Welcome to The Protocol, CoinDesk’s weekly summary of key developments in cryptocurrency technology. We’re Margaux Nijkerk & Jamie Crawley, journalists at CoinDesk.
In this edition:
- Nasdaq-Listed SoFi Adopts Bitcoin Lightning for Remittances
- Bitcoin DeFi Project Joins Solana with BTC-Backed Token YBTC
- Valantis Acquires stHYPE, Enhancing Liquid Staking Capabilities on Hyperliquid
- Hyperbeat Secures $5.2M Funding from ether.Fi, Electric Capital
Network News
SOFI ADOPTS BITCOIN LIGHTNING FOR REMITTANCES: SoFi Technologies is set to introduce remittance payments leveraging the Bitcoin layer-2 Lightning Network via a collaboration with Lightspark, with the aim of offering real-time international money transfers to its users. SoFi’s remittance service, expected to be launched later this year, will permit users to send U.S. dollars through the SoFi app while enabling recipients to receive local currency deposits abroad, utilizing Lightspark’s Universal Money Address (UMA). Lightspark’s UMA provides access to a speedy, scalable global payment infrastructure. Transfers will display upfront exchange rates and fees, tackling long-standing issues in traditional remittance services. This launch follows SoFi’s return to the crypto sector, after pausing services in 2023 during its transition to becoming a national bank. Earlier this year, it announced plans to offer international remittances via blockchain and stablecoins and to allow users to invest in cryptocurrencies. — Jamie Crawley Read more.
BITLAYER ENTERS SOLANA WITH YBTC: Bitcoin DeFi initiative Bitlayer has partnered with Kamino Finance and Orca to introduce its bitcoin-backed token, YBTC, to the Solana ecosystem. This collaboration aims to combine Bitlayer’s security with Solana’s efficiency and scalability, aligning with Bitlayer’s vision of broadening the Bitcoin DeFi space. It will afford bitcoin holders native BTC exposure and yield opportunities, as stated by Charlie Hu, co-founder of Bitlayer. YBTC, pegged 1:1 with BTC, is central to Bitlayer’s BitVM bridge, which facilitates trust-minimized bitcoin transfers by removing centralized intermediaries. The token directly represents users’ locked BTC within the Bitlayer ecosystem, promoting seamless interoperability between Bitcoin and decentralized finance applications. By holding YBTC, Solana users can optimize yields through Kamino’s high-grade earn vaults, which offer auto-compounding and favorable BTC-denominated returns, enhancing asset growth effortlessly. — Omkar Godbole Read more.
VALANTIS ACQUIRES stHYPE: Valantis, a decentralized exchange (DEX) protocol, has acquired Staked Hype (stHYPE), the second-largest liquid staking token (LST) on Hyperliquid. Financial details of the acquisition remain undisclosed. stHYPE, which debuted as the first LST on HyperEVM, currently manages approximately $180 million in total value locked (TVL), according to the stHYPE website. Following the deal, stHYPE’s operations, development, and scaling will be directed by Valantis Labs. Addison Spiegel, founder of Thunderhead, the team behind stHYPE, will act as an advisor to Valantis. Liquid staking has emerged as a key component within Hyperliquid’s ecosystem. According to DeFiLlama, liquid staking constitutes over half of Hyperliquid L1’s $2.26 billion in DeFi TVL. This acquisition builds upon Valantis’ prior introduction of LST-specific DEX pools for both stHYPE and hHYPE, collectively attracting nearly $70 million in TVL and processing over $500 million in trading volume. — Oliver Knight Read more.
HYPERBEAT SECURES $5.2M IN SEED FUNDING: Hyperbeat, a protocol supporting yield infrastructure on the Hyperliquid decentralized exchange, has finalized a $5.2 million oversubscribed seed funding round co-led by ether.fi Ventures and Electric Capital. The funding will be allocated to developing their yield infrastructure for traders, protocols, and institutions engaged in the Hyperliquid ecosystem. The round also saw contributions from Coinbase Ventures, Chapter One, Selini, Maelstrom, Anchorage Digital, and community supporters through the HyperCollective. Hyperbeat functions as the native yield layer for Hyperliquid, creating permissionless financial infrastructure that enables individuals to earn, stake, and spend directly from their on-chain portfolios. It unlocks yield generated from Hyperliquid’s funding rates—previously available only to sophisticated market participants—and packages it into easy-to-use, tokenized vaults. The announcement of the seed raise occurs as Hyperliquid’s total value locked surpasses $2.1 billion, coinciding with increasing institutional interest in its ecosystem. — Margaux Nijkerk Read more.
