In a not-too-distant future Detroit, Officer Alex Murphy is brutally gunned down by a cold-blooded gang leader. From Murphy’s destroyed body, a new hero arises. Murphy is rebuilt into… Robocop.

Now, Robocop was ready to dish out some hardline justice to the criminals of future Detroit. But don’t you think it’s time that crypto had its own protector? Maybe one that was equally effective but significantly less lethal?

Well, a protector has arisen in the form of ERC-7512, a new on-chain stand.

And while ERC-7512 may sound like a destroyer droid, it has only one mission: to defend crypto.

Espresso Shots

☕️ Is Binance Pushing Bitcoin?

As Bitcoin prepares to break through the $28,000 mark, analysts believe Binance’s legal battle with the SEC may be the driving force.

The SEC is currently suing Binance.US for commingling customer funds and noncompliance in the supposedly American-compliant branch of the exchange.

But the case took a surprising turn on September 18, when the presiding judge refused the SEC’s request for access to Binance’s software.

The Judge argued that the SEC’s request was not specific enough to warrant access, scheduling a follow-up hearing for October 12.

But even this partial setback for the SEC’s case was considered a win for crypto, as Bitcoin’s price rallied accordingly.

If you think this is a price bump, you should see what happens to the crypto market when Gary Gensler stumbles up the courthouse steps.

☕️ Alameda and the Fat Finger

Aditya Baradwaj, a former Alameda employee, has taken to X to expose Alameda, FTX’s sister firm, as the cause of Bitcoin’s 87% crash in October of 2021.

Baradwaj claims that the crash was the result of a decimal point that was misplaced by one of Alameda’s traders.

This sort of mistake in financial markets is known as a “fat finger error,” a blameless instance of human error.

But this human error caused Alameda to sell Bitcoin for pennies on the dollar, driving Bitcoin’s price down from $65,760 to $8,200.

“Alameda's losses on the fat-finger trade were staggering - on the order of tens of millions. But because it had been an honest mistake, there wasn't much to do except to implement additional sanity checks for manual trades,” Baradwaj said in his Twitter (X) thread, later reported by CoinDesk.

The unnamed trader is essentially blameless. We all make mistakes. But if the employees at Alameda had fat fingers, then the traders at FTX must have had flippers.

☕️ Building Your Own Crypto Wallet

The hardware behind Trezor Wallet is open source, which means anyone can take a crack at designing their own crypto wallet, and Florin Cocos, a Romanian electronics design manager, decided to do just that.

Cocos built his wallet in just 10 hours, documenting the entire construction on his YouTube channel, Voltlog.

“You have full control over the security aspects, and it’s always fun to build something yourself. For me personally, the idea of making something useful, myself, contributes more than anything else to the decision to start such a project.” Cocos wrote on his blog.

In some ways, designing your own crypto wallet is the ultimate step toward self-custody.

And yes, you can always build your own crypto wallet, but don’t be surprised if your wallet starts asking questions about the nature of its existence and calling you “father.”

Spilling the Beans

Is This Crypto’s Robocop? 🚔

In a world long beleaguered by digital, financial crime, it was only a matter of time before a hero rose from the ashes to defend us.

And that hero has arrived in the form of ERC-7512.

No, don’t let the Star Wars-style naming convention fool you, it’s not a metal automaton here to clean up crime. ERC-7512, also referred to as “On-chain Representation for Audits,” is a new Ethereum Improvement Proposal (EIP) that will revolutionize smart contract security on the blockchain.

Smart contract security is one of the gravest concerns for the future of DeFi. Audits are an important part of verifying the security of a system.

A smart contract audit isn’t too different from a tax audit. In a tax audit, your finances are examined for any inconsistencies. In a smart contract audit, the contract’s code is examined for possible vulnerabilities or inefficient coding.

But currently, there’s no uniform system for evaluating these smart contract audits. ERC-7512 is going to change that. This new system was brought to us by some of the finest names in cyber security and Ethereum development such as Safe, Ackee Blockchain, Ottersec, Chainsecurity, OpenZeppelin, and Hats Finance.

Richard Meisner, one of the co-founders of Safe, wrote a blog post addressing the team’s motivations behind the development of ERC-7512.

“Blockchains have a notion of security at a consensus layer, yet smart contract risk has cost the industry billions. While permissionless innovation allows anyone to build anything, for actual use cases to emerge, we need to create a layer that will enable us to verify the security of contracts that interact. This visibility is currently missing. To scale the advantage of modules in AA, intent hooks, or even bridges, we need on(-)chain utility to guarantee security. The first step is to make crucial audit information available to contracts verifiably. This is the goal of ERC-7512, a standard drafted by some of the industry's best auditors and security minds.”

Okay, no, maybe ERC-7512 isn’t as sexy or exciting as Robocop throwing criminals through pane-glass windows. But this is reality, where progress usually isn’t full of heart-pounding action.

Penicillin has saved millions of lives, but Warner Brothers isn’t racing to make a biopic about mold growing in a petri dish.

ERC-7512’s audit system will bring a new level of safety and security to crypto. And yes, we know we’re endorsing Big Brother here, but an increase in security is good for the whole of the space.

Better security features will mean faster regulatory approval when these standards are presented to the American lawmakers deciding crypto’s future.

While that one episode of “Seinfeld” may have left us inherently reluctant to think about audits, the ERC-7512 is coming — and it’s going to teach us to love the audit.

Crypto 101

Flash Crash: This market movement is often associated with the aforementioned “fat finger errors.”

A flash crash is a steep, sudden decline in an asset’s price before a period of quick recovery.

Unfortunately, Bitcoin’s October crash wouldn’t be considered a flash crash, because BTC is still very much recovering.

The Last Sip

The Last Sip: In the vein of acceptance and body positivity. Future decimal slip-ups in financial markets will be referred to as “Thicc” or “Full-Fingered” errors.

Stay Caffeinated,

Coffee & Crypto Team

Premium Market Report

Bitcoin Flat as Expected Fed Rate Pause Fails to Ignite Risk Appetite 🏛 🪙
Source: CoinDesk + TheBlock

📃 Summary:

• As expected, the U.S. Federal Reserve left interest rates unchanged at a range of 5.25% to 5.50% at its latest policy meeting today, September 20, 2023.

• Fed policymakers project interest rates to remain higher in 2023, estimating a range of 4.9% to 5.6% in 2024, compared to 4.3% in June.

• Bitcoin's price was largely unchanged at approximately $27,200 after the Fed announcement. Analysts say keeping rates elevated in 2023 signals tighter policy ahead.

• The pause in rate hikes is unlikely to significantly spur a renewed appetite for risk assets like Bitcoin in the near term.

• Certainty from ending the rate-hike cycle may provide a modest boost to market sentiment, in addition to the appetite for risk, which could serve as a tailwind for the crypto asset.

☕️ Our Take:

That's all for today! If this email got you hooked on our unhinged crypto takes, be sure to get a full dose on Twitter @GetCoffeeCrypto.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.