Welcome to another thrilling edition of Moon Mag! This is the 35th Issue, so that means we are one month away from our 3rd Birthday; yes, we have been bringing you the best projects for almost 3 years; can you believe that? The crypto world is always abuzz with excitement, whether it be meme coins, new chains or an Ethereum ETF, and we're here to bring you the latest and greatest updates.
Speaking of Ethereum, we tell you all about another exciting upgrade for Ethereum, and the big news is that ETF approval for Ethereum seems to be just around the corner. This is a moment of great anticipation and hope for the Ethereum community. ETH still wears the crown of King of the ALTs but may need to watch out for SOLANA moving into this next bull run.
The overall crypto market is showing signs of finding a bottom, and many experts believe a turnaround is on the horizon. This is an exciting time for all of us who believe in the transformative power of blockchain. With the potential Ethereum ETF approval, we could see a wave of significant institutional interest and investment flooding into the space, further validating our belief in the potential of crypto. Stay optimistic, and keep your eyes on the developments—good things are coming our way!
Enjoy this issue as we dive deep into some of the most promising projects in the crypto space.
DIMO, ALEPH ZERO, and we take a look at BlobSpace!
Check out our feature on Istanbul Blockchain Week, as we cover the MUST ATTEND crypto events. And I bring you TWO articles for you this month on Capital Preservation - which is essential now and Bridging the Investor Gap!
As always, don’t forget to share Moon Mag on your social media and send it to one of your no-coiners friends. Let them discover just what crypto is about!
Now get reading! And I will see you on Social Media and inside GettingStartedinCrypto.com
Lisa x
A note from Josh
Another month, another issue of the Moon Mag! And it seems, another exciting upgrade for Ethereum on the cards too. Not only that, but ETF approval for Ethereum seems to be firmly on the horizon, with rumours that it could be approved by the time you are reading these words on the 8th of July. It certainly would put Ethereum in a strong position for the next bull run if approval was confirmed. Ethereum has always suffered from being second in the race behind Bitcoin, but its prominence is continuously rising, and perhaps it's now it's time to shine. What if when anyone thinks of crypto, they think of Ethereum instead of Bitcoin? What if when you ask someone if they know about crypto, they reply with, 'Oh, that Ethereum stuff? Yeah, I've heard of it.'
We also deep dive into a few exciting looking projects and we have a feature article on Istanbul Blockchain Week, a host of events in Turkey for those who eat, sleep, rave and repeat all things crypto. Let us know if you plan to go!?
Additionally, Lisa has written not one but TWO awesome articles this month. All this glorious content for free! Please help us out by sharing the Moon Mag on social media networks and across the web - we love hearing from everyone who enjoys reading the Moon Mag!
SPONSORS
We are incredibly grateful to the following sponsors for their support. We run a ‘Sponsor A Writer’ campaign where crypto projects take part in an altruistic act of sponsoring our talented writers. By doing so, they play a crucial role in keeping the crypto economy alive and thriving, not only for our readership, but for the writers who provide the awesome articles.
DISCLAIMER
All the content provided for you as part of the Moon Mag has been researched thoroughly and to the best of our ability however it is your choice, and your choice only, whether you wish to invest or participate in any of the projects. We cannot be held responsible for your decisions and the consequences of your actions. We do not provide financial advice. Please DYOR and above all, enjoy the content!
CONTRIBUTORS
Daniel
Daniel has been a blockchain technologyevangelist since 2012 and is a faithful believer in the Crypto ecosystem. Daniel also writes for Coin Telegraph!
Samantha
Freelance journalist dedicated to digital media, enthusiast of the crypto ecosystem and disruptive technologies MDC writer since 2018, currently writer for CryptoTrendencia.
Chris
I joined the crypto party in 2017 Worked as a DAO contributor, startup advisor, lead researcher and co-author My superpower? Translating complex blockchain concepts into clear, engaging content that resonates.
CAPITAL PRESERVATION
in a Volatile (Crypto) Market
written by Lisa N. Edwards
Volatility is a double-edged sword. While it offers opportunities for significant gains, it also presents substantial risks. In such an unpredictable environment, the concept of capital preservation becomes essential. Ensuring that your hard-earned capital remains intact can mean the difference between longterm success and catastrophic loss. I will explore strategies and principles traders can adopt to safeguard their capital in the volatile crypto market.
