The Daily: Ronin pause, Harris-Walz, crypto short squeeze potential and more

Happy Tuesday! In today's Daily, the Ronin Network bridge pauses amid $11.8 million in outflows to MEV bots, Kamala Harris picks her running mate, we take a look at the potential for a short squeeze as the crypto market experiences a slight recovery and more.

 

Meanwhile, TON's head of gaming discusses Hamster Kombat's next move and the future of Telegram mini-games.

 

Let's get started.

• Around 3,996 ETH ($9.8 million) and 2 million USDC were withdrawn from the bridge ahead of the pause — the maximum amount of each asset that can be withdrawn in a single transaction.
• Many speculated that it could be white hat activity, meaning an ethical hacker was behind the incident, though that wasn't confirmed until later in the day.
• Axie Infinity and Ronin Network co-founder Aleksander Larsen said the bridge would remain paused while the team investigated "a report from white hats about a potential MEV exploit," adding, "the bridge currently secures over $850 million, which is safe."
• The Ronin Network team later explained that a bridge upgrade on Tuesday introduced an issue "leading the bridge to misinterpret the required bridge operators vote threshold to withdraw funds."
• It is now working on a solution for the root cause, and a new bridge upgrade will go through "intensive audits" before being voted on by bridge operators ahead of deployment.
• Ronin Network said it was negotiating with the white hats, who have "responded in good faith," adding that any shortfalls would be deposited back into the bridge when it reopens.
• In a further update on Tuesday afternoon, Ronin Network confirmed that the ether had been returned, and it expected the USDC funds to follow later in the day.
• Ronin's bug bounty program will reward the white hats with $500,000, the team added.
• This latest incident follows a major hack on Ronin's bridge with Ethereum in March 2022, where an exploit of five validator keys led to the loss of more than $600 million in ether and USDC — the largest DeFi exploit in history.

Kamala Harris picks Tim Walz as running mate

• Harris' choice of Walz, a Midwestern governor, is seen as a strategic move to strengthen her electoral appeal.
• Although Walz hasn't been vocal about cryptocurrency, his governorship saw the enactment of legislation to bolster the regulation of crypto kiosks in Minnesota.
• Prior to the decision, bettors on the decentralized prediction platform Polymarket pegged Pennsylvania Governor Josh Shapiro as Harris' likely VP pick with odds of 57% compared to Walz's 40%.
• Harris' campaign began reaching out to the crypto industry after President Joe Biden announced he would not be seeking reelection and endorsed Harris to replace him as the Democratic Party's nominee, recently adding crypto advocate David Plouffe to its team.

Coinbase analyst suggests crypto short squeeze potential

• "We believe market jitters will persist in the short-term, but it's possible that shorts could get squeezed here, which could lead to a market rebound in the next few days," Duong said.
• Following Monday's more than $1 billion liquidation bloodbath amid double-digit price drops, the global crypto market cap has recovered slightly, up around 5% over the past 24 hours.
• However, Duong stressed that specific factors were still weighing on the market, including bitcoin and ether distributions from Genesis' bankruptcy liquidation plan and the unwind of yen-based carry trades, which could potentially affect the decisions of some Mt. Gox creditors receiving their bitcoin at the moment.

SEC urges court to reject Coinbase's subpoena request for more documents

• Coinbase has been pushing the SEC to provide more of its internal documents and communications regarding digital assets, which the SEC claims is "extraordinary" and unsupported by legal precedent.
• "If the SEC is going to engage in an unprecedented regulation by enforcement campaign, the least they owe to those they target — and the public — is transparency," Coinbase Chief Legal Officer Paul Grewal said in response to the court document.
• The core of the dispute is the SEC's 2023 lawsuit against Coinbase for allegedly operating as an unregistered securities exchange. Coinbase argues that most cryptocurrencies are digital commodities, not securities.

Starknet Foundation CEO Diego Oliva steps down

• James Strudwick will assume the role of Executive Director, while Oliva will stay on for a month to aid in the transition.
• During Oliva's tenure, Starknet initiated multiple ecosystem development projects, and the foundation signed deals with over 100 infrastructure teams.

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