# Blood Before Christmas

*Author: David Christopher*
*Published: Dec 20, 2024*
*Source: https://www.bankless.com/blood-before-christmas*

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### 1️⃣ Bitcoin’s Tough Week
After reaching all-time highs of ~$108K, Bitcoin hit a wall on Wednesday as hawkish sentiment from Fed Chair Jerome Powell sent it as low as ~$93K on Friday before recovering slightly. As a result, the market will be much more cautious through the end of the year, at least. 

This pain didn’t just hit crypto, though. The stock market also dropped, seeing its [worst day since 2022](https://www.nytimes.com/2024/12/18/business/stock-market-fed-rate-cut-forecast.html). While pullbacks like these prove typical of all bull markets, the road going forward looks to be favoring conservative approaches for the foreseeable future. As a parting note, remember to watch the tokens that remain green on the week or even on the day to gauge where [strength remains in the market.](https://www.coingecko.com/)

> mr powell stole my christmasI will never forgive him!— gum (@0xGumshoe) [December 19, 2024](https://twitter.com/0xGumshoe/status/1869802605503021410?ref_src=twsrc%5Etfw)

### 2️⃣ Deutsche Bank Launching an L2
Deutsche Bank has taken its next step into blockchain with the launch of Project Dama 2, an L2 [built on ZKsync](https://www.bankless.com/read/deutsche-bank-unveils-zksync-based-layer-2). Developed in collaboration with Memento Blockchain and Interop Labs, Dama 2 uses ZKsync for enhanced scalability and privacy, while [Axelar ensures interoperability](https://www.db.com/news/detail/20240514-deutsche-bank-joins-project-guardian-to-explore-asset-tokenization-applications) with Ethereum and other chains. 

Dama 2 is part of Singapore’s Project Guardian, a multi-institutional initiative exploring asset tokenization in regulated financial markets. Deutsche Bank plans to launch a minimum viable product next year, pending regulatory approval, of course.

> 🇩🇪 NEW: German financial giant Deutsche Bank is launching its own Layer 2 network based on ZKsync technology. [pic.twitter.com/ukNcLOjiiR](https://t.co/ukNcLOjiiR)— Cointelegraph (@Cointelegraph) [December 18, 2024](https://twitter.com/Cointelegraph/status/1869377874140012620?ref_src=twsrc%5Etfw)

### 

### 3️⃣ Ethena Launches USDtb and Partners with WLFI
Ethena had a huge week, starting with the [multi-chain launch of USDtb](https://x.com/ethena_labs/status/1868657723799470361), its BlackRock BUIDL-backed stablecoin. USDtb complements the USDe stablecoin, offering a different risk profile with 90% of reserves in cash equivalents allocated to BUIDL. 

Further, in times of poor funding, Ethena can vote on switching the backing of USDe from its delta-neutral strategy to USDtb. Newly launched [stablecoin protocol Usua](https://x.com/ethena_labs/status/1869367144695378302)l also announced they would integrate USDtb, adding to the momentum of its launch. Alongside this launch, Ethena announced a strategic partnership with [Trump-backed World Liberty Financial](https://x.com/worldlibertyfi/status/1869454093015760977) (WLFI), adding color to WLFI’s buys of ENA these past few weeks. As part of the collaboration, WLFI governance will vote on implementing Ethena's USDe as collateral for its upcoming Aave instance to leverage Ethena's large TVL and user base. 

> There is no need to be upset [pic.twitter.com/LWUi2zB0N1](https://t.co/LWUi2zB0N1)— Ethena Labs (@ethena_labs) [December 19, 2024](https://twitter.com/ethena_labs/status/1869786918424326524?ref_src=twsrc%5Etfw)

### 4️⃣ Polygon Faces Community Backlash Over Yield Proposal
Polygon ran aground this week after significant pushback from its community over a controversial proposal to deploy [$1.3B in stablecoins](https://www.bankless.com/read/polygon-faces-proposal-pushback-and-aave-fallout) from chain bridge funds into curated lending pools. Critics cited security risks and a lack of opt-in mechanisms for impacted users. 

The tension escalated when Aave’s leadership proposed phasing out Aave protocols on Polygon, citing security concerns tied to the proposal. Polygon countered with accusations of monopolistic motives, which Aave quickly refuted. The proposal comes as Polygon grapples with declining transaction metrics and active account numbers. 

> My thoughts on the Polygon bridge funds investment proposal:1. The Polygon team (with the help of their friends) created a proposal to take users' funds from the Polygon bridge and invest them into DeFi without sufficient risk protection. Behind closed doors, they selected the…— Stani (@StaniKulechov) [December 18, 2024](https://twitter.com/StaniKulechov/status/1869182600008679563?ref_src=twsrc%5Etfw)

### 5️⃣ Discussions Heat Up Around a Bitcoin Strategic Reserve
Despite recent BTC price action, Bitcoin Strategic Reserve conversations showed promise this week as President-elect Donald Trump reaffirmed his commitment to the initiative, meeting with [Crypto.com CEO Kris Marszalek](http://crypto.com/) at Mar-a-Lago to discuss plans for its establishment. Meanwhile, in Texas, Representative Giovanni Capriglione introduced a bill to create a state-level Bitcoin reserve, with Ohio following suit as [Representative Derek Merrin](https://x.com/DerekMerrin/status/1869134602390122545) filed a bill to add BTC to the state’s treasury. 

However, Fed Chair Jerome Powell reiterated that the Federal Reserve has no plans to hold Bitcoin, which was no surprise. Further, the [initiative’s long-time champion](https://x.com/SenLummis/status/1869109159045771352), Sen. Lummis, also met with incoming crypto czar David Sacks to discuss implementation. Despite these signals, the odds for the reserve *actually* materializing remain at [~35% on Polymarket](https://polymarket.com/event/will-trump-create-a-national-bitcoin-reserve-in-his-first-100-days?tid=1734629034304).

[![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXfDDgHxEAaw2Lj4axSZ0RTLEgs2Yy4SwA237c9r2_eCztBu4P9QrPsLcqHPUHPjhvZSdFKMW1_hWBmQ0zomKM-8PGO4WNoPdZq8y9br_O09f4atItKFdUADzWuWZxuMG5GB5ZC3UQ?key=CoESxB4xZRCQavtIXjQaPEDH)](https://polymarket.com/event/will-trump-create-a-national-bitcoin-reserve-in-his-first-100-days?tid=1734629034304)