Line Reveals Five ‘Gamer First’ NFT Games Releasing in 2023

https://decrypt.co/140020/line-reveals-five-gamer-first-nft-games-releasing-2023

Line Next is making a big Web3 gaming push with its Game Dosi platform, and shared a preview of the first five NFT-based titles.

OFAC Sanctions Target Supporters of North Korean-Linked Lazarus Group

https://decrypt.co/137769/ofac-sanctions-target-supporters-of-north-korean-linked-lazarus-group

The people sanctioned were used by hackers to “conduct transactions on their behalf to avoid detection” said the Treasury Department.

Crypto VC Funding Down 82% Compared to Last Year

https://decrypt.co/137503/crypto-vc-funding-down-82-percent

The evaporating funding means “a lot of companies are doing their down rounds,” said the founder of Delta Blockchain Fund.

Judge Says DOJ Can Call OpenSea NFT Case ‘Insider Trading’, Sets Trial Date

https://decrypt.co/137303/judge-opensea-nft-insider-trading-trial-date

“Chastain’s arguments about use of the term ‘insider trading’ are moot,” the judge wrote in a memo filed yesterday.

Safemoon liquidity pair compromised in $8.9 million hack

https://www.theblock.co/post/223547/safemoon-liquidity-pair-compromised-in-8-9-million-hack

The BNB chain-based exchange Safemoon was compromised earlier today, according to on-chain records, resulting in close to $9 million being drained from its liquidity pool.

“To the @SAFEMOON community: We want to inform you that our LP has been compromised,” the BNB-based exchange wrote on Twitter, adding that it was taking swift action to resolve the issue. Almost $8.9 million in assets were transferred out of the liquidity pool, according to BscScan.

A recent update may have introduced a “public burn bug” that facilitated the hack, security firm Peckshield said.

The hacker was able to artificially raise the price of SFM tokens using a code function, and then sold enough tokens back to the liquidity pool in the same transaction to effectively drain the WBNB from the contract, Peckshield confirmed.

“By exploiting the public mint bug, the actor can burn most SFM token in the pair, which increases the SFM price,” Peckshield told The Block, adding, “With that, the actor basically buys SFM at the beginning, next exploits the public mint bug to increase the SFM price, and then sells SFM with the profit [greater than ] $8.9 million.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

MakerDAO ‘Endgame Plan’ ratified in new ‘Constitution’

https://www.theblock.co/post/223134/makerdao-endgame-plan-ratified-in-new-constitution

More structure is coming to DAI issuer Maker following the majority approval of a constitution for the platform on MakerDAO, a cooperative decentralized autonomous organization (DAO) that manages the protocol.

Of those who responded to an open poll on the matter that closed on March 27, 76% voted to ratify “The Maker Constitution,” a proposal authored by Maker CEO and co-founder Rune Christensen.

“The Maker Constitution is a strategic tool for building as much resilience as possible into the political and operational interactions and processes that occur in Maker Governance,” Christensen’s documentation on the subject said.

The constitution itself introduces a significant reform for MakerDAO as part of the platform’s “Endgame Plan,” a strategy advocated by Christensen. It offers guidance on a variety of platform related functions pertaining to overall stability, decentralization and risk, frontend governance, voter committees and delegates, and more.

For Maker, the proposal means a new level of detail and strategy will be implemented in terms of the long term management of the platform, accounting for risk, partnerships, voter and governance infrastructure and asset management.

Constitutional conservers

The purpose of conservers is to protect Maker governance by “by ensuring it occurs according to the processes defined in the Maker Constitution,” and will “enable MKR holders to participate in Maker Governance in a manner where it is easy for them to make the decisions that best benefit their long term interests as MKR holders, even if the MKR holders have relatively little alignment,” according to the document.

Responsible for two critical governance roles as Constitutional Voter Committee members and Constitutional Delegates, constitutional conservers are to be anonymous. Conservers furthermore must take an oath to fight corruption, organizational drift, and other threats they may discover, and may be subject to additional requirements which may vary as their roles dictate, as described within relevant constitutional articles, the document said.

Voter Committees

Among those MKR holders who wish to publicly coordinate, Voter committees allow for the engagement of voting strategies, political alignment, and for compromise to be found in accordance with the common grounds that lie between various voter groups.

Additional parameters in the document define a Constitutional Voter Committee, made up of constitutional conservers who contribute more than the minimum requirements to platform governance. These committees receive benefits, resources, and support but are held to specific requirements.

