Welcome to our February issue,
many moving parts these past weeks - especially on the regulatory and institutional front:
the SEC is bringing the hammer for US-based staking-as-a-service providers such as Kraken,
the EU is set to take a different approach with MiCA just around the corner and popular initiatives such as the European Blockchain Association (EBA) taking a stance against the SECs ruling,
Hong Kong opens up to crypto, though very strict
Euro-backed stablecoins are a reality now,
Spotify is warming up to NFTs,
Circle pushes the multi-chain frontier with its Cross-Chain Transfer protocol.
It remains to be seen how any of this plays out, but it definitely shows signs of progress.
Anyways, many moving parts on our end and our portfolio networks as well as, so let’s jump right in - see you on the other side.
Solana Munich MeetUp
On February 16th we co-hosted a MeetUp here in Munich to gather the local Solana community. Together with the Solana Foundation, Superteam Germany, Neodyme, Elusiv, PretzelDAO, as well as FemmeCapital, we welcomed over 70 guests at the Center for Digital Technology and Management (CDTM) - thanks again for providing us with the venue.
After a round of some brief, yet very insightful talks by the hosts about their ventures and the overall Solana ecosystem as well as a quick revisit of some blockchain and PoS basics, we spend the rest of the evening networking as well as sharing ideas and visions about cool projects to build for the ongoing Grizzlython.
Berlin Build Station
Just one week after our Munich MeetUp, we took a trip to the capital city to spend some time at the Berlin Build Station and host a few workshops as well as another MeetUp for the Berlin Solana community on Feb. 24th.
Our co-founder, Wolfgang, gave an interesting talk dubbed ‘A bird’s eye view on Solana - blockchain ecosystems from 3000 feet above’ during which he highlighted some verticals that Solana is destined tackle such as payments or DeFi. Wolfgangs’ talk was supplemented by a presentation dubbed ‘A worm’s view on Solana - Blockchain ecosystems from 3 feet below’ given by two members of our Infrastructure/Tech team, Dave & Eric. The two provided the audience with a detailed look at validator hardware, best practices as well as some stories from the everyday lifes of network engineers.
We concluded our workshops by raffling away exclusive Staking Facilities NFTs and merch. Huge thank you to the Solana Foundation, Superteam Germany as well as the w3 fund for putting together such an amazing venue for the builders of the future of the internet. And shout out to Marinade Finance for the nice cross-team dinner we had!
‘Alles Coin, Nichts Muss’
Our co-founder, Florian, sat down with the folks from the ‘Alles Coin, Nichts Muss’ Podcast to talk about our founding history, the early days of Solana, Lido, Ethereum and much, much more. Next to some interesting stories about us and the Proof-of-Stake industry, Florian provides some easy to follow definitions of key mechanisms such as slashing, validating as well as staking this episode. Please note tough that the episode is in German.
Company Retreat
We kicked-off the month of February with a company retreat close to our Munich headquaters. During a jam-packed week, we doubled down on our mission and vision, fine grained our strategy for 2023, engaged in interesting conversations and workshops, revisited and worked through some of the internal & external events of the past few months, hacked away, and enjoyed our time together.
A special highlight was a trip to one of our Data Centers during which our DevOps team showcased some of our newest toys. We’re more than excited for what’s to come and couldn’t be happier to have you alongside with us - thanks for your support.
Ethereum
Brace yourself - withdrawals are coming. The Shanghai-Capella (aka. Shapella) upgrade was successfully deployed on the Sepolia testnet, giving high hopes that ETH withdrawals, a major part of Shapella, are coming to Mainnet in March. Before that, the upgrade will have one final rehersal on the Goerli Testnet, where it is expected to be deployed within the next week or two.
While you’re at it, brace yourself - Lido v2 is coming. Preliminary voting has begun for the Lido community to signal their opinion about v2 before it is finalized through on-chain voting. At the time of writing, the community is in full support of Lido v2. Amongst other things, the upgrade will include two major features in the wake of Shapella (s. above):
Withdrawals support - users will be able to redeem stETH for native ETH directly from the Beacon Chain.
Staking Router - will introduce a modular architecture for node ops and enable anyone to develop on-ramps for new node operators, ultimately making the set more diverse, decentralized, and accessible.
The more, the merrier. Lido v2 comes just at the right time. The protocol witnessed tremendous inflows (i.e. ETH being staked via Lido) in the last couple of weeks (s. here & here). Since many in the ETH community voiced concerns that Lido is a centralization factor, v2 should put an end to these concerns.
Solana
Network Outage Report. On Feb. 25th, the Solana Mainnet Beta had to be restarted by the validator community after a prolonged period of degraded performance and eventually not processing any user transactions.
The root cause is unknown and currently being investigated, however, Solana Labs shared some first insights and findings in this post-mortem.
