Welcome to The Protocol, CoinDesk’s weekly wrap of a very powerful tales in cryptocurrency tech growth. I’m Margaux Nijkerk, a reporter at CoinDesk.
On this problem:
- Stripe-Backed Blockchain Tempo Begins Testnet; Kalshi, Mastercard, UBS Added as Companions
- ZKsync Lite to Shut Down in 2026 as Matter Labs Strikes On
- Blockstream Connects Lightning and Liquid for Quicker, Personal Bitcoin Funds
- Axelar Unveils AgentFlux to Carry AI Brokers Onchain, With out Cloud Dangers
Community Information
STRIPE’S TEMPO TESTNET GOES LIVE: Tempo, a payments-focused blockchain backed by Stripe and crypto funding agency Paradigm, launched its public testnet, a key step in its effort in making stablecoin funds for mainstream use. Tempo additionally unveiled a roster of additives to the community’s accomplice group, together with buy-now-pay-later agency Klarna, predictions market Kalshi, funds big Mastercard and Swiss world financial institution UBS. They be part of a gaggle of earlier design companions corresponding to Deutsche Financial institution, Visa, Shopify, OpenAI and Nubank. Initially launched in September, Tempo is designed to deal with high-volume monetary transactions with low charges, immediate finality and native assist for stablecoins. Now the testnet is dwell, builders and company companions can start experimenting with real-world funds onchain. The transfer suits into the newest pattern of constructing blockchains for stablecoin funds as adoption of digital {dollars} soars globally. At the moment a $300 billion asset class, stablecoins are projected to change into an integral a part of cross-border fee rails with business-to-business (B2B), peer-to-peer (P2P) and card funds driving development, a latest report by Keyrock and Bitso stated. Tempo goals to resolve frequent ache factors in blockchain-based finance like community congestion and unstable transaction charges. The community expenses round one-tenth of a cent per transaction, payable in U.S. dollar-denominated stablecoins and eliminating the necessity for a unstable gasoline token. — Krisztian Sandor Learn extra.
ZKSYNC LITE TO SUNSET IN 2026: Matter Labs plans to deprecate ZKsync Lite, the primary iteration of its Ethereum layer-2 community, the crew stated in a put up on X over the weekend. The corporate framed the transfer, occurring in early 2026, as a deliberate sundown for an early proof-of-concept that helped validate their zero-knowledge rollup design selections earlier than newer methods went dwell. ZKsync Lite, which debuted in 2020, was constructed for primary token transfers, and took a again seat after builders launched ZKsync Period in March 2023, a extra superior zkEVM rollup, which now anchors the venture’s broader ZK Stack roadmap. The Lite community will proceed working for now, with funds remaining protected and withdrawals to Ethereum mainnet nonetheless out there, the crew stated. An in depth migration plan and timetable for the shutdown will likely be printed subsequent yr. — Margaux Nijkerk Learn extra.
BLOCKSTREAM APP INTRODUCES LIGHTNING ATOMIC SWAPS: Blockstream has rolled out an replace to its cell app that permits customers to swap between Bitcoin’s Lightning and Liquid networks, aiming to decrease the entry barrier for personal, quick bitcoin funds. A contemporary model of the Blockstream Inexperienced app introduces assist for trustless atomic swaps between Lightning and Liquid. The change lets customers pay Lightning invoices straight from their Liquid bitcoin (LBTC) balances, avoiding the necessity to handle Lightning channels or preserve inbound liquidity, a course of that may be technically difficult for a lot of. Lightning is designed for fast, low-fee bitcoin funds. Liquid, against this, is a sidechain that gives confidential transactions and simpler administration of unspent bitcoin outputs (UTXOs). By linking the 2 networks by means of atomic swaps, Blockstream is making an attempt to offer customers the advantages of each with out requiring deep technical involvement. The swap course of occurs self-custodially and depends on cryptographic hash locks, making certain that each side of the transaction are accomplished or neither is. If one thing fails, funds return robotically to the unique pockets. — Helene Braun Learn extra.
AXELAR UNVEILS NEW PRIVACY AI FRAMEWORK: Axelar unveiled AgentFlux, an open-source framework designed to run AI brokers regionally whereas conserving personal keys, buying and selling methods and consumer knowledge off the cloud — a pitch aimed squarely at establishments exploring onchain finance and cautious of privateness dangers. Developed by Interop Labs, the crew behind the Axelar community, AgentFlux lets monetary companies deploy “agentic” automation with out sending delicate info to exterior infrastructure, the corporate introduced. The framework tackles one of many largest frictions in AI-driven crypto operations: tool-calling. Most brokers as we speak depend on cloud-based fashions to determine which blockchain instruments to invoke and find out how to construction transactions, which might unintentionally expose the very info establishments search to guard. AgentFlux splits these duties into two smaller, specialised fashions — one for selecting the correct device, and one other for producing the arguments to execute. In accordance with the crew behind Axelar, this setup improves tool-calling accuracy by 46% on benchmark checks, bringing native fashions nearer to the efficiency of bigger cloud methods. – Margaux Nijkerk Learn extra.
