Infinite Node Foundation (NODE), a nonprofit focused on digital art, has acquired the intellectual property of the CryptoPunks non-fungible token (NFT) collection from Yuga Labs, NODE said in a May 13 announcement. 

The acquisition of CryptoPunks, plus its additional $25 million endowment, establishes NODE as “the most well-capitalized nonprofit dedicated solely to digital art in the United States,” the foundation said in an X post. 

The terms of the deal were not disclosed. 

The nonprofit said it has assembled an advisory board to oversee the CryptoPunks collection. It comprises Matt Hall and John Watkinson — the artists behind the NFT collection — and a representative of Yuga Labs, among others. 

“Our role is to build a networked architecture that allows digital art like CryptoPunks to thrive within both digital and art-historical canons,” NODE said. 

The highest-grossing CryptoPunks NFTs. Source: CryptoPunks

Related: Doodles NFT token stalls after airdrop

Most valuable NFT collection

CryptoPunks are “algorithmically generated pixel art characters” that “changed the art world by existing outside of it and sparked a cultural shift that continues to reshape our digital world,” according to NODE.

It is the most valuable NFT collection, with a total market capitalization of nearly $1.2 billion across its 10,000 NFTs as of May 13, according to data from CoinGecko.

The CryptoPunks collection was launched in 2017 by Larva Labs, an NFT designer co-founded by Hall and Watkinson. 

Since then, the NFTs have clocked upward of $3 billion in sales, according to NODE. Each NFT sale creates royalties for the holders of the NFTs’ IP. 

In 2022, the highest-grossing CryptoPunk NFT sold for nearly $24 million, according to CryptoPunks’ website. The collection was purchased in 2022 by Yuga Labs, best known for designing the Bored Ape Yacht Club NFT collection — the third-largest NFT collection by market capitalization, according to CoinGecko. 

Yuga simultaneously purchased Meebits, another Larva NFT collection, before selling it in February.

In March, Yuga Labs said the US Securities and Exchange Commission (SEC) closed an investigation into the company in what it described as “a huge win for NFTs.”

Magazine: Meebits and CryptoPunks are like Hot Wheels for adults: New MeebCo owner Sergito

Defense lawyers have asked a judge to sentence the person responsible for helping post a fake message announcing regulatory approval of Bitcoin exchange-traded funds to roughly a year in prison, countering prosecutors’ request for a two-year sentence.

In a May 13 filing in the US District Court for the District of Columbia, Eric Council Jr.’s legal team asked that he be sentenced to no more than one year and one day in prison following his guilty plea.

Council was part of a group that took control of the US Securities and Exchange Commission’s (SEC’s) X account in 2024 through a SIM swap attack, posting a message that suggested the regulator had approved spot Bitcoin (BTC) exchange-traded fund listings for the first time.

“A sentence of twelve months and one day serves the ends of justice,” said the May 13 filing. “It sufficiently punishes the defendant for his role in this case. It also promotes respect for the law and deters future criminal conduct.”

Eric Council Jr.’s sentencing recommendation, filed on May 13. Source: PACER

Council initially pleaded not guilty to the charges, but changed his plea to guilty in February on one count of conspiracy to commit aggravated identity theft and access device fraud.

The judge overseeing the case, Amy Berman Jackson, also ordered prosecutors to “identify the felony and point to where that information can be found in the record” by May 13.

Prison sentence between 1 and 2 years?

The SEC hacker is scheduled to be sentenced on May 16. Prosecutors asked the judge to impose a two-year sentence on Council, saying he “profited through a sophisticated fraud scheme.” Court filings showed he earned roughly $50,000 through similar SIM swap attacks.

Related: ZKsync X hacker posts false SEC probe in apparent effort to crash token

Though Council’s case was likely winding down with his upcoming sentencing hearing, the DC court district could soon be under new leadership, potentially affecting the prosecution of crypto-related cases. On May 8, US President Donald Trump announced that Fox News host Jeanine Pirro would become the interim US attorney for the District of Columbia.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

Looking for a way to earn passive income on your crypto without riding the rollercoaster of volatile coins? TsUSDe (the staked version) on The Open Network (TON) might be the answer. It’s a dollar-pegged stablecoin that earns yield by design, and you can boost those earnings even more by putting it to work on platforms like STON.fi and DeDust.

