The Daily: World Liberty Financial teams up with Ethena, Polygon rejects $1.3 billion stablecoin proposal and more
Quick Take World Liberty Financial, the fledgling DeFi project supported by President-elect Donald Trump, announced a “long-term collaboration” with synthetic dollar project developer Ethena Labs, starting with the implementation of sUSDe as a collateral token on the WLFI protocol. Polygon community members rejected a recent preliminary proposal to deploy $1.3 billion in stablecoins from the PoS Chain bridge for yield generation, citing security and user consent concerns. Ethereum Name Service (ENS), which
Happy Wednesday! In today's Daily, Trump-backed World Liberty Financial teams up with Ethena, Polygon rejects a $1 billion stablecoin proposal, ENS selects Linea tech for its Ethereum Layer 2 and more.
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Trump-backed World Liberty Financial teams up with Ethena
World Liberty Financial, the fledgling DeFi project supported by President-elect Donald Trump, announced a "long-term collaboration" with synthetic dollar project developer Ethena Labs , starting with the implementation of sUSDe as a collateral token on the WLFI protocol.
- WLFI's governance community will vote this week on introducing sUSDe to its forthcoming Aave instance.
- Ethena's sUSDe yield-bearing stablecoin has rapidly gained traction, reaching approximately $1.2 billion in supplied assets since its mid-November onboarding to Aave Core and Aave's Lido instance, the firms said.
- The integration could also help increase stablecoin deposits on WLFI, driven by sUSDe's use as a collateral asset to borrow tokens like USDC and USDT.
- Even if the Aave instance or sUSDe collateral is not approved, WLFI and Ethena plan to pursue other integration opportunities.
- The news follows WLFI's "not directly connected" recent acquisition of $600,000 worth of Ethena's ENA governance tokens, highlighting its confidence in Ethena's long-term viability.
- "Collaborating with Ethena Labs brings us one step closer to democratizing access to financial tools that deliver better experiences, and greater accessibility for users around the world," World Liberty Financial co-founder Zak Folkman said.
Polygon rejects proposal to use over $1 billion of bridge stablecoins for yield generation
Polygon community members rejected a recent preliminary proposal to deploy $1.3 billion in stablecoins from the PoS Chain bridge for yield generation, citing security and user consent concerns.
- Aave contributor Aave Chan responded to the initial plan by drafting its own proposal to phase out Aave's lending protocols on the Polygon PoS chain to address potential security risks.
- Polygon criticized this reaction as "disappointing," accusing Aave Chan of making threats when Morpho, its main competitor, gained traction.
- Aave founder Stani Kulechov also weighed in, defending the protocol's "risk-averse" approach and criticizing Polygon for shifting blame to Aave leadership.
- The future of Aave's deployment on the Polygon PoS chain remains uncertain as governance discussions continue.
ENS picks Linea to develop 'Namechain' Layer 2 network
Ethereum Name Service (ENS), which simplifies address resolutions on blockchains, selected Consensys-backed Linea's zkEVM technology to build its Namechain Layer 2 network as part of the ENSv2 upgrade.
- Namechain will manage .eth domain registrations and renewals on the Layer 2 while keeping name resolution on Ethereum Layer 1 for compatibility.
- ENS highlighted Linea's trust-minimized implementation of ERC-3668 for decentralized cross-chain name resolution as a key factor in the decision.
- The upgrade aims to improve transaction throughput, supporting higher volumes of registrations and renewals.
Hong Kong's HashKey Group launches HashKey Chain on mainnet
Hong Kong-based regulated digital asset financial services provider HashKey Group has launched its Layer 2 HashKey Chain on mainnet .
- HashKey Chain joins others like Coinbase's Base and Kraken's Ink as part of the Superchain network of interoperable Ethereum Layer 2s built using Optimism's OP Stack.
- During its testnet phase, HashKey Chain claims to have generated nearly 25 million transactions, over 860,000 wallet addresses and 400 transactions per second in test conditions.
- HashKey Chain's native token HSK is already live on multiple crypto exchanges, and its holders can now participate in governance and decision-making within the HashKey Chain ecosystem.
Arthur Hayes predicts crypto will see 'harrowing dump' around Trump's inauguration
Former BitMEX CEO Arthur Hayes predicts a "harrowing dump" in crypto markets around Donald Trump's Jan. 20 inauguration due to the gap between investor expectations and the slow pace of potential policy changes.
- Hayes, who now manages a family office named Maelstrom, argues Trump has only one year to enact meaningful crypto reforms before mid-term election campaigning begins, making quick regulatory shifts unlikely.
- "This realization will lead to a vicious sell-off in crypto and other Trump 2.0 equity trades," he said.
In the next 24 hours
- The Bank of England's latest interest rate decision is due at 7 a.m. ET on Thursday. U.S. jobless claims and GDP figures follow at 8:30 a.m.
Never miss a beat with The Block's daily digest of the most influential events happening across the digital asset ecosystem.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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