Aave, the largest decentralized lending protocol, has proposed reducing its exposure to governance risks within the Ethereum layer-2 network, Scroll’s ecosystem.

The initiative, submitted on Sept. 11 by the Aave Chan Initiative (ACI), comes amid mounting instability in Scroll’s decentralized governance model.

The proposal outlines several defensive measures to protect Aave’s users and liquidity pools. These include raising the reserve factor for all listed assets to 90%, lowering supply caps to existing levels, and cutting borrowing caps for all borrowable assets.

According to ACI, these steps will help contain exposure to Scroll-based assets, reinforce protocol safety through conservative risk parameters, and ensure Aave can respond swiftly if governance disruptions escalate.

ACI pointed out that the proposal’s implementation will proceed through the Direct to AIP process, which allows for faster deployment of urgent changes.

Data from DeFiLlama shows that Aave currently holds about $6 million in total value locked (TVL) on Scroll, making it the chain with one of its smallest liquidity pools.

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Scroll’s DAO issues

The urgency of Aave’s proposal stems from internal turmoil at Scroll’s decentralized autonomous organization (DAO). Scroll announced earlier in the day that it had halted new proposals within its DAO as part of a plan to redesign governance.

Scroll said the decision would allow experimentation with governance models emphasizing efficiency, effectiveness, and alignment. The team also stressed that the pause aims to safeguard stability in the short term while laying the groundwork for sustainable growth.

Meanwhile, Scroll stressed that proposals that have already been approved will proceed. However, fresh submissions will be paused until the new structure is introduced.

This move comes after leadership turbulence within the DAO. Olimpio, a Scroll delegate, confirmed that the DAO’s lead, known as Eugene, resigned earlier in the week.

According to Olimpio, this departure has left the community facing uncertainty, with several proposals now stalled. These include a treasury management initiative, the formation of a governance council, and a test of a DAO timelock mechanism.

February 26th Bitfinex alpha | Bitcoin reduces heat – turn on new turns for red alarms or stepping stones?

Last week, Bitcoin was trapped within familiar transactional ranges. The market’s growth momentum does not appear to show signs of prosperity.

On Friday, February 21st, the market suddenly shook violently about S&P 500 options sellers, along with news about the Buybit Hacking Hack. weekend.

Not only Bitcoin, but the entire crypto market is in the adjustment phase after the breakthrough at the end of 2024. Bitcoin (-5.9%), Ethereum (-16.9%) and Solana (-33.1%) will fall free after a significant increase in February. November and December last year. Most notably, the MemeCoins group, which once flew in December, also flew to 37.4%.

This decline is exacerbated as Bitcoin is increasingly sticky to traditional assets due to the instability of global financial markets. The fact that the S&P 500 missed bookings at a milestone of 6,000 made investors psychologically shy and reduced their level of participation in dangerous assets.

Bitcoin, SPX and major electronic assets performance in 2025
(Source: Bitfinex, S&P)

Demand from large organizations also declined significantly. Cash flow to Bitcoin ETFs, which reached 18,000 BTC per day in November 2024, has been reversed to cash flow. On February 20th, a maximum of USD 360 million was withdrawn from the Bitcoin ETF.

Not only does it turn cars, but it also uses trading activities have also been significantly reduced. These indications indicate that the market is entering a phase of shrinking scale.

After nearly 90 days of passing, Bitcoin is still in the middle of a period of time where there is enough powerful catalyst waiting to explode. The next direction for Bitcoin is likely to depend on macroeconomic factors and may be critical. On the other hand, the US economy is not very positive. Confidences among consumers are declining, but expectations of inflation can be ruptured, while the Federal Reserve’s price management efforts (FEDs). According to the latest research from the University of Michigan, consumer psychology has plummeted, reaching its lowest level in over a year. Americans are preparing for higher inflation as they expect to increase inflation next year to 4.3% compared to 3.3% the previous month. This change shows more careful psychology, which can slow down spending and economic activity. Furthermore, the White House proposal for import taxes has increased inflationary pressures and partially reversed the process of cooling inflation over the past two years.