Here’s how it works and how to get started in just a few steps.

What is tsUSDe, and why use it?

TsUSDe is a US dollar-backed stablecoin on the TON blockchain. It’s designed to earn a base yield of around 10% APY, paid out in Toncoin (TON). That means just holding it in your wallet earns you rewards — no extra steps needed.

But if you want to go a step further, you can use tsUSDe in liquidity pools or farms on TON-based platforms to unlock even more yield. It’s like putting your dollars to work while still staying in stable territory.

Where to earn yield with tsUSDe

Right now, two of the most active platforms for tsUSDe yield farming on TON are:

STON.fi — known for smooth UX and deep liquidity

DeDust — fast, lightweight and gaining traction fast.

Both let you pair tsUSDe with TON and stake your position to earn trading fees plus additional farming rewards.

Did you know? STON.fi has a built-in impermanent loss calculator to help you gauge risk before adding liquidity, while DeDust offers a full portfolio dashboard to track tokens, LPs and rewards in one place.

Step-by-step: How to earn yield with tsUSDe1. Connect your wallet

Go to STON.fi or DeDust.io, connect your TON wallet, and make sure you have some TON in your balance to cover transaction fees.

2. Pick a tsUSDe liquidity pool

Head to the “Pools” or “Farms” section and find a tsUSDe/TON pool. You’ll see estimated APY numbers, which vary depending on trading volume and incentives. On STON.fi, for example, this pool sometimes hits 30%+ APY.

3. Add liquidity

Click “Add Liquidity,” then enter the amount of tsUSDe you want to supply. You’ll also need to supply the same dollar value in TON. Once confirmed, you’ll get LP (liquidity provider) tokens showing your share of the pool.

4. Stake to boost rewards

Now, stake those LP tokens to earn extra farming rewards. On STON.fi, look for the “Farm” button next to your position. On DeDust, use the “Boost” feature. Once staked, you’ll start earning even more TON on top of trading fees.

5. Monitor and claim rewards

You can check your rewards anytime and claim them whenever you want. You’re in full control; you can unstake or remove your liquidity whenever it suits you.

What are the benefits of passive income with tsUSDe?

Passive income with tsUSDe comes with unique advantages for users, including:

Dollar stability: tsUSDe aims to stay pegged to $1, so your base savings aren’t volatile.

Built-in APY: tsUSDe earns ~10% just sitting in your wallet.

Extra rewards: Farming lets you boost returns even more through TON incentives.

Non-custodial: You keep control of your assets the whole time.

What about the risks of TON stablecoin yield?

Earning yield with TON stablecoins comes with certain risks to be aware of, such as:

Impermanent loss: If TON’s price changes significantly, your share of the pool may shift, reducing your value when you withdraw.

Smart contract risk: As with any DeFi platform, there’s always a risk of bugs or exploits.

Stablecoin peg risk: tsUSDe is designed to stay at $1, but extreme situations could cause a temporary depeg.

Stick with well-known platforms and don’t invest more than you’re comfortable with.

Did you know? TON supports TON Proxy, a decentralized anonymity protocol inspired by networks like Tor and I2P. TON Proxy allows users and nodes to obfuscate their identities and traffic.

Earn APY with tsUSDe, but carefully

If you’re already holding tsUSDe, putting it to work on TON is a no-brainer. You get a solid base yield, plus a chance to earn more through farming — all while keeping your savings in dollars. Whether you go with STON.fi or DeDust, the setup is quick, and the returns can add up fast.

