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The Protocol: Solana’s Allure for Devs; Avalanche’s Big Upgrade

Published

4 месяца ago

18 декабря, 2024

Welcome to The Protocol, CoinDesk’s weekly wrap-up of the most important stories in cryptocurrency tech development. I’m Marc Hochstein, CoinDesk’s deputy editor-in-chief for features, opinion and standards.

In this issue:

Solana was the biggest draw for new crypto developers in 2024

No wonder: Solana’s transaction volume is off the charts

Coinbase alums take next step toward no-code blockchain development

Kraken’s ‘Ink’ layer-2 goes live

Avalanche activates biggest-ever upgrade

Ethereum’s ENS picks Consensys’ tech for its L2

Bitcoin’s Stacks L2 gets an automated market maker for Runes

Most Influential 2024: EigenLayer’s Sreeram Kannan

This article is featured in the latest issue of The Protocol, our weekly newsletter exploring the tech behind crypto, one block at a time. Sign up here to get it in your inbox every Wednesday.

Network News

NEW DEVS ❤️SOLANA: The Solana ecosystem, ground zero for the memecoin craze, was the most popular blockchain among new developers this year, according to a report released last week by Electric Capital. In July, this community became the first since 2016 to bring on board more devs than Ethereum. Solana attracted 7,625 new developers in 2024, the most of any chain and a little over 1,000 more than Ethereum. The results underscore the challenge Ethereum faces as rival smart contract platform Solana’s low fees and fast transactions attract investment and talent. Read more.

SPEAKING OF SOLANA: Solana’s network activity has lit up as the Pudgy Penguins NFT project debuted its native token, PENGU, on the programmable blockchain. Solana registered a total transaction tally of 66.9 million Tuesday, the highest daily volume since its inception in 2020, according to data source Artemis. To highlight how busy it was, Solana’s transaction count eclipsed the total of all other major chains combined. Read more

THE INK IS DRY: Kraken, the seventh-largest crypto exchange, said its layer-2 rollup network, built on top of the Ethereum blockchain, has gone live. The network, called Ink, is Kraken’s answer to Base, the highly successful blockchain launched by rival exchange Coinbase. Like Base, Ink is based on the OP Stack, a customizable framework that lets developers build their own rollups using Optimism’s technology. The team had originally planned for Ink to go live in early 2025, so the launch of its main network is ahead of schedule. Read more

AVALANCHE UPGRADE: Avalanche, a layer-1 blockchain launched in 2020 that’s now the tenth-largest by total value locked (TVL), activated its highly anticipated Avalanche9000 upgrade Monday, marking the ecosystem’s biggest technical changes to date. The network has been prepping for these changes for months, with new features that will cut the costs for sending transactions, operating validators and building applications on the network. Leaders at Avalanche previously said that part of the goal with the upgrade is to attract developers to Avalanche and encourage them to create customized blockchains using its technology, known as subnets, or “L1s.» Read more.

A BOON FOR RUNES: Crypto degens have a new – and, if all goes according to plan, faster, cheaper and safer – way to trade Runes, the Bitcoin ecosystem’s answer to memecoins. An automated-market maker (AMM) for the Runes protocol went live on Wednesday on Stacks, following the unveiling of the layer-2 network’s native BTC-backed asset sBTC on Tuesday. It’s the first AMM for such tokens on Stacks. The teams behind decentralized exchange (DEX) Bitflow Finance and Bitcoin bridge Pontis developed the AMM. Runes launched in April and spurred a flurry of activity, paying 78.6 BTC ($8.18 million) in fees in the first 90 minutes. However, less than a month later, this excitement waned considerably, with fees dropping more than 50%. Bitflow’s aim is for its AMM to help Runes scale and address some of the shortcomings holding it back. Read more.

