President Donald Trump has privately told senior aides he could end the U.S.-Iran war without securing a nuclear agreement if Tehran fully reopens the Strait of Hormuz, the Wall Street Journal reported on Aug. 9, citing U.S. officials.

The report comes as Iran raises the price for reopening the waterway, tying compensation, sanctions relief and wider security demands to any durable arrangement.

The White House has not publicly confirmed that Trump has changed his nuclear objective. Its latest published Iran remarks, from July 28, instead repeated that Iran cannot obtain a nuclear weapon and said military options remain available if diplomacy fails. The reported willingness to “walk away without a nuclear deal” therefore remains a private policy consideration, not an announced shift in U.S. strategy.

Iran’s latest demands complicate the Hormuz exit path

The Journal reported that Iran is seeking billions of dollars in U.S. payments, the withdrawal of American forces from the region and an end to the U.S. naval blockade. Reuters separately reported that Foreign Minister Abbas Araqchi is demanding compensation for U.S. attacks, while Mohammad Baqer Zolqadr, secretary of Iran’s top security body, called for sanctions relief, freed Iranian assets and an end to U.S. military pressure on Iran and its regional allies.

Tehran has also separated its talks with Oman from a broader settlement with Washington. Araqchi said an Iran-Oman agreement defining new shipping lanes is in “final stages,” but said the waterway would not reopen simply because that technical arrangement is completed. He added that Iran and the U.S. are not in direct talks, although messages continue through intermediaries.

A U.S. official told Reuters that Washington would lift its blockade of Iranian ports once commercial shipping resumes without impediments. That creates a sequencing problem: Washington wants shipping restored before lifting the blockade, while Iran says broader U.S. concessions must come first.

The proposed arrangement also remains politically sensitive because Reuters reported that one version could give Tehran a role in controlling ships entering the Gulf. U.S. officials have repeatedly opposed Iranian control of Hormuz and mandatory tolls, leaving another unresolved issue even if technical shipping lanes are agreed.

Trump’s public nuclear line has not formally changed

The strongest reason to treat the latest report cautiously is the gap between Trump’s private comments and public position. In a July 28 White House statement, Trump maintained that Iran could not obtain a nuclear weapon and warned that U.S. forces could strike additional sites if diplomacy failed. The administration has not issued a public statement reversing that position.

The Journal, however, reported that Trump has privately told aides Tehran may be unable to rebuild its nuclear program during his presidency after earlier U.S. strikes damaged major facilities. According to the report, he believes U.S. intelligence could detect renewed work and that the threat of more military action could deter rebuilding. Those judgments are not a negotiated nuclear settlement.

A White House official told the Journal that the administration considers its military objectives completed and is now focused on restoring energy flows through the Strait of Hormuz, while keeping military options available if Iran attacks shipping. That would make reopening Hormuz the near-term test for de-escalation even if the nuclear dispute remains unresolved.

Domestic politics add pressure. The Journal reported that Trump is prepared to wait through the latest negotiating difficulties as long as gasoline prices remain manageable. It put the U.S. national average at $4.02 a gallon on Saturday, compared with $3.16 a year earlier, with the midterm elections less than three months away.

Hormuz keeps oil and crypto markets sensitive

Markets remain focused on whether shipping can normalize. Reuters reported that most Gulf stock markets ended Sunday subdued while investors waited for clarity on the Oman-Iran arrangement. Brent crude settled Friday at $83.55 a barrel, up $1.06, or 1.3%.

Bitcoin was trading near $65,184 on Sunday. There is no evidence that the Journal report alone caused the move, especially with U.S. markets closed. Still, the conflict has repeatedly fed into crypto risk sentiment through oil prices, inflation expectations and broader geopolitical risk.

As crypto.news reported on July 31, Bitcoin fell below $64,000 as renewed Iran fighting lifted oil and revived fears over energy disruption. Bitcoin later moved back above $64,000 as expectations for a Hormuz agreement improved. Those episodes help explain why crypto traders continue watching the negotiations even when the trigger is outside digital asset markets.