Start small, be aware of risks, monitor your rewards, and make your stablecoins work harder.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Opinion by: Jupiter Zheng, Partner Liquid Fund at HashKey Capital

Whenever Bitcoin falls in value, the narrative is always the same: It’s failing as a hedge against inflation. In the eyes of critics, Bitcoin is not the “digital gold” that so many others claim it to be.

With gold hitting all-time highs, these critics have grown louder. If Bitcoin is an inflation hedge, they ask, why isn’t it also rallying as investors seek safety?

Even in today’s bearish, high-inflation environment, the cardinal truth holds: Bitcoin is an inflation hedge — arguably the most important one for long-term capital preservation the world has seen. 

Strength in scarcity

Bitcoin has a hard cap of 21 million coins, with full circulation expected by 2140. This built-in scarcity mirrors gold, which has historically served as an inflation hedge. Bitcoin has outperformed gold during multiple periods, such as the COVID-19 era, when global markets were flooded with liquidity.

Like gold, Bitcoin works as an inflation hedge over the long term, not the short term. Critics focus too much on short-term volatility and ignore broader trends. Bitcoin has consistently been used as a store of value during extended periods of money printing.Bitcoin is not controlled by any central bank or politician. It’s a decentralized, peer-to-peer system governed by math and consensus — not by election cycles or political pressure. In places like Zimbabwe or Venezuela, where governments destroyed their currencies, Bitcoin has offered a more stable alternative. When faith in traditional systems weakens, Bitcoin often strengthens. 

Consensus beats centralization

Bitcoin’s value isn’t just in its price — it’s in its design. Countries like the US, EU, UAE, Singapore, and Hong Kong have advanced regulations around Bitcoin, but its relevance goes far beyond developed economies.

Inflation is an inconvenience in wealthier countries — rising grocery bills and pricier eggs. In struggling economies, inflation can signal political and financial collapse. Bitcoin offers a way out. It’s not theoretical anymore — it’s happening in real life.

During Greece’s 2015 crisis, citizens used Bitcoin to bypass capital controls. In Venezuela and Argentina, where national currencies lost most of their value, Bitcoin became a tool for survival. People used it to preserve wealth, access global markets, and transact on decentralized exchanges.

Recent: Bitcoin may rival gold as inflation hedge over next decade — Adam Back

Bitcoin’s borderless, censorship-resistant nature is critical. It doesn’t rely on the decisions of any one institution. It’s protected from debt monetization, interest rate manipulation, and geopolitical pressures. Bitcoin runs on consensus, not command. 

Consensus matters most when trust in institutions is low. This immutability is a characteristic that investors are undervaluing — and may not appreciate until they need it the most. 

Portability is power

Bitcoin’s resilience also matters in developed markets — especially when traditional systems fail. Banks can collapse. Stock markets can crash. Payment processors can go offline. Bitcoin doesn’t sleep. It runs 24/7, 365 days a year.

During the Silicon Valley Bank collapse in March 2023, Bitcoin jumped 23% as investors sought safety outside the traditional banking system. Bitcoin’s availability and independence became its advantage.

In a bank failure like Lehman Brothers in 2008, consumers can lose access to their funds for months or even years. Bitcoin, held in self-custody, remains in your control — as long as you have the private keys. No third party is needed.

Payment networks like Visa or SWIFT can also become chokepoints — and targets for hackers who want to disrupt the global payments infrastructure. Bitcoin isn’t subject to those bottlenecks. Miners, not banks, verify it. While congestion can slow transactions, scaling solutions are evolving to improve speed and cost.

Bitcoin’s digital nature makes it especially valuable during capital controls, inflation, or crisis. It’s hard to seize, devalue, or freeze — giving individuals more autonomy than traditional financial systems allow.

A more nuanced term: speculative hedge  

Based on these characteristics, Bitcoin is unmistakably a hedge against inflation. Maybe we need a better term for Bitcoin’s central role in our financial futures.

A more precise term might be speculative hedge — it offers long-term protection thanks to scarcity, consensus and decentralization. 