Understanding Market Volatility
Volatility refers to the rate at which the price percentage increases or decreases. It measures the risk involved in a particular market or security. High volatility often indicates larger price swings and, consequently, higher risk. Volatility is why we are trading cryptocurrency, as stocks and bonds often don’t offer the same returns.
Several factors contribute to market volatility, including economic data releases, geopolitical events, changes in market sentiment, and unexpected news. These fluctuations can lead to significant losses if not managed properly by traders.
This link is for the USA, but each government will have something similar. https://www.federalreserve.gov/newsevents/calendar.htm
As for Australia https://www.rba.gov.au/schedules-events/calendar-2024.html
Principles of Capital Preservation
Risk Management: The Cornerstone
Effective risk management is the foundation of capital preservation. This involves setting strict stop-loss orders to limit potential losses on any given trade. A stop-loss order ensures that a position is automatically closed when it reaches a predetermined loss level, thus protecting your capital from further downside.
Position Sizing: Don’t Put All Eggs in One Basket Position sizing is crucial in controlling risk. It involves determining the amount of capital to allocate to a particular trade. A general rule of thumb is to risk no more than 1-2% of your total trading capital on a single trade. (Margin or Leverage Trading) This way, even a series of losses won’t significantly deplete your capital. For Spot trading, it is essential to split your risk over numerous positions, and when the market is uncertain, only trade 10% of your trading balance.
I also need to make it clear that a trading balance IS NOT your entire portfolio. In issue 31, I break down how to create a trading plan https://themoonmag.com/issue-31/
Diversification: Spreading the Risk Diversification involves spreading your investments across different asset classes or markets to reduce exposure to any single risk. By diversifying, you can mitigate the impact of a poor-performing asset on your overall portfolio. This also helps with FOMO, as usually something is moving.
Technical Analysis: Reading the Market Utilising technical analysis tools can help traders make informed decisions based on historical price data and market trends. Indicators such as moving averages, Relative Strength Index (RSI), and Bollinger Bands can provide insights into potential market movements and help identify entry and exit points.
Stay Informed: Knowledge is Power. Keeping abreast of market news, economic indicators, and global events is essential. Being informed allows traders to anticipate potential market movements and adjust their strategies accordingly. Subscribing to financial news services and following reputable analysts, GettingStartedinCrypto.com can provide valuable insights.
Strategies for Capital Preservation
1. Hedging: A Safety Net. For margin and leverage traders, switch to an exchange that allows the HEDGING Function. Hedging involves taking an offsetting position in a related security to mitigate potential losses. For example, you could be short on the same crypto if you hold a long position. If the price falls, the gain from the short can offset the loss from the long position.
2. Implementing a Conservative Trading Strategy Adopting a conservative trading approach can help preserve capital. This might include focusing on high-quality, low-volatility crypto (Like Top 10 only) or employing a value investing strategy that targets undervalued assets with strong fundamentals.
3. Regular Portfolio Rebalancing Periodically reviewing and rebalancing your portfolio ensures that your asset allocation remains aligned with your risk tolerance and investment goals. This process involves selling overperforming assets and buying underperforming ones to maintain your desired risk level.
Psychological Aspects of Capital Preservation
1. Emotional Discipline Emotional discipline is critical in trading. Fear and greed can cloud judgment and lead to impulsive decisions that jeopardise capital. Sticking to a well-defined trading plan and avoiding emotional reactions to market movements can help preserve capital.
2. Patience and Long-Term Perspective. Having a long-term perspective and patience can prevent knee-jerk reactions to short-term volatility. Understanding that markets go through cycles and that temporary downturns are part of the game can help traders focus on their overall strategy.
Capital preservation should be a trader’s top priority.
By implementing sound risk management practices, diversifying investments, staying informed, and maintaining emotional discipline, traders can navigate the stormy waters of market volatility.
Remember, the goal is not just to survive but to thrive in the long run. By safeguarding your capital today, you prepare for the impending bull run!
After a groundbreaking debut in 2022, the W3Expo, organised by web3 Marketing & PR Agency EAK Digital, is set to make a triumphant return on August 13-14 at the Hilton Istanbul Bomonti Hotel & Conference Center, reaffirming its commitment to the Web3 gaming industry.
