SF Newsletter April Issue
BBQ season, MiCa, SAGA, Shapella - not sure what all of this means? We got you covered.
Welcome to our April issue,
the financial services committee kicked off the 2023 BBQ season by grilling SEC Chairman Gary Gensler - kind of cringe to watch, but worth your time.
While influential figures in the US, such as Mr. Gensler, frequently shift their stance on digital assets, the European Union has made significant progress in establishing greater clarity and consistency in its approach:
After years of consultations, intense debates, last-minute changes, and closely contested committee votes, the EU Parliament has passed the new EU crypto framework, MiCA, with a remarkable majority of 517 MEPs in favor and only 38 against on April 20th.
As the world's most comprehensive regulatory framework for crypto assets, MiCA has garnered significant global attention from the crypto community. By offering regulatory clarity in the face of worldwide uncertainties and providing access to a vast single market of 450 million consumers, the EU could potentially become the next leading global hub for crypto projects.
Let’s conclude this issue’s intro with some good news and jump right into some updates, shall we?
Finance Wizards - where are thou?
Our finance team is seeking a Senior Finance Manager to develop and oversee our financial strategy, ensuring it aligns with our mission. Responsibilities include leading financial planning and analysis processes, managing cash flow, and ensuring accurate and timely financial reporting. We're a dynamic, flexible, and agile team, and our roles reflect that.
The ideal candidate will be driven, entrepreneurial, and have strong problem-solving and analytical skills. They should have a background in finance, accounting, or a related field, at least four years of experience in finance, and be skilled in MS Excel, Google Suite, Datev, Finway Agicap. Fluency in English and an interest in working at the forefront of web3 are essential.
If you or someone you know fits this description, we'd be thrilled for you to apply or share this job posting. Let's grow together, upwards and onwards!
Read the full job-posting here or directly apply here.
Node conquerors - rise to the challenge!
As a start-up that prioritizes employee growth and development, you will have the opportunity to expand your role and continuously develop your skills. As a member of our Tech Team, your primary responsibilities will include ensuring the continuous operation of blockchain networks, performing routine and emergency updates, actively monitoring system states, responding promptly to alerts and on-call phone calls, mitigating site outages to minimize downtime, optimizing work processes, and actively communicating with operators and the team through channels like Discord, Slack, and Telegram.
While previous experience in the crypto/blockchain industry is welcome, it is not required, as we focus on hiring talent and developing skills. The ideal candidate will have an exceptional drive, a high level of initiative, an entrepreneurial mindset, a strong background in Computer Science or a related field, strong Linux skills, experience with networking stacks, firewalls, and load-balancers, and practical expertise with Docker, Ansible, and/or TerraForm. Additionally, candidates should be able to read and comprehend code in Rust or Golang, develop small tools in a preferred programming language, design and critically think about project architecture, and be fluent in English (German is a plus). You may work from anywhere but should be willing to travel occasionally to meet the team in person.
Read the full job-posting here or directly apply here.
Ethereum
Chapeau. Shapella. On April 12th, the Ethereum network finalized its full transition to Proof-of-Stake by successfully completing the Shapella hardfork. Kudos to everyone involved as the upgrade went (almost) as smoothly as The Merge back in September of last year. Almost, because there were a few minor hiccups during the first few epochs post Shapella, mostly incorrect head votes, missed blocks, and attestations - except for a minor slashing event of one of Lidos’ node operators, nothing really worthwhile. So other than that, how did it go?
Since the upgrade, net staking outflows amount to ~ 320,000 ETH at the time of writing (May 3rd). Centralized exchanges made up 82% of total withdrawals, with Kraken, which faced regulatory issues, accounting for 48%.
These withdrawals were partially counterbalanced by increased deposit activity, as staking pools catering to institutions saw significant growth in net inflows. The Shapella upgrade has sparked a wave of innovation in Ethereum's staking solutions, with e.g. Lido, Obol Network, or Eigenlayer introducing new products and services in the staking domain.
