The Protocol: The Impact of Telegram CEO's Arrest on TON Blockchain

As a seasoned crypto enthusiast with a knack for spotting promising projects, I must say that the Babylon initiative has piqued my interest. Coming from someone who’s been around since the early days of Bitcoin, it’s rare to see a project that aims to bring fresh dynamics to such an established asset.

In this week’s CoinDesk newsletter, I delve into the latest developments in the blockchain realm:

ALSO:

Binance once again hunts for a home.
Cardano heads toward biggest upgrade in two years.
Babylon launch sends Bitcoin fees soaring.
Top picks from the past week’s Protocol Village column: Tonkeeper, Sony, Startale, Optimism, Bluwhale, Starknet, SwapKit, BitPay, THORChain.
$60M+ of blockchain project fundraisings.

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JUST IN: OpenSea Gets ‘Wells Notice’ From SEC, Calling NFTs Sold on Platform Securities

With Telegram CEO Pavel Durov scheduled to appear in a French court on Wednesday, experts are examining the potential implications for The Open Network (TON blockchain), a project closely related to Telegram. According to Alex Thorn, Galaxy Digital’s head of research, the worth of TON and its native token, toncoin (TON), is significantly tied to the integration between the project and Telegram. The value of TON plummeted following the announcement that Durov was arrested on Saturday – detained as part of an investigation into potential crimes related to Telegram. It’s uncertain how resilient TON will be if France or other significant governments attempt to disrupt it or take it down in relation to Durov’s arrest, Thorn noted. The TON Society, a community organization associated with TON, has released an open letter criticizing Durov’s arrest and urging France to free him. In an unexpected twist, the TON blockchain experienced a nearly six-hour outage on Wednesday due to increased network traffic – which may be linked to the recent distribution of a memecoin based on TON called DOGS. In a statement on X, the TON blockchain team explained that “Several validators are unable to clear their database of old transactions, resulting in losing consensus.” They added that “no cryptocurrency assets will be lost due to this issue.”

The Protocol: The Impact of Telegram CEO's Arrest on TON Blockchain

As a researcher, I recently came across an insightful conversation with Kain Warwick, the visionary mind behind DeFi projects Infinex and Synthetix. This engaging discussion took place on the popular Steady Lads podcast, which can be found on YouTube.

Is Vitalik Buterin Pro-DeFi or Critical? In recent discussions on platform X, there has been debate among supporters of Decentralized Finance (DeFi) over whether Ethereum co-founder, Vitalik Buterin, is an ally or adversary. Given that around $50 billion worth of DeFi collateral is secured in Ethereum protocols, which is more than five times the amount on runner-up Tron’s network – making DeFi one of Ethereum’s most significant successes. The significance of this sector is underscored by a recent research report predicting that a crucial DeFi metric could surpass its 2021 peak by the end of next year.

The chatter dates back to a post several weeks ago, when Kain Warwick (pictured above), founder of the very-much-DeFi projects Infinex and Synthetix, wrote that, “If the only thing propping up your chain for the last five years is DeFi, and the best you can muster is begrudgingly tolerating it, you are anti-DeFi.” He didn’t mention the Ethereum co-founder by name, but a few days ago, Warwick appeared on the Steady Lads podcast to clarify that he is not a “Vitalik maxi,” asserting that the “importance of DeFi” is “one of the most critical things” that Buterin has gotten wrong over the last five years. “He keeps trying to meme non-DeFi things into existence,” Warwick added. On Saturday, the conversation spilled over to X after user @llamaonthebrink wrote that, “I can’t read Vitalik’s mind so I don’t know what he really thinks. I just find it hard to believe that his views of defi are really that pitiful.”

As a crypto investor, I recently came across Vitalik Buterin’s thoughts on the current state of cryptocurrencies. Instead of outright disagreeing with the points raised, he highlighted various use cases that he finds appealing: decentralized trading platforms, stablecoins operated in a decentralized manner, prediction-betting sites like Polymarket, and even centralized stablecoins such as USDC.

1. Zaheer Ebitkar from Split Capital stated that Vitalik’s questionable decision-making in DeFi can be seen as a positive sign, indicating that the asset isn’t overly reliant on its creators. User @DeFiSurfer808 added humor by saying, “Ethereum’s DeFi is exactly what it’s all about!” Stani Kulechov, founder of Aave – the leading DeFi lending platform – may have made a powerful statement when he wrote, “Building robust finance can address numerous other challenges and empower people, but we are still far from widespread adoption.”