ENS PICKS L2 TECH: ENS Labs, the company behind the Ethereum Name Service, has picked Linea’s technology to build its upcoming layer-2 network, Namechain. Linea is a zero-knowledge rollup that came out in July 2023 and was built by Ethereum infrastructure giant Consensys. It is the seventh-largest rollup network, according to L2Beat, with $1 billion locked in its ecosystem. Rollups are a special type of blockchain where one can transact faster and at a lower cost. There are two kinds of rollups: optimistic and zero-knowledge. Optimistic rollups use optimistic proofs, which have a seven-day window to dispute transactions before they are finalized. Zero-knowledge rollups, by contrast, finalize proofs within minutes. ENS has been described as «the phone book for Web3,» but a more precise analogy is the web’s domain name service (DNS). The domain name «CoinDesk.com» is easier to remember and type than a numerical IP address. Similarly, ENS handles like parishilton.eth, which the namesake heiress acquired in 2021, are more relatable than the strings of letters and numbers that make up Ethereum wallet addresses. For this service, «we need fast finality,” said Nick Johnson, the founder and lead developer of ENS. That’s because “you want to be able to update your ENS name and have the chain reflect it in the smallest interval possible. And to do that and have it remain decentralized and secure, we need fast finality, and optimistic roll-ups can’t deliver that.» Read more.

NO CODE, NO PROBLEM? Patchwork, a startup focused on simplifying blockchain and smart-contract development founded by former Coinbase employees, has released the next version of its low-to-no-code tools for building decentralized applications (dapps). Currently linked to Coinbase’s Base and backed by Coinbase Ventures, the “Create-Patchwork” picks-and-shovels approach lowers the barriers to building blockchain applications and attaching data to them. Following the trend toward easily generated content, the complex world of blockchains and smart-contract design is on a path to no-code applications, or a “text-to-app” experience. Create-Patchwork is the first of several features the team plans to roll out in early 2025 and a foundational step to enable creators to generate contracts and applications in seconds using natural language inputs. “Patchwork is an Ethereum protocol that makes it really easy to build dynamic on-chain applications,” co-founder Kevin Day said in an interview. “It lets on-chain things own other on-chain things, and it allows anyone to attach programmable data to on-chain things.” Read more

EIGENLAYER’S SREERAM KANNAN: KING OF THE PROFESSOR COINS

For a crypto founder who’s attracted so much controversy, Sreeram Kannan is surprisingly sanguine.

In a wide-ranging interview after his selection as one of CoinDesk’s “Most Influential” figures in crypto for 2024, the EigenLayer founder was generous with his time, chatting more than an hour beyond our scheduled slot. I was surprised at his openness because the last time we spoke, a colleague and I had just published an investigation into potential conflicts of interest at his company, Eigen Labs, and in the interim Kannan had disavowed our reporting point-by-point on a Blockworks podcast.

This time, Kannan emerged in a different light. Whatever his misgivings about CoinDesk’s past coverage, they didn’t seem top-of-mind.

What emerged wasn’t the portrait of a defensive tech founder, but rather that of a driven, thoughtful academic-turned-entrepreneur still adjusting to a spotlight few in this industry ever enjoy. Instead of bitterness or evasion, I found ambition, reflection and a quiet kind of excitement.

Kannan seemed as astonished as anyone by how swiftly EigenLayer had transformed from a concept into one of crypto’s most talked-about experiments, telling CoinDesk that he continued to view EigenLayer as a “scrappy startup.”

Over the past 12 months, EigenLayer — which allows emerging blockchain applications to borrow Ethereum’s robust security — went from a relative unknown to an industry heavyweight. The platform raised more than $100 million from venture firms including Andreessen Horowitz and, before even fully launching, drew hundreds of millions of dollars in deposits from crypto users seeking extra yield. Many were incentivized by a viral points program that investors hoped would translate into a lucrative future token airdrop.

EigenLayer’s success during the bear market was striking, and Kannan may have played a larger role than any other entrepreneur in revitalizing decentralized finance on Ethereum. But not everything went according to plan. Industry critics took issue with the EIGEN token distribution plan — which locked up tokens for months and barred claimants from certain geographies — as well as the platform’s slower-than-expected feature rollout and concerns about “rehypothecation,” or the reuse of collateral for multiple purposes. In August, the CoinDesk investigation (that Kannan disputed in the podcast) raised questions about EigenLayer’s conflict-of-interest policies, which may have allowed employees preferential access to tokens powered by its platform.

None of this seemed to derail Kannan’s intellectual ascent. Beyond running Eigen Labs, he still holds a position as an affiliate professor of electrical and computer engineering at the University of Washington, and his theory of “restaking” — letting people reuse staked Ethereum assets to secure other networks — has sparked a wave of innovation and copycats. He’s become a familiar face on the conference circuit, where he unpacks his vision of blockchains as tools for solving humanity’s endless “coordination problems.”

