The Daily: Dogecoin's ETF debut, 'Solana season' brewing, Ethereum validator exits, and more

The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

Happy Wednesday! U.S. PPI came in below expectations at 2.6% for August year-over-year — helping to spur a rebound in crypto prices. A similar surprise in tomorrow's CPI data could provide a further bullish catalyst, while a hot read could easily reverse the gains.

In today's newsletter, the first U.S. Dogecoin ETF is expected to debut on Thursday, Bitwise sees an "epic" year-end rally ahead for Solana, Kiln exits its Ethereum validators as a safety precaution, and more.

Meanwhile, Binance.US cuts fees as trading volumes remain abysmal.

Let's get started.

P.S. Don't forget to check out The Funding, a biweekly rundown of crypto VC trends. It's a great read — and just like The Daily, it's free to subscribe!

Dogecoin's ETF debut

REX Shares and Osprey Funds are expected to launch the first U.S. Dogecoin ETF under the ticker DOJE on Thursday via the alternative Investment Company Act of 1940 route.

• DOJE follows the same regulatory workaround the issuers used for their Solana staking ETF, SSK, structuring the product through a Cayman Islands subsidiary to gain exposure to DOGE.
• DOJE isn't a standard spot ETF under the Securities Act of 1933, like the Bitcoin and Ethereum funds, but it will still hold Dogecoin directly via the subsidiary while using derivatives or other instruments to meet diversification rules.
• "Memecoin ETF era about to kick off it with DOJE slated for a Thursday launch, albeit under the '40 Act," Bloomberg Senior ETF Analyst Eric Balchunas said on X. "Pretty sure this is first-ever U.S. ETF to hold something that has no utility on purpose."
• Meanwhile, the SEC delayed Bitwise's '33 Act spot Dogecoin ETF proposal again on Tuesday, citing a need for more time to review the rule change.
• New SEC Chair Paul Atkins has signaled a friendlier stance toward digital assets, though nearly 100 spot crypto ETF filings remain pending.

Bitwise CIO sees 'Solana season' brewing on ETF approvals and corporate treasury buys

Bitwise CIO Matt Hougan said spot ETF approvals and corporate treasury purchases could usher in "Solana season," producing an "epic" end-of-year run for SOL similar to BTC's and ETH's surges under the same recipe.

• Several issuers, including Bitwise, await the SEC's decisions on their spot Solana ETF filings by Oct. 10, potentially setting up multiple launches in Q4, Hougan said, boosting institutional flows.
• Meanwhile, Galaxy Digital, Jump Crypto, and Multicoin Capital pledged $1.65 billion this week to Forward Industries, a new publicly traded Solana treasury company that will buy and stake SOL, adding to other corporate accumulators of the cryptocurrency.
• With Solana's $119 billion market cap representing just 5% of Bitcoin and 23% of Ethereum, relatively small inflows could have an outsized price impact in the months ahead, Hougan said.

Kiln exits Ethereum validators in safety move after SwissBorg's $40 million hack

Crypto staking platform Kiln began an orderly exit of all its Ethereum validators on Wednesday as a safety precaution after hackers exploited its API via SwissBorg on Monday, leading to $40 million in Solana losses.

• The exit process will take 10 to 42 days, during which staking rewards will continue to accrue, and withdrawals may take up to nine days.
• Kiln stressed that no additional funds were compromised beyond the SwissBorg exploit, assuring clients that their assets remain secure, temporarily suspending access to certain services while strengthening its infrastructure security.
• SwissBorg promised substantial user reimbursement from its treasury and is working with white-hat hackers to help recover the stolen funds.

Consensys' Ethereum Layer 2 Linea launches TGE and airdrop after brief outage

The Consensys-incubated Ethereum Layer 2 Linea launched its token generation event on Wednesday, opening a 90-day claims window for a 9.36 billion LINEA airdrop.

• The distribution sets aside 85% of the supply to support the ecosystem, overseen by the Linea Consortium of projects, including Consensys, Eigen Labs, ENS, SharpLink, and Status.
• No tokens are allocated to team members or VCs, though Consensys holds the remaining 15% under a five-year lockup.
• Linea has also introduced a dual burn fee model where 20% of ETH fees are burned and 80% go to buy and burn LINEA, aiming to create deflationary pressure on the token.
• Linea resumed block production ahead of the TGE after an outage affecting its mainnet sequencer resulted in temporary downtime for the network earlier in the day.

Paxos pitches PayPal, Venmo rails in bid to issue Hyperliquid USDH stablecoin

Paxos pitched a PayPal and Venmo integration in an updated proposal to issue Hyperliquid's USDH stablecoin, with PayPal committing $20 million in incentives as well as adding HYPE listings and on/off-ramps.

• Paxos also proposed an updated rewards system reinvesting USDH revenue in growth and Hyperliquid's Assistance Fund until the stablecoin's TVL hits $1 billion, capping Paxos' revenue share at 5%.
• Paxos faces rival bids from Frax, an Agora–Rain–LayerZero coalition, Ethena, and Sky as Hyperliquid validators prepare to vote on their preferred USDH issuer starting Sept. 14.

In the next 24 hours

• The ECB's latest interest rate decision is due at 8:15 a.m. ET on Thursday. U.S. jobless claims data follows at 8:30 a.m. alongside fresh CPI inflation numbers. Est. MoM 0.3%; Core 0.3%. Est. YoY 2.9%; Core 3.1%.
• ECB President Christine Lagarde will speak at 10:15 a.m.
• Aptos is set for a token unlock.
• Vienna Blockchain Week and Boston Blockchain Week continue.

Never miss a beat with The Block's daily digest of the most influential events happening across the digital asset ecosystem.