Maybe a good time to talk withdrawals:
Due to its origin as a Proof-of-Work network, Ethereum's withdrawal process differs slightly from other PoS networks. It operates with two interconnected layers: the Consensus Layer, handling consensus and staking, and the Execution Layer, managing everything else, such as smart contracts or stablecoin transactions. To unstake ETH, it needs to move from the Consensus Layer to the Execution Layer. There are two types of ETH unstaking events:
Partial Withdrawals
These withdrawals enable users to remove accrued rewards while maintaining the validator active with a minimum of 32 ETH. The automated withdrawal process for partial withdrawals typically takes 2-5 days because the network must process eligible withdrawals across all validators.
Full Withdrawals
These withdrawals involve the complete balance of a validator that has exited the network, either voluntarily or due to slashing. Full withdrawals take more time than partial withdrawals, as they involve a multi-step process that includes a minimum exit queue of 5 epochs, a withdrawal delay of at least 256 epochs, and an automatic withdrawal process lasting 2-5 days. The exit queue and withdrawal delay are in place to ensure the network's security and deter malicious actors from causing harm to the network and leaving without facing penalties.
Solana
Welcome home. Helium has successfully upgraded its blockchain from its own layer-1 to Solana, marking a new era of scalability and expansion for the world's largest decentralized wireless network. This migration brings several benefits:
Faster transaction speeds and smart contract capabilities, allow developers to focus on the network's growth instead of maintaining the layer-1 blockchain.
Improved feature possibilities, such as dynamic markets to better allocate rewards based on regional demand.
Lower transaction costs, greater access to DeFi, and compatibility with the Solana Program Library (SPL) standard.
Enhanced network efficiency, stability, and reliability through the use of oracles and a global developer community.
Changes to governance and voting models, emphasizing long-term commitment and enabling independent governance for IoT and 5G networks.
The upgrade aims to boost network performance, accelerate the growth of decentralized wireless networks, and support open-source development for hardware and software on the Helium Network.
And if that wasn’t enough, Helium Mobile Beta (invite-only) launches on Star Wars day - that’s May the 4th, do your homework.
Mad.Lads. Not trying to shill any NFT collection here, but Mad Lads is a special one as it introduced executable NFTs aka. xNFTs to the masses. In short, xNFTs are code-based tokens that signify ownership rights concerning the execution of the code. Mad Lads is now the first xNFT collection and hit a record-breaking 24-hour trading volume of $8.2 million on Solana on 22nd April, and generated over $16 million in trading volume within the first week of launch. Check this thread to learn more about MadLads, xNFTs, and the Backpack wallet.
The NFT space on Solana is far more than flipping & botting new NFTs mints for quick bucks - there’s real innovation happening, which, besides xNFTs, is exemplified by compressed NFTs. Here’s a great thread that breaks down the concept in simple terms.
State of Solana. As always, Messari’s State of Solana report is a must-read - following is the gist of it for those of you short on time:
In Q1, Solana experienced a resurgence in user activity as market sentiment improved. Daily unique fee payers and transactions recovered from Q4 lows and remained stable throughout the quarter. The network advanced towards decentralization with increased stakes and a growing validator set.
Consistent distribution of TVL across DeFi applications was maintained, LSDs saw substantial growth, and new NFTs and games gained traction. The DePIN sector continued to boost network activity quarter-over-quarter.
It’s shipping. Solanas’ web3-ready smartphone, SAGA successfully launched on April 14th and started shipping to US-based pre-order customers on April 20th, while shipping for European pre-order customers started May 3rd.
Tendermint: Cosmos, Stride & Celestia
Atom Economic Zone. A few (signaling) proposals are about to pass with flying colors:
Proposal #790 signals an intention to replace the staking, distribution, and slashing modules on the Cosmos Hub with versions that govern liquid staking. These versions are collectively referred to as the Liquid Staking Module (LSM).
Proposal #792 seeks to initiate Neutron on Replicated Security (RS). If accomplished, Neutron will be secured by the Cosmos Hub validator set and formally enter the Atom Economic Zone.