Constitutional Delegates

Certain constitutional conservers operate smart contracts related to the Protocol Delegation System, making them constitutional delegates, according to the constitution. They “are eligible to receive significant income from the Maker Protocol … based on the number of votes delegated to them,” as long as participation requirements are met.

The delegates are to refrain from involving themselves in MakerDAO operational activities, nor are they able to allocate resources from their delegacy toward operations, with the exception of allocations which have a charitable impact.

Delegates are encouraged to “compete and campaign on their ability to achieve some level of charitable impact with the resources available to them, in order to demonstrate alignment with the public good purpose of the DAO,” according to the constitution.

SubDAOs and communities

The constitution provides details for the launch of six subDAOs comprising two FacilitatorDAOs that manage governance, two ProtectorDAOs that manage real-world assets, and two CreatorDAOs focused on innovating decentralization.

For each subDAO a well developed community will be required, and to spur the cultivation of such groups, infrastructure and support will be provided.

Provisions were also laid out to provide project-based funding for professional actors who aren’t classified as core units but still offer “critical services for SubDAOs, and professional and expert services for Maker Core, or b2b services for other Ecosystem Actors,” according to the document.

Circle sidesteps SWIFT after bank collapses, turns to Gibraltar’s Xapo Bank

https://www.theblock.co/post/222123/circle-sidesteps-swift-after-bank-collapses-turns-to-gibraltars-xapo-bank?utm_source=rss&utm_medium=rss

The SWIFT network may be in for some competition after Gibraltar-based Xapo Bank said it will collaborate with stablecoin issuer Circle to offer to members a means bypass the banking payment system with USDC.

Xapo will offer one-to-one dollar conversion of USDC and convert all deposits of USDC into USD, with a 4.1% annual interest rate on deposits, the bank said. SWIFT is the current system used by institutions worldwide and enables global bank-to-bank payments and transfers. Xapo said that it refrains from lending or fractional reserve banking practices and holds customer funds in reserves and short-term liquid assets. The bank charges $150 to members to recover overhead.

“By adding outrails to its existing USDC onramps, Xapo Bank is enabling members to bypass costly and time consuming SWIFT payments and instead deposit and withdraw via the stablecoin with no fees charged by Xapo Bank,” the bank said in a statement.

Although USDC currently trades at $1, the stablecoin recently lost its dollar peg following the collapses of some of its major banking providers, including Signature, Silvergate and Silicon Valley Bank, the latter of which held $3.3 billion of Circle’s USDC reserves.

The stablecoin recovered dollar parity after Circle CEO Jeremy Allaire said on Twitter that all of the company’s SVB related deposits were secure.

Circle and Xapo did not immediately respond to requests for comment.

Coinbase will soon support the ARB-USD trading pair

https://www.theblock.co/post/222022/coinbase-will-soon-support-the-arbitrum-arb-usd-trading-pair?utm_source=rss&utm_medium=rss

In advance of the Arbitrum airdrop, Coinbase tweeted that it will support trading for the governance token on March 23.

“Once sufficient supply of this asset is established, we will announce the impending launch of trading on our ARB-USD pair in phases,” Coinbase said, adding that support may be restricted in some jurisdictions. Coinbase warned users to avoid sending the token to a network other than Arbitrum, as it will result in the loss of tokens.

Arbitrum will trade on Coinbase with the “experimental asset label” that the exchange assigns to new assets or those with low performance relative to the trading volume of other supported trading pairs.

Coinbase noted that it is aware of an issue in which “some users may see a delay in depositing on the Arbitrum network” and said its team is working to resolve the issue. It will update the site’s status page once the issue is resolved, Coinbase said.

The long-awaited airdrop of ARB will see 11.6% of the total supply fall into the hands of users, while 1.1% goes to DAOs on the Layer 2 platform. The lion’s share of ARB, some 42.8%, is earmarked for the Arbitrum Foundation.

CityCoins lose liquidity on Okcoin exchange: Bloomberg

https://www.theblock.co/post/221801/citycoins-lose-liquidity-on-okcoin-exchange-bloomberg?utm_source=rss&utm_medium=rss

Okcoin exchange has halted the trading of two proof-of-work tokens, the mining of which respectively supported the cities of New York and Miami, due to lack of liquidity, Bloomberg first reported.

Miami’s CityCoin got the city a $5.25 million dollar disbursement in February last year. New York City Mayor Eric Adams gave his blessing to a similar cryptocurrency, NYCCoin, in November 2021.

However, liquidity support for the CityCoins on Okcoin exchange fell below what the market could tolerate.

The CityCoins halted trading on Okcoin March 16, “until we are able to safely restore trading, but we don’t know when that will be possible,” the exchange said in a statement.

