The Protocol: Lido Backers vs EigenLayer

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Meme coins have gained significant attention in the crypto industry recently. According to an industry insider I spoke with over margaritas, venture capital firms are starting to view meme coins as a legitimate investment class. In April 2021 alone, CoinMarketCap added 138 new meme coins to its listings, compared to just 18 in the same month the previous year, bringing the total number of meme coins to 2,229 with a market capitalization exceeding $50 billion.

New Development: Two siblings are in custody, charged by the US Department of Justice with orchestrating a 12-second assault on the Ethereum blockchain and making off with $25 million worth of cryptocurrency, as detailed in an unveiled indictment on Wednesday.

Vitalik Buterin’s Productive Writing: In our previous articles for The Protocol newsletter, we have emphasized Vitalik Buterin’s extensive writing abilities and the significant impact his words have on Ethereum-related discussions. For instance, Decrypt recently covered a lengthy piece by Buterin about “multidimensional gas pricing.” With a tight deadline looming for Ethereum wallet standard discussions, Buterin demonstrated impressive speed in creating EIP-7702 within 22 minutes. This proposal served as an alternative to the previously debated EIP-3074 and garnered praise from critics. The Ethereum community swiftly expressed their approval of replacing the earlier plan with Buterin’s proposed solution.

The courtroom where Tornado Cash developer Alexey Pertsev was sentenced. (Camomile Shumba/CoinDesk)

As a crypto investor and follower of the latest news in the blockchain space, I’ve been closely monitoring the recent developments regarding Alexey Pertsev, the 31-year-old developer behind Tornado Cash. In a shocking turn of events, a Dutch judge found him guilty of money laundering and sentenced him to 64 months in prison. The case, along with other similar cases brought by prosecutors worldwide, has sparked intense debate about the degree of responsibility that crypto developers hold for the code they create.

As a researcher studying the Solana blockchain ecosystem, I’ve followed the developments of various crypto trading protocols. One project that has recently gained attention is Cypher. Unfortunately, this protocol has faced several setbacks, including hacks and heists. However, its latest loss came from an unexpected source. On Tuesday, a pseudonymous developer identified as Hoak confessed to stealing hundreds of thousands of dollars worth of cryptocurrencies from Cypher’s hack reimbursement fund. In a statement, Hoak admitted to using the funds for gambling activities, attributing his actions to an overwhelming gambling addiction.

As a researcher, I’ve come across the intriguing news that El Salvador has established a new platform for monitoring its substantial $350 million investment in Bitcoin. According to Bitcoin Magazine, this development underscores the Central American country’s commitment to transparency and accountability in managing its digital currency reserves.

The Ethereum layer-3 meme coin blockchain, Degen Chain, resumed operations following a two-day interruption. Launched in March, Degen Chain is described as an “affordable L3 solution tailored for the Degen community” by Syndicate, its infrastructure provider. The platform utilizes Arbitrum Orbit for scalability, Base for settlements, and AnyTrust for data availability.

In case you missed it: Danny Nelson from CoinDesk explores the enigmatic realm of crypto influencers, or “key opinion leaders” (KOLs), who invest in projects they publicize on social media. As a reward for their promotion, these individuals are granted early access to investment opportunities before other investors.

Protocol Village

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

Hyperbolic’s Proof of Sampling architecture (Zhang et al)

As a crypto investor, I’m excited to share that Jasper Zhang, the math whiz behind the two-year-old startup Hyperbolic, announced on Thursday their latest innovation: a new protocol called “Proof of Sampling (PoSP)”. PoSP is designed to tackle trust issues in decentralized AI networks. Co-founded by Zhang and Yuchen Jin, who holds a Ph.D. in computer science from the University of Washington, Hyperbolic has been making waves since its establishment in 2022.

2. Lens Lab, a part of the Stani Kulechov-led Avara and the team behind Lens Protocol, a Web3 social platform built on Polygon PoS, announced that it is now developing its own blockchain network, Lens Network. The new network will be built on Matter Labs’ ZK Stack, powered by zkSync on Ethereum. “The Lens Network will set a new baseline/precedent for how social networks should be built,” Alex Gluchowski, co-founder and CEO of Matter Labs, said in a press release.

Polkadot, the layer-1 blockchain ecosystem headed by Ethereum co-founder Gavin Wood, has introduced Asynchronous Backing as announced by the team. This development paves the way for Polkadot 2.0, which brings a series of enhancements anticipated to boost scalability, reduce costs and transaction fees, increase network speed, and foster growth in decentralized applications. Asynchronous Backing reduces block time by half (from 12 to 6 seconds), allows parallel processing of transactions and block production, and offers up to tenfold higher throughput for Polkadot’s parachain consensus protocol.

CoinDCX, a prominent crypto exchange based in India, is broadening the scope of its Okto wallet into a comprehensive Okto ecosystem. This expansion encompasses the launch of a blockchain, a native token, and a rewards program, set to commence on Tuesday. The founders, Neeraj Khandelwal and Sumit Gupta, shared with CoinDesk their intentions of providing a seamless, one-click mobile experience for users navigating the Web3 realm.

