GizmoLab Report: Cutting-Edge Developments in Web3 📈

A Quick TL;DR:

- Starknet Approves Dynamic Staking to Manage Token Inflation

- Circle Relocates HQ to NYC Ahead of IPO

- Wormhole Brings Worldcoin’s World ID to Solana

- A16z, OpenSea Create NFT Legal Defense Fund

- Tether Hires PayPal's Ex-Regulatory Executive as Head of Government Affairs

- Brazil Lifts Freeze on Starlink and X Accounts After $3M Fine Payment

Starknet Community Overwhelmingly Approves Dynamic Staking Mechanism to Control STRK Inflation and Incentivize Participation

The Starknet community has approved a dynamic staking mechanism, with over 98% of voters in favor. This new system aims to balance token supply by adjusting the minting rate of STRK tokens in proportion to staking participation. If fewer STRK tokens are staked, the minting rate will increase, while it will decrease when staking levels are high. The mechanism is designed to manage inflation and encourage more staking activity.

Native stakers must hold at least 20,000 STRK ($8,000), though there is no minimum for delegates. Starknet Foundation or a designated monetary committee will manage the minting curve, with adjustments ranging from 1% to 4%. This change comes as Starknet faces a significant drop in daily transactions, currently down 80% from last year. The new staking model is expected to incentivize participation and boost network activity.

USDC Issuer Circle Moves Global Headquarters to New York, Prepares for 2025 IPO Amid Turning Point for Crypto Industry

Circle, the issuer of USDC, the second-largest stablecoin, is relocating its global headquarters to New York City, occupying one of the top floors of 1 World Trade Center. The move is in preparation for its planned Initial Public Offering (IPO) expected in 2025. Circle CEO Jeremy Allaire sees 2024 as a turning point for the crypto industry, with stablecoins gaining mainstream attention.

Allaire believes that by 2025, stablecoins will achieve even broader adoption, driven by key developments like the introduction of Bitcoin and Ether ETFs in the U.S. Circle’s move to the “heart of Wall Street” underscores its ambition to integrate crypto into the traditional financial system, furthering the use of stablecoins in mainstream finance. This step comes amid ongoing regulatory uncertainties in the U.S., though Allaire remains optimistic about the country’s leadership in the crypto space.

Wormhole Integrates Worldcoin’s Biometric Identity Protocol World ID with Solana, Expanding Cross-Chain Interoperability Beyond Ethereum

Wormhole, a leading cross-chain interoperability protocol, has integrated Worldcoin’s biometric identity system, World ID, with Solana. This marks the first time World ID is available outside of the Ethereum ecosystem. The smart contracts for this integration are being audited by Ackee and are expected to be completed in the coming weeks. Robinson Burkey, Wormhole Foundation’s co-founder, emphasized that the move enhances identity verification across decentralized applications, improving trust in cross-chain systems.

This development reflects Worldcoin’s ambitions to expand its reach across the cryptocurrency ecosystem, with Solana emerging as a key player due to recent technical upgrades and memecoin popularity. The announcement had an immediate market impact, with Wormhole’s W token rising 5%, SOL gaining 2%, and Worldcoin’s WLD spiking 8%. However, Worldcoin continues to face controversy, including privacy concerns related to its biometric registration process and investigations in countries like Singapore.

A16z and OpenSea Launch Creator Legal Defense Fund, Offering Legal Support for NFT Artists Amid Rising Regulatory Pressure 

Andreessen Horowitz’s a16z Crypto fund has partnered with Stand With Crypto and OpenSea to establish the Creator Legal Defense Fund. This initiative aims to provide legal support to artists and creators utilizing blockchain technology, particularly in the NFT space. NFTs allow artists to monetize their work and retain royalties through smart contracts, but recent legal pressures, including a Wells Notice issued to OpenSea by the U.S. Securities and Exchange Commission, have raised concerns.

The fund will offer legal assistance from major firms like Cooley LLP and Latham & Watkins LLP to help creators navigate regulatory challenges. A16z has committed $1 million to the fund, while OpenSea has pledged $5 million. Miles Jennings, General Counsel at a16z, emphasized that artists should not fear legal repercussions when pursuing blockchain-based innovations.

Tether Appoints Former PayPal Regulatory Executive Jesse Spiro as Head of Government Affairs to Lead Engagement with Lawmakers Amid Growing Scrutiny

Tether, the issuer of the world’s largest stablecoin USDT, has appointed Jesse Spiro, PayPal’s former head of regulatory relations, as its new head of government affairs. Spiro will spearhead Tether's policy and regulatory engagement with lawmakers, regulators, and key industry figures. With experience at PayPal’s blockchain and crypto unit and Chainalysis, Spiro brings a wealth of knowledge to address increasing regulatory challenges. Tether CEO Paolo Ardoino emphasized this hire as a step toward ensuring “responsible innovation” in the crypto space.

Spiro’s focus will be on fostering collaboration between the crypto ecosystem and policymakers to navigate regulatory hurdles and support sustainable growth. The announcement comes at a time when U.S. legislators are considering laws to govern dollar-pegged stablecoins, and Tether faces transparency concerns. Additionally, there is speculation about potential government enforcement actions against the firm.

Brazil Lifts Freeze on Starlink and X Accounts After Elon Musk's Platforms Pay $3M Fine Amid Legal Dispute Over Court Order Compliance

Brazil’s Supreme Court has lifted the freeze on Starlink and X's bank accounts after Elon Musk’s companies paid fines totaling $3.3 million. The fines stemmed from X’s failure to comply with court orders to block accounts spreading misinformation and extremist content deemed a threat to democracy. Justice Alexandre de Moraes imposed these penalties, further exacerbating tensions when X refused to appoint a local legal representative, violating Brazilian law.

Although the payment addressed financial penalties, the platform remains suspended in Brazil. The country’s Attorney General recently defended the suspension, claiming it doesn’t violate free speech. This legal battle could set critical precedents for tech companies operating in Brazil, as the government under President Lula supports the crackdown on misinformation, particularly following political unrest tied to social media platforms.

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