With a unique vision that prioritises gaming first, the W3Expo is dedicated to placing Web3 games directly into the hands of consumers. Unlike typical B2B events or being tucked away in the NFT corner of crypto conventions, W3Expo stands out as a dedicated gaming showcase that merges the worlds of web2, web3 and esports. It welcomes all genres across PC, mobile, and console platforms and features live esports action on stage.
Turkey's reputation as a hotspot for gaming is well-earned, with its vibrant casual gaming market capturing the hearts of millions. As a nation, it has swiftly climbed the ranks to become one of the top five global adopters of Web3 technology, further solidified by its burgeoning esports industry. This unique combination of passion for gaming, technological embrace, and competitive spirit makes Turkey the ideal host for W3Expo 2024. Integrated within Istanbul Blockchain Week (IBW), the expo is set to draw an international audience exceeding 4,000, comprising gamers, developers, and Web3 enthusiasts eager to explore the latest gaming innovation.
The design of W3Expo's exhibition spaces is a testament to immersive and interactive gaming experiences. They feature intuitively designed walk-up-and-play game stations equipped with PCs and mobile devices. Every setup is linked to large monitors, ensuring that the thrill of gameplay is shared with onlookers. This creates a community atmosphere where every victory and defeat can be collectively experienced.
Avalanche is set to present its gaming repertoire by presenting Raini: Lords of Light along with Providence, Spellborne, RoboKiden and Fableborne, each uniquely leveraging Avalanche's robust blockchain technology. These additions promise to enrich the W3Expo experience, offering players diverse, immersive experiences ranging from strategic battles to innovative gameplay mechanics in the other titles.
Commenting on the return, Damian Bartlett, W3E Team Lead at W3Expo, said:
"We're excited to bring W3Expo back to Istanbul, 2022 was a ground-breaking event where we merged web3 gaming in its infancy with web2 and esports. The focus is on prioritising gaming, ensuring it reaches true enthusiasts, and showcasing web3 alongside the traditional gaming industry on an equal footing.
“With Turkey's strong gaming and esports culture, along with its leading position in web3 adoption, there's no better place for W3Expo 2024."
Whether you're a gamer, developer, or enthusiast, this is a great chance to be part of an event that celebrates the future of gaming.
What is Istanbul Blockchain Week?
Istanbul Blockchain Week 2024 is set to illuminate the vibrant city of Istanbul on August 1314 at the Hilton Istanbul Bomonti Hotel & Conference Center, marking its return as the nexus for Web3 innovation in the Eurasian region. This event builds on previous years' success and expands its horizons with more speakers, activations, and Web3 education, leveraging Turkey's burgeoning role as a crypto powerhouse. With the nation's dynamic tech ecosystem and strategic geographic position, Istanbul Blockchain Week promises a confluence of international and local experts driving the Web3 revolution.
The Istanbul Blockchain Week tickets include entrance to W3Expo, and early bird tickets can be purchased here
About W3E
W3E is at the forefront of Web3, and gaming innovation, dedicated to enriching the gaming and esports scene within the web3 ecosystem. Under the leadership of team lead Damian Bartlett, W3E has made significant strides, including hosting the world’s first Web3 LAN tournament at the ESA Esports Arena during Istanbul Blockchain Week 2022. As part of the EAK Global Group, W3E is building an all-in-one gaming ecosystem that supports games with their go-to-market strategies while offering consumer-facing W3Expo and esports events for players. The team, boasting extensive backgrounds in the gaming industry, provides a robust platform for emerging projects, game testing, and networking among gaming, blockchain, and esports enthusiasts, aiming to bring legitimacy and facilitate growth in the web3 gaming space.
To learn more, visit w3expo.gg
About Istanbul Blockchain Week
Istanbul Blockchain Week is an annual event bringing together blockchain enthusiasts, industry experts, and thought leaders from across the globe. Following its remarkable success in 2022 and 2023, which witnessed an impressive turnout of over 8,000 attendees and featured 180+ international and Turkish speakers such as Changpeng Zhao, Ziya Altunyaldız, Yoshihisa Hashimoto, and Şant Manukyan, IBW returned to Turkey's prominent crypto hub on August 13th to 14th. As a dynamic platform for networking, knowledge sharing, and exploration of the latest advancements in blockchain technology, Istanbul Blockchain Week creates an environment conducive to collaboration and innovation. The event offers attendees a diverse program featuring keynote speeches, panel discussions, workshops, and exhibitions that delve into various aspects of web3. Istanbul Blockchain Week presents a unique opportunity for individuals to immerse themselves in the blockchain world and connect with like-minded visionaries who are actively shaping the future.
