8/27/22 FAL Weekly Digest
The FAL Weekly Digest is a source for this week’s biggest cryptocurrency-related news and updates. This newsletter features excerpts and links to this past week’s biggest news articles written by members of FAL Consulting’s writing team or gathered from other listed sources.
Ethereum and Cardano Development Updates
Ethereum and The Merge
Ethereum Foundation Announces Merge Update
The Merge has been in the works for the past few years to transition the network from proof-of-work (POW; mining) to proof-of-stake (POS; staking). In a blog post uploaded on Aug 24, important dates were announced including The Merge schedule.
The mainnet Merge is finally ready after successfully upgrading all public testnets. The update will occur in two stages: Bellatrix upgrade (expected September 6, 2022) then the Paris upgrade (expected between September 10-20, 2022).
Ethereum Hashrates Dropping While Ethereum Classic Rising
Ethereum Hashrates are finally dropping and it looks like miners are going to Ethereum Classic. The Merge will introduce a “mining difficulty bomb”. This mechanism will increase the mining difficulty to a point where mining ETH is no longer profitable. This is to encourage miners to make the switch to PoS.
ETC’s network hashrate rose from 18.2955 TH/s (Terra Hash per second) on 07/15/22 to an all-time-high of 44.85 TH/s on 08/25/22.
ETH’s hashrate hit its all time high a few months ago in May 2022 reaching 1.06 PH/s (Peta hash per second; 1 Peta hash = 1,000 Terra hash). It has since been dropping since then, and for the first time since June 2021.
Cardano and the Vasil Upgrade/Hard-fork
The Vasil hard fork will bring significant performance upgrades and should also lower transaction fees. The average transaction fees on the blockchain are already well under $1, usually around 0.16 $ADA or a few cents. Smart contract functionalities will be improved but puts more focus on scaling and network/ledger optimization. The Alonzo era/update introduced smart contract support for the platform in September 2021.
Over 33% of Cardano nodes have been upgraded to version 1.35.3. The Vasil hard fork will have a green light once 75% of stake pools have upgraded to the newest version. Cardano developers and even founder Charles Hoskinson are confident that this version will introduce the hard fork.
*SPOs: Make sure to download, compile, and install libsecp256k1 BEFORE building the node!
Tornado Cash
Tornado Cash was sanctioned by the US Department of Treasury’s Office of Foreign Assets Control (OFAC) on August 8, 2022 claiming that North Korean hackers and others had used the service to conceal at least $7 billion in stolen cryptocurrency.. The service provided a virtual currency mixer which was used to launder over $7 billion USD worth of crypto since its release in 2019. While the mixer was used for malicious acts, it introduced many privacy and animosity related concepts and potential enhancements to blockchain technology.
Tether continues to support Tornado Cash Despite US sanction
The company behind the number one most used stablecoin in the world is potentially violating U.S sanctions by continuing to support crypto transaction privacy mixer Tornado Cash, according to a report from the Washington Post.
The article cites analytics from crypto intelligence firm Dune Analytics to argue that Tether has not yet blocked any wallets tied to Tornado Cash.
Tether’s Chief Technology Officer, Paolo Ardoino, said in a statement that U.S regulators have yet to reach out to Tether regarding stopping any Tornado Cash transactions.
Johns Hopkins University Professor will preserve the Tornado Cash source code
Professor Matthew D. Green of Johns Hopkins just uploaded the Tornado Cash source code onto a github repository to continue teaching the concepts within the code. Green is an associate professor of computer science and a member of the university’s Information Security Institute. Green is also one of the creators of the Zerocash protocol used by Zcash.
Github ultimately censored or removed the original source code to Tornado Cash; Green believes that this was likely part of a risk-mitigation procedure in reaction to the OFAC order. Green reuploaded the code to the same platform since GitHub is the most widely used software distribution website and believes that the platform shouldn’t have any issues with the code being up for non-deployment purposes.
NFT and Metaverse
Eminem and Snoop Dogg hosting metaverse show for VMAs
Snoop Dogg and Eminem will bring their Bored Ape Yacht Club (BAYC) NFTs to the VMAs this Sunday, performing from inside Yuga Labs’ upcoming metaverse game “Otherside.” The rap superstars will perform their song, “From the D to the LBC,” according to MTV and Yuga Labs. “Otherside” is still in development and does not yet have a confirmed release date. According to the company, the Web3 metaverse game is currently in “Phase 1,” meaning only owners of its Otherdeed land NFTs and select developers have been able to try out aspects of the MMORPG-inspired title.