Neither of the coins is officially partnered with the cities, as noted by CityCoins website. However, Miami Mayor Francisco Suarez and Adams both previously touted the token’s virtues, and 30% of the money spent on mining each coin was to be donated to the city the coin represented, according to Okcoin.

This week in markets: Bitcoin soars, Ether jumps and Coinbase, MicroStrategy rally

https://www.theblock.co/post/221022/this-week-in-markets-bitcoin-soars-ether-jumps-and-coinbase-microstrategy-rally

The value of the two biggest cryptocurrencies surged last week amid continuing turmoil in the banking industry. Bitcoin jumped 35.05% last week to $27,401 and Ethereum similarly spiked 24.75% to close the week at $1,794.

Chart from TradingView.

Crypto stocks and structured products

Shares of Silvergate plummeted 38.62% to close the week at $2.05.

Coinbase shares rose 33% and MicroStrategy gained 30% for the week. Jack Dorsey’s Block gained 5%.

For the week, Grayscale’s structured bitcoin trust surged 33% and Ethereum trust rose 16%.

Macro Matters

Grayscale said it’s possible the Federal Open Market Committee will forgo any interest rate increase when in it meets March 22 if the banking crisis persists. Before the crisis, it was widely assumed the central bank would hike rates by 0.25%

Inflation fell to 6% in February from 6.4% in January, according to a report from the U.S. Department of Labor.

Coinbase to process ETH unstaking requests 24 hours after Shanghai update

https://www.theblock.co/post/220259/coinbase-to-process-eth-unstaking-requests-24-hours-after-shanghai-update?utm_source=rss&utm_medium=rss

Coinbase will begin to take unstaking requests around 24 hours after the Shanghai-Capella upgrade to the Ethereum network that will allow users to unstake ETH goes live, the exchange said on Twitter.

However, that doesn’t mean users will be able to unstake their ETH right away because “the Ethereum protocol controls the unstaking process and we’re simply the conduit,” Coinbase, said, adding “we can’t share an exact waiting period when you request to unstake.”

Coinbase currently provides a 6.0% APY return on staked ETH.

Once unstaking requests are processed on-chain and released by the Ethereum protocol, Coinbase confirmed users will receive all their staked ETH, in addition to staking rewards accrued.

While Coinbase will process withdrawal requests just a day after the Ethereum Shanghai-Capella update, staking platform Lido said it will wait until mid-May to initiate staked ETH withdrawals following the completion of on-chain code audits to ensure user safety.

Maverick Protocol DEX launches with Lido integration to compete with Uniswap

https://www.theblock.co/post/217919/maverick-protocol-dex-launches-with-lido-integration-to-compete-with-uniswap?utm_source=rss&utm_medium=rss

A new contender is challenging Uniswap for decentralized exchange supremacy. Or so Maverick CTO Bob Baxley believes.

Maverick Protocol, along with Lido, Liquity and Galxe, today deployed a decentralized exchanging that uses smart-contract driven on-chain modular trading strategies designed to offer more capital efficiency and reduced gas fees for liquidity providers.

“In Maverick, we give the LPs a new degree of freedom, which is they pick not just a range, but a distribution,” Baxley told The Block, adding that LPs can deploy liquidity “in an automated way with price so that it stays in range more often and that increases the capital efficiency.”

Maverick will integrate with Lido and use the staking protocol’s wrapped liquid staking token, wstETH, as the predominant ETH-based quote asset, and LPs that choose to use wstETH instead of ETH receive extra APR, since wstETH accrues staking rewards, the company said.

An additional partnership with Galxe and Liquity, will see the Maverick platform host LPs from the both communities establish and support respective LUSD-wstETH and GAL-wstETH pools, according to Maverick.

Market action and capital allocation

In decentralized exchange networks, LPs facilitate trading with capital they allocate to various trading pairs of cryptocurrencies for which they collect fees.

“The challenge with that is when the price leaves the LPS range, their capital efficiency goes to zero,” Baxley said.

On existing automated market makers, liquidity providers depend on sideways market action to maximize capital efficiency, and manually tracking price changes to maintain the concentration of a liquidity pool introduces gas costs and a layer of complexity, according to Baxley.

However, markets don’t always go sideways. Maverick designed approaches that allow LPs to make a bet on price action as they collect fees with automated strategies that operate on-chain and are designed to ensure capital is deployed at the price where trading occurs, said Baxley.

One strategy works like a directional bet that Baxley called “mode right” and only moves liquidity allocations with increases in price. Any subsequent decreases in price don’t change liquidity allocations in this scenario. So if the price decreases or trades below the range for an extended time, another mode may need to be selected.

