ConsenSys, an Ethereum-based blockchain firm and owner of the popular wallet MetaMask, has been making the rounds in the crypto-sphere of late.
On July 11, United States Senate Financial Services Committee Chair Ron Wyden and ranking member Mike Crapo reached out to the digital asset community through an open letter, seeking input on the taxation of digital assets. The senators are seeking solutions to address the intricate tax issues, providing background reading from the Joint Committee on Taxation to aid respondents.
The senators pointed out that the Internal Revenue Code of 1986 lacks a straightforward classification for digital assets. Consequently, they posed numerous questions grouped into nine subject areas, highlighting the Committee on Finance’s recent bipartisan endeavor to identify critical questions at the intersection of digital assets and tax law. The letter covered topics such as fair value accounting, trading safe harbor, digital asset loans, wash sales, income from staking and mining, reporting by foreign firms, and valuation on an exchange, frequently referencing specific sections of the tax code.
The Internal Revenue Service (IRS) has primarily focused its efforts on countering criminal activities within the crypto realm, boasting about seizing $10 billion worth of cryptocurrency in law enforcement initiatives this year.
Additionally, the IRS is taking a more proactive approach to income taxation. In a recent case, it issued a summons to the crypto exchange Kraken in 2021, requesting user information on transactions exceeding $20,000. Kraken was ordered by the District Court for the Northern District of California to provide the requested information by June 30. Responses to the letter will be accepted by the Senate committee until September 8.
Consensys Delivers Linea, Ethereum’s Scaling Pioneer
The Ethereum ecosystem warmly welcomes ConsenSys as it begins onboarding partners to its Linea network, an Ethereum layer-2 scaling solution that has achieved significant scaling milestones during testing.
Linea functions as an Ethereum layer-2 scaling network, allowing developers to construct or migrate decentralized applications for Ethereum. It leverages zero-knowledge proofs and is equivalent to the Ethereum Virtual Machine (EVM), ensuring seamless interaction with the Ethereum blockchain.
Throughout an extensive testnet phase, Linea witnessed over 5.5 million unique wallets conducting more than 46 million transactions. ConsenSys has detailed improvements to Linea’s performance, transaction costs, and user experience based on the testing period.
The gradual alpha release commenced on July 11 with over 100 partners, boasting faster throughput and transaction fees 15 times lower than those on Ethereum’s mainnet.
Linea seamlessly integrates with ConsenSys’ Ethereum browser wallet, MetaMask, providing Linea users with access to token bridging, swapping, and purchasing functionalities.
ConsenSys founder and CEO Joseph Lubin highlights the abundance of layer 2 Ethereum scaling protocols and solutions as crucial drivers in advancing Web3 applications and functionality. The Merge to Proof of Stake and the widespread adoption of the rollup-centric roadmap are set to propel Ethereum layer 2’s scalability and usability.
The announcement emphasizes the migration of decentralized finance (DeFi) applications to Linea, benefiting from fast finality, capital-efficient bridging, and inheriting security from Ethereum’s mainnet.
Furthermore, Linea offers lower gas fees, high throughput, and low latency, making it ideal for powering nonfungible tokens, blockchain gaming, and social applications.
ConsenSys has also introduced the Linea Ecosystem Investment Alliance (EIA), involving over 30 venture capital firms providing capital and advisory support to ecosystem builders.
To ensure user protection, safeguarding DApps and the network itself, Linea’s alpha mainnet launch will implement necessary measures. These measures will initially restrict execution calls to launch partners for the first week.
ConsenSys plans to open up the network during ETHCC in France starting from July 17, with potential limits on withdrawals during the initial 90 days. The company will conduct a bug bounty program and closely monitor system performance before fully opening Linea to end users.
In 2023, Ethereum layer 2 solutions have become a significant topic of discussion. Polygon, a layer 2 development firm, publicly launched its zkEVM network in March 2023, while Starknet has focused on enhancing network throughput this year under the guidance of its founder, Eli Ben-Sasson, who pioneered zk-proofs.