The Daily: Robinhood adds $25 million in bitcoin to its balance sheet, and more

The following article is adapted from The Block's newsletter, The Daily, which comes out on weekday afternoons.

Happy Wednesday! Bitcoin is trading down around $83,500, with Middle East tensions and forced liquidations pressuring the market.

In today's newsletter, Robinhood adds $25 million worth of bitcoin to its balance sheet, Ethereum researcher Justin Drake calls for "bunker mode" planning over private key recovery risk, Pudgy Penguins-backed Ethereum Layer 2 Abstract plans to shut down, and more.

Meanwhile, Moody's gives Sky Protocol a B3 rating, and NEAR's Illia Polosukhin sees a shrinking need for centralized exchanges as onchain tools expand.

P.S. Don't forget to check out The Latent, our sister website covering AI. Get The Latent Daily here and all other The Block newsletters here.

Robinhood adds $25 million in bitcoin to its balance sheet

Robinhood has added $25 million worth of bitcoin to its balance sheet, with SVP Johann Kerbrat saying the purchase was intended to signal the company's commitment to crypto.

• Kerbrat said the purchase is relatively small for Robinhood given its roughly $100 billion market capitalization, but is about aligning the company and its vision with the crypto community.
• The purchase comes as Robinhood expands its crypto offerings, including plans to launch perpetual futures trading for eligible U.S. users in the coming months.
• Robinhood is also expanding Robinhood Chain, its Layer 2 built using Arbitrum's tech stack, which reached $1.05 billion in total value locked as of Tuesday.
• The company has launched Stock Tokens, allowing eligible users to trade them 24/7 directly on Robinhood Chain.
  Robinhood has 28 million funded accounts, including 27 million in the U.S., while its wallet is available in more than 120 countries, according to Kerbrat.

Ethereum researcher Justin Drake calls for 'bunker mode' planning

Ethereum Foundation researcher Justin Drake is calling on the blockchain industry to start planning for "bunker mode," warning that it is reasonable to prepare for the possibility that a widely used cryptographic system could be broken.

• Drake said the worst case could come in "months not years," potentially allowing private keys to be recovered quickly. He stressed that existing cryptography has not already been broken and warned holders not to panic or rush.
• He recommended that crypto holders, starting with large and sophisticated ones, move most of their funds to fresh addresses that have never signed a transaction, keeping their public keys hidden.
• Drake linked his warning partly to recent advances in AI-generated mathematics and said Ethereum's draft roadmap already moves toward hash-based cryptography and formal verification to prepare for quantum risks.

Pudgy Penguins-backed L2 Abstract to shut down after losing 'tens of millions'

Abstract, the consumer-focused Ethereum Layer 2 backed by Pudgy Penguins parent Igloo, will shut down on Dec. 15 after citing stagnant growth, thin liquidity, a restricted DeFi ecosystem and limited institutional adoption.

• Abstract said more than 144 apps were deployed on the network and over 400,000 users were onboarded, but said operating a chain focused exclusively on consumer crypto had proven unsustainable as a standalone model.
• Igloo funded Abstract for the past 18 months and lost "tens of millions of dollars," according to CEO Luca Netz. The company will now redirect resources toward Pudgy Penguins and PENGU.
• Netz said Igloo decided against launching an Abstract token or continuing to fund the network. Users must bridge their assets off Abstract before Dec. 15 or risk losing access to their funds.

Coinbase Pro to return; Deribit integration creates Coinbase Global Exchange

Coinbase plans to bring back Coinbase Pro by the end of the year and has completed its Deribit integration, creating Coinbase Global Exchange.

• Coinbase Pro will support spot, futures, perpetuals, options and equities, with the platform rebuilt for high-volume active traders.
• Coinbase Financial Markets will soon connect eligible U.S. clients to global crypto derivatives liquidity, bringing U.S. and international derivatives markets into a single liquidity pool.
• Coinbase will roll out Deribit-powered options, spot margin and unified portfolios in the coming weeks. Eligible traders outside the U.S. will get options access in the coming weeks, with U.S. retail access expected later this year.

Hyperliquid Policy Center CEO says exchanges will need public blockchains

Hyperliquid Policy Center CEO Jake Chervinsky said every exchange, including traditional venues such as CME and ICE, will have to adopt public blockchain infrastructure within the next decade to remain competitive.

• Chervinsky said Hyperliquid is infrastructure rather than an exchange itself, sitting below companies such as Coinbase, Robinhood and CME in the technology stack and providing technology they could use for their products.
• He said U.S. regulators are working to bring onchain markets into the regulatory perimeter and expects that to happen "at some point soon." He sees perpetuals on other assets, including oil, metals and agricultural contracts, as a further regulatory step.

In the next 24 hours

• U.S. weekly jobless claims and August wholesale trade data are due Thursday. St. Louis Fed President Alberto Musalem is also scheduled to speak at Bloomberg's The Future of Fixed Income event.
• A Eurogroup meeting is scheduled for Thursday, with the ECB's Monetary Policy Meeting Accounts also due and ECB Chief Economist Philip Lane set to speak.
• TOKEN2049 Singapore continues Thursday for the second and final day of the conference.
• Puffer Finance (PUFFER) and Endurance (ACE) are among the tokens set for unlocks.

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