5. The developer formerly known as CyberConnect, now branded as “Cyber,” has introduced its own layer-2 network within the Ethereum blockchain system, which they’ve labeled as the “first social L2.” The team emphasizes that this new chain utilizes “leading modular solutions” for affordable transactions, high transaction per second (TPS) rates, and a user-friendly interface. As mentioned in their blog post, AltLayer will oversee the technical launch, ongoing management, operations, and future enhancements of this rollup.

EasyA Consensus Hackathon – Call for Participants

In 2023, Consensus is teaming up with EasyA, the leading Web3 education platform, to host our inaugural in-person hackathon. This three-day event will take place in person and span multiple blockchains. Renowned sponsors such as Sui, Stellar, Polkadot, and more will support this hackathon, drawing top developers from around the world to innovate for the future of Web3 technology and secure funding for their projects.

As a researcher studying the tech industry, I can share that startups founded by EasyA alumni have amassed a significant value of over $2.5 billion. The upcoming EasyA Consensus hackathon in 2024 is poised to be a landmark event in the hackathon scene.

If you’re eager to join the hacking event, don’t miss out – sign up here as we have only a few spots left.

‘Liquid Vesting’ Is Oxymoronic Blockchain Feature That Lets Early Investors Sell Without Waiting

Avalanche Incubator Colony Lab Co-founders Wessal Erradi and Elie Le Rest (Colony Lab)

Even in anything-goes crypto trading, there are conventions designed to protect the little guy.

One method to express this idea in clear and conversational language is: During the vesting period after a digital token sale or airdrop, early investors, including founders, contributors, and venture capitalists, are restricted from selling their allotted tokens for a specified length of time.

One common practice for projects is to implement measures aimed at preventing a sudden drop in the price of their token following a listing. This can be achieved by slowing down the selling pace of big stakeholders or insiders. Additionally, these measures help keep early investors engaged and committed to the project’s long-term success.

As a crypto investor excited about the Avalanche blockchain ecosystem, I’m thrilled to share that Colony Lab, a leading developer and project incubator, has introduced an innovative new feature called “liquid vesting.” This means that instead of being locked up in traditional vesting contracts, my tokens can now be traded on the open market while still adhering to a vesting schedule. It’s like having the best of both worlds – the ability to sell or trade my tokens when I need liquidity, while still honoring the long-term commitment to the project. A game-changer for those looking to manage their crypto investments more effectively in the dynamic world of decentralized finance!

As an analyst, I would advise you to consider this option as a way to access your liquidity prior to the end of the vesting period. If you choose to do so, it will allow you to have and hold onto your bags, while also gaining access to cash now.

Click here for the full article by CoinDesk’s Margaux Nijkerk

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Data and Tokens

Runes Frenzy Fades

Last month, we witnessed the highly anticipated launch of the Runes protocol on Bitcoin. In real time, we observed its immediate popularity and widespread adoption following the bitcoin halving, which drove transaction fees to unprecedented heights. Users rushed to create new meme coins through the protocol, vying for their transactions to be processed in the now heavily congested blockchain. I’m looking forward to interviewing Rodarmor onstage at CoinDesk’s Consensus conference in Austin on May 31st. Notably, as of last week, Runes accounted for a significant proportion of all Bitcoin transactions, surpassing both the original bitcoin and Ordinals inscriptions, as well as the competing fungible token standard BRC-20.

The excitement surrounding Runes has cooled off somewhat. A recent report by Coin Metrics stated that Runes have been dismissed as a failure due to decreased interest that hasn’t lived up to initial hype. However, analysts at Coin Metrics also suggested that there could be a revival: “Runes have yet to gain traction through listings on major exchanges and primarily trade on niche collectibles platforms.” The number of transactions related to the new protocol seems to be decreasing.

Since the launch in late April, the volume of transactions on the Runes network has decreased across the board (according to data from @runes\_is and Dune Analytics).

Calendar

May 18-27: Berlin Blockchain Week.

May 29-31: Consensus, Austin Texas.

May 29-31: Bitcoin Seoul.

July 8-11: EthCC, Brussels.

July 25-27: Bitcoin 2024, Nashville.

Aug. 19-21: Web3 Summit, Berlin.

Sept. 19-21: Solana Breakpoint, Singapore.

Sept. 1-7: Korea Blockchain Week, Seoul.

Sept. 30-Oct. 2: Messari Mainnet, New York.

Oct. 9-11: Permissionless, Salt Lake City.

Oct. 21-22: Cosmoverse, Dubai.

Oct. 23-24: Cardano Summit, Dubai.

Oct. 30-31: Chainlink SmartCon, Hong Kong

Nov 12-14: Devcon 7, Bangkok.

Nov. 20-21: North American Blockchain Summit, Dallas.

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