Bipartisan US Bill May Transform Crypto Taxes; Ethereum's EigenLayer Faces Withdrawal Surge; BlackRock's BUIDL Becomes Largest Tokenized Fund
Summary:
A bipartisan bill, proposed by two U.S. congressmen, may alter how taxes are applied to crypto networks, taxing block rewards at the point of sale rather than acquisition. Ethereum restaking platform EigenLayer faces over 12,000 withdrawal requests due to falling confidence from a recent airdrop. Meanwhile, BlackRock's tokenized treasury fund, BUIDL, becomes the largest of its kind worldwide after being established only six weeks ago.
A fresh bipartisan bill, put forth by American congressmen from different political parties, might add a twist to cryptocurrency network tax structures. In another development, Ethereum's restaking platform EigenLayer is overwhelmed with requests for withdrawals following the disappointment stemming from the EIGEN airdrop. Meanwhile, a tokenized treasury fund run by BlackRock, a mere six weeks old, now holds the title for the largest in the world.
The proposed US bill — the brainchild of two congressmen, Drew Ferguson from Georgia's Republican party and his Democrat counterpart from North Carolina, Wiley Nickel — stipulates that block rewards generated from proof-of-work and proof-of-stake systems should be taxed upon sale, as opposed to when they are initially received. This groundbreaking legislation, dubbed the 'Providing Tax Clarity for Digital Assets Act,' would treat staking rewards as 'created property' according to US tax laws and gain tax on block rewards at the time of their acquisition. Nickel criticized current regulations for being unduly complicated, catalyzing investor confusion, double taxation, and the inevitable relocation of American enterprises to foreign lands.
On the other hand, EigenLayer, Ethereum's largest restaking protocol, has been hit by a deluge of over 12,412 withdrawal applications in the wake of the much-decried planned EIGEN airdrop. Steep climb in withdrawal applications began on April 29, rocketing from 4,336 to an astounding 6,496 by the following day, per Dune data. Although the actual count for individual withdrawal applications is unknown, the 11.6% of queued withdrawals would minimize EigenLayer's present total value from $14.8 billion to a little above $13 billion. Barring prime economic areas from the EigenLayer airdrop sparked immense dissatisfaction, which might impact the protocol's total value, says Anndy Lian, an intergovernmental blockchain specialist and the author of NFT: From Zero to Hero.
In a related development, BlackRock's nascent USD Institutional Digital Liquidity Fund, known as BUIDL, has turned heads by becoming the world's largest tokenized treasury fund on a blockchain, all within just six weeks of its launch. As of April 30, BUIDL's market cap peaked at $375 million, pushing past the older Franklin OnChain U.S Government Money Fund (BENJI), which weighed in at $368 million. The past week saw BUIDL register a $70 million cash flow, with $50 million from Ondo Finance, a real-world asset tokenization corporation, for its OUSG token. Meanwhile, BENJI witnessed a dip of about 3.7% in its assets under management during the same period. Now, Ethereum, Polygon, Solana and other blockchains hold more than $1.2 billion worth of US Treasurys. Journalists Geraint Price, Ana Paula Pereira, Sam Bourgi, and Felix Ng contributed to this story.
Published At
5/1/2024 11:36:49 PM
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