Breaking down Ethereum’s evolution and its impact on crypto markets Was this newsletter forwarded to you?Sign up here. |
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As of October 4, 2022 @ 20:09:20 UTC. |
Welcome to Valid Points! MEV-Boost has been live and working ever since Ethereum transitioned from proof-of-work (PoW) to proof-of-stake (PoS) on Sept. 15. But the software has made a lot of noise recently as Flashbots, the company that developed MEV-Boost, is running a censored relay that excludes Tornado Cash transactions from the blocks it proposes. So what has been the fallout from this critical piece of software since the Merge? – Margaux Nijkerk |
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What’s Going On With Ethereum’s MEV-Boost? |
Soon after the U.S. Treasury’s Office of Foreign Asset Control (OFAC) blacklisted the Tornado Cash mixer program in August, Ethereum research and development firm Flashbots announced that it would, in accordance with U.S. Treasury Department sanctions, begin censoring transactions by means of a key piece of infrastructure used by many of the validators that run Ethereum’s proof-of-stake blockchain. For many developers, writing code is a form of free speech and, as such, it should be protected by the First Amendment of the U.S. Constitution. So when the U.S. government sanctioned the smart contracts affiliated with Tornado Cash, the action was seen by many members of the crypto community as an attack on free speech. Flashbots, by adhering to the sanctions, also fell prey to the community’s first amendment scorn. In response to the backlash, Flashbots raced to make open source its MEV-Boost code before the Merge so that others could develop their own, non-censoring versions of MEV-Boost relays. Maximal extractable value (MEV) refers to the income that block builders and validators receive as a result of inserting or reordering transactions within a block. Researchers of MEV have tried to solve issues that have caused it to become an unexpected vector for user exploitation, centralization and (now) censorship. Flashbots is a research and development team that has been working on ways to reduce the negative effects of MEV through MEV-boost, a middleware component that allows validators to request blocks from a network of builders. They designed it to enable validators to skirt MEV centralization while providing a good option for solving some proposer-builder separation problems. But, in turn, the problem of block censorship appears to be on the rise. Read the full article here. |
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The following is an overview of network activity on the Ethereum Beacon Chain over the past week. For more information about the metrics featured in this section, check out our 101 explainer on ETH metrics. |
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Disclaimer: All profits made from CoinDesk’s Eth 2.0 staking venture will be donated to a charity of the company’s choosing once transfers are enabled on the network. |
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SWIFT, the interbank messaging system that allows for cross-border payments, has partnered with Chainlink. WHY IT MATTERS: SWIFT is working with Chainlink, a provider of price feeds and other data to blockchains, on a cross-chain interoperability protocol (CCIP) in an initial proof-of-concept. CCIP will enable SWIFT messages to instruct on-chain token transfers, helping the interbank network to communicate across all blockchain environments. Chainlink co-founder Sergey Nazarov said on Wednesday that this will help accelerate the adoption of distributed ledger technology blockchains across capital markets. Read more here. Decentralized crypto exchanges (DEX) have grown faster than centralized exchanges (CEX) over the past two years, Citigroup reports. WHY IT MATTERS: The gap is likely to widen as users move away from centralized platforms to avoid their know-your-customer procedures. Citi says DEXs are responsible for 18.2% of spot trading volume, noting that volumes have remained resilient at over $50 billion a month. Uniswap continues to dominate, accounting for around 70% of total DEX volume. The bank said, “This could mark a key pivot for a foundational DEX within the [decentralized finance] space.” Read more here. Digital asset management platform Safe to offer governance token for SafeDAO. WHY IT MATTERS: The motivating force underpinning the launch of the SAFE token was “to effectively decentralize” Safe, which was previously known as Gnosis Safe. Safe co-founder Lukas Schor said, “As a public good and fundamental infrastructure of Web3, we know that only decentralized governance can guarantee the long-term neutrality of the project. Safe, which features a smart contract wallet that needs a minimum threshold of people to authorize a transaction, currently secures close to $40 billion in all its Ethereum contracts. Read more here.
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Valid Points incorporates information and data about CoinDesk’s own Eth 2.0 validator. All profits made from this staking venture will be donated to a charity of our choosing once transfers are enabled on the network. For a full overview of the project, check out our announcement post. You can verify the activity of the CoinDesk Eth 2.0 validator in real time through our public validator key, which is: 0xad7fef3b2350d220de3ae360c70d7f488926b6117e5f785a8995487c46d323ddad0f574fdcc50eeefec34ed9d2039ecb. Search for it on any Ethereum block explorer site! |
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