Blockchains, Kannan says, “are the biggest upgrade to human civilization since the U.S. Constitution.”

CLICK HERE FOR THE FULL PROFILE BY COINDESK’S SAM KESSLER:

Money Center

‘Wrapped’ in intrigue

Coinbase Says It Nixed wBTC Because Justin Sun Posed ‘Unacceptable Risk’

WBTC Episode ‘Reopened Old Wounds’ of Centralized Failures: Bitcoin Builders Association

Deals and grants

Stablecoin Payments Platform BVNK Raises $50M to Fuel U.S. Expansion

RWA-Focused Plume Raises $20M from Brevan Howard, Others Ahead of Mainnet Launch

Custody Firm Taurus Partners With Temenos Bringing Crypto Wallets to Thousands of Banks

Regulatory and policy

Next U.S. Senate Banking Chair Calls Crypto ‘Next Wonder’ of World

Calendar

Jan 9-12, 2025: CES, Las Vegas

Jan. 15-19: World Economic Forum, Davos, Switzerland

January 21-25: WAGMI conference, Miami.

Jan. 24-25: Adopting Bitcoin, Cape Town, South Africa.

Jan. 30-31: PLAN B Forum, San Salvador, El Salvador.

Feb. 1-6: Satoshi Roundtable, Dubai

Feb. 19-20, 2025: ConsensusHK, Hong Kong.

Feb. 23-24: NFT Paris

Feb 23-March 2: ETHDenver

March 18-19: Digital Asset Summit, London

May 14-16: Consensus, Toronto.

May 27-29: Bitcoin 2025, Las Vegas.

Uncategorized

Mike Novogratz’s Galaxy Digital Swaps $100M ETH for SOL, On-Chain Data Shows

Published

2 часа ago

22 апреля, 2025

admin

Mike Novogratz’s Galaxy Digital has apparently swapped $100 million worth of ether (ETH) for solana’s SOL.

According to Wu Blockchain, on-chain data suggests that Galaxy has swapped out a considerable amount of its ETH holdings for SOL. Over the last two weeks, Galaxy has transferred 65,600 ETH – or about $105 million – to Binance and has withdrawn 752,240 SOL (approximately $98.37 million).

Galaxy may have made the move because ETH continues to be in «structural decline» according to a recent note from Standard Chartered, which slashed its year-end target price for the asset.

Data from an Arkham dashboard shows that the firm holds $87.9 million ETH versus $23.86 million SOL.

Galaxy did not immediately return a request for comment from CoinDesk.

Market data shows that in the last month, SOL is up 8% while ETH is down nearly 20%.

(TradingView)

Standard Chartered estimated in its note that Base has cut $50 billion from its market cap, but also argued that tokenized real-world assets could help stabilize Ethereum.

Many blockchain metrics would support Standard Chartered’s thesis, as transactions on Solana have rocketed past Ethereum in the last three months.

(Dune Analytics)

A Dune dashboard shows that decentralized exchange (DEX) volume on Solana has moved past $500 billion in the last three months, while DEX volume on Ethereum is less than $400 billion. Active addresses on Solana are over 220 million while Ethereum and Ethereum Layer-2 addresses are just over 80 million.

One idea, first proposed by Tron’s Justin Sun, to reverse this «structural decline» of Ethereum has been a tax on Layer-2s.

«All collected taxes will be used to repurchase ETH and burn it in a fully decentralized manner,» he wrote on X. This idea, however, hasn’t been formalized into an Ethereum Improvement Proposal (EIP) which would be the first step in it becoming reality.

Meanwhile, flow data from the Ether ETFs shows that investors moved nearly $600 million out of these listed products over the last two months.

Uncategorized

U.S. Derivatives Watchdog Weighs 24/7 Action With Crypto Oversight on Horizon

Published

8 часов ago

21 апреля, 2025

admin

Bitcoin is the crypto sector’s top asset and is also universally defined by U.S. regulators and courts as a commodity, putting it under the jurisdiction of the Commodity Futures Trading Commission. That agency is now seeking public comments on whether it should open the wider world of derivatives to around-the-clock trading, as already executed for bitcoin and other digital assets.

Though the CFTC is expected to be established as a crypto market regulator in Congress’ ongoing effort to establish industry rules, the agency’s invitation for comments issued on Monday doesn’t explicitly discuss digital assets oversight. The request notes that «technological advancements and market demand» are pushing CFTC-regulated firms toward being able to handle transactions at all times.