The same settings can be reversed if the market is contracting for a “mode left” directional bet.

A “mode both” strategy offers the highest possible capital efficiency by tracking price action in either direction and allocating capital accordingly but also comes with a higher risk of impermanent and permanent loss which can occur during extremely volatile conditions, said Baxley.

“If you really believe the price is going to go sideways and just sideways, mode both is your way to go,” said Baxley, noting that it “can be a good position for something like a very stable pair like USDC, USDT, or even an LSD pair where you expect the price to not have kind of drastic undulations left and right.”

Arbitrary capital distributions

Another Maverick strategy is similar to how liquidity functions in Uniswap V3, but differs in that it allows LPs to select arbitrary distributions within a certain range that does not move with price, said Baxley.

These arbitrary distributions allow LPs to direct their support and set price walls or price floors, or distribute capital to markets in ways that Baxley said are designed to reward early adopters.

For protocols interested in maintaining the dollar parity of a native stablecoin, such as Liquity, liquidity may be deployed on either side of the dollar peg to encourage trading where support is needed, Baxley said.

“So this is in contrast to something like a curve stable swap pool where the liquidity is always proportional to the price, and so if it’s off peg and you add more liquidity, you are just exacerbating the problem,” Baxley said, pointing out that the structure of curve stable swap pools can mean LP capital infusions attempting to right the situation can “create a bigger liquidity wall between peg and price.”

Silvergate suspends Silvergate Exchange Network as company reels from crises

https://www.theblock.co/post/217098/silvergate-suspends-silvergate-exchange-network-as-company-reels-from-crises?utm_source=rss&utm_medium=rss

Silvergate suspended its Silvergate Exchange Network on Friday, the result of what it called “a risk-based decision.”

The network shutdown comes after Moody’s downgraded Silvergate’s credit rating for the second time in less than two weeks. Moody’s said it downgraded Silvergate due to insufficient capitalization and “governance deficiencies” after the company delayed its annual report filing and following the company telling the Securities and Exchange Commission it was "less than well-capitalized."

Although SEN is now shut down, other deposit-related services are unaffected, according to Silvergate.

A number of major blockchain industry companies, including Circle, Blockchain.com, Wintermute, GSR, Coinbase and Paxos, severed ties with Silvergate.

The bank recently also will release $9.9 million to distressed crypto lender BlockFi, as stipulated and ordered in BlockFi’s bankruptcy.

Silvergate now faces a number of issues, including litigation, as well as regulatory and congressional scrutiny, according to its SEC filing.

Arthur Hayes vows his family office Maelstrom will ‘f— some s— up’

https://www.theblock.co/post/217082/arthur-hayes-vows-his-family-office-maelstrom-will-f-some-s-up?utm_source=rss&utm_medium=rss

Arthur Hayes, a co-founder founder of the Bitmex exchange, said he’s ready to “be more public” about his family office dubbed Maelstrom.

“You will see our head of investments, Akshat Vaidya at conferences globally,” Hayes said in a post on LinkedIn, adding, “let’s fuck some shit up!"

Maelstrom invests “in cool shit with a focus on crypto and digital assets,” according to the family office’s website. The home page for the office features the slogan "we are entropy." The office didn’t immediately respond to a request for comment.

Before joining Maelstrom, Vaidya served for just over three years at BitMEX as an investment associate, manager, and later as vice president of corporate development and strategic finance, according to his LinkedIn profile.

Hayes, alongside investors FalconX, Commonwealth, OP Crypto, and ChapterOne, participated in a $2.1 million seed round for Elixir, a decentralized finance protocol and market maker, that was announced earlier this year.

Last May, Hayes was handed a sentence of six months in home detention for his role at BitMEX. He told the court he was “ready to turn the page.”

Update: Added details on Vaidya’s previous employment.

Correction: Updated with the corrected amount in the seed round from Elixir.

Cumberland Labs backed Hashnote launches regulated DeFi platform

https://www.theblock.co/post/215589/cumberland-labs-backed-hashnote-launches-regulated-defi-platform?utm_source=rss&utm_medium=rss

A regulated decentralized finance (DeFi) platform for institutions, Hashnote, launched after a $5 million incubation with early stage blockchain investor Cumberland Labs.

“We are kind of a funnel into DeFi for institutional investors,” Hashnote founder and CEO Leo Mizuhara told The Block in an interview. “Think of us almost like an on-ramp.”