Yet, adoption and price volatility are still hurdles to Bitcoin dethroning gold as a true global inflation hedge. Still, there are encouraging signs. Companies like Strategy, GameStop, Block and MassMutual have added Bitcoin to their balance sheets as a treasury strategy — with some estimates pointing to one in four companies in the S&P 500 following suit by 2030. More governments are exploring Bitcoin reserves.

As a speculative hedge, Bitcoin shines during inflation, currency devaluation, or systemic instability. It’s not a cure-all. Its effectiveness depends on user education, internet access, and geopolitical context. If connectivity disappears entirely — say, during a nuclear war — there will be bigger problems than inflation.

Bitcoin is best understood as a financial lifeboat. It’s not perfect. It takes effort to use it correctly. It’s a small measure of preparation for life’s unknowns. But when the ship starts sinking, you’ll wish you had one.

Opinion by: Jupiter Zheng, Partner Liquid Fund at HashKey Capital.

Institutional demand for Bitcoin is growing, as Coinbase, the world’s third-largest cryptocurrency exchange, recorded its highest daily outflows of Bitcoin in 2025 on May 9.

On May 9, Coinbase saw 9,739 Bitcoin (BTC), worth more than $1 billion, withdrawn from the exchange — the highest net outflow recorded in 2025, according to Bitwise head of European research André Dragosch.

“Institutional appetite for bitcoin is accelerating,” Dragosch added in a May 13 X post.

Source: André Dragosch

Related: Nasdaq-listed GDC plans to buy Bitcoin and TRUMP memecoin for $300M

The outflow occurred as Bitcoin traded above $103,600 and just days after the White House announced a 90-day reduction in reciprocal tariffs between the US and China, easing market concerns and lifting broader investor sentiment.

Joint statement on US-China meeting in Geneva. Source: The White House

The 90-day suspension of additional tariffs removes the risk of “sudden re-escalation,” which may help Bitcoin, altcoins and the wider stock market rally due to improved risk appetite, Nansen’s principal research analyst, Aurelie Barthere, told Cointelegraph.

Related: Bitcoin ETFs, gov’t adoption to drive BTC to $1M by 2029: Finance Redefined

Corporate Bitcoin investment may lead to supply shock

Growing demand from institutional investors and corporations may lead to a diminishing Bitcoin supply on exchanges, signaling a potential price rally driven by a “supply shock,” which occurs when buyer demand meets decreasing available BTC, leading to price appreciation.

While Bitcoin may experience short-term corrections, Dragosch remains “very bullish” for the rest of 2025, he told Cointelegraph during the Chain Reaction daily X show on May 12.

“In 2025 alone, corporations have bought four times more Bitcoin than all US spot Bitcoin ETFs combined, which is crazy,” he said. “We’re close to 200,000 Bitcoin already, which is the annual supply of new Bitcoin.”

Despite the bullish backdrop, Dragosch noted that the crypto market may still see short-term corrections due to what he described as overheated investor sentiment.

Bitcoin illiquid supply. Source: Glassnode

Meanwhile, Bitcoin’s “illiquid supply” reached a record 14 million BTC, according to Glassnode data, signaling that large investors continue accumulating, Cointelegraph reported on May 13.

Magazine: Altcoin season to hit in Q2? Mantra’s plan to win trust: Hodler’s Digest, April 13 – 19

Institutional demand for Bitcoin is growing, as Coinbase, the world’s third-largest cryptocurrency exchange, recorded its highest daily outflows of Bitcoin in 2025 on May 9.

On May 13, Coinbase saw 9,739 Bitcoin (BTC), worth more than $1 billion, withdrawn from the exchange — the highest net outflow recorded in 2025, according to Bitwise head of European research André Dragosch.

“Institutional appetite for bitcoin is accelerating,” Dragosch added in a May 13 X post.

Source: André Dragosch

Related: Nasdaq-listed GDC plans to buy Bitcoin and TRUMP memecoin for $300M

The outflow occurred as Bitcoin traded above $103,600 and just days after the White House announced a 90-day reduction in reciprocal tariffs between the US and China, easing market concerns and lifting broader investor sentiment.