To learn more and get IBW tickets, visit istanbulblockchainweek.com
Aleph Zero Protocol and the AZERO token
written by Chris
Key Insights
▪ Aleph Zero is a Layer 1 blockchain that bridges the gap between privacy and regulatory compliance.
▪ Its unique consensus mechanism, AlephBFT, combines Proof of Stake (PoS) and Directed Acyclic Graph (DAG) technology for high performance and security.
▪ The Shielder privacy layer uses zero-knowledge proofs and secure multi-party computation to enable confidential transactions on a public blockchain.
▪ The AZERO token fuels the whole ecosystem, incentivises network participation, and provides governance rights to holders.
▪ Aleph Zero's growing ecosystem of projects and strategic partnerships demonstrates its potential for real-world applications in finance, supply chain management, and other fields.
Overview
The pursuit of privacy often clashes with the demands of regulatory compliance. This conflict presents a significant challenge for blockchain projects aiming to balance user autonomy with the need to adhere to legal frameworks. Enter Aleph Zero, a privacy-enhanced blockchain platform that's turning this challenge into an opportunity.
Aleph Zero isn't just another blockchain; it's a carefully engineered solution that seeks to harmonise the opposing forces of privacy and compliance. By leveraging ZK technology and collaborating with industry experts, Aleph Zero is building a platform that protects user data and embraces the modern world's regulatory realities.
At its core, Aleph Zero is a public L1 blockchain network that prioritises scalability and privacy. It boasts impressive speed, validation times, and security, addressing many limitations plaguing earlier blockchain projects. But what truly sets Aleph Zero apart is its innovative approach to privacy. It employs a unique Directed Acyclic Graph (DAG) technology to create an efficient and decentralised system that can handle large volumes of transactions while maintaining user privacy.
This approach is not just about technical advancement in the space; it's about enabling a more practical and sustainable future for blockchain technology. Aleph Zero envisions a world where businesses and individuals can exchange data and value on a truly decentralised ledger while ensuring compliance with existing regulations. This could revolutionise the finance and healthcare industries, paving the way for a more transparent and equitable digital landscape.
In this deep dive, we'll explore everything related to Aleph Zero, the challenges it seeks to address, and its potential to reshape the way we think about privacy and compliance.
Background & History
Aleph Zero's story is of meticulous research and a steadfast commitment to building a privacy-focused blockchain that doesn't shy away from regulatory compliance. The project's roots trace back to early 2018 when a team of researchers and developers set out to address the shortcomings of existing distributed ledger technologies.
From Theory to Practice
The Aleph Zero whitepaper unveiled at the Advances in Financial Technologies (AFT) conference in Zurich in October 2019 laid out the project's ambitious vision. It proposed a unique blend of privacy-enhancing features, scalability, and a commitment to regulatory compliance, setting the stage for a blockchain platform that could bridge the gap between Web3 and traditional finance.
Securing Funding and Building Momentum
By 2020, the Aleph Zero team had made significant progress, culminating in a successful seed funding round. This capital allowed them to accelerate development and lay the groundwork for the project's future growth. Early 2021 marked another significant milestone, with a public sale raising almost $19m, further solidifying community support and raising awareness of Aleph Zero's unique value proposition.
Mainnet Launch and Beyond
The culmination of years of research and development came in November 2021 with the launch of Aleph Zero's mainnet. This significant achievement marked the beginning of a new chapter for the project. Since then, the Aleph Zero team has continued to iterate and refine the platform, improving scalability, enhancing privacy features, and forging strategic partnerships to expand its reach and impact.
The Aleph Zero Foundation
Central to the project's evolution is the Aleph Zero Foundation, a non-profit organisation dedicated to fostering the growth and adoption of the Aleph Zero blockchain. The foundation is crucial in supporting research, development, and community initiatives, ensuring the project's longterm sustainability and success.
The road ahead for Aleph Zero is one of continued innovation and expansion. With a focus on delivering real-world solutions that address the complexities of privacy and compliance, Aleph Zero is poised to make a lasting impact on the blockchain landscape.