Hashnote is a compliance driven DeFi platform on the Ethereum blockchain that conforms to Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) standards and offers clients exposure to crypto-based investments such as yield generation, downside protection and leveraged upside products, the company said.

“Our ecosystem is a walled garden, whitelisted ecosystem,” said Mizuhara, noting that if customers want to bring their own wallets, they must follow KYC procedures that he thinks are “important for being regulated in the U.S. as well as really regulated anywhere else in the world.”

Three ways to interact

With respect to an institutional market sector that may not be familiar with web3 interfaces, Hashnote is taking a multi-pronged approach to onboarding newcomers into the DeFi ecosystem, according to Mizuhara.

One approach allows clients to wire cash directly to Hashnote, with the option to track transactions on the blockchain.

A second option allows traders to send a wire transaction but opt for Hashnote to create an empty wallet which receives assets but requires both Hashnote and the recipient to sign a transaction, which Mizuhara referred to as a “safe way” to approach DeFi.

The third option allows knowledgeable web3 traders to practice self custody and interact with Hashnote via MetaMask or any other blockchain wallet, said Mizuhara.

Mounting demand for DeFi

Institutions are seeking a fully regulated KYC platform to access DeFi, according to Mizuhara, who added Hashnote is “getting a ton of interest” and that financial products of this nature are “in demand right now.”

“We should be looking at trillions, not billions,” Mizuhara said. “And I think the way forward is onboarding all these people who are in the traditional finance space and bridging that gap between what we call traditional finance and DeFi.”

“I think we’ll be able to onboard the next couple billion–trillion dollars into the crypto space,” he added.

Voyager transferred $154 million USDC off Coinbase this month, Arkham Intelligence says

https://www.theblock.co/post/215529/voyager-transferred-154-million-usdc-off-coinbase-this-month-arkham-intelligence-says?utm_source=rss&utm_medium=rss

On-chain data shows that Voyager’s assets are on the move amid the company’s bankruptcy proceeding.

Around $154.4 million in USDC was transferred to the shuttered exchange’s "Voyager 1" Ethereum wallet from Coinbase this month, according to transaction records.

The selloff was noted by web3 analytics firm Arkham Intelligence, which confirmed in a tweet that Voyager has been selling off assets “at a rate of around $100M/week.” It added that the company had “$700M in two very large wallets.”

The Voyager wallets contain $268 million in ETH, $236 million USDC, and another $77 million in SHIB, according to Arkham.

While regulators have objected to to a revamped bid to buy Voyager by Binance.US and said plans by Voyager to sell its crypto may violate securities laws last week, the transfers may be in line with court stipulations. Voyager was previously allowed to liquidate cryptocurrency from customer accounts with a negative USD balances and sweep cash held in third-party exchanges in a court order dated Aug. 5, 2022.

Voyager did not immediately respond to a request for comment from The Block.

BitFlyer’s ex-CEO vies for former role: Bloomberg

https://www.theblock.co/post/215276/bitflyers-ex-ceo-vies-for-former-role-bloomberg?utm_source=rss&utm_medium=rss

Yuzu Kano, the co-founder of Japanese crypto exchange BitFlyer, is reportedly planning to retake his old position as chief executive officer of the firm, according to a Bloomberg report.

Kano’s proposal to reassume the CEO role and pursue an initial public offering will be presented to shareholders next month in a bid to put to rest a dispute between shareholders and the company’s management, said Bloomberg.

Kano, who stepped aside from the role of CEO in 2019, owns 40% of the company, according to Bloomberg. Currently, he serves as the CEO of a BitFlyer subsidiary, BitFlyer Blockchain Inc.

An earlier bid to sell BitFlyer last year was defeated by Kano, who reportedly said that the Singapore-based fund ACA Partners “wanted to get rid of me, both as a shareholder as well as the representative of a subsidiary.”

Issues involving BitFlyer shareholders will be addressed at the forthcoming meeting according to BitFlyer’s current CEO, Hideki Hayashi, who Bloomberg said declined to address Kano’s statements.

SpankChain co-founder teases Tornado Cash ‘sequel’

https://www.theblock.co/post/215260/spankchain-founder-teases-tornado-cash-sequel?utm_source=rss&utm_medium=rss

Ameen Soleimani, the co-founder of SpankChain and Reflex Labs, has teased a revival of sorts for the controversial Ethereum transaction mixer, Tornado Cash.

Soleimani’s tweet indicated the involvement of Moloch DAO, which provides grants for Ethereum project development.

“I sincerely hope no one thought we were finished,” said Soleimani.