Joint statement on US-China meeting in Geneva. Source: The White House

The 90-day suspension of additional tariffs removes the risk of “sudden re-escalation,” which may help Bitcoin, altcoins and the wider stock market rally due to improved risk appetite, Nansen’s principal research analyst, Aurelie Barthere, told Cointelegraph.

Related: Bitcoin ETFs, gov’t adoption to drive BTC to $1M by 2029: Finance Redefined

Corporate Bitcoin investment may lead to supply shock

Growing demand from institutional investors and corporations may lead to a diminishing Bitcoin supply on exchanges, signaling a potential price rally driven by a “supply shock,” which occurs when buyer demand meets decreasing available BTC, leading to price appreciation.

While Bitcoin may experience short-term corrections, Dragosch remains “very bullish” for the rest of 2025, he told Cointelegraph during the Chain Reaction daily X show on May 12.

“In 2025 alone, corporations have bought four times more Bitcoin than all US spot Bitcoin ETFs combined, which is crazy,” he said. “We’re close to 200,000 Bitcoin already, which is the annual supply of new Bitcoin.”

Despite the bullish backdrop, Dragosch noted that the crypto market may still see short-term corrections due to what he described as overheated investor sentiment.

Bitcoin illiquid supply. Source: Glassnode

Meanwhile, Bitcoin’s “illiquid supply” reached a record 14 million BTC, according to Glassnode data, signaling that large investors continue accumulating, Cointelegraph reported on May 13.

Magazine: Altcoin season to hit in Q2? Mantra’s plan to win trust: Hodler’s Digest, April 13 – 19

Venture capital firms remain critical to infrastructure development in the Bitcoin ecosystem, despite pushback from some in the community, according to builders speaking at the Token2049 conference in Dubai.Charlie Yechuan Hu, CEO of Bitcoin layer-2 protocol Bitlayer, shared his insights on venture capital (VC) firms in the Bitcoin (BTC) ecosystem.

Hu told Cointelegraph that he views many VC firms in the space positively, as they offer support to early ventures that need capital to build infrastructure.

“You need developers, you need to open up the whole ecosystem foundation, everything,” Hu said. “You need to pay for the cloud, like AWS or RPCs, all that, servers […] So, we have to have VC on that.“

Hu argued against the usual Bitcoiner ethos that argues against outsider capital, saying, “It’s difficult to say, okay, let’s do a fair mint, and then have a very successful, healthy treasury, and you have to pay all this stuff.”

“It doesn’t work that way,” he said.

Related: StarkWare researchers propose smart contracts for Bitcoin with ColliderVM

Lightning-only stance sparks debate

Not everyone agrees. Mike Jarmuz, a managing partner at Bitcoin venture capital firm Lightning Ventures, told Cointelegraph that Lightning is the only L2 his company has invested in and is interested in.

He said, “Anything with a ‘token’ that allows for ‘staking’ and earning some absurd APY interest on your Bitcoin should be avoided.”

Jarmuz said that Lightning Network, on the other hand, is growing very quickly and makes Bitcoin transactions instant, nearly free and scalable. Bitcoin Visuals data shows that the Lightning Network has a cumulative capacity across all channels equivalent to almost $452 million at the time of writing. He added:

“There is no ‘token’ when using the Lightning network. It’s Bitcoin. That to me is the only real L2, at least as of right now.“Lightning Network capacity chart. Source: Bitcoin Visuals

Jarmuz said that projects not meeting his criteria are “masquerading as useful” while doing nothing for Bitcoin. He claimed that sidechains like the Liquid Network and newer protocols such as e-cash and federations or Ark “are not widely used” but “are at least interesting.”

He recognized that those “do not involve a staked token, promising yield,” with projects that have those features, “just waiting for rug pulls and issues.”

“We don’t invest in that area,“ he added.