In Different Information
- Superstate, a blockchain-focused monetary expertise agency, rolled out a brand new platform that permits U.S. Securities and Trade Fee (SEC)-registered public firms to problem shares straight onchain to traders on Ethereum. Referred to as the Direct Issuance Program, Superstate’s new initiative permits firms to lift capital by promoting newly issued, tokenized fairness in alternate for stablecoins. Traders obtain the tokenized shares instantly, and the corporate’s shareholder information are up to date in actual time through Superstate’s SEC-registered switch agent infrastructure. First issuers are anticipated to go dwell subsequent yr, the agency stated. The transfer comes as tokenization is gaining traction with monetary establishments and different companies exploring blockchain rails for effectivity good points. In an interview final week, SEC Chairman Paul Atkins stated tokenization might “reshape the monetary system” over the subsequent few years, underscoring how regulators are opening the door to blockchain as a part of the subsequent era of market infrastructure. — Krisztian Sandor Learn extra.
- BitMine Immersion Applied sciences (BMNR), the Ethereum-focused digital asset treasury agency, acquired 138,452 ether final week, accelerating an accumulation technique that lifted its whole holdings to three.86 million tokens, the corporate reported. At present ETH costs, final week’s acquisition is price roughly $435 million. That is a 156% improve from 4 weeks in the past when it added about 54,000 ETH, the agency identified, and it is also increased than the earlier two weeks’ haul of 97,000 and 70,000 tokens. The agency additionally elevated its money holdings to $1 billion, up from the earlier week’s $882 million. Together with a small bitcoin stash and a stake in Eightco Holdings (ORBS), the corporate’s whole crypto and money property are price $13.2 billion. The most recent buy will increase BitMine’s share of the second largest cryptocurrency’s circulating provide to over 3.2%, reinforcing its place as the biggest identified ETH treasury. — Krisztian Sandor Learn extra.
Regulatory and Coverage
- A Republican U.S. senator on the heart of talks over the crypto market construction invoice that is the trade’s prime coverage precedence, Senator Cynthia Lummis, stated the White Home resisted ethics language she hashed out with Democrats. That is left the Wyoming lawmaker as a go-between making an attempt to fulfill Democratic colleagues within the bipartisan talks whereas convincing the White Home to return alongside, she stated on the Blockchain Affiliation’s coverage summit in Washington. Nonetheless, she thinks the negotiators ought to reveal their working draft by the tip of the week and formally mark it up subsequent week. Lummis stated that she and Democratic Senator Ruben Gallego had provide you with some language on ethics. Whereas she wasn’t express about particulars, one of many sticking factors for Democrats has been their demand that prime authorities officers should not be allowed to revenue from the trade over which they maintain coverage authority — pointedly aimed largely at President Donald Trump and his household’s crypto companies. — Jesse Hamilton Learn extra.
- The U.S.’ second-largest instructor’s union urged the Senate to rethink a crypto invoice it says places 1.8 million members’ pensions in danger, whereas doing little or no to struggle fraud and corruption within the digital property sector. In a letter dated Dec. 8 obtained by CNBC, Randi Weingarten, president of the American Federation of Academics (AFT), addressed the U.S. Senate Banking Committee over the Accountable Monetary Innovation Act, saying, “it poses profound dangers to the pensions of working households and the general stability of the financial system”. The proposal, which builds on a measure the Home handed earlier this yr, is co-sponsored by crypto ally Senator Cynthia Lummis and Senator Bernie Moreno , together with Senate Banking Committee Chair Tim Scott. Whereas the invoice lays out a framework for overseeing digital property, it additionally raises contemporary questions on how tokenized securities, devices that aren’t strictly cryptocurrencies, can be handled by regulators. “The laws on crypto we’ve got seen weighed by the committee over the previous few months provides us deep concern,” Weingarten wrote. “It’s as irresponsible as it’s reckless. We consider that if enacted, this invoice has the potential to put the groundwork for the subsequent monetary disaster … Past the menace to the retirement safety of working households, the laws being thought of by the committee does little to curb the criminality, fraud and corruption that continues to be prevalent in nameless crypto markets,” he wrote. — Olivier Acuna Learn extra.
Calendar
- Dec. 11-13: Solana Breakpoint, Abu Dhabi
- Feb. 10-12, 2026: Consensus, Hong Kong
- Feb. 17-21, 2026: EthDenver, Denver
- Mar. 30-Apr. 2, 2026: EthCC, Cannes
- Apr.15-16, 2026: Paris Blockchain Week, Paris
- Might 5-7, 2026: Consensus, Miami
