Welcome to The Protocol, CoinDesk’s weekly roundup of the most important stories in the development of cryptocurrency technology.
In this week’s edition of the Protocol newsletter:
- Trump’s crypto team
- Aptos Leadership Restructuring
- TikTok meets tokens
- Kraken grows
This article appears in the latest issue of The Protocol, our weekly newsletter that explores the technology behind cryptocurrencies, block by block. Sign up here to receive it in your inbox every Wednesday.
Network news
TRUMP CRYPTO APPOINTMENTS: President-elect Donald Trump continues to make high-profile appointments spanning cryptocurrencies and emerging technologies in his second term. 1) Esteban Miranelected president of the Council of Economic Advisers, is a cryptocurrency advocate who aims to integrate blockchain and decentralized finance into the US economy. 2) Bo Hinesa former college football player, will head the newly formed Crypto Council. Hines is tasked with balancing innovation and consumer protection while building a regulatory framework for digital assets. 3) David Sacosa Silicon Valley veteran and vocal blockchain supporter, is stepping in as AI and Crypto Czar. Sacks plans to merge blockchain with AI while strengthening American dominance in both sectors. These appointments signal a clear shift from Trump’s previous skepticism about digital assets. The big question now is how these measures translate into meaningful policies amid regulatory gridlock and political friction.
APTOS LEADERSHIP CHANGE: Aptos Labs CEO and co-founder Mo Shaikh has resigned and co-founder Avery Ching has taken over as CEO. Shaikh, who will remain a strategic advisor, highlighted the company’s achievements, including raising $400 million in venture funding and building a thriving ecosystem supported by partners such as BlackRock, Google, Mastercard and PayPal. Known for its Layer 1 blockchain that leverages Facebook’s Project Diem’s Move programming language, Aptos Labs is expanding into financial and AI applications with the help of advisors such as former Grayscale CEO Michael Sonnenshein, and Kevin Weil of OpenAI. The leadership transition underscores the company’s continued focus on scalability, security and innovation in blockchain technology.
SONIC TO TIKTOK AIR LAUNCH: Sonic, a Layer 2 solution on the Solana blockchain, has announced plans to launch its native token, SONIC, to TikTok users. This initiative aims to introduce TikTok’s extensive user base to decentralized finance (DeFi) by integrating blockchain technology with social media platforms. The airdrop is part of Sonic’s strategy to improve user engagement and promote adoption of Layer 2 solutions to improve scalability and reduce transaction costs on the Solana network. By targeting TikTok users, Sonic seeks to bridge the gap between mainstream social media audiences and the DeFi ecosystem, encouraging broader participation in decentralized financial services.
ALSO:
- Microstrategy added 5,262 BTC to its holdings as its shares secure a spot on the Nasdaq 100, bolstering its long-standing Bitcoin strategy.
- nokia enters the world of cryptocurrencies with a patented technology for encrypting digital assets, signaling its step towards blockchain innovation.
- undulation Legal chief urges Congress to focus on regulating crypto practices rather than stifling innovation by targeting the technology itself.
Feature: Kraken Ink Layer 2 Activates
Kraken, the seventh-largest crypto exchange, said its Layer 2 rollup network, built on the Ethereum blockchain, is now available.
The network, called Ink, is based on the OP stack, a customizable framework that allows developers to create their own rollups using Optimism technology. The team had originally planned for Ink to go live in early 2025, so its mainnet launch is ahead of schedule.
Kraken agreed to receive 25 million OP tokens (worth around $58 million) as part of a deal to develop the OP Stack. Optimism has recognized that providing developer grants to participants building on the stack is part of its strategy, which in turn contributes to the broader “Superchain” ecosystem. Kraken competitor Coinbase said in August 2023 that it would build a Layer 2 network with OP Stack.
The product, called Base, is now the second largest cumulative network according to L2beat. At the time, Optimism said that the Base team would receive up to 118 million OP tokens and in return would contribute 2.5% of its sequencer revenue or 15% of its profits to the Optimism Collective, whichever is greater. .
Read Margaux Nijkerk’s full story here
money center
Fundraising
- Avalon Laboratories has raised $10 million in a Series A funding round to expand its Bitcoin-backed stablecoin, aiming to improve liquidity and stability in the cryptocurrency market. The investment reflects growing interest in financial products collateralized by Bitcoin as a bridge between traditional finance and digital assets.
Offers and subsidies
- Tie has announced a $75 million deal to acquire a stake in Rumblea video sharing platform. The investment aims to support decentralized media and aligns with Tether’s commitment to fostering open communication technologies.
Data and tokens
- bonk (BONK) surged 30%, leading a rally among dog-themed meme tokens, with shiba inu (SHIB) and Dogecoin (DOGE) is also experiencing gains. Additionally, the Commodity Futures Trading Commission (CFTC) classified floki (FLOKI) as a utility token, potentially influencing its regulatory status.
Data Corner: 60M USDC Outflows Affect Hyper Liquid
Hyper Liquid, a cryptocurrency exchange focused on perpetual contracts, has reported a record outflow of $60 million in USDC amid speculation that North Korea is investigating the platform. The sudden exodus of funds raises questions about the liquidity of the stock market and the stability of its operations. This highlights the growing tension of crypto markets with geopolitical issues, as regulatory scrutiny and potential misuse of platforms by state actors comes into focus. The incident highlights vulnerabilities in crypto markets, particularly for exchanges dealing with high-risk financial products such as perpetual contracts. The Hyper Liquid situation may prompt greater scrutiny of similar platforms, emphasizing the need for stronger safeguards in the face of growing global regulatory pressure.
Get the full scoop from Omkar Godbole here
Calendar
- January 9-12, 2025: CES, Las Vegas
- January 15-19: World Economic Forum, Davos, Switzerland
- January 21-25: WAGMI conference, Miami.
- January 24-25: Bitcoin Adoption, Cape Town, South Africa.
- January 30-31: PLAN B Forum, San Salvador, El Salvador.
- February 1-6: Satoshi Roundtable, Dubai
- February 19-20, 2025: ConsensusHK, Hong Kong.
- February 23 and 24: NFT Paris
- February 23 to March 2: ETHDenver
- March 18-19: Digital Asset Summit, London
- May 14-16: Consensus, Toronto.
- May 27-29: Bitcoin 2025, Las Vegas.