Related: Spar supermarket in Switzerland starts accepting Bitcoin payments

VCs seen as enablers of Bitcoin growth

According to Hu, VCs bring liquidity, resources and experience to new startups while opening “up all the institutional ideas and connections.” He said that those were important additions to Bitlayer’s resources as well, noting that “we wouldn’t have that if those people didn’t invest in us.”

He also argued that VCs tend to back long-term infrastructure efforts rather than speculative projects like memecoins or non-fungible tokens.

That experience was echoed by Walter Maffione, lead engineer at Lightning Network-based decentralized exchange (DEX) Kaleidoswap, who told Cointelegraph that the protocol started as an open-source project and raised a pre-seed investment from Fulgur Ventures and Bitfinex Ventures.

“Those funds were used to pay open-source developers and accelerate protocol development, not to build a token or capture governance rights,“ he said.

Hu claimed that VCs have contributed significantly to developing layer-2 scalability solutions, wallets, Bitcoin lending and staking protocols. He added:

“All of them are VC-backed, including us. And some of them are listed on top exchanges.”

Vikash Singh, principal at Bitcoin VC firm Stillmark, told Cointelegraph that when selecting Bitcoin layer-2 protocols to invest in, they consider demonstrated security and robustness, proliferation and adoption of non-speculative use cases and growth of the application layer. Much like Jarmuz, he said that Stillmark believes that proof-of-work is the superior consensus model.

Still, unlike Jarmuz, Singh said proof-of-stake or Byzantine fault-tolerant consensus “may be suitable for Bitcoin sidechains and rollups.”

Magazine: ‘Bitcoin layer 2s’ aren’t really L2s at all: Here’s why that matters

Venture capital firms remain critical to infrastructure development in the Bitcoin ecosystem, despite pushback from some in the community, according to builders speaking at the Token2049 conference in Dubai.Charlie Yechuan Hu, CEO of Bitcoin layer-2 protocol Bitlayer, shared his insights on venture capital (VC) firms in the Bitcoin (BTC) ecosystem.

Hu told Cointelegraph that he views many VC firms in the space positively, as they offer support to early ventures that need capital to build infrastructure.

“You need developers, you need to open up the whole ecosystem foundation, everything,” Hu said. “You need to pay for the cloud, like AWS or RPCs, all that, servers […] So, we have to have VC on that.“

Hu argued against the usual Bitcoiner ethos that argues against outsider capital, saying, “It’s difficult to say, okay, let’s do a fair mint, and then have a very successful, healthy treasury, and you have to pay all this stuff.”

“It doesn’t work that way,” he said.

Related: StarkWare researchers propose smart contracts for Bitcoin with ColliderVM

Lightning-only stance sparks debate

Not everyone agrees. Mike Jarmuz, a managing partner at Bitcoin venture capital firm Lightning Ventures, told Cointelegraph that Lightning is the only L2 his company has invested in and is interested in.

He said, “Anything with a ‘token’ that allows for ‘staking’ and earning some absurd APY interest on your Bitcoin should be avoided.”

Jarmuz said that Lightning Network, on the other hand, is growing very quickly and makes Bitcoin transactions instant, nearly free and scalable. Bitcoin Visuals data shows that the Lightning Network has a cumulative capacity across all channels equivalent to almost $452 million at the time of writing. He added:

“There is no ‘token’ when using the Lightning network. It’s Bitcoin. That to me is the only real L2, at least as of right now.“Lightning Network capacity chart. Source: Bitcoin Visuals

Jarmuz said that projects not meeting his criteria are “masquerading as useful” while doing nothing for Bitcoin. He claimed that sidechains like the Liquid Network and newer protocols such as e-cash and federations or Ark “are not widely used” but “are at least interesting.”

He recognized that those “do not involve a staked token, promising yield,” with projects that have those features, “just waiting for rug pulls and issues.”

“We don’t invest in that area,“ he added.

Related: Spar supermarket in Switzerland starts accepting Bitcoin payments

VCs seen as enablers of Bitcoin growth

According to Hu, VCs bring liquidity, resources and experience to new startups while opening “up all the institutional ideas and connections.” He said that those were important additions to Bitlayer’s resources as well, noting that “we wouldn’t have that if those people didn’t invest in us.”