The Strait handled about one-fifth of global oil and liquefied natural gas shipments before the current disruption, according to Reuters. A durable reopening could therefore affect energy prices, transport costs and inflation expectations, although the market response would depend on the terms and whether shipping normalizes in practice.

What happens next in the Iran talks

The next verifiable step is an Iran-Oman shipping agreement. Araqchi says the deal is close, but no final text has been published and Tehran says it will not be enough by itself to reopen the strait. Washington says its blockade can be lifted once commercial shipping resumes freely.

The broader demands remain harder to resolve. Iran is seeking compensation, sanctions relief, access to frozen assets and security concessions. As previously reported, access to frozen Iranian assets has surfaced in earlier negotiations as one potential bargaining point, although no current deal on that issue has been announced.

Meanwhile, the U.S. has not publicly agreed to Tehran’s latest terms, while the White House has not confirmed the Journal’s report that Trump would accept ending the war without a nuclear accord. Iran also continues to say there are no direct U.S.-Iran talks at present.

For now, reopening Hormuz appears to be the most tangible off-ramp available to Washington. Whether it becomes the basis for ending the conflict will depend on published terms, actual shipping access and whether both sides can sequence concessions without triggering another round of military escalation.

Fresh HYPE supply is moving through trading venues after HyperLabs unlocked 433,025 tokens worth more than $23 million, adding another test for Hyperliquid’s market as scheduled team distributions continue. 

On Aug. 8, onchain tracker Lookonchain reported that the development team had redeemed the tokens from staking and was gradually moving them toward Flowdesk and OKX.

Coinbase has pulled trading support for five cryptocurrencies after giving holders a month to prepare.

On Aug. 7, the exchange confirmed that trading had been disabled for Idex (IDEX), Loopring (LRC), Omni Network (OMNI), Pirate Nation (PIRATE) and StaFi (FIS). The suspension covers Coinbase Simple and Advanced Trade, Coinbase Exchange and Coinbase Prime.

For customers still holding the five tokens, the change stops trading rather than immediately removing access to the assets. Coinbase said balances remain accessible and withdrawals can continue, allowing holders to transfer tokens to compatible external wallets or other platforms that support them. The exchange’s latest notice did not announce an automatic conversion or liquidation of remaining balances.

Coinbase gave holders one month before halting trading

The Aug. 7 suspension was not announced without warning. Coinbase first disclosed the planned removals on July 7 and said trading would stop on or around 2 p.m. ET on Aug. 7. Before the cutoff, order books for IDEX, LRC, OMNI, PIRATE and FIS were moved into limit only mode, allowing customers to place and cancel limit orders while matches could still occur.

Coinbase said it regularly monitors assets to determine whether they continue to meet its listing standards. However, the notices reviewed by crypto.news did not identify a separate reason for removing each of the five tokens. That means claims attributing a particular token’s suspension to liquidity, regulation, development activity or another individual factor would go beyond Coinbase’s public explanation.

The change has now taken effect. Coinbase’s current asset pages label IDEX, Loopring, Omni Network, Pirate Nation and StaFi as not tradable on the platform.

Token suspensions differ from Coinbase’s six pair removals

The five token suspensions came one day after Coinbase removed six individual trading pairs. The exchange ended trading on Aug. 6 for LSETH-ETH, MINA-EUR, GRT-GBP, MASK-GBP, CHZ-USDT and CRO-USDT.

Those changes should not be confused with the five token suspensions. Removing a trading pair means Coinbase can continue supporting the underlying asset through another available market, depending on the customer’s region. By contrast, IDEX, LRC, OMNI, PIRATE and FIS have lost trading support across Coinbase’s main retail, advanced and institutional spot services.

As crypto.news reported, Coinbase said the six pair removals followed its regular market reviews and were intended to consolidate liquidity and support healthier markets. Five of those markets had first been shifted to limit only trading before being suspended.

