Even for those made a bit uncomfortable by censorship resistance for money (miscreants! ne'er-do-wells!), censorship resistance for writings, media and data likely makes some sense, Brady writes.

• This is a key part of the promise of Filecoin, a decentralized storage system for data, one where people can cut a deal to secure their files with lots of entities at once, making it very hard for an adversary (even a government) to destroy or hide it.

Why it matters: Filecoin's another great example for how the weird world of liquid staking tokens (LSTs) can drive value across a blockchain ecosystem.

Driving the news: Multicoin Capital announced that it led a $4.5 million round for Glif, which has built the Filecoin equivalent of LSTs.

Zoom out: We've written about liquid staking tokens a fair amount, largely because they're the one thing that was really compelling and big on the blockchains during the moribund days of 2022 and dead days of 2023.

To understand how it works on Filecoin, let's look at how Filecoin works.

• The platform pays storage providers cryptocurrency for supplying capacity to the network.
• But it's not enough for someone with a rack of servers to plug into the network to earn cryptocurrency. They have to post a bunch of Filecoin's native cryptocurrency, FIL, as insurance that they will be good network participants.

How it works: Glif does the same thing on Filecoin that Rocket Pool and Lido do on Ethereum — it gives investors a place where they can lend FIL to storage providers for posting, in exchange for a return. Those who deposit FIL get iFIL, a claim on that FIL (also a derivative).

• Liquid staking — technically liquid "leasing" on Filecoin — enhances the capital efficiency between FIL holders and storage providers greatly, making participating in the network more attractive.

Be smart: LSTs are derivatives of a blockchain's native coins. And native coins play all sorts of different roles on different blockchains.

• On Ethereum, ethers (ETH) get staked to validate the state of the blockchain, earning a small return. stETH, a tradeable token, is the top LST that represents a claim on those deposits.

The bottom line: As more FIL becomes liquid again as iFIL, look for further financialization of the asset. In other words: Filecoin DeFi, which could make it easier to fund more storage providers and more applications building on the network.

It is very undesirable for blockchains to go down, but Solana just did it again yesterday, Brady writes.

• It knocked some value out of Solana's native token, SOL — for a little while.

Why it matters: When lots of organizations rely on one continuously updated state, it can be horrible for some users if that state quits updating.

• Imagine someone with a loan on a blockchain, collateralized against an asset whose value is quickly falling. What if the blockchain goes out just as they are trying to close the loan?
• By the time it comes back up, that asset might have fallen so much in value that they get liquidated or can't afford to top up their collateral.

Flashback: Solana used to go down so often it was a bit of a joke, but then it got much, much steadier.

• Meanwhile, it has also been the comeback kid of crypto, roaring back from a 90% drop in its value (the micropayments startup we covered yesterday, Code, runs on Solana).

The latest: The outage lasted just under five hours. It's back now.

The bottom line: The network's last big outage was on Feb 25, 2023 — so close to one solid year!

Treasury Secretary Janet Yellen said congressional action is necessary for filling gaps in digital assets regulation, Crystal writes.

Details: The House Financial Services committee held a hearing yesterday on an annual report from the Financial Stability Oversight Council (FSOC), which Yellen chairs.

• While delivering remarks about the bigger picture, she answered questions from crypto-friendly lawmakers, who prodded her about two bills, Fit21 and one covering stablecoins. Both passed through committee last year.

What she's saying: "Stablecoins pose risks to the financial system that both FSOC and the President's Working Group on Financial Markets have identified as potentially becoming significant over time, and we would very much welcome an effort by Congress to create a regulatory framework that would be appropriate to address those risks."

Context: The tension around stablecoin legislation has to do with state versus federal oversight.

What others are saying: Committee Chair Patrick McHenry (R-N.C.), in his opening remarks, asked whether the "resilient" New York regime for stablecoins, for example, could address the problem.

Of note: Yellen said FSOC believes "it's critical for there to be a federal regulatory floor that would apply to all states."

Flashback: This is in line with what she's said before.

• Yellen pointed to Congress after terraUSD blew up and said "highly appropriate" legislation for stablecoins would arrive by the end of 2022. (It didn't, though, not for a lack of effort.)
• In 2021, when asked about crypto regulation, in a conversation with the Wall Street Journal (cue it up to 19:40), she addressed just CBDCs, saying: "the Federal Reserve is looking at this" while explaining how a soon-to-be rolled out FedNow would speed up payments in the U.S.

What we're watching: FSOC has warned that it would be forced to act on its own if rules for digital assets don't materialize.

✂️ Crypto custody provider Fireblocks cuts jobs. (Bloomberg)

🦊 Metamask is accessing Robinhood's liquidity. (CoinDesk)

🤫 BlockFi and Three Arrows Capital (3AC) reached a settlement deal, but details are under seal. (The Block)

We told you about EigenLayer on Monday and even ran a version of this chart, Brady writes.

• Its growth had already been pretty wild. Then it doubled yesterday in terms of assets committed to this system of extending Ethereum's security.

The latest: The team has been capping deposits as they built assurances it was safe, but it took those caps off until Friday, and investors showed how eager they were to get in.

The bottom line: We'll say it again: Liquid staking is a very big deal right now.