Summation of what happen today in crypto...

Taken from Kraken's Daily Hash email:

Poly Network Hacker Returns Nearly All of the $611M in Stolen Funds

• After the hacker who exploited Poly Network for $611M returned ~$256M yesterday, they returned most of the remaining loot today.
• The only funds not returned are the $33M in USDT that Tether froze following the exploit, which can't move until Tether authorizes it.
• Tether CTO Paolo Ardoino said, "We'll expedite the work with the project to return the funds," adding that the company will likely burn the tokens and reissue them to pass them to Poly Network rather than trusting the hacker to move the funds once unfrozen.
• The hacker said they refused a $500,000 bounty for discovering the exploited bug, "The poly did offered a bounty, but I have never responded to them. Instead, I will send all of their money back."

Polygon Acquires Hermez in $250M Deal That Includes First-Ever Token 'Merger'

• Ethereum scaling project Polygon (formerly Matic Network) acquired Hermez Network, a ZK-Rollups-based Ethereum layer 2 scaling solution, for $250M.
• Hermez's offerings will be merged into Polygon, and the new project will be named "Polygon Hermez."
• The two projects are merging their native tokens, MATIC and HEZ.
• Hermez's 26 members of staff are also joining Polygon's team of 80.
• Polygon co-founder Mihailo Bjelic said, "This (to the best of our knowledge) is the first-ever full-blown merger of blockchain networks, where one network will completely absorb the other, including its token."
• The two projects decided that the swap ratio of their tokens is 3.5 MATIC:1 HEZ, meaning HEZ token holders will be able to swap their tokens for several of Polygon's MATIC tokens via a swapping contract that the projects will publish "soon."
• Bjelic said Hermez's largest token holders, constituting more than 90% of the total token holders, were aware of the peg and all of them agreed with it.
• Bjelic added that the deal became possible as HEZ is still a "fairly early stage token."
• Polygon has committed a total of 250M tokens from its treasury for the merger worth ~$250M at the time of acquisition, or 2.5% of Polygon's total supply.
• Polygon further committed $1B from its treasury to ZK-based solutions, "We consider ZK cryptography the single most important strategic resource for blockchain scaling and infrastructure development, and we have a clear goal of becoming the leading force and contributor in this field in years to come."
• Polygon Hermez will be Polygon's fourth Ethereum solution offering after Polygon Commit Chain, Polygon SDK, and Polygon Avail.
• Business development lead at Hermez Network Antoni Martin said his team will "focus on developing the zkEVM technology to provide native smart contract scalability inside a ZK-Rollup. This merger should accomplish our shared objective to create a more inclusive financial system that is secure, decentralized, and permissionless, on top of Ethereum. We are committed to working hard to make this dream possible."

Argentina Open to Adopting Bitcoin, Says President Alberto Fernandez

• During an interview on Caja Negra, Argentina's President Alberto Fernandez suggested that he is open to the idea of crypto playing a larger role in Argentina's economy, despite his skepticism.
• When asked if he would consider making use of a central bank digital currency (CBDC) or adopt bitcoin as a legal lender, Fernandez said, "I don't want to go too far out on a limb [...] but there is no reason to say 'no' [...] Perhaps that is a good path to take. They say the advantage is that the inflationary effect is largely nullified."
• Fernandez tempered his interest in cryptoassets like bitcoin as potential inflation hedges with a healthy dose of caution, "It is a global debate, and I must confess that it is a topic [that I approach with] caution. In my case, there is caution because of how unfamiliar it is, and because it is hard to understand how this fortune materializes. Many people in the world have these concerns, and that is why the project, or the system, has not yet expanded [more than it has]. But it is something to consider."

• However, the President of Argentina's central bank Miguel Pesce said earlier this week that he believes bitcoin "is not a [real] financial asset, and does not generate any [lasting] profitability."

