Bitcoin’s ambitious plan to purge non‑financial activity from its ledger through BIP‑110 collapsed into a short‑lived fork, while a Senate vote on the CLARITY Act is set to take place in September—an outcome that appears unlikely to succeed.
The BIP‑110 Soft Fork
Proponents of BIP‑110 aimed to eliminate spam transactions such as Ordinals by introducing a soft fork that would adjust the network’s rules. However, after a prolonged debate the proposal was deemed “dead on arrival.” With only 2.5 % of the community backing it before mandatory signaling began on Saturday, the fork split into a minority chain that produced just two blocks in an eight‑hour window before stalling.
The new chain offered no advantage: mining on it was as hard and costly as on the main Bitcoin network, yet miners had no mechanism to sell block rewards and recoup their expenses. Even if the chain had continued, the difficulty would have decreased only after an additional 2,014 blocks were mined.
Critics argued that BIP‑110 constituted censorship by banning certain types of transactions. Michael Saylor, the executive chairman of Strategy, said he shared the goal of reducing spam but contended that the method threatened Bitcoin’s neutral rules and consensus. Adam Back, CEO of Blockstream, warned that a consensus‑level change could damage Bitcoin’s credibility and render some unspent transaction outputs unusable. Bitcoin Core developer Murch followed up by proposing the removal of BIP‑110 backer Luke Dashjr from his role as a BIP Editor.
CLARITY Act in the Senate
Senator Tim Scott, chair of the Senate Banking Committee, announced on Thursday that a procedural vote on the CLARITY Act should occur before the August recess “without any question.” Senator Cynthia Lummis also expressed hope for a last‑minute vote, suggesting that senators might be compelled to compromise before the break.
However, Senate Majority Leader John Thune opted not to force the issue and instead set the cloture vote for September 15. “The Democrats are insistent on no CLARITY vote,” Thune told Cointelegraph, adding that he had worked with bill sponsors and that Lummis had been supportive, noting that they would address the matter first thing upon returning.
Crypto lobbyists now have until that date to secure the 60 votes required, negotiating on ethics rules, stablecoin yield issues, and developer protections in the BRCA. Whether the vote will be a genuine attempt to pass the legislation or simply a procedural step to get legislators on record before the mid‑term elections, as Lummis suggested, remains uncertain.
Bitcoin Security Audit Reveals Thousands of Vulnerabilities
A volunteer group called Bitcoin Red Team, comprising 16 members, reported finding nearly 5,000 potential issues during a rapid AI‑assisted review of Bitcoin ecosystem projects mid‑week. By the weekend, the count had risen to 7,958, including 168 critical flaws and 1,120 high‑severity problems.
The team, which includes Rob Hamilton of AnchorWatch and Bitcoin developer Calle, employs AI tools alongside human scrutiny to scan open‑source Bitcoin‑related repositories for vulnerabilities. Calle noted that the group averages roughly one critical exploit discovered per hour per person.
The audit was prompted by the Coldcard hardware wallet hacks, which Coinkite suggested resulted from an AI analysis of its source code. The attacks stole over $100 million from 7,300 wallets, stemming from a flaw in the random number generator used for seed phrases. This incident became the third largest crypto hack in 2026 and pushed July’s total thefts to $247 million.
The breach raised questions about the reliability of hardware wallets, prompting many Bitcoin users to consider rolling at least 100 manual dice rolls to generate their own seed phrases.
Ethereum Researchers Propose Sharper Validator Reward Cuts
Separately, a group of Ethereum researchers and developers has suggested adjusting the network’s issuance policy to reduce validator rewards more aggressively as the proportion of staked ETH increases.
Tapered Issuance Burn Draws DeFi Opposition
The “Tapered Issuance Burn” mechanism, also known as EIP‑8363, proposes to eliminate validator rewards once the share of ETH that is staked exceeds the 50 % threshold. At present, staking accounts for roughly 34 % of the total supply, with a sizable backlog of ETH waiting to join the pool. Critics warn that as the staked proportion climbs, the incremental security benefit will diminish while the reward cut becomes increasingly severe.
Despite presenting a logical case for the proposal, it has provoked a strong negative reaction from the decentralized‑finance sector. Mike Silagadze, founder of Ether.fi, warned that his platform would abandon staking altogether if the amendment were adopted. He emphasized that the change would make continued participation untenable for his protocol.
Spot Bitcoin ETFs Register Robust Inflows
Spot Bitcoin exchange‑traded funds recorded their third‑strongest weekly performance since October, signaling a resurgence of institutional interest. The funds attracted $853.54 million in new capital over the week—a figure five times larger than the total inflows recorded for the entire month of July and the most significant weekly influx since April. Ether‑based ETFs also saw notable demand, pulling in an additional $243.7 million.
