a February 2025 launch for the first part. The Pectra upgrade, which merges the Prague and Electra upgrades, is designed to enhance Ethereum’s scalability and efficiency. Developers stressed during a Sept. 12 meeting that the split would only make sense if the first phase is delivered by early 2025, warning that any delays past June 2025 would be seen as a failure. Some developers believe that splitting the upgrade reduces risk, while Ethereum researcher Ansgar Dietrichs emphasized the importance of timely delivery.

The final decision on the split will be made during the upcoming All Core Developers (ACD) meeting on Sept. 19. Industry experts remain optimistic, with many calling Pectra the most significant upgrade in Ethereum’s history. Additionally, Ethereum Improvement Proposal (EIP) 3074 has been included, allowing normal wallets to function like smart contracts, potentially simplifying transactions for users.

Circle Predicts Stablecoins Will Become a Mainstream Global Payment Method as Regulatory Harmonization Becomes Crucial

Circle, the issuer of USDC, expects stablecoins to become mainstream payment tools globally as regulations harmonize. Dante Disparte, Circle's chief strategy officer, emphasized that stablecoins are here to stay and will drive innovation in the financial services sector. However, Disparte stressed the importance of global regulatory frameworks to ensure compliance for all issuers.

As Circle plans to move its headquarters to New York by early 2025, Disparte highlighted the need for the U.S. to enact federal stablecoin regulations to safeguard the dollar's dominance and prevent exploitation by illicit actors. In Europe, Circle became the first global stablecoin issuer compliant with MiCA regulations, although future upgrades like MiCA 2.0 are already being discussed.

John Deaton Blames SEC’s Aggressive Crypto Stance for $15 Billion Losses, Calls Out Regulatory Overreach

John Deaton, a pro-crypto attorney and U.S. Senate candidate, has criticized the SEC, claiming its aggressive stance on cryptocurrency regulation caused over $15 billion in losses for retail investors. Deaton, who has represented thousands of XRP holders, called the SEC's actions "gross overreach" and held the agency responsible for harming small investors. He pointed to the SEC’s refusal to provide clear guidance on XRP as an example of its inconsistent enforcement practices.

Deaton, who will challenge Senator Elizabeth Warren in the upcoming election, aims to hold the SEC accountable. Meanwhile, the SEC’s regulatory efforts in 2024 have resulted in record enforcement actions, including a $4.47 billion settlement with Terraform Labs. Seven U.S. states have now filed legal challenges against the SEC’s attempts to regulate cryptocurrencies, accusing the agency of exceeding its authority and stifling innovation.

Polygon to Invest $5M in Servers with Custom Chips to Boost Zero-Knowledge Cryptography Processing for AggLayer

This controversy erupted when community members noticed that two wallet addresses Polygon Labs is investing $5 million in servers equipped with specialized chips designed for zero-knowledge (ZK) cryptography processing. These chips, created by hardware maker Fabric, are part of Polygon’s broader efforts to enhance its interoperability solution, AggLayer. This collaboration follows Fabric’s recent $33 million Series A funding round, which Polygon also participated in. Fabric is producing custom "verifiable processing units" (VPUs) optimized for cryptography, which will power Polygon’s ZK prover libraries, Plonky2 and Plonky3.

Provers are essential in blockchain systems based on ZK cryptography, a growing focus in the industry. The new chips are expected to significantly reduce the timeline for ZK technology adoption from several years to mere months. Polygon co-founder Mihailo Bjelic highlighted the potential for the AggLayer to deliver affordable, real-time cryptographic proofs much faster than anticipated, with greatly reduced proving costs. The initiative is seen as a major leap for ZK technology, promising substantial advancements for the blockchain ecosystem.

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