This VMA performance is yet another example of NFTs bleeding into mainstream culture. NFTs—unique blockchain tokens that signify ownership—have become digital status symbols for the rich and famous, and Bored Apes have been co-opted for everything from fast food restaurants to M&Ms. The promoters say Snoop and Eminem’s “Otherside” performance will be a never-before-seen experience.
Eminem is clearly getting good use out of his BAYC NFT, which he bought back in December for a hefty $450,000 and has used as his Twitter profile picture ever since. Snoop got his Ape from crypto payments company MoonPay, who transferred Bored Ape #6723 to Snoop Dogg’s son, Champ de Medici, back in December, according to Etherscan data. While “From the D to the LBC” is a lyrical hit for many fans, there has been no shortage of complaints about the NFTs featured prominently across the song’s cover art and music video.
Read more on Info Hub (Premium)
Reddit airdrops NFTs
Last week, a Reddit moderator told its community that the outlet would airdrop free NFT avatars to individuals who had earned a certain amount of karma points- Reddits way for users to reward each other for their community posts. The NFTs will be given out on a user-by-user basis with no community excluded, per the post.
The Snoo NFTs dubbed “Collectible Avatars” are created on the Polygon blockchain, an Ethereum scaling solution that enables more affordable, faster, and more energy-efficient transactions than on Ethereum’s mainnet. These adorable NFTs will come in four styles: Aww Friends, Drip Squad, Meme Team, and The Singularity.
Curiously Reddit has refrained from using any “NFT” vocabulary when prompting its Collectible Avatars program, following similar moves brands like esports team 100 Thieves and Coca-Cola. NFTs are controversial to certain consumers and have drawn criticism for their environmental footprint, the scams that plague the space, and their high volatility rate.
Read more on Info Hub (Premium)
SudoRare NFT Marketplace
The NFT scene has been crowded with scams and rugpulls since its inception. Many NFT projects see “rug pulls”, which includes scam promotions to drive up prices then ends with the scammer selling everything and running off with the profits while the project usually becomes worthless.
SudoRare pulled the rug on an entire marketplace. The NFT platform was forked from SudoSwap and LooksRare and was launched on Monday. By Tuesday morning, all associated social media accounts were deleted and user funds were lost.
Just six hours after launching, 230.6 LOOKS tokens were swapped into USD Coin (USDC), and 1 million LOOKS tokens into 154.5 Ethereum, according to Etherscan (an Ethereum blockchain explorer).
A total of 519 ETH were then moved off the platform, worth roughly $850,000 at the time of writing. All the funds were drained using three wallet addresses, with all evidence of the existing project wiped from the internet.
Lawsuits
Coinbase
The most recent class action lawsuit claims that Coinbase failed to properly secure customers accounts and caused financial harm to users by locking them out of their accounts and also violating federal law by offering and listing securities on its platform(s). The suit was filed through The US District court for the Northern District of Georgia Atlanta.
The plaintiffs claim that withdrawing their funds at points of volatility in the market was impossible due to the exchange's constant crashes. “Coinbase’s user growth has outpaced its ability to provide the account services and protections it promises to consumers,” the lawsuit adds. The suit further alleges that user assets were “vulnerable to theft.”.
These past months have been tumultuous for America's number one crypto exchange, as it was hit with multiple suits from customers and an SEC investigation. The SEC investigation pertains to the company's alleged allowance of US users to trade unregistered securities.
Read more on Info Hub (Premium)
Celsius Accuses Prime Trust and Keyfi of Malpractice
Crypto lending platform Celsius Network has filed a lawsuit claiming that custodian Prime Trust failed to turn over roughly $17 million worth of cryptocurrency. In a Tuesday filing with the U.S. Bankruptcy Court in the Southern District of New York, Celsius’ legal team brought a complaint against Prime Trust, alleging the company did not return $17 million worth of crypto assets in June 2021 when it terminated its relationship with the lending firm.
The legal team added: “Celsius sought for many months to persuade Prime Trust to honor its obligations and transfer identified Subject Property to Celsius. At times, it appeared those efforts were close to being rewarded. However, to this day, Prime Trust continues to wrongfully withhold Subject Property that Celsius has directed Prime Trust to release.”
Market
Market Cap: $965.145 B; down from $1.029 T last week
24h Volume: $73.252 B; down from $87.083 B last week
BTC Dominance: 39.7%; same from 39.7% last week
ETH Dominance: 18.7%; down from 20.1% last week
None of our posts or newsletters are meant to be taken as financial advice.