“As I have long said, the CFTC must take a forward-looking approach to shifts in market structure to ensure our markets remain vibrant and resilient while protecting all participants,” said Acting Chairman Caroline Pham, in a statement. She was tapped by President Donald Trump to run the agency while it awaits the Senate confirmation of its chairman nominee, Brian Quintenz.

Trading without downtime presents a host of challenges for U.S. markets unaccustomed to it, according to the request, including «what governance frameworks, exchange staffing models and technologies would be necessary to ensure market integrity and operational resilience, as well as compliance with all core principles, under a continuous trading model.» Such an expansion would require firms to handle live maintenance and technology patches and human monitoring of the systems and markets during the extended hours, which are issues already long wrestled with by digital assets operations.

The CFTC would still need a change in law before it could have direct authority over actual spot-market trading of bitcoin and other tokens that aren’t eventually categorized as securities, which would get Securities and Exchange Commission oversight. If the agency is ultimately a major regulator of trading and of the platforms and firms that handle customers’ transactions, that’s a space in which 24-hour, seven-days-a-week activity is already the model.

Uncategorized

Can Bitcoin Benefit From Trump Firing Powell? Turkey’s Lira Crisis May Provide Clues

Published

11 часов ago

21 апреля, 2025

admin

The week has begun on an interesting note, with the U.S. dollar crashing to three-year lows alongside losses on Wall Street, yet bitcoin, which usually follows the sentiment on Wall Street, stands tall.

This could just be the beginning.

The shift away from the USD and toward seizure and censorship-resistant assets like BTC and stablecoins could accelerate if President Donald Trump follows through with his reported plans to fire Federal Reserve Chairman Jerome Powell, which have pushed the DXY and U.S. stock markets lower today.

That’s the lesson from Turkey, which has seen its currency, the lira (TRY), collapse over the years mainly due to President Recep Tayyip Erdogan’s repeated interference in the central bank’s operations. The sliding lira has triggered a capital flight into BTC and stablecoins since at least 2020-21.

Trump’s issues with the Fed

Trump has feuded publicly with the Federal Reserve and its chairman, Jerome Powell, for years, criticizing Powell for being too late on rate cuts even during his first term when interest rates were way lower than today.

However, Trump’s criticism has recently reached a fever pitch with reports suggesting he is looking for ways to get rid of Powell, who recently warned of stagflation even as the President reiterated calls for lower borrowing costs while suggesting there is no inflation.

Powell’s patient approach follows a trade war-led spike in survey-based measures of inflation expectations, which could always become self-fulfilling.

Still, on Monday, Trump went further, calling Powell a «major loser» and warning that the economy could slow down unless interest rates are immediately lowered.

Lesson From Turkey

Erdogan began interfering in the central bank’s operations in 2019, and since then, the lira has collapsed sevenfold from 5.3 per dollar to 38 per dollar.

It all started with Turkey’s inflation rate reaching double digits in 2017. It remained elevated in the subsequent year, which prompted the country’s central bank to increase the one-week repo rate from 17.5% to 24% in September 2018.

The move likely didn’t go well with Erodgan, who issued the first decree dismissing Central Bank of Turkey (CBT) governor Murat Cetinkaya in July 2019. From then on until the end of 2021, Erdogan issued multiple decrees dismissing and hiring several CBT officials. Amid all this, inflation remained elevated, and the lira continued to depreciate at an alarming rate.

«We certainly don’t believe in high interest rates. We will pull down inflation and exchange rates with low-rate policy … High rates make the rich richer, the poor poorer. We won’t let that happen,» Erdogan said in 2021.

As of 2025, Turkey faces an inflation rate of nearly 40%, according to data source TradingEconomics.

This episode serves as a cautionary tale for Trump, highlighting that tampering with central bank independence — especially in the face of looming inflation — can erode investor confidence and send the domestic currency into a tailspin.

This does not necessarily mean that the USD will crash exactly like lira but may see significant devaluation.

Perhaps it could prove even more destabilizing for global markets, considering the dollar is a global reserve currency, and the U.S. Treasury market is the bedrock for international finance.

If better sense fails to prevail, U.S. investors may feel incentivized to move away from U.S. assets and into BTC and other alternative investments, just as Turks did.