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- 🟣 Preparing for the long-term
🟣 Preparing for the long-term
Macauley Peterson & Donovan Choy
August 02, 2024
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Welcome back to 0xResearch. Here's what we’ve got for you today:
Market chop
Polyhedra launches Proof Cloud
Base holds a party
Ethereum block censorship abates
Thursday saw a fairly sizable flush in the BTC market of about -5% to a low around $62.3k. But the late-day rebound allowed bitcoin to close out the day in the green.
In the short-term, we look to be in for some more choppy behavior, but the long-term picture is unchanged. Crypto markets are holding up well considering the tech-heavy Nasdaq is down sharply Friday. It’s retesting levels from late March as the correction from the index’s July peak is now -11%.
A Proof Cloud
How exactly do we decentralize the modular tech stack in a multichain future of interoperable validity proof-based rollups?
One piece of the puzzle is a marketplace for provers. There are various attempts to decentralize provers and sequencers, and the space’s latest entrant is Polyhedra Network, with the launch of Proof Cloud in open beta.
Early backers include Polygon, Linea and Lita, which is developing a new zk virtual machine. The Proof Cloud is a collaboration with Google, and was announced at Google’s Zk Summit in Singapore.
Of particular note is Proof Arena, a benchmarking platform that offers transparent comparisons of different zk proof systems. This tool allows developers to test and optimize their provers, selecting the most efficient ones for their needs. Standardizing the testing of prover performance is undeniably useful. By using Proof Arena, developers can compare leading provers such as Linea’s Gnark, Polygon’s Plonky3, Polyhedra's Expander and StarkWare’s Stwo.
BaseCamp Summit
Coinbase is taking big steps to expand its crypto empire onchain.
Yesterday’s BaseCamp Summit touched on several product developments:
Basenames, a new digital identity that lets users connect their wallets to social media platforms and attest to various job skills using onchain credentials. Basenames leverages Ethereum Name Service (ENS), so your Basename will read as, for instance, “tom.base.eth.” The new feature is set to go live in coming weeks.
EURC, the euro-denominated stablecoin issued by Circle, has gone live on Base. With just a $39 million market cap, EURC pales in comparison to its USD-denominated cousin, USDC, reflecting challenges specific to the euro stablecoin market.
Coinbase is onboarding the nearly half a million users from Coinbase One to Base. Coinbase One is the exchange’s monthly subscription service that offers free transactions and higher staking rewards.
The exchange mentioned future features in the pipeline, such as global onramps to incentivize user referrals for other users to come onchain, AI-powerered multisig wallets primarily for enterprise use and the use of mass payouts to pay thousands of users with a phone number or email.
Fault proofs went live today on Base testnet, and senior smart contract engineer Anika Raghuvanshi also confirmed the goal to bring the proofs to mainnet before the end of 2024. The lack of working fault proofs has been a major liability for chains using the OP stack. OP Mainnet’s fault proof system went live in June.
Base has been doing well of late. As of the past day, the Ethereum rollup leads in monthly active users at 11.3 million, outperforming all its competitors and even L1 networks like BNB Chain.
According to TokenTerminal data, the chain has generated the highest revenues among L2s at $54 million on a year-to-date basis.
— Donovan Choy (X: @donovanchoy | Farcaster: @donovan)
All 1000X listeners know that when Jonah and Avi give guidance on the markets, it’s best to pay heed.
Catch them live and in person at Permissionless III in October as they answer the perennial question: “Where are we in the cycle?”
Ethereum builders and censorship:
Source: censorship.pics (h/t Toni Wahrstatter)
When OFAC sanctioned Tornado Cash in August 2022, participants in the MEV landscape scrambled to exclude any transactions routed through the cryptocurrency mixer. This brought to the forefront of Crypto Twitter debates of existential risks around censorship and how the raison d’etre of Ethereum itself was threatened.
Almost two years later, the outlook has improved considerably. Ethereum censorship on the block builder side of things has sharply reduced in the last month, mostly thanks to the largest block builder (Beaverbuild.org) deciding to stop censoring transactions on July 18.
The move is a welcome development for observers worried about builder centralization and its effects on censorship-resistance. However, the blockchain remains subject to the altruistic whims of MEV stakeholders until new upgrades like inclusion lists and encrypted mempools can be executed from the Ethereum roadmap.
— Donovan Choy (X: @donovanchoy | Farcaster: @donovan)
The Ahmedabad hard fork specifications are being finalized, with a focus on PIP-30 for increasing max code size and on PIP-36 for improving state-syncing transactions. The inclusion of PIP-45, which proposes a token ticker change, is still under consideration and may affect the timeline. The ticker change has been discussed extensively over the past PPGCs. MATIC to POL transition is scheduled for Sept. 4, 2024. This transition involves multiple PIPs to upgrade backwards-compatible with automatic conversions between MATIC and POL where necessary. The proposed PIP-45 suggests changing the token name and symbol from MATIC to POL, which could have potential implications for smart contracts, front-ends and systems relying on these identifiers.
The Paradigm team has developed Reth, a framework for developing Ethereum-compatible nodes to enhance Ethereum’s infrastructure by improving its performance and fostering a more efficient and developer-friendly environment. The aforementioned framework serves as a growth catalyst for Base, Optimism and Symbiotic.
Europe is handing Tether unforeseen advantages with MiCAR.
There is a strange correlation between Trump’s odds and the price of bitcoin.
The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.