Coinbase has used similar review processes before. The exchange ended DAI trading in May as part of a separate asset change that included conversion of remaining eligible balances into USDS. The current IDEX, LRC, OMNI, PIRATE and FIS notice is different because Coinbase has not announced a comparable conversion plan.

Some affected tokens were already undergoing wider changes

The five assets are not all in the same position outside Coinbase. Omni Network, for example, underwent a broader transition after the project rebranded to Nomina. Nomina said Omni Core was officially sunset in February 2026 and its assets migrated to Ethereum as the ecosystem shifted toward the NOM token and an Ethereum based trading protocol. Coinbase did not cite that transition as the reason for suspending OMNI.

StaFi had also lost a major trading venue before Coinbase’s decision. Binance ended spot trading for FIS in December 2025 as part of its own periodic review. Again, there is no public evidence showing Coinbase based its decision on Binance’s earlier removal, and the two exchanges conduct their listing reviews independently.

The current Coinbase data also shows why the five tokens should not be treated as removed from existence simply because trading has stopped on one exchange. Coinbase continues to display informational price pages for the assets even though those pages now identify them as unavailable for trading. Users can also withdraw balances under the exchange’s Aug. 7 notice.

What happens next for affected Coinbase users

The immediate decision for holders is whether to leave their assets on Coinbase or withdraw them to another supported destination. Coinbase has not set a new trading date or announced that any of the five markets will return. Its latest statement says users continue to have access to their funds and can withdraw them.

Users moving tokens externally need to confirm that the destination supports the correct network and token contract before initiating a transfer. Coinbase’s own support materials note that onchain sends are irreversible, making network and address compatibility important when withdrawing delisted assets.

Meanwhile, the trading changes are taking place as Coinbase reorganizes other parts of its business. As previously reported, institutional Coinbase International Exchange accounts, positions and balances are scheduled to migrate to Deribit on Sept. 9. Coinbase’s official migration guidance sets Aug. 28 as the opt out deadline and Aug. 31 for clients to verify Deribit access.

That institutional derivatives migration is separate from the five token suspensions, but together the moves show Coinbase making several market and infrastructure changes during August. For IDEX, LRC, OMNI, PIRATE and FIS holders, however, the position is straightforward for now: trading has stopped, balances remain accessible and withdrawals remain available, with no public timetable for trading support to resume.

At the start of 2026 these builder-deployed markets were about 2% of Hyperliquid’s perp volume. They are now roughly half of it.

The pass-through shows up in the accounts. Cost of revenue, the portion of fees Hyperliquid hands straight back to builders, market makers and its own liquidity vault, was under 6% of gross revenue in the second quarter of 2025. A year later it was 18%.

Builder code fees, which front-ends like Phantom charge on top for routing an order, arrived at roughly $16 million of revenue in the second quarter and left as roughly $16 million of cost in the same quarter. Every dollar of it passes through.

Traders keep showing up because of what those builder markets list. Real-world asset perps, contracts on things like crude oil, gold, Nvidia, Tesla, a Nasdaq-100 tracker and pre-IPO names like SpaceX, hit a record $3.6 billion in open interest this month and overtook bitcoin as the platform’s largest market by that measure.

Between July 13 and July 19, tokenized stocks and commodities did $25 billion in volume, 52% of the weekly total, outpacing crypto perps for the first time. The contracts settle in stablecoins, never expire, and trade through the weekend when the New York Stock Exchange is shut. A product such as leveraged Nvidia exposure, at 2 a.m. on a Sunday, has few other homes.

Michael Saylor put Strategy’s Bitcoin activity back under scrutiny on Sunday, Aug. 9, with a two word X post: “Doing ₿usiness.” 

The company’s executive chairman offered no details about whether the message referred to buying Bitcoin, selling more BTC, raising capital or another treasury transaction. As of Sunday, Strategy’s public Bitcoin ledger still showed 842,138 BTC, meaning no additional disposal after its Aug. 3 filing had been confirmed.