Proposal #794 signals the intention for Stride to become part of the Atom Economic Zone and utilize Replicated Security. If successful, the Atom community will endorse Stride's security by the Cosmos Hub validator set.
DVT meets IBC. Obol is actively researching applications of Distributed-Validator-Technology (DVT) beyond Ethereum and hence, amongst others, asked our team for input regarding DVT on Cosmos. In this blog post, the team shares their first insights and research findings - as usual, we’re hooking you up with the gist of it all in our newsletter:
DVT enables a single validator to operate on a node cluster, offering active redundancy. This allows the cluster to function normally even if several nodes go down.
While there are significant differences when comparing validators on Ethereum with their Cosmos counterparts, there are two use cases for DVT on Cosmos: one, helping smaller validators make it into the Cosmos Hub validator set (currently limited to 175) by pooling resources and two, help bootstrapping and/or extending validator sets for appchains (think use case specific chains within the Cosmos ecosystem that have their own validator set rather than using the Hubs’ set aka ‘Replicated Security’).
Thread time. Check out this thread illustrating the Celestia network using the metaphor of a power grid.
Substrate: Polkadot, Kusama & Hydra
Substrate meets Tendermint. The Astar Network has integrated with Injective, a major DeFi hub in the Cosmos ecosystem. This enables direct connections between Polkadot and Cosmos and allows users to easily move assets between the two ecosystems without centralized exchanges or high fees. The connection is made possible by the Celer Bridge and opens up opportunities for developers to build inter-chain dApps across both networks. Learn more here.
No more myths. Mythical, the fourth largest blockchain in terms of monthly digital asset sales, is departing from Ethereum to introduce its new Mythos ecosystem on Polkadot. The collaboration will also see the development of a DAO to provide a platform for creators and players to easily access and interact with digital assets, like NFTs, within the gaming world.
More auctions. Check out this spreadsheet to see a schedule of Polkadot auctions for the rest of 2023.
Network quick takes
Bridging just got easier. Wormhole Connect has been introduced as an easy-to-use widget for developers, allowing them to incorporate cross-chain asset bridging directly into their decentralized applications (dApps) with just three lines of code. Connect eliminates the need for redirects to external bridges and reduces gas payments only to the source chain while automatic relaying does the rest. More features such as cross-chain asset swaps are also planned.
Just swipe it. The Graph integrates Banxa's OpenRamp, allowing developers to make direct fiat payments using credit or debit cards with its billing smart contract. Users can now access The Graph without needing to manage cryptocurrency tokens or interact with exchanges, making it as easy as using a SaaS product.
State of The Graph. Messari recently published their State of The Graph Q1 2023 Report and as always, it’s a great read. While we recommend reading the whole post, here’s the gist:
The Graph is mainly focused on transitioning from a hosted service to a decentralized network (mainnet), with 776 subgraphs migrated as of Q1 2023. The ecosystem experienced growth in staked Indexers (+58%), Delegators (+2%), and Curators (+1%) quarter over quarter. At the same time, Q1 2023 saw a 41% quarterly increase in USD revenue from query fees for The Graph. Its migration to Arbitrum aims to provide a smooth and gas-efficient decentralized data experience for users. As more subgraphs move to the mainnet in future quarters, The Graph will keep reducing technical obstacles for developers, promoting faster innovation in the Web3 space.
Threat time (again). Here’s a great thread covering all things Aptos.
“PayPal to Enable On-Chain Transfers From Venmo Accounts, Including to On-Chain Wallets” (read)
“Mastercard teaming with Solana, Polygon on new Crypto Credential standards” (read)
“Visa Hiring More Crypto Developers To Drive Mainstream Adoption” (read)
“State of Crypto: Index” (read)
“State of Crypto: Report” (read)
“The EU's new MiCA framework for crypto-assets - the one regulation to rule them all” (read)
USDC x CCTP: “An Open Dollar Platform for Developers” (read)
Crypto Finance Use Cases - Thread (read)