ELSEWHERE:

Binance CEO Richard Teng, a former financial regulator in his native Singapore as well as the United Arab Emirates, said in an interview with CoinDesk that Binance is looking for a headquarters but that the question is “very complex.” The crypto exchange’s Chinese-Canadian founder, Changpeng “CZ” Zhao, was famously evasive about the question, perhaps because the company was so nomadic – reportedly founded in Shanghai and later based in Japan, Malta and unspecified, but with European operations based in France and Middle Eastern headquarters in Dubai.
Nigeria’s money laundering case against crypto exchange Binance, detained executive Tigran Gambaryan and fugitive Nadeem Anjarwalla will resume on Sept. 2, a month earlier than planned, after defense lawyers asked for the trial to be brought forward, Gambaryan’s family said.
Michelle Bond, who once ran a Washington-based crypto advocacy group and had served as a U.S. Securities and Exchange Commission lawyer, was indicted in federal court for taking illegal campaign contributions during her 2022 run for Congress, and court documents detail how a river of cash came through her former FTX executive boyfriend, Ryan Salame.

Cardano Blockchain Heads for ‘Chang Hard Fork,’ Biggest Upgrade in Two Years

Cardano founder Charles Hoskinson speaks last week on a video posted to X. (@IOHK_Charles/X)

In 2017, Cardano – created by Ethereum co-founder Charles Hoskinson – is moving forward with its most significant update in two years. This upgrade will bring substantial modifications to the fundamental structure of its primary network, and it will allow users to engage in on-chain governance through new mechanisms.

The “Chang hard fork,” a significant advancement in Cardano’s plan, will be marked by the long-anticipated integration of smart contract capabilities, which is expected in 2021. However, contrary to initial plans, Hoskinson announced on Friday that this upgrade has been delayed until September 1, allowing certain exchanges like Binance to properly adjust their systems beforehand.

In a post on X, Hoskinson wrote, “Deadlines have a unique power; they make those who aren’t prioritizing updates exclaim, ‘We need to act fast!'”

The primary enhancement in the latest update empowers Cardano with on-chain governance capabilities. By possessing ADA, Cardano’s native token, users will have the opportunity to select delegates (referred to as Delegate Representatives or dReps) and participate in voting processes for suggestions on enhancements and future modifications to the blockchain, along with other important decisions.

Click here for the full story by Margaux Nijkerk

Protocol Village

Top picks of the past week from our Protocol Village column, highlighting key blockchain tech upgrades and news.

Photo of Tonkeeper dApp browser on smartphone (Tonkeeper)

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Space and Time co-founders Scott Dykstra (left) and Nate Holiday (Space and Time)

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Data and Tokens

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Regulatory, Policy and Legal

WazirX Asks Singapore High Court for 6 Months to Restructure Its Liabilities
Hong Kong Markets Authority Opens Its Tokenization Sandbox and Major Institutions Dive in
Australia’s Securities Regulator Wins Case Against Kraken’s Local Operator

Babylon Blitz Briefly Overwhelms Bitcoin

As an analyst, I observed a significant surge in Bitcoin transaction fees, measured in satoshis per vByte, coinciding with the launch of the staking platform, Babylon. This insight was gleaned from data visualized on Mempool.space.

Last week, the Bitcoin-centric staking platform known as Babylon was launched, leading to a surge of users and projects eager to join, which resulted in an overwhelming amount of traffic on the blockchain. This excessive activity temporarily pushed transaction fees to their peak levels since June.

Initially, the project set a maximum limit of 1,000 Bitcoins for the initial phase, which meant there was a restricted amount of space available. Amazingly, it only took 74 minutes for this allocated amount to be filled up, as participants were enticed by the potential benefits of boasting rights and advertising opportunities, in addition to the implied incentive of future rewards. The cost for an individual block during this time soared to a staggering 15.5 BTC ($900,000 approximately), in contrast to the usual fees of 0.1 BTC or less, as indicated by data site Mempool.space. Despite this, one project, Lombard Finance, was able to secure a spot as a “Day 1 Babylon staker.” However, they ultimately decided against investing the planned 250 BTC due to the high fees, which were nearly $750,000 according to a tweet.

Babylon is somewhat similar in concept to the Ethereum restaking protocol EigenLayer, but for Bitcoin; users “stake” deposits on the platform, and that essentially serves as the security collateral to safeguard additional protocols and networks. For bitcoin holders, the project offers a chance to earn extra return beyond price appreciation on a $1.3 trillion asset with no native yield. The planned “shared security” marketplace allowing stakers to earn rewards won’t come until a subsequent launch phase. “If successful, Babylon can potentially unlock massive value in BTC,” Presto Research wrote in a report.

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2024-08-28 21:07

The Protocol: The Impact of Telegram CEO’s Arrest on TON Blockchain