Bitcoin BTC$65,175.72 exchange-traded funds (ETFs) pulled in $853.54 million in net inflows for the week ended Aug. 7, the largest weekly total since mid-April, according to data from SoSoValue.

BlackRock’s IBIT accounted for the bulk of the activity, attracting $693 million on its own.

This surge in inflows offers a tentative sign that institutions are dipping back in after the heavy selling earlier this year.

Recent bitcoin price action has looked more constructive. Negative headlines, including a multi-million-dollar Coldcard hack and rising government bond yields, have failed to dent the spot market. Bitcoin held steady at around $64,000 early this week and traded at around $65,100 as of this writing.

Friday’s unexpectedly weak U.S. jobs report for July has cooled bets on further Federal Reserve rate hikes for now, potentially clearing the path for continued institutional buying in ETFs.

What next?

The latest spike in inflows represents only one week of data. On a year-to-date basis, the ETFs remain roughly $4.5 billion in the red due to net outflows. This helps explain the heavy selling pressure seen during the first six months of the year, when Bitcoin fell 33% to below $60,000 by the end of June.

Most traders assume depegs are slow. They are not. Inside the 30 second window where arbitrage bots, liquidation cascades, and oracle lag collide to turn a minor price slip into a systemic event.

The popular explanation of a stablecoin depeg involves a gradual loss of confidence: reserves are questioned, redemptions spike, and the peg erodes over hours or days. That version describes Terra’s collapse. It does not describe what happens when USDC trades at $0.87 on a Friday afternoon because a bank failed, or when USDT briefly drops to $0.97 on Curve during a liquidity crunch. Those events last seconds to minutes, and the damage they cause operates on a completely different timescale than the narratives written about them afterward. The mechanics of a short depeg are faster, more automated, and more consequential per second than almost anything else in crypto.

The assumption that a depeg needs to persist for minutes or hours to matter is wrong. Thirty seconds is enough for an automated system to declare a position insolvent, execute a liquidation, sell the seized collateral at a discount, and move on. Thirty seconds is enough for a liquidity pool to absorb a sell order large enough to shift its composition from balanced to critically one sided. And thirty seconds is more than enough for an arbitrage bot to decide whether the depeg represents a buying opportunity or a genuine solvency event, a distinction that determines whether the bot stabilizes the price or accelerates the decline.

How a peg works when nothing is wrong

A stablecoin maintains its dollar peg through a combination of primary market redemption and secondary market arbitrage. The primary market is where authorized participants, typically large trading firms with direct relationships with the issuer, can create or redeem stablecoin tokens for exactly one dollar of the underlying reserve asset. The secondary market is where everyone else trades, on centralized exchanges, decentralized exchanges, and automated market makers.

When the secondary market price drops below one dollar, arbitrageurs buy the discounted stablecoin on the secondary market and redeem it for one dollar through the primary market, pocketing the difference. When the price rises above one dollar, they do the reverse: mint new tokens at one dollar and sell them on the secondary market at a premium. This two sided arbitrage keeps the price pinned to one dollar under normal conditions.

The system works because the primary market acts as a price floor and ceiling. As long as anyone can redeem one USDC for one dollar of reserves, the token cannot trade meaningfully below one dollar for long, because doing so creates a guaranteed profit for anyone willing to execute the redemption. The key phrase is “for long.” The lag between detecting a depeg and executing a redemption is where everything happens.

The 30 second anatomy of a depeg

A typical depeg event on Ethereum unfolds across a compressed timeline that most observers reconstruct only after the fact.

Second zero: a large sell order hits a stablecoin liquidity pool on a decentralized exchange. The order is large enough to move the pool composition, pushing the stablecoin’s implied price below one dollar. On Curve Finance, which uses a specialized bonding curve optimized for assets that should trade at similar prices, a sell order of $10 million to $50 million can move the implied price by 0.5 to 3 percent depending on pool depth.

Seconds one through six: the trade is confirmed in the next Ethereum block. The pool’s new composition is now public. Every bot monitoring the mempool and block stream sees the price deviation.