Some market observers link the surge to the recent Coldcard security breach, which appears to have shifted institutional custodians toward exchange‑based storage solutions. Bloomberg ETF analyst Eric Balchunas hinted at a possible connection, while Binance co‑founder Changpeng “CZ” Zhao bluntly stated that, statistically, keeping assets on exchanges is safer than self‑custody.
Market Snapshot: Prices and Altcoin Movers
At the close of the reporting week, Bitcoin (BTC) rose 2 % to about $64,814, while Ethereum (ETH) gained 1.7 % to roughly $1,908. XRP, by contrast, slipped 5 % to $1.02. The aggregate market capitalization stood at $2.21 trillion, according to CoinMarketCap data.
Among the top‑100 cryptocurrencies, the week’s leading gainers were:
- Pump.fun (PUMP) – up 27.6 %
- LayerZero (ZRO) – up 17.6 %
- Curve DAO (CRV) – up 16.2 %
The biggest decliners were:
- Injective (INJ) – down 15.1 %
- Canton (CC) – down 13.8 %
- Cronos (CRO) – down 13.7 %
Nansen CEO Suggests Bitcoin May Have Reached Its Bottom
Alex Svanevik, founder and chief executive of analytics firm Nansen, posited that Bitcoin could be nearing a cycle low near the $60,000 level. “In my view, I don’t anticipate Bitcoin falling below $60,000 again,” he remarked, adding that this price range belongs to the past and may become a permanent floor. Svanevik’s stance rests on the belief that Bitcoin functions as a hedge against the expansion of central‑bank money supplies, and he expects the global monetary‑expansion cycle to persist for the foreseeable future.
Physical Attacks on Crypto Holders Accelerate
Chainalysis data indicate that more than $30 million was stolen through direct, violent assaults on cryptocurrency owners during the first half of 2026. If the trend continues, the year could eclipse the $58 million total recorded in 2025. The firm documented 46 “wrench attacks”—including kidnappings, home invasions and hostage situations—by late June, up from 40 incidents over the same period in the previous year. Only 12 of those attempts resulted in a successful payment, yielding a 26 % success rate, a decline from the 49 % observed in 2025.
ElizaOS Token Declared Defunct
ElizaOS experienced a 19 % drop in price over a single day, sinking to an all‑time low after its founder, Shaw Walters of Eliza Labs, announced that the token was effectively “dead” and that the Eliza Foundation would be wound down. Walters stated unequivocally, “The token is dead. Completely,” and confirmed that he no longer holds or backs the token.
The announcement marks a sharp reversal for a token that, under its former name AI16Z, reached a market‑cap peak of $2.5 billion in January 2025, according to CoinGecko. Walters added that development of the open‑source Eliza software will proceed independently of the token and the foundation.
Perpetual Futures Volume Slumps Across CEXs and DEXs
July saw crypto perpetual futures trading volume on centralized exchanges tumble to $4 trillion, the lowest level in 31 months. Binance retained its position as the top venue with $1.4 trillion in monthly volume, followed by OKX at $607 billion and Bybit at $300 billion, as reported by analytics platform CryptoRank.
On the decentralized side, perpetual futures turnover fell to $531 billion in July, the weakest figure since June 2025 and a 21 % decline from the $676 billion recorded in June 2026, according to data aggregator DefiLlama.
Coldcard Entropy Issue Sparks Hardware Wallet Concerns
A recent vulnerability discovered in the Coldcard wallet’s entropy generation has shaken confidence in the broader hardware wallet market. The flaw, which could potentially compromise the randomness used to create private keys, raised alarms among users of Ledger, Trezor, and the Foundation’s own hardware solutions. Analysts warn that any compromise of entropy could enable attackers to predict or duplicate keys, undermining the very security that hardware wallets are meant to provide. As a result, many holders are re‑evaluating their cold storage strategies and looking for additional safeguards, such as multi‑device redundancy or hardware that has undergone independent third‑party audits.
Tokenized Cows and Other On‑Chain Oddities
The blockchain ecosystem continues to host an eclectic mix of on‑chain assets. While tokenized cattle have recently captured the internet’s imagination, they are just one example of the diverse items now represented digitally. Earlier this year, the market saw a surge of unconventional tokens, ranging from farts to pieces of human skin, and even destroyed artworks. These quirky projects illustrate the creative, albeit sometimes perplexing, ways in which creators are exploring ownership and provenance on distributed ledgers.
Ethereum’s EIP‑8363: Balancing Supply Cuts with DeFi Risks
Ethereum’s latest proposal, EIP‑8363, seeks to overhaul the network’s staking reward structure in order to reduce overall issuance. Proponents argue that a smaller supply growth will help stabilize the token’s price and encourage long‑term holding. Critics, however, caution that the proposed changes could negatively impact DeFi protocols, decentralization, and institutional interest. They point out that a sharper reduction in rewards may disincentivize validators, potentially leading to lower network security and higher centralization. The debate continues as stakeholders weigh the benefits of a tighter supply against the potential costs to the ecosystem’s broader functionality.
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