#44

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DeFi

Another major airdrop surprises DeFi users

Early adopters of Decentralized Finance (DeFi) protocols have been rewarded with yet another massive airdrop. This time the Ethereum Name Service protocol distributed its governance token to all addresses that have ever owned any .ETH second-level name, for example ‘vitalik.eth’.

More than 137,000 eligible addresses received the airdrop mostly in the range of 100 to 1,000 ENS tokens, depending on the amount of time they’ve been holding .ETH domains for. In the first week after the airdrop the price of ENS token has been hovering above $50, meaning that most users received somewhere between $5,000 and $50,000 worth of ENS.

One quarter of ENS total supply has been allocated for the airdrop to early adopters and another quarter for contributors and active community members, while 50% of all ENS tokens went into the DAO treasury. All eligible users have to claim the airdrop until May 4th, 2022, after which the remaining tokens will be sent to project’s treasury.

Along with receiving these tokens, users were asked to cast their votes on the new constitution proposal that is supposed to guide the future governance process of the ENS protocol with a set of binding rules. Although it’s unclear how these rules will be enforced, since the rules are not hard-coded in a smart contract.

Meanwhile, another popular blockchain-based domain name provider Unstoppable Domains announced its transition to Polygon — a second layer scaling solution built atop of Ethereum in order to increase transaction throughput. The company issues NFTs with domain names ending in .crypto, .bitcoin, .blockchain, .dao, .nft, etc.

Legislation

US infrastructure bill is now the law of the land

A bipartisan infrastructure bill with controversial cryptocurrency tax reporting requirements passed the U.S. House of Representatives and was signed by President Joe Biden.

While the new legislation is aimed at funding major American infrastructure projects, it also contains a very vague definition of a ‘broker’, essentially imposing sophisticated tax reporting requirements on all participants in the crypto economy. The new regulation would potentially hold miners, proof-of-stake validators, wallet providers and even smart contract developers responsible, as brokers, for reporting to the Internal Revenue Service (IRS) data that they often do not have access to.

The new crypto reporting requirement is scheduled to go into effect in 2024. Many in crypto and DeFi space see the latest events as a call-to-action to elect more crypto-friendly representatives to help fight the law’s implementation. Two U.S. Senators have already introduced a new bill that would revise the definition of digital asset brokers, excluding non-custodial actors from tax reporting requirements.

In other news

  • After four years of development, Bitcoin’s long-awaited upgrade Taproot has been activated following a 90% lock-in consensus from miners. Taproot introduces Schnorr signatures to the network, improving privacy of multi-signature, multi-input transactions. It is the first major upgrade since 2017, when bitcoiners divided over the SegWit2x fork, leading to the creation of Bitcoin Cash (BCH).

  • Discord CEO shared a screenshot hinting at the potential integration of popular web3 browser extensions MetaMask and WalletConnect into the chat app. However, following the backlash from users, the company decided to shelve its idea.

  • The Chairman of the U.S. FED, Christopher Waller, praised the potential of decentralized stablecoins, while restating his opposition to the U.S. Department of Treasury’s idea for Central Bank-issued Digital Currencies — or CBDC — calling it ‘redundant’.

  • The government of Barbados is preparing to open the world’s first digital embassy in the metaverse.

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