Seconds seven through twelve: arbitrage bots that operate across multiple venues detect the price difference between the decentralized exchange and centralized exchanges where the stablecoin still trades at par. The fastest bots submit transactions in the next block, buying the discounted stablecoin on the DEX and simultaneously selling it on a centralized exchange.

Seconds thirteen through twenty four: the arbitrage trades execute. If the initial sell order was a one time event, a large fund rebalancing its portfolio or a panic seller liquidating a position, the arbitrage flow absorbs the price impact and the peg restores within two to three blocks. This is the benign scenario and accounts for the vast majority of stablecoin price deviations.

Seconds twenty five through thirty and beyond: if the sell pressure continues, the arbitrage flow cannot keep up. The bots are limited by their own capital, their willingness to hold inventory risk, and the speed at which they can move funds between centralized and decentralized venues. When the depeg persists past the arbitrage capacity, the market transitions from a liquidity event to a confidence event, and the dynamics change fundamentally.

Oracle lag and the liquidation trigger

The most consequential feature of a short depeg is not the price movement itself but the interaction between that movement and the oracle systems that DeFi lending protocols use to value collateral.

Lending protocols such as Aave, Compound, and Maker do not use real time market prices. They use oracle feeds, most commonly provided by Chainlink, that aggregate prices from multiple sources and update on chain according to specific rules. For major stablecoins, Chainlink’s price feeds typically use a deviation threshold of 0.25 percent and a heartbeat of 3,600 seconds. The feed updates when the price moves more than 0.25 percent from the last on chain value, or when one hour has passed since the last update, whichever condition triggers first.

This design is intentional. Updating on every block would be prohibitively expensive in gas costs and would expose the oracle to manipulation through short lived price spikes. But the design creates a window of vulnerability during a depeg. If USDC trades at $0.99 on the secondary market but the oracle last reported $1.00 and the deviation threshold has not been crossed, the protocol still values USDC collateral at one dollar. Borrowers who posted USDC as collateral have a few minutes of grace before the oracle catches up.

When the oracle does update, the effect is abrupt. Every position that was marginally above the liquidation threshold at the old price may suddenly fall below it at the new price. The protocol does not liquidate positions one at a time in order of risk. It opens all eligible positions to liquidators simultaneously, creating a wave of liquidation transactions that compete for block space and drive up gas prices, which in turn increases the cost of executing arbitrage trades, which in turn reduces the arbitrage flow that would otherwise stabilize the price.

This feedback loop, depeg triggers oracle update triggers liquidations triggers more selling triggers deeper depeg, is why short depegs can cause damage disproportionate to their duration. The March 2023 USDC event produced approximately $2.1 billion in liquidations across DeFi. The depeg lasted roughly 48 hours in total, but the majority of liquidations occurred in concentrated bursts that corresponded to oracle update cycles.

Curve pools and one sided liquidity

Curve Finance occupies a unique position in stablecoin infrastructure because its automated market maker is specifically designed for assets that should trade at the same price. The Curve stableswap invariant, a mathematical formula that concentrates liquidity around the one to one price ratio, allows large trades with minimal slippage under normal conditions. During a depeg, this same design amplifies the problem.

When traders sell a depegging stablecoin into a Curve pool, the pool absorbs the selling by accumulating more of the depegging asset and distributing more of the other assets in the pool. As the composition shifts, say from 33/33/33 in a three asset pool to 80/10/10, the implied exchange rate for the majority asset deteriorates nonlinearly. A pool that can handle a $50 million swap with 0.1 percent slippage at balanced composition might require 5 percent slippage for the same swap when one asset comprises 80 percent of the pool.

This dynamic means that Curve pools act as both a stabilizer and an amplifier. In the early seconds of a depeg, the pool absorbs selling and the stableswap invariant keeps the price close to par. As the composition becomes increasingly one sided, the pool begins amplifying the depeg by making it progressively more expensive for arbitrageurs to buy the discounted asset. Liquidity providers, who deposited balanced allocations of all three assets, find themselves holding mostly the depegging asset, a form of impermanent loss that can become permanent if the depeg does not reverse.