While this is far from ideal, the incident demonstrated on the one hand how decentralized the network really is and on the other, that there is still lots of work to do. We’re confident that the bottom line effect of this is quite positive esp. the validator community and core devs are now dead-set on increasing the stability of the network and improving upgrade processes as exemplified by this post from Anatoly.
SF Validator Outage. On March 2nd, our validator got hit with 65 Gbit/s of UDP traffic. Neglecting prior arrangements, our Data Center blackholed our uplinks, forcing us offline. Six months ago, due to a similar incident, we decided to fully migrate our entire Solana infrastructure to a brand-new Equinix DC. It took time as we don't run any validator infrastructure in the cloud and build our racks from the ground up.
As we didn't get a clear timeline for the re-activation of our uplinks we decided to force the migration. Due to the spontaneous nature & some minor challenges the downtime accumulated to ~8 hours. That doesn't match our standards & we apologize.
However, there’s also good news (very good news actually): Our validator now runs behind a 100G uplink, runs 74F3 EPYCs, and, lost but definitely not least, runs the Jito MEV client. We'll share more about the nature of the incident as we learn.
From the ashes, it shall rise. While this fits the above two bullets as well, it is intended to hin on Phoenix, a central limit order book (aka. CLOB), built by Ellipsis Labs.
CLOBs are way more efficient market makers than AMMs, which rose to fame during the DeFi summer of 2020. However, due to previous blockchain architectures and high TXs fees, CLOBs were not feasible to be put on-chain. The launch is perfectly timed as retail users slowly wake up to the fact that providing liquidity (aka. LPing) for AMMs is most often a money-losing endeavor (check this thread for more context).
It’s great to see teams leveraging Solanas’ unique capabilities to move the whole space forward. The code is open-sourced and already available in Beta on Solanas’ mainnet.
Tendermint: Cosmos & Stride
Replicated Security. Formerly known as Interchain Security (ICS), Replicated Security is a shared security model that enables new projects launching within the Cosmos ecosystem to lease security from the Cosmos Hubs’ validator set, ultimately replicating the set and having the validators also validate the additional chain. This will render the respective chain a Consumer Chain and empowers it to focus on its core business logic rather than having to spin up its’ own validator set - new chains often struggle to get a solid validator set going and due to the novelty of their native tokens, subprime security through low token prices and liquidity is an unwanted byproduct. For ATOM delegators, RS constitutes an additional revenue stream as Consumer Chains share their revenue with the Hub, its’ validators as well as delegators. RS is expected to be rolled out in the wake of the Lambda upgrade. You can learn more here.
Governance Spam. The hub witnessed a spike in spam governance proposals since submitting a proposal has neglectful costs. The spam proposals cluster irritates some user interfaces and partly contains malicious links - we advise you to be careful with clicking any links for the foreseeable future and to not link your wallet to any suspicious websites. A solution is on the way and expected to be implemented soon. Kudos to the community for the quick turnaround!
Cosmos 🤝 Polkadot. Serious cross-pollination is happening between two of our favorite ecosystems: the first Inter-Blockchain-Communication (IBC) transfer took place between the Picasso parachain (Kusama) and the Stride (Cosmos). The token transfer between the sovereign ecosystem was led by a community member and while ‘only’ a test, it once again demonstrates clear signs of a multichain future.
Substrate: Polkadot, Kusama, Hydra
Need for speed. Asynchronous Backing is coming, which means faster parachains. Currently, the performance of parachains was strongly dependent on relaychains and the time window in which the parachain block had to be transmitted to the Relay Chain for validation was very small. If the parachain collator was now very far away from the relaychain validator and one of the nodes had eventual performance issues, this quickly led to the fact that the block could not be included and the parachain had to wait roughly 12 seconds for the next window with the next collator. With asynchronous backing, this becomes more dynamic and performant. For a more visually appealing explanation of asynchronous backing, check out this post.
Hash it out. Congratulations to Hashed Network for winning parachain auction #40. With a focus on enterprises, the team behind Hashed Network pursues multi-custody digital asset treasuries. These support flexible spending policies, native Bitcoin, and live proof-of-reserves. Enterprises control their own assets, while the accounting integrations allow for simplified compliant operations and reporting.
Network quick takes
Game it out. Aptos Labs recently released a new software development kit (SDK), which empowers developers to build web3 games. The SDK contains tools that enable actual ownership of in-game assets (e.g. skins), portability of virtual goods, as well as the purchase, liquidation, and trade of game items.
Base(d). Coinbase recently announced the launch of their own Ethereum Layer2, Base. Shortly after, The Graph announced its support of the new network right from the get-go.
Optimus Prime. Optimism, a popular L2 scaling solution for Ethereum, is now fully supported and live on Wormhole - learn more about the integration, optimistic rollups, as well as the protocol itself in this fantastic thread.