Welcome to The Protocol, CoinDesk’s weekly wrap-up of the most important stories in cryptocurrency technology development. I’m Margaux Nijkerk, a reporter at CoinDesk.
In this issue:
- Stripe-Backed Blockchain Tempo Starts Testnet; Kalshi, Mastercard, UBS Added as partners
- ZKsync Lite shuts down in 2026, while Matter Labs moves on
- Blockstream connects lightning and liquid for faster, private Bitcoin payments
- Axelar Unveils AgentFlux to Bring AI Agents Onchain Without Sky Risks
Network news
STRIPES TEMPO TESTNET GOES LIVE: Tempo, a payments-focused blockchain backed by Stripe and crypto investment firm Paradigm, launched its public testnet, a key step in its efforts to make stablecoin payments mainstream. Tempo also revealed a list of additions to the network’s partner group, including buy-now-pay-later firm Klarna, prediction marketplace Kalshi, payments giant Mastercard and Swiss global bank UBS. They join a group of previous design partners such as Deutsche Bank, Visa, Shopify, OpenAI and Nubank. Initially introduced in September, Tempo is designed to handle large financial transactions with low fees, instant finality and built-in support for stablecoins. Now the testnet is live, developers and enterprise partners can start experimenting with real-world payments onchain. The move fits into the recent trend of building blockchains for stablecoin payments as the adoption of digital dollars increases globally. Stablecoins, currently a $300 billion asset class, are expected to become an integral part of cross-border payment rails with business-to-business (B2B), peer-to-peer (P2P) and card payments driving growth, said a recent report from Keyrock and Bitso. Tempo aims to solve common pain points in blockchain-based finance like network congestion and volatile transaction fees. The network charges about a tenth of a cent per transaction, paid in US dollar-denominated stablecoins, eliminating the need for a volatile gas token. — Christian Sandor Read more.
ZKSYNC LITE FOR SUNSET IN 2026: Matter Labs plans to phase out ZKsync Lite, the first iteration of its Ethereum layer-2 network, the team said in a post on X over the weekend. The company framed the move, which happened in early 2026, as a planned sunset for an early proof-of-concept that helped validate their zero-knowledge rollup design choices before newer systems went live. ZKsync Lite, which debuted in 2020, was built for basic token transfers and took a backseat after developers released ZKsync Era in March 2023, a more advanced zkEVM rollup that now anchors the project’s broader ZK Stack roadmap. The Lite network will continue to operate for the time being, with funds remaining safe and payouts to the Ethereum mainnet still available, the team said. A detailed migration plan and timetable for the shutdown will be published next year. — Margaux Nijkerk Read more.
BLOCKSTREAM APP INTRODUCES LIGHTNING ATOMIC SWAPS: Blockstream has rolled out an update to its mobile app that allows users to swap between Bitcoin’s Lightning and Liquid networks, aiming to lower the barrier to entry for private, fast bitcoin payments. A fresh version of the Blockstream Green app introduces support for trustless atom swaps between Lightning and Liquid. The change allows users to pay Lightning invoices directly from their Liquid bitcoin (LBTC) balance, avoiding the need to manage Lightning channels or maintain incoming liquidity, a process that can be technically challenging for many. Lightning is designed for instant bitcoin payments at low fees. Liquid, on the other hand, is a sidechain that offers confidential transactions and easier management of unspent bitcoin outputs (UTXOs). By connecting the two networks through atomic swaps, Blockstream tries to give users the benefits of both without requiring deep technical involvement. The exchange process is done on its own and relies on cryptographic hash locks that ensure that both sides of the transaction are completed or neither is. If something goes wrong, the money will automatically return to the original wallet. — Helen Braun Read more.
AXELAR REJECTS NEW PRIVACY AI FRAMEWORK: Axelar unveiled AgentFlux, an open-source framework designed to run AI agents locally while keeping private keys, trading strategies and client data off the cloud — a pitch aimed squarely at institutions exploring onchain financing and wary of privacy risks. Developed by Interop Labs, the team behind the Axelar network, AgentFlux lets financial firms implement “agentic” automation without sending sensitive information to external infrastructure, the company announced. The framework tackles one of the biggest frictions in AI-powered crypto operations: tool calls. Most agents today rely on cloud-based models to decide which blockchain tools to invoke and how to structure transactions, which can inadvertently expose the very information institutions seek to protect. AgentFlux splits these tasks into two smaller, specialized models—one for selecting the right tool and another for generating the arguments to execute. According to the team behind Axelar, this setup improves the accuracy of tool calls by 46% on benchmark tests, bringing local models closer to the performance of larger cloud systems. – Margaux Nijkerk Read more.