When arbitrage bots stop buying

The critical transition in any depeg event is the moment when arbitrage bots stop providing a floor. Bots buy a depegged stablecoin because they expect to redeem it for one dollar or sell it elsewhere at par. Their willingness to do so depends on two assessments: whether the issuer can actually honor redemptions, and whether the capital required to execute the arbitrage is worth the risk.

During the USDC depeg in March 2023, Circle had approximately $3.3 billion deposited at Silicon Valley Bank, which represented roughly 8 percent of USDC’s total reserves at the time. When SVB failed, the question was not whether Circle would eventually recover the funds but whether Circle could process redemptions immediately. Arbitrage bots that would normally buy USDC at $0.95 and redeem it for $1.00 stopped buying because the redemption mechanism was temporarily frozen over the weekend.

This created a gap between the stablecoin’s fundamental value, which depended on whether the FDIC would make depositors whole, and its market price, which reflected the immediate liquidity available for redemptions. The gap persisted until Sunday evening, when the Federal Reserve and FDIC announced that all SVB depositors would be made whole. USDC’s price recovered to $0.99 within minutes of the announcement.

The lesson is that arbitrage provides a price floor only when the redemption mechanism is functioning. When the floor disappears, the price is set entirely by secondary market supply and demand, and secondary markets in a crisis are dominated by sellers.

What lending protocols see during a depeg

From the perspective of a lending protocol, a stablecoin depeg creates a specific sequence of risks that the protocol’s risk parameters are designed to handle, but only up to a point.

When a borrower posts USDC as collateral and borrows ETH, the protocol maintains a loan to value ratio. If USDC is valued at one dollar and the LTV limit is 80 percent, a borrower can post $100 of USDC and borrow $80 worth of ETH. If USDC’s oracle price drops to $0.90, the collateral is now worth $90, pushing the effective LTV to 88.9 percent, above the liquidation threshold.

The protocol opens the position to liquidators, who repay part of the borrower’s debt and receive the collateral at a discount, typically 5 to 10 percent. The liquidator profits from the discount, the protocol recovers the borrowed funds, and the borrower loses a portion of their collateral. In theory, this mechanism keeps the protocol solvent even when collateral values decline.

In practice, the mechanism depends on liquidators being willing and able to execute quickly enough. During a depeg, liquidators must buy the depegging stablecoin to repay the debt, which means they are absorbing the same asset that everyone else is trying to sell. If liquidation volume exceeds the market’s capacity to absorb sales of the depegging asset, the protocol can accumulate bad debt, positions where the collateral value has fallen below the debt value and no liquidator is willing to close the position.

Aave v2 accumulated approximately $1.6 million in bad debt during the USDC depeg, a small amount relative to its total value locked but a proof of concept for the failure mode. Larger or longer depegs would produce proportionally more bad debt.

What this does not cover

This article does not cover algorithmic stablecoin depegs, which involve fundamentally different mechanisms. Terra’s collapse in May 2022 was caused by a failure of the algorithmic stabilization mechanism itself, not by a temporary liquidity event or external shock to reserves. The dynamics of an algorithmic depeg involve death spirals between the stablecoin and its paired governance token, a phenomenon that does not apply to fiat backed stablecoins like USDC or USDT.

This article also does not cover the regulatory implications of depegs. The GENIUS Act and other stablecoin legislation address reserve requirements and redemption rights, but the interaction between those requirements and real time market mechanics during a depeg is a separate topic.

Finally, this article does not cover the specifics of individual protocol risk parameters. Each lending protocol sets its own oracle sources, deviation thresholds, liquidation bonuses, and bad debt handling procedures. The general mechanics described here apply broadly, but the specific numbers and outcomes vary by protocol.

Practical checks

If you hold stablecoins or use them as collateral in DeFi, several factors determine your exposure to a short depeg event.