Transaction mixing protocols like Tornado Cash use a variety of techniques to obfuscate the origin of cryptocurrency, which has attracted widespread scrutiny from regulators. Last year, the U.S. Office of Foreign Assets Control accused Tornado Cash of enabling money laundering by North Korea-linked hacking group Lazarus.

Tornado Cash developer Alexey Pertsev was arrested last summer by Dutch authorities. Pertsev remains detained until a hearing scheduled this April.

Central African Republic’s Sango coin experiences deposit downtime

https://www.theblock.co/post/215125/central-african-republics-sango-coin-experiences-deposit-downtime?utm_source=rss&utm_medium=rss

Sango, the coin by the Central African Republic launched in 2022, may be experiencing issues with deposits, representatives for the project said on Telegram.

"We have some fantastic news!" they wrote, saying the tech team was working to resolve the problem. "We are incredibly sorry for the inconvenience."

Users who contact the organization by email may convert deposits at the price of the deposit time cycle if they provide a request with the specific price and the transaction ID, according to Sango.

A committee set up by the country has been exploring ways to integrate Sango with the wider economy since convening this January.

Cathie Wood’s Ark Invest adds $3.9 million worth of COIN

https://www.theblock.co/post/214868/cathie-woods-ark-invest-adds-3-9-million-worth-of-coin?utm_source=rss&utm_medium=rss

Ark Innovation ETF added 53,783 Coinbase shares, while fellow fund, Ark Next Generation Internet ETF, added 9,802 shares, the company’s latest filing shows.

Coinbase shares closed up just over 2% Thursday, at $62.33, according to TradingView, meaning Ark’s latest investment in Coinbase amounts to roughly $3.9 million.

The latest COIN investment is just one of many in a series of Coinbase buys from Wood this month. Ark has spent nearly $37 million investing in the exchange so far this month.

Coinbase unveils its Ethereum Layer 2 network that won’t have a token

https://www.theblock.co/post/214183/coinbase-unveils-layer-2-network-and-developer-fund?utm_source=rss&utm_medium=rss

Coinbase is officially jumping into the Layer 2 game.

The crypto exchange giant unveiled Base, a testnet version of its new Ethereum Layer 2 network, at ETHDenver. Modeled on Ethereum’s Goerli testnet, it is designed to eventually connect to the main Ethereum network, according to Jesse Pollack, Coinbase’s senior director of engineering.

“Our goal with Base is to launch a platform that makes it really easy for developers to build apps that users actually want to use and then plug that into the Coinbase product suite to make it really easy for users to use those apps,” Pollack said.

Notably, Pollack told The Block that Base won’t sport its own dedicated token.

“These networks don’t need tokens to be successful,” said Pollack, adding that in some cases native tokens may obscure whether the networks are finding a product market fit with customers, users, and developers alike.

Base is built on the open-source OP Stack, a blueprint for compatible blockchain Layer 2 networks that was created by the Ethereum Layer 2 network Optimism. Coinbase will also be joining Optimism as a core developer for the OP Stack.

Drawing in developers

The existing suite of Coinbase developer tools will be integrated with Base, said Pollack, noting that “in collaboration with Optimism [OP] and building the OP Stack, we’re going to make it so Base and other chains running on the OP stack are incredibly low cost, decentralized and secure.”

Base will also mesh with consumer products from the company, such as Coinbase and Coinbase Wallet, and in so doing “give developers access to the 100 million plus users in the Coinbase ecosystem, 100 billion plus assets," and "enable the scale that developers who are building web2 apps are used to in this new web3 economy,” said Pollack.

To further spur development on Base, Coinbase and its venture arm, Coinbase Ventures, will launch the Base Ecosystem Fund to make “a bunch of investments … at the pre-seed stage in companies and organizations that are building on Base,” according to Pollack.

“We expect that lots of those developers will eventually go multichain or folks may start on another chain and then come to Base,” Pollack said.

Many specialized Layer 2 chains

For the last year, Coinbase has been working on proto-dank sharding, an upgrade to Ethereum that will reduce fees on Layer 2 networks between 10-100 times current levels, Pollack said.

Layer 2 networks reduce the computation strain on Ethereum but require a certain amount of data availability to publish data to the main Ethereum chain.

Proto-dank sharding will scale data availability at Layer 1, and scale execution at Layer 2 in the rollups, according to Pollack.

“We expect there’s going to be many of these Layer 2s, and that’s why we’re building based on the OpenStack, that’s open source that anyone can use to run one of these L2s or roll-ups,” said Pollack, adding: “And then we can work to drive interoperability between all of them so that they increasingly work together, almost like that original Ethereum sharding at the execution layer vision, but in this new Layer 2 world.”