Team & Founders
Aleph Zero's impressive team is a diverse blend of academic and industry experts united by a shared vision for a secure, decentralised future. With backgrounds ranging from theoretical computer science to hands-on experience in finance and tech, the team brings a unique combination of skills.
Founding Team
The project was co-founded by a group of experienced researchers and entrepreneurs, including:
● Dr. Adam Gagol: A mathematician with a PhD and a deep understanding of cryptography, Gagol's expertise forms the backbone of Aleph Zero's technology.
● Antoni Żółciak: With over a decade of experience in technology marketing, Żółciak brings a wealth of knowledge in communicating Aleph Zero's vision and engaging with the broader community. His past collaborations with global brands like ING, Samsung, and Sony demonstrate his ability to bridge the gap between technology and the market.
● Dr. Matthew Niemerg: Niemerg's diverse career has spanned distributed ledger technology, cryptography, and high-performance computing.
● Michał Świętek: An experienced developer, Świętek plays a key role in translating Aleph Zero's ambitious concepts into practical, working solutions.
A Growing Team
The team has grown significantly, now encompassing over 40 members with diverse skill sets and backgrounds. Team members' impressive list of achievements includes top placements in international competitions and experience at renowned companies like IBM, ABB, Stellar, and Google.
Collaboration and Expertise
Aleph Zero's development is not solely an inhouse effort. The project collaborates with key partners to leverage specialised expertise:
● Cardinal Cryptography: This research and development firm, co-founded by Aleph Zero team members, focuses on cryptography, native tooling, and incubation of projects built on the Aleph Zero network.
● 10Clouds: 10Clouds provides vital DevOps infrastructure support, ensuring the smooth operation and scalability of the Aleph Zero platform.
● Serotonin: This marketing consultancy firm helps to shape and execute Aleph Zero's communication and outreach strategies.
An Inclusive Community
Aleph Zero actively fosters an inclusive and collaborative community. They offer an Ambassador Program, inviting passionate supporters to contribute to the project's growth and development. They also maintain an active presence across social media and their website, sharing updates, insights, and educational resources to help users understand and embrace the potential of Aleph Zero.
The team's dedication, diverse expertise, and collaborative spirit are integral to Aleph Zero's success. They are committed to building a blockchain platform that solves technical challenges and creates a more equitable and transparent future.
For more information on the team and their backgrounds, visit the Aleph Zero website: https://alephzero.org/the-team
The AZERO Token
Here are the market stats of the AZERO token at the time of writing:
Understanding the economic model behind any blockchain project is essential for gauging its potential and long-term sustainability. Aleph Zero's approach with its native token, AZERO, is transparent and strategic. It aims to strike a balance between incentives, community participation, and financial stability.
The Building Blocks of AZERO
● Supply and Inflation: Aleph Zero embraces a controlled inflationary model. The total supply of AZERO is not capped, with an annual inflation rate of 30,000,000 tokens. This means that new tokens are minted every year to reward network participants and fund development initiatives. As of the time of writing, there are ~319m in circulation, while 160m was the initial supply tokens of tokens.
● Distribution Strategy: The initial allocation of AZERO was carefully planned to ensure a broad distribution across key stakeholders. 23% was allocated to the Aleph Zero Foundation to support research, development, marketing, and other activities. The core team received 10%, with most of these tokens subject to lock-up and vesting periods to incentivise longterm commitment.
● Past Funding Rounds: Aleph Zero has raised a total of ~$20.85m across their Pre-Seed, Early Community, Seed and Public Sale rounds. It's important to note that this does not include the undisclosed amount raised in their February 2022 Strategic Round with RR2 Capital and LeadSeed
The Role of AZERO
AZERO plays multiple roles that drive its vibrant community while advancing its mission:
● Staking Rewards: Validators/Nominators securing the network are rewarded with newly minted AZERO for their service.
● Transaction Fees: AZERO is used to pay for transaction fees across the network, ensuring that users have a practical way to interact with the blockchain.
● DeFi Utility: Within Aleph Zero's ecosystem, AZERO is used for activities like DEX swaps, wrapping assets, and participating in liquidity pools.
● Governance: As Aleph Zero evolves, the AZERO token will become the key to participating in its governance. Token holders will have the opportunity to vote on proposals and shape the protocol's future direction.
What About Inflation?