He also argued that VCs tend to back long-term infrastructure efforts rather than speculative projects like memecoins or non-fungible tokens.

That experience was echoed by Walter Maffione, lead engineer at Lightning Network-based decentralized exchange (DEX) Kaleidoswap, who told Cointelegraph that the protocol started as an open-source project and raised a pre-seed investment from Fulgur Ventures and Bitfinex Ventures.

“Those funds were used to pay open-source developers and accelerate protocol development, not to build a token or capture governance rights,“ he said.

Hu claimed that VCs have contributed significantly to developing layer-2 scalability solutions, wallets, Bitcoin lending and staking protocols. He added:

“All of them are VC-backed, including us. And some of them are listed on top exchanges.”

Vikash Singh, principal at Bitcoin VC firm Stillmark, told Cointelegraph that when selecting Bitcoin layer-2 protocols to invest in, they consider demonstrated security and robustness, proliferation and adoption of non-speculative use cases and growth of the application layer. Much like Jarmuz, he said that Stillmark believes that proof-of-work is the superior consensus model.

Still, unlike Jarmuz, Singh said proof-of-stake or Byzantine fault-tolerant consensus “may be suitable for Bitcoin sidechains and rollups.”

Magazine: ‘Bitcoin layer 2s’ aren’t really L2s at all: Here’s why that matters

Venture capital firms are critical to infrastructure development in the Bitcoin ecosystem, despite pushback from some in the community, according to builders speaking at the Token2049 conference in Dubai.Charlie Yechuan Hu, CEO of Bitcoin layer-2 protocol Bitlayer, shared his insights on venture capital (VC) firms in the Bitcoin (BTC) ecosystem.

Hu told Cointelegraph that he views many VC firms in the space positively, as they offer support to early ventures that need capital to build infrastructure.

“You need developers, you need to open up the whole ecosystem foundation, everything,” Hu said. “You need to pay for the cloud, like AWS or RPCs, all that, servers […] So, we have to have VC on that.“

Hu challenged the usual Bitcoiner ethos that argues against outsider capital.

“It’s difficult to say, okay, let’s do a fair mint, and then have a very successful, healthy treasury, and you have to pay all this stuff,” he said. “It doesn’t work that way.”

Related: StarkWare researchers propose smart contracts for Bitcoin with ColliderVM

Lightning-only stance sparks debate

Not everyone agrees. Mike Jarmuz, a managing partner at Bitcoin venture capital firm Lightning Ventures, told Cointelegraph that Lightning is the only L2 his company has invested in and is interested in.

He said, “Anything with a ‘token’ that allows for ‘staking’ and earning some absurd APY interest on your Bitcoin should be avoided.”

Lightning Network, on the other hand, is growing very quickly and makes Bitcoin transactions instant, nearly free and scalable, Jarmuz said. Bitcoin Visuals data shows that the Lightning Network had a cumulative capacity across all channels equivalent to almost $452 million at the time of writing. He added:

“There is no ‘token’ when using the Lightning network. It’s Bitcoin. That to me is the only real L2, at least as of right now.“Lightning Network capacity chart. Source: Bitcoin Visuals

Jarmuz said projects not meeting his criteria are “masquerading as useful” while doing nothing for Bitcoin. Sidechains like the Liquid Network and newer protocols such as e-cash and federations or Ark “are not widely used” but “are at least interesting,” he said.

He recognized that those “do not involve a staked token, promising yield,” with projects that have those features, “just waiting for rug pulls and issues.”

“We don’t invest in that area,“ he added.

Related: Spar supermarket in Switzerland starts accepting Bitcoin payments

VCs seen as enablers of Bitcoin growth

According to Hu, VCs bring liquidity, resources and experience to new startups while opening “up all the institutional ideas and connections.” Those were important additions to Bitlayer’s resources as well, he said, noting that “we wouldn’t have that if those people didn’t invest in us.”

