New York sues Polymarket over alleged illegal gambling
New York state authorities on Thursday filed a lawsuit against crypto prediction market platform Polymarket, accusing it of operating an "illegal gambling operation" in the state. The case centers on event betting offered without a license from the state Gaming Commission.
The move follows a broader series of legal actions by New York Attorney General Letitia James and related agencies against firms involved in prediction markets, including Kalshi, Coinbase and Gemini. State authorities have argued that such platforms offered event-based wagering products without the required approval.
Magic Eden NFT incident traced to Limit Break Payment Processor V2
A suspected security incident involving Magic Eden led white-hat responders to move 3,832 NFTs from hundreds of wallets. Yuga Labs CEO Michael Figge said the issue had been discovered hours earlier and that Yuga Labs vice president of blockchain, Quit (0xQuit), was handling assets caught in the white-hat recovery scope.
Quit said the transfers were protective moves rather than theft. The NFTs were gathered in an address beginning with 0x71cF, kept safe there, and were set to be returned to their original owners after the risk had passed. At that stage, Magic Eden had not disclosed the root cause or the full scope of the impact.
Quit later said the incident, initially thought to involve Magic Eden directly, actually came from a flaw in Limit Break Payment Processor V2. The white-hat operation ultimately secured 23,155 NFTs valued at more than $5.7 million, with all of them transferred to safety.
He added that a similar flaw could also be used to steal WETH, and roughly 660 WETH was not recovered in time. Payment Processor V3 on ApeChain carried a similar risk. Quit published the Payment Processor V2 contract on Ethereum and the V3 contract on ApeChain that users should revoke, and advised users to remove approvals through tools such as revoke.cash.
Magic Eden said it stopped using Payment Processor V2 in October 2024 and shut down its EVM Marketplace in the first quarter of 2026, so current live listings were not affected. The company said NFTs listed on the Magic Eden EVM marketplace roughly between February 2024 and October 2024 may have been exposed, while listings created after October 2024 were expected to be unaffected. The platform said its investigation was ongoing and that it was working with Limit Break on additional mitigation steps.
Circle Mint adds BTC-collateralized USDC borrowing
Circle said its institutional platform Circle Mint has launched digital asset-backed borrowing, or DABB, allowing eligible institutional clients to post BTC and borrow USDC on Arc and Ethereum.
Under the setup, users deposit BTC and mint cirBTC, which is backed 1:1 by native BTC. They can then use cirBTC as collateral in third-party lending markets, with borrowed USDC deposited directly into their Circle Mint accounts. The service launched first with the decentralized lending protocol Morpho, and Circle said support for other venues such as Aave is planned. Interest rates, collateral requirements and liquidation thresholds are determined by third-party markets.
Camelot and Cypher to merge into Frontier
DeFi protocols Camelot and Cypher said they are combining under a new brand, Frontier, which will build unified liquidity and asset issuance infrastructure on Uniswap v4. Once migration is complete, the existing protocols, brands and token ecosystems will cease operations.
Frontier said 15% of total FRONT supply will be reserved for the two communities. Holders of GRAIL, xGRAIL, CYPH and xCYPH will have 30 days to migrate. FRONT received in the process will be subject to a three-month lock after the token generation event, followed by a 12-month linear unlock.
The project is also offering a USDC redemption option priced using the seven-day time-weighted average price before the announcement. Eligible xGRAIL holders that choose migration will receive an additional 25% FRONT allocation.
Pyth becomes an external distributor for Nasdaq Basic
Pyth Network said it has become an external distributor for Nasdaq Basic market data and will offer real-time U.S. equity quotes and trade data through Pyth Data Marketplace.
Nasdaq Basic covers securities listed on U.S. exchanges, not only stocks listed on Nasdaq. The feed includes best bid and offer data, quoted size, last sale price and volume, as well as Nasdaq official opening and closing prices. Pyth said the service is aimed at brokers, banks, fintech platforms and blockchain-native applications.
Sonic Labs removes manual inflation for S token
Sonic Labs CEO Matt Visser said in the project’s 100-day progress report that all manual inflation for the S token will be canceled, while automatic issuance used to pay validator rewards will remain in place to support network security.
Visser said the team is adding new independent validators and studying a dynamic rewards mechanism. He also said a third party has been hired to audit S token supply and related disclosures, with a report expected in the coming weeks.
He added that buybacks, burns and fee sharing need to be backed by actual revenue, and those measures will not move forward without revenue support. Sonic V2.2 went live on Sept. 22, adding transaction bundling, expanded transaction fee sponsorship and a new execution engine.
The project is also moving ahead with an organizational restructuring. Sonic said it will continue operating the Sonic L1 network while separate technology businesses focus on payments and FX, AI, RWA and tokenization, and prediction markets.
Aave V4 deposits reach $1.2 billion
Aave founder Stani Kulechov said on X that Aave V4 uses a hub-and-spoke market structure with markets isolated by default based on risk profiles. Markets that pass risk adjustment can share liquidity through the hub within defined caps, which he said reduces capital fragmentation and improves utilization and capital efficiency.
He said the V4 codebase is significantly smaller than V3, that deposits have reached $1.2 billion, and that the protocol has been deployed on Ethereum, Avalanche and Arc. V4 also allows third-party market managers such as EtherFi to build and manage full market structures and take part in broader lending market returns.
Kulechov also said Coinbase tokenized stocks are now live on Aave V4 on Base, allowing users to borrow USDC against tokenized stocks as collateral. Aave said those tokenized equities are available only to users in eligible jurisdictions outside the United States.
Ethena extends USDe basis strategy to stock perpetuals
Ethena said it has partnered with Binance to expand the basis trading strategy behind USDe into stock perpetual contracts for the first time.
Under the arrangement, Ethena will use bStocks as tokenized spot equity collateral and hedge through Binance stock perpetual contracts denominated in USDT, keeping the strategy delta-neutral. Ethena said the annualized average basis on Binance stock perpetuals was about 11% over the past six months, and the allocation began on the day of the announcement.
Aster launches Grid 2.0 and Grid Marketplace
Aster rolled out Grid 2.0 and Grid Marketplace. Grid 2.0 allows grid strategies and manual trading on the same perpetual contract to run at the same time, with grid orders and positions managed separately. In isolated margin mode, users can run as many as 50 independent grid strategies on the same trading pair.
Grid Marketplace lets users browse active grid strategies on Aster, filter them by market, and compare PnL, ROI, runtime and trading activity. Users can copy existing parameters, reverse-copy long and short direction, and edit settings before creating a strategy.
When a grid strategy starts, the initial margin is transferred from the perpetual account to the grid account, reducing the balance available for other perpetual positions. Once the strategy is fully closed, remaining funds are automatically transferred back.
LayerZero to end off-chain support for 13 chains
LayerZero said it is gradually ending off-chain support for several lower-activity blockchains: Aurora, Taiko, Japan Open Chain, LightLink, Viction, Animechain, XPLA, Merlin, Gnosis, Zora, Otherworld Space, XAI and opBNB, for a total of 13 chains.
Those networks will no longer be able to use LayerZero’s DVN and Executor services. The move will also cause Stargate Hydra to stop supporting some of the affected chains. LayerZero told users to redeem Hydra assets on those chains, including USDC.e, wETH and Hydra USDT. The company said the exact effective dates and affected networks should be checked in its official notices.