In Other News
- SkyBridge Capital, led by Anthony Scaramucci, is set to tokenize $300 million worth of its hedge fund assets on the Avalanche network. The firm intends to transition its Digital Macro Master Fund and Legion Strategies on-chain in collaboration with tokenization provider Tokeny and its parent, Apex Group, which manages over $3.5 trillion in assets, according to the press release shared with CoinDesk. Apex acquired Tokeny earlier this year. The initiative utilizes the ERC-3643 token standard with operational support from Apex’s Digital 3.0 platform, managing issuance, administration, and distribution. — Kristzian Sandor Read more.
- Thumzup Media, with Donald Trump Jr. as a significant shareholder, announced plans to acquire Dogehash Technologies, Inc. in an all-stock transaction, shifting focus from digital marketing to large-scale crypto mining. Under the agreement, Dogehash shareholders will receive 30.7 million Thumzup shares, according to a Tuesday release, valuing the transaction at $153.8 million based on the shares’ closing price. The unified company will rebrand as Dogehash Technologies Holdings, Inc. and list on Nasdaq under the ticker XDOG, subject to shareholder approval later this year. The company also plans to utilize Dogecoin’s DogeOS layer 2 for staking in DeFi products, aiming to enhance miner returns beyond standard rewards. — Sam Reynolds Read more.
Regulatory and Policy
- The cryptocurrency sector is mounting a response against Wall Street bankers’ push to alter the U.S. stablecoin law, asserting that efforts to retract key provisions of the GENIUS Act would favor traditional banks. In a letter to Senate Banking Committee leaders dated Aug. 19, the Crypto Council for Innovation and the Blockchain Association urged lawmakers to reject proposals from the American Bankers Association, Bank Policy Institute, and state banking entities that requested the removal of Section 16(d) of the law and a ban on yield programs provided by affiliates of stablecoin issuers. Section 16(d) permits subsidiaries of state-chartered institutions to engage in money transmission across state lines to support stablecoin issuer activities, ensuring holders can redeem their tokens nationwide without needing additional state licenses. Banking groups cautioned earlier this month that allowing state-chartered, uninsured institutions to issue stablecoins and operate nationwide would constitute regulatory arbitrage, evading state licensing protocols. — Sam Reynolds Read More
- The U.S. Federal Reserve’s newly appointed vice chair overseeing Wall Street banking, Michelle Bowman, delivered a speech on cryptocurrency on Tuesday that echoed sentiments from industry advocates, suggesting that banks should support the digital assets movement and that the Fed should establish regulations that won’t inhibit crypto growth. During the Wyoming Blockchain Symposium, Bowman cautioned banks that resist the transition to crypto “will occupy a diminished position in the financial ecosystem at large,” emphasizing a shift in crypto attitudes among U.S. banking regulators. “Your sector has faced significant challenges due to unclear standards, conflicting guidance, and inconsistent regulatory interpretations,” she stated. “We require a clear, strategic regulatory framework that will facilitate the integration of new technologies, acknowledging that in some cases applying existing regulatory guidance may be inadequate or inappropriate for addressing emerging technologies.” — Jesse Hamilton Read more.
Calendar
- Sept. 22-28: Korea Blockchain Week, Seoul
- Oct. 1-2: Token2049, Singapore
- Oct. 13-15: Digital Asset Summit, London
- Oct. 16-17: European Blockchain Convention, Barcelona
- Nov. 17-22: Devconnect, Buenos Aires
- Dec. 11-13: Solana Breakpoint, Abu Dhabi
- Feb. 10-12, 2026: Consensus, Hong Kong
- May 5-7, 2026: Consensus, Miami