He also argued that VCs tend to back long-term infrastructure efforts rather than speculative projects like memecoins or non-fungible tokens.

That experience was echoed by Walter Maffione, lead engineer at Lightning Network-based decentralized exchange (DEX) Kaleidoswap, who told Cointelegraph that the protocol started as an open-source project and raised a pre-seed investment from Fulgur Ventures and Bitfinex Ventures.

“Those funds were used to pay open-source developers and accelerate protocol development, not to build a token or capture governance rights,“ he said.

Hu claimed that VCs have contributed significantly to developing layer-2 scalability solutions, wallets, Bitcoin lending and staking protocols. He added:

“All of them are VC-backed, including us. And some of them are listed on top exchanges.”

Vikash Singh, principal at Bitcoin VC firm Stillmark, told Cointelegraph that when selecting Bitcoin layer-2 protocols to invest in, they consider demonstrated security and robustness, proliferation and adoption of non-speculative use cases and growth of the application layer. Much like Jarmuz, he said that Stillmark believes that proof-of-work is the superior consensus model.

Still, unlike Jarmuz, Singh said proof-of-stake or Byzantine fault-tolerant consensus “may be suitable for Bitcoin sidechains and rollups.”

Magazine: ‘Bitcoin layer 2s’ aren’t really L2s at all: Here’s why that matters

The largest political party in South Korea, the Democratic Party, has launched a Digital Asset Committee focused on developing cryptocurrency policies and promoting industry growth.

The committee held its inaugural meeting at the National Assembly Members’ Hall in Seoul on May 13, the local news agency News1 reported.

During its first meeting, the committee highlighted the importance of resolving regulatory uncertainty and addressing burning issues like stablecoin regulation amid the push for US-dollar stablecoins by the US government.

The new committee joins similar organizations in South Korea, including the Virtual Asset Committee launched in late 2024 and another public-private crypto task force introduced in 2022, both initiated by the Financial Services Commission (FSC).

Exchanges like Upbit and Bithumb involved

The leadership of the Digital Asset Committee includes South Korean officials and politicians, such as National Assembly Chairman Min Byeong-deok, who joined the committee as chairman.

Additionally, the organization features standing general election committee Chairman Yoon Yeo-joon, Muksanism Committee Chairman Maeng Seong-gyu, National Assembly member Kim Byeong-gi and former National Assembly Chairman Kim Jeong-woo.

Digital Asset Committee Chairman Min Byeong-deok, Yoon Yeo-jun, Maeng Seong-gyu and Kim Jeong-woo (from left to right). Source: News1

According to a report by ChosunBiz, the committee will also include participation of executives from major local exchanges, including Upbit, Bithumb, Coinbit and Gopax.

Criticism of “one-exchange, one bank” rule

At the opening meeting, committee Chairman Min expressed concerns regarding limitations of South Korea’s current one-exchange-one-bank rule, implying that crypto exchanges are restricted to collaborating with only one lender.

“There are clear shortcomings to the one exchange, one bank principle,” Min reportedly said, adding that the committee is working with regulators to resolve the issue.

The chairman also mentioned discussions about which regulators should supervise the stablecoin industry and whether stablecoins should be subject to a licensing or reporting system.

Related: South Korea presidential front-runner pledges to approve Bitcoin ETFs

“There is also a point of contention as to whether the Bank of Korea or the FSC should handle the regulation,” he reportedly said.

The news came shortly after a Bank of Korea executive expressed concerns over the issuance of the South Korean won-backed stablecoins.

“Stablecoin has a great impact on the implementation of central bank policies such as monetary policy, financial stability, and payment settlement,” Bank of Korea’s Koh Kyung-chul reportedly said at a conference on May 12.

“The negative impact on the central bank’s policy implementation should be minimized by the central bank’s practical intervention in the approval stage,” he added.

Magazine: Finally blast into space with Justin Sun, Vietnam’s new national blockchain: Asia Express