🟣 Not all bots are bad

Visa attempts to suss out stablecoin payment flows

Author

Macauley Peterson
May 06, 2024

Welcome back to 0xResearch – quick hitting alpha for the crypto degens. Here's what we got for you today:

  • Stablecoin volumes

  • SEC vs Robinhood

  • SUI spam and supply

Financial giant Visa has been attempting to suss out stablecoin payment flows in a suite of widely-praised analytics dashboards. But its characterization of “organic activity” has led to some negatively-framed press regarding stablecoin utility.

In Bloomberg’s telling, for instance, “More Than 90% of Stablecoin Transactions Aren’t From Real Users,” which makes it sound like only the 10% should be considered “important” and the rest dismissed or taken with a grain of salt.

Is it really any surprise that programmable money is used largely by bots? And what about the users of those bots? Real users had to program and deploy them for a purpose.

Take arbitrage as an example. For stablecoins to remain stable across hundreds of trading venues, arbitrage bots are constantly at work in the background, moving and rebalancing sources of liquidity.

That’s not “organic” and it’s a good thing! Humans are far too slow. But it is important for the orderly functioning of onchain markets.

Visa’s efforts to separate out this activity from humans buying goods or manually moving money may be laudable, but the implicit conclusion in the resulting media coverage is that other sources of transaction volume should be treated with suspicion.

Regulatory trouble for Robinhood

Crypto markets have been under pressure even on a solidly up day in US equities after Robinhood disclosed it received enforcement threats from the SEC.

The agency has opened yet another front in its battle to declare certain crypto assets as securities.

But like Uniswap, Coinbase and Consensys, Robinhood is likely to put up a fight.

“We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law,” said the firm’s Chief Legal and Compliance Officer Dan Gallagher.

— Macauley Peterson (X: @yeluacaM | Farcaster: @Macauley)

Synthetix is scaling on Base. Join us by LPing USDC collateral to earn fees and incentives from perps trading volume.

Slamming SUI with spam:

A SUI community project deliberately set out to spam the network with transactions as a means of testing the Move-based L1 under unusually high load.

In the process, “SpamSui” produced transaction volumes greater than Solana, Tron, Sei and other high-throughput chains.

“There is no proof of work, only proof of spam,” its website explains.

Speaking of SUI and controversial stats, Crypto X has been all atwitter over the status of supposedly locked tokens, following shade thrown by Cyber Capital’s Justin Bons.

The SUI Foundation sought to set token holders at ease but ultimately reinforced the notion that users must trust the Foundation.

That doesn’t seem to bother Tim Kravchunovsky, founder of SUI-based DePIN project Chirp. He told Blockworks “the Foundation can ensure that tokens are distributed fairly and in line with the best interests of the community, which also reduces the risk of market manipulation or non-compliance.”

TAO has led the decentralized AI narrative throughout the year. Compared to other decentralized AI related tokens, like Akash (AKT) and Render (RNDR), Bittensor is more encompassing, and attempts to cover more of the decentralized AI stack. A recent proposal, BIT001, is a necessary upgrade to continue to foster and incentivize founders to build on Bittensor, while preventing further dilution of TAO, both in emissions and in attention.

A fragmented liquidity landscape across L2s has led to newfound appreciation for predominantly monolithic L1 architectures over the past year, especially when considering qualifying capabilities like high throughput and low latency. Despite Aptos being a relatively young blockchain when compared to other L1s, a combination of design choices, network adoption, partnerships and dapp development proves that the network is primed for breakout momentum over the coming years.

Robinhood’s chief legal officer said the notice came after “years of good faith attempts” to work with the SEC.

The DOJ is alleging that wallet developers should be charged with unlicensed money transmission.

The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.