Aleph Zero's inflationary model is a deliberate choice designed to foster growth and sustainability. The yearly addition of 30 million tokens is justified by::
● Network Security: The platform encourages active participation in network security by rewarding validators with a share of the new tokens. This helps maintain a robust and decentralised system.
● Development and Innovation: The ecosystem treasury receives some of the newly minted tokens. This provides a continuous funding source for research, development, marketing, and other initiatives that drive the platform forward.
● Long-Term Focus: By rewarding those who stake their tokens, the platform incentivises long-term holding, promoting stability and reducing the potential for speculative volatility.
Future Outlook
The future of AZERO's tokenomics is one of continued evolution. While there is currently no token-burning mechanism, it's possible this could be introduced as the ecosystem matures. Additionally, the Aleph Zero team is committed to decentralised governance, with plans to give the community more control over key decisions, including potential adjustments to the inflation rate, among others. The ecosystem is already looking good and always expanding.
This transparent and adaptable approach to tokenomics reflects Aleph Zero's broader vision: to build a robust and sustainable blockchain ecosystem that empowers users, promotes innovation, and embraces the future of DeFi.
How Aleph Zero Works?
Aleph Zero doesn't simply rely on existing blockchain blueprints; it reimagines them. The project's core innovation is its AlephBFT consensus protocol, a meticulously designed mechanism that sets it apart from its competitors.
Unlike many blockchains that solely rely on Proof of Work or Proof of Stake, Aleph Zero merges PoS with Directed Acyclic Graph (DAG) technology. This creates a hybrid model that is optimised for both security and throughput.
In this system, validators stake AZERO tokens to secure the network and earn rewards, aligning their interests with the platform's long-term success.
However, Aleph Zero goes a step further by utilising a rotating committee structure, where different groups of validators take turns confirming transactions. This makes the system more resilient to attacks and ensures a broader distribution of decisionmaking power.
Adding DAGs to the mix allows Aleph Zero to process transactions in parallel, similar to how modern computer chips handle multiple tasks simultaneously. This enhances scalability, enabling the network to handle a growing volume of transactions without sacrificing speed or efficiency.
Resilience is another key pillar of Aleph Zero's design. The AlephBFT protocol incorporates Byzantine Fault Tolerance (BFT), meaning the network can function correctly even if some nodes fail or act maliciously. This is crucial for maintaining trust and reliability in a decentralised system in general.
Furthermore, Aleph Zero's asynchronous operation eliminates the need for nodes to wait for confirmations from others before proceeding, boosting transaction speed and reducing potential bottlenecks.
Confidentiality is critical in the business world. Many companies hesitate to embrace blockchain technology due to concerns about data privacy. Aleph Zero is changing this narrative by offering a unique solution: private smart contracts.
How It Works:
● Zero-Knowledge: Aleph Zero utilises zero-knowledge proofs (ZKPs). This clever cryptography allows you to prove a transaction is valid without revealing its sensitive details. It's like proving you know a secret password without saying it out loud.
● Trust, But Verify: Aleph Zero's trustless design means you can verify the accuracy of a transaction yourself without relying on a third party. This reduces risk and fosters a more transparent environment.
Why It Matters:
With Aleph Zero, businesses can finally tap into the power of smart contracts without compromising confidentiality. This opens the door to countless possibilities:
● Secure Data Sharing: Collaborate with partners and share sensitive information without fear of leaks.
● Transparent Supply Chains: Track the movement of goods with an immutable record while keeping proprietary details private.
● Confidential Financial Transactions: Execute transactions with complete privacy, reducing the risk of fraud and manipulation.
Aleph Zero's approach isn't just about protecting data; it's about building trust and unlocking the full potential of blockchain technology for real-world applications. By prioritising privacy, Aleph Zero is paving the way for a more secure and equitable digital future.
Shielder: Aleph Zero's Private Transactions Tool
What is Shielder?
Shielder is a unique feature of the Aleph Zero blockchain for user privacy. Think of it as a secure vault where transactions can remain confidential. Unlike many other privacy solutions, Shielder doesn't sacrifice the security and transparency of blockchain networks:
Source: btn.group
● Shielded Pool: This allows users to deposit and withdraw their PSP22 tokens (similar to ERC-20 tokens on Ethereum) into a common pool. Once inside this pool, the tokens become "shielded," meaning their transaction history and ownership details are hidden from public view.