A16z backed Bitski launches digital currency wallet

https://www.theblock.co/post/213838/a16z-backed-bitski-launches-digital-currency-wallet?utm_source=rss&utm_medium=rss

Bitski today rolls out a new wallet targeting crypto natives and newcomers alike.

Backed by major investors such as A16z, Galaxy Digital and Kindred Ventures, Bitski brings to Ethereum users an option to set up logins via email and password, similar to services like the Wax Cloud wallet on the Wax blockchain, and Dapper wallet on Flow Blockchain.

The Bitski wallet, which features both an iOS and browser extension, gives every user “a Bitski Vault Wallet and has the ability to import their existing wallets,” Bitski CEO and co-founder, Donnie Dinch, told The Block.

The vault is designed to make crypto wallets more accessible to non-crypto natives, according to Dinch.

“Bitski Vault wallets are hosted in our hardware-security modules. Keys never leave hardware and all transactions are signed in hardware. This allows users to traverse web3 seamlessly without needing to become key-management experts,” Dinch said.

In addition to the vault, the wallet also features self-custody support.

“When a Bitski user imports a self-custody wallet, it is securely stored on the device they’re imported on,” said Dinch.

The wallet also features a transaction simulator that Bitski said will help users to avoid being the target of phishing scams and a number of other features including a transaction feed, alerts for price changes as well as on and off chain activity, and a decentralized application browser.

Euro-backed stablecoin, Euro Coin set to trade on Coinbase

https://www.theblock.co/post/213776/euro-backed-stablecoin-euro-coin-set-to-trade-on-coinbase

Support for Euro Coin (EUROC), a euro-backed stablecoin, will go live on Coinbase in regions where trading is supported, the exchange said on Twitter.

Trading is slated to begin on or after 9 a.m. PST, Feb. 22, once liquidity conditions are met and asset supplies are established, said Coinbase, adding that after which the launch of EUROC-USD and EUROC-EUR pairs will continue in phases.

Coinbase will support EUROC as an ERC-20 token on the Ethereum network. It warned users to avoid sending the asset over other networks, or funds may be lost. The EUROC token will launch with the Experimental Label, designated for new or low volume tokens on the exchange, said Coinbase.

Stablecoins such as EUROC have recently come under regulatory scrutiny, with the Securities and Exchange Commission earlier this month threatening a lawsuit against stablecoin issuer Paxos over the listing of Binance’s BUSD stablecoin.

The SEC action led to “constructive discussions” between the two entities and the severing of relations between Binance and Paxos.

Latest round of Ethereum Shapella testnet development reveals a few bugs

https://www.theblock.co/post/212636/latest-round-of-ethereum-shapella-testnet-development-reveals-a-few-bugs?utm_source=rss&utm_medium=rss

Testing on Ethereum’s Zhejiang testnet ahead of the Shanghai-Capella update revealed some bugs, but nothing that will affect the timeline for the introduction of staking to the network.

Developer Marius VanDerWijden documented a syncing bug encountered by other clients that developers are confident can be patched, according to a thread from the Ethereum Foundation’s Tim Beiko. The bug won’t affect any established timelines for the proposed upgrade set for the Sepolia testnet scheduled for Feb. 28, he noted.

The latest withdrawal devnet update detailed a stress test consisting of 600,000 validators, 360,000 of which performed withdrawal credential updates at the time of the fork. Client spikes in RAM and CPU occurred and developers will gauge the number of lost versus recorded credential update messages over the coming days, said Beiko.

The stress test also revealed a bug between a proof-of-stake client, Prysm, and the Besu client which is designed for permissioned use cases. To sync properly, Prysm client expects a certain number of responses; however, Besu imposes response limitations that bring it below the necessary syncing threshold, Beiko said. The Besu team is looking into the matter.

Blobless ban

After a discussion on how to best optimize initial client orientation, developers ultimately decided to completely ban blobless 4844 transactions, which would change client assumptions around the transactions and could complicate setup.

Developers also discussed how to move ahead with the deprecation of the SELFDESTRUCT keyword, which terminates a contract, removes the contract’s bytecode from the blockchain, and reroutes funds on the contact to a specified address.

While the path forward remains unclear, there are three current proposals on the subject in discussion as developers seek to find “deactivating options that don’t break things,” Beiko said.

“The challenge here is it opens up a nasty attack vector: deploy a contract, fill storage in a certain way, and when you redeploy the contract, the old storage is still there, and could be accessed in malicious ways,” Beiko said.

