• Meta begins testing Ethereum NFTs.

• Sepolia merge testnet upgrade.

• BlockFi signs an acquisition deal with FTX.

• 3AC files for Chapter 15 bankruptcy.

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According to a Meta representative, Facebook began rolling out NFT support for certain U.S. creators. Earlier this week, Navdeep Singh, a Product Manager at Meta, tweeted a sneak peek of the implementation. The sneak peek showed NFTs under a new “digital collectibles” tab on a user’s Facebook profile. Users will be able to connect a crypto wallet to their Facebook profile and post NFTs to their timeline. Meta plans to support NFTs on Ethereum, Polygon, Solana, and Flow. Meta is also implementing NFT display options within Instagram’s AR feature. Users will also be able to display 2D NFTs that they own using mobile AR.

Ethereum’s Sepolia Testnet is set to transition to PoS when Terminal Total Difficulty (TTD), the total difficulty on the PoW chain, hits 17,000,000,000,000,000. Upgrading to The Merge occurs in two phases. The first phase, known as Bellatrix, occurs when the Beacon Chain reaches a certain epoch height. Sepolia already ran through the Bellatrix upgrade on June 20th. The second phase occurs when the PoW chain hits a TTD value on the execution layer. At the current hash rate, Sepolia will hit the target TTD on July 6th. Sepolia will be the second of three public testnets to merge. Ropsten successfully ran through the merge on June 8th. Goerli will follow the same process at a later date. Once Goerli and Prater have stabilized, an epoch and a TTD value will be chosen for The Merge on Ethereum Mainnet.

BlockFi CEO Zac Prince revealed that the company lost close to $80 million from a $1 billion overcollateralized loan provided to 3AC. The loan was partially collateralized by GBTC, which depegged by more than 30%. BlockFi was forced to liquidate GBTC at a loss. Prince said the losses will be absorbed by BlockFi with no impact to client funds. He also revealed the company signed a stock purchase agreement with FTX. As part of the deal, BlockFi will receive a $400 million revolving credit line subordinate to all client funds. This means the loan must first be used to fulfill obligations to clients before it can be used for other operations. FTX also has the option to acquire BlockFi at a variable price of up to $240M based on performance triggers. The new deal values BlockFi at a maximum of $680 million, nearly a 90% drop in value compared to its peak valuation of $4.8 billion.

According to Bloomberg, 3AC has filed for Chapter 15 Bankruptcy to protect its U.S. assets. This comes after the firm was ordered by a court in the British Virgin Islands to liquidate its assets. 3AC is currently in default on a $646 million loan from crypto platform Voyager Digital. Voyager Digital has since suspended trading and withdrawals for its users citing the unpaid loans. FTX, Deribit, and BlockFi are among the firms to have liquidated their positions in 3AC. Under Chapter 15 bankruptcy, foreign companies are provided with a mechanism for dealing with U.S. assets while their insolvency proceeds in their home country.

Ramp Network, a fiat on-and-off ramp has added support for ETH on Optimism. Users can now onboard to Optimism by credit card, bank transfer, or Apple Pay. Onboarding via a gateway is among the lowest-cost options because it removes the need to bridge.

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• Ethereum activates Gray Glacier upgrade.

• OpenSea suffers an email data leak.

• Arbitrum pauses Odyssey campaign.

• Ankr suffers a DNS hijack.

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Ethereum successfully underwent the Gray Glacier upgrade on June 30th at block 15,050,000. The upgrade pushed back the Ice Age Difficulty Bomb by 700,000 blocks or roughly 100 days. The difficulty bomb is a mechanism intended to make PoW mining much more difficult and unprofitable as the network shifts to PoS. This type of upgrade has also been done in the Byzantium, Constantinople, Muir Glacier, London, and Arrow Glacier network upgrades. Since Ropsten has already transitioned to PoS, the difficulty bomb only affects Ethereum Mainnet. Gray Glacier will mark the last hard fork on Ethereum before the merge, so long as the merge goes live within the next 100 days.

OpenSea notified users of a data breach affecting user email addresses. An employee at Customer.io, an email vendor used by OpenSea, misused their access to download and share email addresses with an unauthorized third party. The breach affected newsletter subscribers as well as anyone who provided an email address in their account. The marketplace advises anyone who has shared their email with OpenSea in the past to assume they were impacted. Users should be highly cautious of phishing attempts and are advised to never download anything from an OpenSea email.

Arbitrum announced the pause of its Odyssey campaign, an eight-week program that rewards users with NFTs for using various protocols on the network. The pause came as heavy traffic led to higher-than-expected gas fees. At one point, token swap gas fees on Arbitrum surpassed Ethereum. The issue was tied to capacity throttling, causing increasing gas prices during traffic surges. The Odyssey program will be resumed after the release of Arbitrum Nitro, a new prover that is expected to increase network capacity and reduce transaction fees. Nitro can run Arbitrum’s classic interactive fraud proofs over WASM code. Aribitrum did not specify a timeline for the release.

Web 3 infrastructure provider Ankr suffered a DNS hijack affecting its public Polygon RPC (polygon-rpc.com) and its public Fantom RPC (rpc.ftm.tools). Remote Procedure Call (RPC) endpoints are software communication protocols that allow applications to send transactions to Ethereum. Affected users received a false RPC error asking them to urgently reset their seed on a phishing website. Ankr's DNS hijack was caused by a breach at their domain hosting provider gandi.net. An attacker was able to persuade an employee at gandi.net to change the email address associated with Ankr’s account. Ankr has since restored the public endpoints. Polygon is working with Ankr to investigate the incident

According to CNBC, three sources familiar with the situation claim that FTX is close to finalizing a term sheet to buy BlockFi for just $25 million. The deal would drop BlockFi’s valuation by 99% from its last valuation of $4.8 billion in June of last year. BlockFi CEO Zac Prince has since tweeted in response to the matter, stating “I can 100% confirm that we aren’t being sold for $25M.“ This comes a week after FTX provided a $250 million emergency line of credit to the company. BlockFi had also liquidated a $1 billion loan provided to 3AC. The loan was collateralized by BTC and GBTC, but BlockFi reportedly struggled to liquidate GBTC amid a significant depeg of the asset.

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