● ZK-IDs: Users within the Shielded Pool are assigned secret identifiers called ZK-IDs. These ZK-IDs enable private transactions and interactions while maintaining anonymity.
● Optional Registrar: For added control, the Shielder offers the option of a Registrar, who can verify and whitelist new users entering the pool. This feature is handy for applications where membership needs to be managed or restricted.
● Optional Anonymity Revoker: In exceptional circumstances, such as legal investigations, a designated Anonymity Revoker can unmask a user's identity, safeguarding against illicit activity.
● Safe Transfers: Shielder ensures secure transfers by requiring recipients to actively claim funds. This prevents accidental loss or theft of shielded tokens.
● ZK-Plugins: This innovative feature allows for additional programmable logic to be applied to the secret data stored within shielded accounts, opening the door to a range of potential privacy-preserving applications.
Shielder is a unique feature of Aleph Zero that offers a clean solution for confidential transactions. It empowers users to maintain their privacy while benefiting from the security and transparency of a public, permissionless blockchain.
Final Thoughts
Aleph Zero's emergence significantly shifts how we think about privacy and enterprise adoption. It's a project that not only talks the talk but also walks the walk, offering practical solutions to real-world problems. By integrating cutting-edge technologies like zeroknowledge proofs and secure multi-party computation, Aleph Zero ensures that confidentiality doesn't have to be sacrificed for the benefits of decentralisation.
From financial transactions to supply chain management, Aleph Zero's technology has the potential to revolutionise how businesses operate in Web3. By empowering both individuals and organisations to control their sensitive data, Aleph Zero fosters a greater sense of trust and security.
This focus on privacy, its robust technical foundation and a growing community of dedicated developers and supporters paints a bright future for Aleph Zero. As the world continues to embrace decentralisation, Aleph Zero is poised to be a leading force, offering a glimpse into a future where privacy and technological innovation go hand in hand.
Pectra Upgrade
What improvements can it bring to the Ethereum network and the end user?
written by Daniel
Ethereum core developers want to launch Pectra, the next hard fork upgrade, by the end of Q1 2025.
Pectra expects to be the most significant upgrade ever planned in Ethereum, with 19 EIPs to implement. Let's look at some of those improvements and what benefits their implementation can bring to the user.
What is Pectra?
The Ethereum Upgrade coined as "Pectra" is the upgrade combination that will happen in Prague, the execution layer, and in the consensus layer called Electra by early 2025, as agreed by Ethereum developers at the last ACDC (All Core Developers Consensus) held on 30 May 2024. The Ethereum Upgrade coined as "Pectra" is the upgrade combination that will happen in Prague, the execution layer, and in the consensus layer called Electra by early 2025, as agreed by Ethereum developers at the last ACDC (All Core Developers Consensus) held on 30 May 2024.
Looking to the future, the next major upgrade (Pectra) will reduce hardware requirements for validators and bolster network decentralisation. This approach will immediately result in a more resilient, robust, decentralised, and secure Ethereum.
The 'Pectra' upgrade will feature the EVM Object Format (EOF), a new way to organise, update, and execute smart contracts on the EVM, and PeerDAS, a data availability sampling solution. Developers also agreed to replace the account abstraction EIP-3074 with EIP-7702, enabling EOAs to function as smart contract wallets, which adds significantly more functionality. The final scope of the upgrade, which consists of the Prague upgrade on the Execution Layer and the Electra upgrade on the Consensus Layer, is still under discussion.
However, we can already talk about some EIPs confirmed by developers in ACDC call 134 that will undoubtedly positively impact the whole ecosystem and the blockchain industry due to Ethereum's relevance.
The developers and the Ethereum Foundation are working hard to fine-tune the details before the scheduled update implementation. These details, broken down into various enhancement proposals, can be found in the crucial EIPs included, some of which include retroactive EIPs to clarify existing protocols.
EIPs involved
Among the key EIPs are 2537, 2935, 6110, 7002, 7251, 7540, 7685, 7702, 7692, 3074, 7549 and others. Remember that there is also a long list of EIPs considered for inclusion that you can review in this thread on eips.ethereum.
It is pivotal to mention that the PeerDAS in the Pectra upgrade, with a separate activation epoch, are proposed to extend ENS to Layer 2. EIP7594 PeerDAS is in Pectra but with a separate activation epoch to allow moving to a later upgrade if needed.