GSR pledges $10 million to its philanthropic social impact foundation

https://www.theblock.co/post/212278/gsr-pledges-10-million-to-its-philanthropic-social-impact-foundation?utm_source=rss&utm_medium=rss

GSR, the crypto market maker founded by former Goldman Sachs executives, will launch the GSR Foundation with a $10 million pledge the company said will be used to address technological barriers encountered by marginalized communities.

The GSR foundation will support nonprofit organizations around the globe and aims to correct entrenched problems in the philanthropic ecosystem that could be overcome through emerging technologies. Participation barriers disproportionately affect a number of marginalized communities, “including BIPOC communities, women, LGBTQ+, refugees, populations within less-developed economies, and many others,” GSR said.

“We believe that new technologies, like blockchain and crypto, can play an important role in changing this, but this will only happen if no one is excluded from participating,” newly appointed GSR Foundation Executive Director James Newell told The Block.

As GSR branches into philanthropy, its labor force is shrinking. In addition to staff reductions in October, GSR recently saw another 5% to 10% workforce decline amid layoffs and resignations due to a low January bonus, according to sources familiar with the matter.

Where traditional philanthropy fails

“There are too many areas where traditional finance and traditional philanthropy fail communities. For example, look at how many people are un-bankable in Afghanistan, or how difficult it is to make bank transfers to populations affected by conflict,” Newell said.

Whether communities are facing a lack of hardware or other difficulties, the foundation seeks to better understand “any work that challenges paradigms, uses existing technologies in new ways, or applies new technologies to longstanding problems,” he said.

Programs for small and large grants were formed by the foundation and it is expected that the smaller grant program will be most active in the next two years. The foundation will shift gears to larger grants with “a higher value, lower volume approach once we have established where our funding is most impactful,” Newell said.

684 million BUSD burned for redemptions amid US regulatory scrutiny

https://www.theblock.co/post/211703/684-million-busd-burned-for-redemptions-amid-us-regulatory-scrutiny

Just over a day after it categorically denied regulator claims Binance USD (BUSD) is a security, Paxos has burned some 684 million of the stablecoin for U.S. dollar redemptions, on-chain data show.

Formerly an issuer of BUSD, Paxos ceased distributing the stablecoin after the company received a Wells notice from the Securities and Exchange Commission.

Dollar parity redemptions for BUSD will be supported through at least February 2024, Paxos said.

To facilitate redemptions, Paxos sends BUSD to a burner address, destroying the tokens, which initiates a smart contract-driven process that refunds U.S. dollars to users from the reserve underpinning the stablecoin.

An initial Paxos redemption to the tune of roughly $144 million in tokens a day ago was followed by additional tens of millions in redemptions, data from Arkham show.

Amid the redemptions the total supply of BUSD dipped below $16 billion to $15.81 billion.

Sinbad crypto mixing service may be Blender in disguise: Elliptic

https://www.theblock.co/post/211225/sinbad-crypto-mixing-service-may-be-blender-in-disguise-elliptic

A shuttered crypto transaction mixer once sanctioned by U.S. regulators may have returned under a new name, according to an analysis by crypto firm Elliptic.

Elliptic said that on-chain data show a likely connection between Blender, which was sanctioned by the Office of Foreign Assets Control (OFAC) in August, and a service called Sinbad.

Blender shut down in Dec. 2022 after being linked to money laundering activity by Lazarus, a North Korean hacking syndicate suspected of stealing billions in crypto.

“Analysis indicates that Sinbad is in fact highly likely to be a rebrand of Blender, with the same individual or group responsible for it,” said Elliptic.

“Blender may have been motivated to re-brand in order to avoid sanctions, and OFAC could now seek to impose further sanctions on Sinbad,” Tom Robinson, chief scientist at Elliptic, told The Block, adding that the measure may have been taken to restore trust in users “following Blender’s abrupt closure last year, and the disappearance of significant amounts of funds from the mixer.”

Nearly identical

In several ways, Blender and Sinbad are nearly identical, according to Elliptic.

As with Blender, Sinbad is a custodial mixer, meaning its operator or operators maintain complete control of any assets the service is handling until transferring them out. Both mixers feature 10-digit mixer codes, guarantee letters signed by the service address, and a transaction delay no greater than seven days.

Prior to Sinbad’s launch, one of the site’s service addresses “received Bitcoin from a wallet believed to be controlled by the operator of Blender" according to Elliptic, which added that the suspected Blender wallet also issued payments to those who promoted Sinbad.

Roughly $22 million in early transactions were routed through Sinbad from the suspected Blender operator, according to Elliptic.