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Solanas validators are a bit like baristas flipping around an iPad theyre nicer to you when you include a tip. And as traders keep cramming into Solanas metaphorical coffee shop, the validator tip jar looks increasingly stuffed with money.

Validators are a group of 1,728 computers that run software to produce blocks on the Solana blockchain. Coinbase Cloud is a prominent Solana validator, as is Google Cloud. One revenue stream that validators earn is called maximal extractible value (MEV), which refers partly to tips paid by searchers to be included in Solana blocks.

This MEV revenue has been growing quickly since mid-March. Notably, Solana validators are earning more from MEV overall than Ethereum validators, according to Blockworks Research. Just a few months ago, Solanas MEV revenue was a rounding error compared to Ethereums.

Read more: MEV doesnt have to be a zero-sum game, research suggests

Broadly defined, MEV refers to the largest amount of value that validators can create by packing transactions into blockchain blocks. Blockworks Researchs dashboard suggests Solana validators raked in a hair under $7 million from MEV last week.

At the moment, Solana MEV is almost entirely the product of a protocol named Jito. Jito offers a fork of the Solana validator called Jito-Solana, and 78% of Solanas validators use this client, according to Jitos website. The client lets searchers, or traders, arrange transactions in bundles. Searchers can include a tip to try getting validators to send their particular bundle to the blockchain.

Whether all this is good for Solana is something of a matter of perspective. Some forms of MEV can be predatory. Jito recently suspended its mempool, a kind of waiting area for transactions, due to sandwich attacks that let opportunists create MEV by trading right before and after a transaction to manipulate the price and take profit from the trader.

Read more: Jito Labs ends mempool functionality citing impact on Solana users

In Jitos telling, the protocol is making Solana more efficient while also minimizing negative forms of MEV like sandwich attacking. If it can pull that off, Solana could see a lot of benefit.

Continued long-term growth in Solanas MEV would likely imply that less spam is being included in blocks, and Solana would have more available blockspace, Blockworks Research analyst Hayden Tsutsui said. In a best case scenario, more blockspace could free up room for more on-chain activity, which could also bring along more liquidity, Tsutsui said.

But it bears mentioning that as things currently stand, Solana is still staggering under a mountain of spam. More than 60% of non-vote transactions fail on Solana, according to Blockworks Research, largely due to bots taking advantage of Solanas cheap fees by inundating the network in hopes of getting transactions to land.

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MEV collected by validators is now higher on Solana than on Ethereum - Blockworks

Crypto asset manager Grayscale is unlikely to go to war again for Ethereum.

Grayscale famously sued the Securities and Exchange Commission in 2022 in a fight to offer customers Bitcoin ETFs. The case went in its favour, and paved the way for the products to launch.

But now?

Theyre probably just like, To hell with it. Let somebody else step up this time, Bloomberg Intelligence ETF analyst Eric Balchunas told DL News.

The firm this week withdrew a filing that wouldve made it harder for the SEC to defend the denial of Ethereum spot ETFs in court.

Theyre just sort of taking their ball and going home, Balchunas said.

And part of me doesnt blame them. Its not just money its bandwidth, its attention.

The SEC spent years shooting down Bitcoin spot ETF applications before Grayscale filed a lawsuit against the regulator in protest in 2022.

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The courts agreed something was wrong.

In September, a judge found that the SEC had acted in an arbitrary and capricious manner by denying the applications.

So Grayscale was able to convert its Bitcoin trust into a spot ETF finally giving the option for investors to exit the fund if they chose to. And 10 other firms, including BlackRock and Fidelity, launched their own ETFs.

But the move backfired on Grayscale. Its ETF has hemorrhaged over $17 billion in Bitcoin since January, while BlackRock and Fidelitys funds have vacuumed more than $23 billion in assets.

Balchunas said Grayscale probably didnt expect outflows to be so violent.

Seventy-eight days of straight outflows. They broke all records, he said. They didnt realise how hardcore the US ETF market is.

At issue was Grayscales 1.5% management fee, which turned out to be multiples higher than their competitors 0.2% or 0.3% fees.

They probably thought everybody would be between 0.7% and 1%, so they wouldnt be too far away at 1.5%, Balchunas said.

Grayscales Ethereum trust has almost $9 billion in assets which would likely bleed away if the vehicle were converted into a proper ETF.

These funds are trapped, as the current structure doesnt permit redemptions. Grayscale makes a solid 2.5% fee on those assets.

The other issue is that demand for an Ethereum ETF simply isnt as strong as for the Bitcoin ETF.

Balchunas predicted that, if they do launch, Ethereum ETFs will only get about 10% to 15% of the assets that Bitcoin ETFs garnered.

Grayscale has less to lose by not fighting for the Ethereum ETFs, Balchunas said. Bitcoin ETFs are the headlining act.

Ethereum ETFs will never have the same fever pitch attention around their approval.

Tom Carreras is a markets correspondent at DL News. Got a tip about Grayscale and Ethereum ETFs? Reach out at tcarreras@dlnews.com

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Grayscale fought hard for Bitcoin ETFs. Why it won't bother with Ethereum - DLNews

Coinbase is preparing for a future of 1 billion customers using decentralized applications on millions of blockchains safely and securely in a system integrating the Ethereum Virtual Machine (EVM) and Circles USD Coin (USDC).