In other news
- Superstate, a blockchain-focused financial technology firm, rolled out a new platform that allows US Securities and Exchange Commission (SEC)-registered public companies to issue shares directly onchain to investors on Ethereum. Called the Direct Issuance Program, Superstate’s new initiative allows companies to raise capital by selling newly issued, tokenized equity in exchange for stablecoins. Investors receive the tokenized shares immediately, and the company’s shareholder records are updated in real-time via Superstate’s SEC-registered transfer agent infrastructure. The first issuers are expected to go live next year, the firm said. The move comes as tokenization gains traction with financial institutions and other companies exploring blockchain rails for efficiency gains. In an interview last week, SEC Chairman Paul Atkins said tokenization could “reshape the financial system” over the next few years, underscoring how regulators are opening the door to blockchain as part of the next generation of market infrastructure. — Christian Sandor Read more.
- BitMine Immersion Technologies (BMNR), the Ethereum-focused digital asset treasury firm, acquired 138,452 ether last week, accelerating an accumulation strategy that lifted its total holdings to 3.86 million tokens, the company reported. At current ETH prices, last week’s acquisition is worth about $435 million. That’s a 156% increase from four weeks ago, when it added about 54,000 ETH, the firm pointed out, and it’s also higher than the previous two weeks’ moves of 97,000 and 70,000 tokens. The firm also increased its cash holdings to $1 billion, up from the previous week’s $882 million. Including a small bitcoin holding and a stake in Eightco Holdings (ORBS), the company’s total crypto and cash assets are worth $13.2 billion. The latest purchase increases BitMine’s share of the second largest cryptocurrency’s circulating supply to over 3.2%, strengthening its position as the largest known ETH wallet. — Christian Sandor Read more.
Legislation and policy
- A Republican US senator at the center of negotiations on the crypto market structure bill, which is the industry’s top policy priority, Sen. Cynthia Lummis, said the White House opposed ethics language she challenged with Democrats. That has left the Wyoming lawmaker as a middleman trying to appease Democratic colleagues in the bipartisan talks while convincing the White House to come along, she said at the Blockchain Association’s Policy Summit in Washington. Still, she believes the negotiators should reveal their working draft by the end of the week and formally flag it next week. Lummis said she and Democratic Sen. Ruben Gallego had come up with a language about ethics. Although she was not explicit about specifics, one of the points of contention for Democrats has been their demand that top government officials not be allowed to profit from the industry over which they have political authority — pointed mostly at President Donald Trump and his family’s crypto businesses. — Jesse Hamilton Read more.
- America’s second-largest teachers union called on the Senate to reconsider a crypto bill it says puts 1.8 million members’ pensions at risk while doing little to fight fraud and corruption in the digital asset sector. In a letter dated Dec. 8 obtained by CNBC, Randi Weingarten, president of the American Federation of Teachers (AFT), addressed the US Senate Banking Committee regarding the Responsible Financial Innovation Act, saying “it poses profound risks to the pensions of working families and the overall stability of the economy.” The proposal, which builds on a measure passed by the House earlier this year, is co-sponsored by crypto allies Sen. Cynthia Lummis and Sen. Bernie Moreno, along with Senate Banking Committee Chairman Tim Scott. While the bill sets out a framework for monitoring digital assets, it also raises new questions about how tokenized securities, instruments that are not strictly cryptocurrencies, would be treated by regulators. “The crypto legislation we’ve seen weighed by the committee over the past few months gives us deep concern,” Weingarten wrote. “It is as irresponsible as it is reckless. We believe that, if passed, this bill has the potential to set the stage for the next financial crisis … In addition to the threat to the retirement security of working families, the legislation being considered by the committee does little to curb the illegal activity, fraud, and corruption that remains rampant in anonymous crypto markets,” he wrote. — Olivier Acuna Read more.
Calendar
- 11-13 Dec: Solana Breakpoint, Abu Dhabi
- 10.-12. February 2026: Consensus, Hong Kong
- 17.-21. February 2026: EthDenver, Denver
- March 30-Apr. 2, 2026: EthCC, Cannes
- 15-16 Apr. 2026: Paris Blockchain Week, Paris
- 5.-7. May 2026: Consensus, Miami
