February 11, 2022 · 3 min read
The Weekly Wrap-Up - 11th February 2022
El Salvador to Offer Bitcoin Bond
Nation’s Pro-BTC Stance Expands
On Tuesday, finance minister of El Salvador, Alejandro Zeleya announced that the country plans to issue a Bitcoin bond between the 15th and 20th of March. The government has stated that it will issue $1B for the bond, and expects it to be oversubscribed by around $500M. With a minimum purchase of $100, the bond will be issued on the 'Liquid Network' Bitcoin sidechain.
The IMF (International Monetary Fund) has expressed concerns over the risks of issuing Bitcoin-backed bonds. The group also expressed concerns surrounding El Salvador’s consideration of Bitcoin as legal tender. Zeleya stated that the bond will be fully compliant with “all regulations of the financial markets.”
Aave Launches Decentralised Social Media Platform ‘Lens’
DeFi Protocol Makes Move Into Web3 Social Media
Decentralised lending protocol Aave has launched Lens - a decentralised social media platform built on Ethereum layer 2 scaling solution Polygon. The platform allows users to mint an NFT to represent their account, which is used to store post and comment history.
These NFT-based accounts can be ‘followed’ in the same manner as Twitter, and the protocol’s CEO Stani Kulechov stated that he hopes the platform will become a competitor. Kulechov additionally stated his belief that social media users should be able to “own their audiences in a permissionless fashion”.
The protocol is also exploring the possibility of becoming a DAO (decentralised autonomous organisation) in the future.
Optimism Fixes Critical Bug
Ethereum Layer 2 Scaling Solution Awards Bug Bounty
Ethereum Layer 2 scaling solution Optimism announced on Thursday that it had awarded a bug bounty of over $2M to an independent developer who had discovered and disclosed a critical bug in the protocol. The bug would have allowed an infinite number of ETH to be minted by calling a specific function on any contract that held ETH.
The bug has since been patched by the Optimism dev team. They stated that:
We also alerted multiple vulnerable Optimism forks and bridge providers to the presence of the issue. The projects have all applied the required fix.
Fears Rise That Tax Changes Could Drive DeFi Out Of UK
Effort to Lobby Against DeFi-Taxes Underway
The trade body CryptoUK and several MPs have banded together to oppose proposed taxes to DeFi earnings reported in the UK. The proposed changes relate to earnings made via yield farming activities such as lending and staking. It would also entail cryptocurrency being removed from the classification of ‘financial instrument’ which it is currently classified as by HMRC.
If the change occurs, it is expected to be applied retroactively - raising concerns that DeFi companies might look elsewhere for business. CryptoUK (a group representing fintech, crypto wallets and crypto trading companies) stated that it believed the new laws to be impractical, as they would require investors to report hundreds of transactions and place undue burden on individuals involved in DeFi.