Coinbase head of tokenization Anthony Bassili, speaking at TokenizeThis 2024 in Miami, said Coinbases Ethereum layer-2 Base blockchain will save time on Know Your Customer (KYC) and Anti-Money Laundering (AML) with identity attestation through the Ethereum Attestation service and Coinbase verification, which creates a tag on the users so-called smart wallet.

Coinbase verification is available after the customer has completed its KYC procedure. While that may not be sufficient in all cases, Bassili said:

Already, more than 300,000 wallets have been attested.

Related: Coinbases Base could make it the Nvidia of DeFi

To give those customers with wallets and verified identities Web3 access, Base will leverage the interoperability of EVM networks. The ecosystem will be supported by USDC. Coinbase took an equity stake in Circle in August. Right now, were somewhere above $28 billion of total assets in Circle, Bassili said. Coinbase also has the ability to mint USDC.

When robust tokenized assets in different asset classes arise, it could become possible to trade assets for assets without going through the intermediate step of trading them for dollars. Bassili said:

Crypto is the perfect embodiment of a liquid free open market structure where you can design any amount of complexity into it and have assets, trade with each other, dont have to be dollar pairs trade, Bassili said. In the meantime, USDC provides a first step to developing that market structure.

Magazine: 6 Questions for Kim Hamilton Duffy of Centre

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Coinbase sees infinite interoperability potential with Ethereum and USDC - Cointelegraph

The United States Securities and Exchange Commission (SEC) has delayed its decision on Invesco Galaxys application for a spot Etherexchange-traded fund (ETF).

In a May 6 filing, the SEC gave itself another 60 days to decide on the Invesco Galaxy spot Ether (ETH) ETF, with the next deadline set to July 5.

The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein, the SEC wrote.

In recent months, the SEC has delayed decisions on applications from all eight prospective Ether ETF issuers, including BlackRock, Fidelity, Franklin Templeton, Hashdex and Ark 21Shares, in line with analyst expectations.

May 23 is the final deadline for VanEcks Ether ETF application and the only deadline that matters, said Bloomberg ETF analyst James Seyffart in a March 20 X post.

In March, senior Bloomberg ETF analyst Eric Balchunas downgraded his odds of the SEC approving the ETFs from 50% to 35%, as he was less convinced the regulator would approve VanEcks bid by the deadline.

Related: SEC will classify Ether as security, deny spot Ether ETFs Michael Saylor

Speaking to Cointelegraph on March 12, Balchunas looked to a prolonged period of radio silence from the SEC to prospective fund issuers, combined with increasing political pushback for SEC Chair Gary Gensler, as reasons for the decreasing likelihood of approval.

Seyffart said his cautiously optimistic attitude toward the pending Ether ETF applications had changed. As of March 20, he expects that all applications for an Ether ETF will ultimately be denied by the SEC on May 23.

Despite this consensus from ETF analysts, Ethereum advocate Anthony Sassano said he maintains conviction that the regulator could approve the funds by VanEcks final deadline.

Sassano looked to the agencys approval of Ether futures ETF products in 2023, citing a March 9 meeting between the regulator, crypto asset management firm Grayscale and crypto exchange Coinbase as further reasons why the SEC could still approve the applications.

Magazine: The real risks to Ethenas stablecoin model (are not the ones you think)

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SEC punts Invesco Galaxy spot Ethereum ETF decision to July - Cointelegraph

Crypto markets have recouped losses after last weeks crash, which saw Bitcoin fall as low as $56,000.

The renewed bullishness comes amid slowing job growth a possible sign of easing inflation and hopes of rate cuts later this year.

Today, the largest cryptocurrency is back trading at just above $65,000. The second-largest Ethereum is up 11% since its low last Wednesday.

Overall, the wider cryptocurrency market added some $200 billion, according to CoinGecko, since Federal Reserve Chair Jerome Powell spoke on May 1.

He signalled that a rate hike when the central bank raises interest rates and increases borrowing costs for banks and businesses would be unlikely.

Still, the coast is far from clear for the Federal Reserve to begin lowering interest rates soon, according to Noelle Acheson, author of the Crypto is Macro Now newsletter.

Interest rates in the United States have risen to record highs as the Federal Reserve combats rampant inflation stoked by the COVID-19 pandemic. High interest rates also increase the amount people earn on their bank holdings, another incentive to keep cash rather than spend it.

Rate hikes are thus less beneficial for stocks and riskier investments like cryptocurrencies, as seen in last weeks dramatic drop in Bitcoin and Ethereum.

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In the first quarter, economic growth in the US slowed to its lowest level in nearly two years. The deceleration was partly attributed to a moderation in consumer spending and a widening trade deficit, or when a country imports more goods than it exports.

When rates are higher, business loans become more expensive, which discourages owners from expanding or hiring. The ripple effects can slow the wider economy as well.

Recent employment data released Friday, for instance, revealed the slowest job growth in six months and lower than the average monthly gain over the last year.

High unemployment combined with inflation and slowed economic activity would spell even more trouble for Powell.

Powells key objective these days is to avoid stagflation, an economic climate in which the economy continues to face high inflation while in a recession.

According to crypto venture capital firm Ryze Labs, that situation looks less likely to occur.

With rate hikes off the table and markets already pricing in little to no cuts for 2024, we think this bodes constructively for risk assets, Ryze Labs analysts told DL News.

The worst of stagflationary headwinds might be behind us, they said.

Sebastian Sinclair is a markets correspondent for DL News. Have a tip? Contact Seb at sebastian@dlnews.com.

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Bitcoin and Ethereum bounce back after week of brutal losses here's why - DLNews