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 November 22, 2022 @ 21:32:23 UTC. |
Happy Thanksgiving to our American readers! Sam Kessler is out this week, but Ethereum reporter Margaux Nijkerk has returned to look into the angst that has been swirling within the Ethereum community following a change of wording on the Ethereum.org website. Loosen your belts and grab a drink. You’re in good hands. Rumors emerged on Twitter last week claiming that the Ethereum Foundation is pushing back its timeline for staked ether (ETH) to be withdrawn from the Beacon Chain. In these volatile times for the crypto industry, when many services including FTX, BlockFi, and Genesis have halted crypto withdrawals and appear to be collapsing, it’s understandable that stakers would be suspicious of any perceived delays in accessing their funds. So what is going on? Ethereum core developers generally agree that the aim was always for staked ETH withdrawals to be opened up as part of “Shanghai,” the next upgrade on its development road map. But a definitive date for withdrawals? That hasn’t been set yet. Ethereum core developers have always been hesitant to ink in a date for the upgrade. After all, implementing any hard fork upgrade is not a simple task. Before the code gets shipped, it will have to run through tests, and developers will have to debug any problems in the implementation. Anyone who has been following Ethereum at any point in its seven-year history knows the protocol is notorious for being perpetually behind schedule and for pushing deadlines farther and farther into the future. Ethereum retired its old model, proof-of-work, which used miners to add new blocks of transactions to the ledger. Since the Merge on Sept. 15, the blockchain has adopted a proof-of-stake consensus mechanism, which uses validators to approve those blocks instead. Validators began staking 32 ETH in the Beacon Chain prior to the Merge in order to participate in the block validation process: Part of the deal was that all that staked ether and any accrued rewards would remain locked up in the Beacon Chain smart contract until the next upgrade, which would happen at some point after the Merge. That upgrade, Shanghai, is expected to include the mechanism by which those rewards will be released. There was a projected implementation for six to 12 months after the Merge, according to the Ethereum Foundation website. But last week followers noticed the language had changed: The Foundation website no longer had a proposed timeframe. Tim Beiko, lead protocol support at the Ethereum Foundation (EF), told CoinDesk the original projection of “six to 12 months is the ‘historical average’ time between upgrades on Ethereum. I don’t see why this upgrade would take longer, but we’re not far enough in the process to talk about main net deployment dates.” This change in language, even if it is innocuous, isn’t sitting well with ETH stakers right now. They want to know exactly when they will be able to access their funds, and the lack of specifics seems to be making them nervous. |
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"I don’t track daily changes to Ethereum.org (which has contributions by hundreds of people, not just the EF), but there hasn’t been any change to Withdrawals’ status: They are included in the next network upgrade, as can be seen in the specs for both the execution and consensus layer,” said Beiko. Ethereum developers say they are committed to making withdrawals a priority for Shanghai. “There’s always discussions about timelines and moving things around, but I don't think there’s ever been more consensus among core devs to move withdrawals back. It has and will always be included in the next fork,” said Parithosh Jayanthi, a DevOps engineer at the Ethereum Foundation, to CoinDesk. “I don’t see a scenario in which withdrawals don't get shipped in the next fork.” More to Shanghai than staking? The Shanghai upgrade is the next in a long series of hard forks that are shaping the Ethereum ecosystem. And it is not necessarily a single-issue upgrade. While staked ETH withdrawals seem to be universally agreed upon to be included in Shanghai, there are other Ethereum Improvement Proposals (EIP) that are under consideration for inclusion. For example, EIP-4844, also known as proto-danksharding, could be a first step toward making the network more scalable through sharding, a method that splits up the network into other databases, or “shards,” as a way to increase its capacity and bring down gas fees. But developers are still unsure whether proto-danksharding will be included in Shanghai or in a subsequent upgrade. They are collecting data now to see how difficult it is to implement EIP-4844. “I think if EIP-4844 seems too difficult to achieve, we'll split it into a simple withdrawals fork + a bigger 4844 fork later in the year. Currently, our aim is to try and ship both together, pending data collection,” Jayanthi said. At this week’s upcoming All Core Developers call, Ethereum developers are likely to decide which EIPs, including EIP-4844, make it into Shanghai. Then, once that decision is made, all the Shanghai EIPs will go through a rigorous testing process to make sure that the upgrade is ready for mainnet.
Progress on that front is already underway. In October, Shanghai’s testnet, Shandong, went live. There, developers will have opportunities to ensure that the new code is secure and working properly.
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Celsius Network LLC, et al., are soliciting offers for the purchase substantially all of their assets, including their Retail Platform and Mining Business, consistent with the bidding procedures approved by the U.S. Bankruptcy Court for the Southern District of New York, No. 22-10964 (MG) [Docket No. 1272]. All interested bidders should carefully read the bidding procedures and bidding procedures order. The deadline to submit final bids is December 12, 2022 at 4:00 p.m. ET. |
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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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Ethereum validators saw a surge in MEV amid the FTX blowup. WHY IT MATTERS: This month’s collapse of FTX drove a dramatic increase in profitability of running the Ethereum network. Ethereum validators saw profits from MEV (maximal extractable value) spike as FTX faltered, according to data from Flashbots. MEV is a cornerstone of how crypto trades, measuring the amount of additional income that validators can earn by tinkering with and optimizing the order in which blockchain transactions are recorded. “The more action on the market, no matter if up- or downwards, the more MEV [is available],” said Toni Wahrstatter, an Ethereum researcher who has created his own MEV-Boost monitoring dashboard. Read more here. More than 50% of bitcoin addresses are in the red. WHY IT MATTERS: Just over 51%, or 24.6 million bitcoin addresses of the total 47.9 million, are below purchase price on their investments, according to data provided by blockchain analytics firm IntoTheBlock. About 45% are in the money, which means they are boasting unrealized gains, while the rest are roughly at breakeven. Even though past data is no guarantee of future results, previous bear markets ended with the majority of addresses at a loss. The bearish momentum looks overdone, according to Luca Outumuro, head of research at IntoTheBlock. Read more here. Input Output Global (IOG), the firm behind the Cardano blockchain, to release a new privacy-focused blockchain called Midnight. WHY IT MATTERS: Midnight, which is underpinned by zero-knowledge proof technology, is one of many side chains now being deployed around Cardano, IOG CEO Charles Hoskinson said on Friday. The system will walk the line between preserving privacy and allowing regulators and auditors a backdoor into the system when the permission is granted, he said. “This is a completely new way of writing and running private smart contracts and private computation. So you can have a private DEX (decentralized exchange or go mine an anonymous data set or these types of things.” Read more here. |
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Consensus is a place for the crypto and Web3 communities to come together, take stock of everything that is happening, talk through difficult challenges and figure out what is needed to make this industry stronger. We want you to be a part of that conversation. Use code CFA15 for 15% off. Register now. |
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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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