University of Michigan – Consumer’s 1 year expectation of inflation

Meanwhile, the housing market slowly saw a decline in new home constructions by 8.4% in January. The rate is still high.

Construction of a new residential area (source: US Census Bureau)

Contractors are struggling to launch new projects due to increased costs, draining their construction profits. Limited new supply will raise housing prices and make it even more difficult for the Federal Reserve to target inflation at 2%. Without a big policy that will help remove supply barriers, the dream of owning a home at a comfortable price will remain far away in the near future.

The cryptocurrency market is in a struggle between motivations for price rises and great risks. Strategy has announced plans to issue US$2 billion worth of converted bonds, buy more Bitcoin and serve business purposes.

In other developments, the US Senate formally approved Howard Lutnick as Minister of Trade. This will make important changes to the management of your digital assets. A loyal supporter of Bitcoin and investing in Tether, Lutnick is expected to promote more open policies, helping Crypto move further into mainstream financial flows . Furthermore, Latnic’s trade position, particularly the support of former President Trump’s tariff policy, will have an impact on financial markets.

However, not all news is positive. BYBIT is suffering from a US$1.5 billion hack. This is one of the most serious security cases in the history of code. The transaction floor confirms that solvency is still possible, but the incident still raises concerns about an increase in security holes and an increase in sophistication in cyberattacks.

We pray for “Green” trading week!
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]]> https://earlybirdsinvest.com/bitfinex-alpha-bitcoin-reduces-heat-turn-on-new-turns-for-red-alarms-or-stepping-stones/feed/ 0 21998 https://earlybirdsinvest.com/state-of-wisconsin-reduces-grayscale-bitcoin-trust-holdings-but-adds-more-blackrock-btc-etf-shares-sec-filing/ https://earlybirdsinvest.com/state-of-wisconsin-reduces-grayscale-bitcoin-trust-holdings-but-adds-more-blackrock-btc-etf-shares-sec-filing/#respond Sat, 15 Feb 2025 21:41:44 +0000 https://earlybirdsinvest.com/state-of-wisconsin-reduces-grayscale-bitcoin-trust-holdings-but-adds-more-blackrock-btc-etf-shares-sec-filing/

The State of Wisconsin Investment Board (SWIB) appears to have reduced its exposure to the Grayscale Bitcoin Trust exchange-traded fund while adding to its position in Blackrock’s iShares Bitcoin ETF.

A new filing with the U.S. Securities and Exchange Commission (SEC) indicates SWIB holds 6,060,351 shares of BlackRock’s IBIT.

With the fund trading at $55.33 at time of writing, that means SWIB’s IBIT exposure currently stands at more than $335.3 million.

In a previous filing back in May, SWIB reported owning only 2,450,400 shares of IBIT. However, the May filing indicated the investment board also held 1,013,000 shares of Grayscale’s BTC ETF (GBTC), which were collectively worth around $57 million at the time. In filings submitted in November and this week, SWIB didn’t disclose any GBTC holdings.

The State of Wisconsin Investment Board is a state agency managing investments for public retirement and trust funds. It has diversified investments, including cryptocurrency, Coinbase, Marathon Digital, Riot Platforms, Block, Cipher Mining, Cleanspark, Microstrategy and other traditional financial vehicles.

IBIT is the largest Bitcoin ETF, with $56.38 billion worth of assets under management (AUM), according to data from Coinglass. Fidelity’s FBTC is second with $20.19 billion in AUM, and GBTC ranks third, with $19.28 billion.

The SEC greenlit the first spot market Bitcoin ETFs in January 2024, bringing in billions of dollars worth of inflows to the top digital asset by market cap. The regulator subsequently approved Ethereum (ETH) ETFs for trading in July.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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