Check the oracle source your lending protocol uses. Protocols that rely on a single oracle with a high deviation threshold are more exposed to delayed liquidation triggers. Protocols that use multiple oracles or have tighter update thresholds will reflect price changes faster, which can be either protective (faster liquidation prevents bad debt accumulation) or harmful (faster liquidation gives borrowers less time to add collateral).

Check the composition of any Curve or Uniswap pool where you provide liquidity. If one stablecoin already comprises a disproportionate share of the pool, the pool is already pricing in a mild depeg risk, and your impermanent loss exposure is elevated.

Check whether the stablecoin issuer has published information about its reserve custodians. Circle discloses its banking relationships. Tether provides quarterly attestations but does not disclose individual custodians. The risk profile of a depeg depends heavily on the specific institutions holding the reserves and their susceptibility to bank runs, regulatory actions, or operational failures.

Check your liquidation threshold. If you are borrowing against stablecoin collateral, calculate how far the stablecoin price would need to fall before your position is liquidated. A 3 percent depeg that lasts 30 seconds may not trigger your liquidation if your LTV is conservative, but a 10 percent depeg almost certainly will.

Check the stablecoin’s redemption terms. Some stablecoins can be redeemed 24/7. Others have processing windows, minimum redemption amounts, or identity verification requirements that create delays. Those delays determine how quickly arbitrage can restore the peg after a depeg event.

What to watch

Oracle infrastructure upgrades. Chainlink and other oracle providers are actively developing pull based oracle models that allow protocols to request price updates on demand rather than waiting for push based updates on fixed schedules. These models would significantly reduce the oracle lag window during depegs.

Curve v2 and concentrated liquidity adoption. Newer AMM designs that allow liquidity providers to concentrate their capital around specific price ranges may change the dynamics of one sided liquidity during depegs, either reducing slippage for large trades or creating cliff effects where liquidity disappears entirely below a certain price.

Stablecoin reserve diversification post GENIUS Act. The GENIUS Act’s reserve requirements may push issuers toward more diversified custodial arrangements, reducing the concentration risk that caused the USDC depeg when SVB failed.

Cross chain depeg propagation. As stablecoins are bridged across multiple chains, a depeg on Ethereum can propagate to Arbitrum, Optimism, Base, and other networks with varying delays depending on bridge finality times and oracle configurations on each chain.

Real time liquidation dashboards. Tools like DefiLlama’s liquidation tracker provide real time visibility into the collateral positions that would be liquidated at various price levels. Monitoring these dashboards during periods of stablecoin stress gives advance warning of potential liquidation cascades.

Bitcoin’s contentious BIP-110 test has moved from signaling into an actual chain split, and the first hours show miners overwhelmingly continuing to build on the existing Bitcoin chain.

The proposal entered mandatory signaling at block 961,632 on Aug. 8 after only 51 of the previous 2,016 blocks, or 2.53%, signaled support. Nodes enforcing BIP-110 then began rejecting blocks without version bit 4.

The latest available BIP-110 monitoring data on Aug. 9 showed the enforcing branch stalled at block 961,633 after producing only two blocks. Bitcoin’s non-enforcing chain had already reached 961,731, putting it 98 blocks ahead. The tracker also showed no BIP-110 signaling among the first 100 blocks of the new difficulty period on the dominant chain.

Bitcoin BIP-110 split widens after miner support stays low

The split began because BIP-110 applies different validity rules during its mandatory signaling window. According to the official BIP-110 specification, enforcing nodes must reject any block between heights 961,632 and 963,647 that fails to signal bit 4. Ordinary Bitcoin nodes do not impose that requirement, allowing them to continue following non-signaling blocks.

Roughnecks, a pseudonymous mining operation using OCEAN’s DATUM system, produced BIP-110 blocks 961,632 and 961,633. The branch then stopped advancing for about 15 hours in the latest monitor snapshot. Earlier Sunday, when the main chain stood at 961,721, the gap had already widened to 88 blocks.