  Members of Congress Lobby Nancy Pelosi and Others to Amend Crypto Tax Definition

• Representative Anna Eshoo wrote to Speaker of the US House of Reps Nancy Pelosi, urging her to amend the crypto broker definition in the Senate's controversial infrastructure bill.

• Eshoo claimed that miners, validators, and developers of wallets would be unable to comply with the crypto tax reporting requirements.

• In the letter, Eshoo stated, "In the decentralized system of cryptocurrencies, these individuals and entities do not know who the buyers and sellers are and would be unable to comply with the broker requirements."

• The bill's wording isn't finalized yet as the latest text still needs to clear the US House of Reps, and several House members have already called for changes.

• Eshoo added that tax evasion should be addressed, "The House must amend the bill to meet this goal without stifling innovation in a nascent industry by imposing unworkable regulations."

Crypto Bits & Bytes

Bitcoin

• Popular Canadian psychologist Jordan Peterson published a podcast titled “Bitcoin: The Future of Money?” this week that hosted Bitcoiners, including John Vallis, Der Gigi, Richard James, and Robert Breedlove.

Ethereum

• Kryptoin Investment Advisors filed a proposal with the SEC for an ETF that would "provide exposure to Ethereum at a price that is reflective of the actual Ethereum market where investors can purchase and sell Ethereum." According to Bloomberg's ETF Research Analyst James Seyffart, there have been a total of 21 crypto ETF applications this year.

Mining

• Bitcoin mining difficulty adjusted +7.3% today for the second positive adjustment since China’s mining crackdown in May sent Bitcoin’s hash rate down by -55%.
• Publicly-listed crypto mining firm, Hive Blockchain, ordered 1,800 mining machines from Bitmain Technologies for delivery next year, which will add a total hash power of 180 PH/s.
• Bitcoin miner Marathon Digital reported 2Q miner reported adjusted earnings per share of $0.21, ahead of analyst estimates of $0.16. Revenues came in at $29.3M, short of forecasts for $34.4M. The company also said it produced ₿654 in 2Q, bringing the total of new bitcoins mined for 1H2021 to ₿846.

Non-Fungible Tokens (NFTs)

• Business magazine Fortune raised over $1.3M in its first NFT sale.
• Ethereum-based NFT project Pudgy Penguins has been trending recently as nearly $18M worth of the collection’s NFTs have been sold on secondary markets within the last two days alone. The daily average price of a Pudgy Penguin is now at an all-time high of $11,341, while the weekly average is $4,470.
• The Rarible team announced the launch of Rarible Protocol, an open-source toolkit for developers to create custom NFT storefronts and marketplaces. The Rarible protocol is currently deployed on Ethereum and will soon be available on Flow and Polygon.
• Rario, an officially licensed cricket NFT platform that will allow fans to collect and trade iconic moments from cricket history, launched yesterday. The platform will be integrated with layer 2 Ethereum scaling solution Polygon.

Decentralized Finance (DeFi)

• Major Latin American VC fund Kaszek made its first DeFi investment as it led a $3M round in Exactly, a startup that is building an open source, non-custodial credit protocol on the Ethereum platform.
• Oracles from Chainlink, a provider of data feeds to smart contracts, have been integrated into Ethereum scaling solution Arbitrum One.
• Cardano (ADA) is up +15% on the day and +40% over the past week as market participants prepare for the Alonzo hard fork, an upgrade that will deploy smart contract functionality on the mainnet and effectively enable DeFi on Cardano.

Regulation and Policy

• Listen to CoinDesk's Nathaniel Whittemore and the Blockchain Association's Jake Chervinsky discuss the crypto industry's battle against the Infrastructure bill.

Central Bank Digital Currency (CBDC)

• Chinese smartphone brand Honor released the first Snapdragon-powered smartphone to support a digital yuan hardware wallet.

Data Analytics

• Norway-based crypto data analytics startup, Dune Analytics, raised $8M in a Series A equity funding round led by Union Square Ventures. The fresh capital will help Dune expand its team, launch a new data platform, and support more blockchains