The widening gap reflects the difference in computing power assigned to each chain. BIP-110 entered the current period with the same mining difficulty environment, but its enforcing branch has only a small fraction of Bitcoin’s hash power. Without more miners joining, it must continue finding difficult blocks slowly before reaching another difficulty adjustment.

That does not technically erase the minority branch. More hash power could still be directed toward it. However, the observed block production provides no evidence so far that enough miners are switching to close the accumulated work gap.

The 55% voluntary threshold was missed by a wide margin

BIP-110 allows an earlier lock-in if 1,109 of the 2,016 blocks in a difficulty period signal support, equal to 55%. The period ending at block 961,631 recorded just 51 signals, according to the monitoring data, leaving support at 2.53%.

Strategy Executive Chairman Michael Saylor had already argued before the deadline that the low signaling rate showed the proposal lacked broad mining support. His characterization that the data represented “not miner consensus” was his assessment of the signaling figures rather than a formal network governance determination.

Saylor and Blockstream CEO Adam Back opposed the proposal on broader grounds. Back warned that enforcing new consensus restrictions without wider agreement could divide participants, while supporters argue the restrictions are needed to discourage non-monetary data use. Those remain competing views about how Bitcoin block space should be governed.

BIP-110 would temporarily restrict several transaction structures once fully active. Most new output scripts would be limited to 34 bytes, OP_RETURN outputs to 83 bytes, and some data pushes and witness elements to 256 bytes. It would also restrict parts of Taproot for the proposal’s roughly one-year active period.

The chain split also creates a practical issue for holders. As crypto.news reported before mandatory signaling began, Bitcoin developer Kevin Loaec warned that signed transactions could potentially be recognized on both chains because BIP-110 does not automatically separate users’ pre-fork balances.

A holder attempting to transfer coins on the minority branch could therefore risk moving the corresponding BTC on the dominant chain if the same transaction is valid there and gets rebroadcast. The risk applies to the transaction inputs involved rather than giving another party control over an entire wallet. Leaving pre-split coins unmoved avoids creating a transaction that could be replayed.

The practical risk depends partly on whether markets, wallets or exchanges begin treating the minority branch as an asset worth transacting. With only two blocks mined so far, there is little evidence that such an ecosystem has developed.

Proof-of-work change remains a fallback, not a scheduled fork

Some BIP-110 supporters have prepared for the possibility that existing Bitcoin miners continue rejecting the proposal in practice. On Aug. 1, developer Chris Guida rebased experimental proof-of-work change code originally authored in part by Bitcoin Knots maintainer Luke Dashjr. The GitHub comparison contains 12 commits affecting 19 files, including code for selecting a different proof-of-work algorithm.

However, the code does not establish a scheduled network change. Guida described it as “just some code to have in our back pocket” and said no activation deadline had been set. His comments make the proof-of-work proposal a contingency rather than an announced hard fork with a fixed date.

Dashjr has continued supporting BIP-110 despite criticism and earlier rejected calls to withdraw it. Supporters maintain that temporary restrictions would reduce arbitrary data storage, while critics favor leaving block-space allocation to fees and individual node policies.

What happens next for BIP-110

The next protocol checkpoints are defined by block height rather than fixed dates. Mandatory signaling continues through block 963,647. Under the BIP specification, the deployment reaches LOCKED_IN no later than block 963,648, followed by ACTIVE at 965,664. Only then would the proposal’s reduced-data transaction rules begin.

Those heights could arrive on very different timelines across the two branches. Bitcoin’s dominant chain continues producing blocks at its normal pace, while the BIP-110 enforcing branch would need substantially more hash power to approach the same rate. At the latest retrieved snapshot, it remained 98 blocks behind after advancing only once beyond its alternative block 961,632.

The immediate metric to watch is therefore not another scheduled vote but mining activity. If miners begin extending the BIP-110 branch, its block production could resume. If hash power remains concentrated on Bitcoin’s existing chain, the gap will continue widening and the enforcing branch will face an increasingly difficult path to becoming the chain with the most accumulated proof of work.