From the list of approved EIPs to include in Pectra Upgrade and the EIPs under consideration, we can see that there are two significant upgrades to consider at both the execution layer and the consensus layer (Beacon Chain).
The first is EIP-7251, which concerns increasing the maximum adequate balance limit for validators from the current 32 ETH to 2048 ETH. The other is Vitalik Buterin's proposal under EIP-7702, which replaces the account abstraction of EIP-3074 and seeks to incorporate a new type of transaction called a "user transaction."
Let's look at the implications for the end user and the ecosystem of these proposed improvements.
EIP-7251: Larger validators
It impacts the mechanics employed by the individual and institutional staking pools in terms of 'validator compaction'.
In other words, EIP-7251 seeks to implement a series of changes in Ethereum's consensus layer to incentivise validator consolidation and thus curb artificial decentralisation in the Beacon Chain.
As noted above, "MAX_EFFECTIVE BALANCE" is increased from 32 ETH to 2048 ETH, increasing the staking limit for validators. Thus, staking operations are simplified, and the operational burden is reduced.
Imagine that LIDO, a large player with a market share of almost 32% of all ETH staked, could consolidate multiple validators of 32 ETH into a single pool of 2048 ETH.
As shown in the graph above, the immediate impact would be that unifying validators would lower the operational burden from almost 300,000 to only about 145 validators.
Reducing the operational burden for institutions and staking protocols is a significant achievement and breakthrough in simplifying the costs of setting up nodes in the Ethereum ecosystem. Charges for specialised hardware, storage costs depending on the type of node to set and maintenance for hosting these nodes, such as VPS, Internet, electricity, and others,+ are just some of the difficulties that staking protocols and even decentralisationloving users running Solo Staking must overcome.
In addition to the benefits of simplicity in the operational burden, there are marked advantages at the user level:
● Reduced time for set-up of validators
● Saving gas costs by reducing interaction with the same contract multiple times per dispersed validator
● A more intuitive and easier-to-enter user interface
● Lower barrier to entry for delegating ETH or generating a validator in DVT-based pooled staking protocols
● Decreases the risk of slashing
● It consolidates the validator's balance and earned rewards into a single account, making it easier to manage assets.
EIP-7702: No gas for transactions? Find a sponsor!
This upgrade seeks to significantly alter how users interact with the Ethereum blockchain by giving regular accounts temporary smart contract capabilities, batch transactions and introducing fee sponsorship options.
As noted above, this EIP introduces EOA (Externally Owned Account), a type of Ethereum account controlled by a private key outside the blockchain instead of smart contract accounts.
This proposal suggests allowing an EOA account to have code associated with it during a single transaction and to behave as if it had code, thus allowing it to execute logic similar to that of smart contracts.
This could impact the flexibility and functionality of transactions on the Ethereum network, allowing externally owned accounts to perform more complex tasks without needing to be smart contract accounts on an ongoing basis.
More simply, EIP-7702 introduces the following improvements to Ethereum:
● It allows regular Ethereum accounts, which can only send and receive transactions, to execute more complex operations usually reserved for contracts within a single transaction.
● Users could combine multiple trades into a single transaction, resulting in a reduction in gas tariffs.
● The concept of "tariff sponsorship" is introduced, improving flexibility in gas cost management. In this way, any user can find a sponsor to pay transaction fees when they do not have sufficient balance to execute the transaction or even cover the transaction fees of other users. Similar to how some wallets work, this feature will now come natively built into the Ethereum network.
The enhancements proposed in the EIP-7702 within the Pectra Upgrade will undoubtedly impact user flexibility and transaction efficiency on Ethereum by allowing regular accounts to temporarily perform smart contract functions. This will allow users to implement complex logic without going through the smart contract learning curve.
Of course, this feature will benefit all sectors, especially DeFi, where users aren't allowed to configure their wallet to execute automatic trades when meeting certain market conditions to maximise their trading strategy in various protocols, similar to bot trading.
In addition, transaction batching will save users money during times of high network congestion. Processing multiple actions at once will allow DeFi enthusiasts, for example, to maximise their trading strategy by batching multiple trade orders into a single transaction, ensuring they are processed together and saving on gas fees.
Imagine executing several sequential trades as staking, then using the staked tokens as collateral for a loan, and finally exchanging the loaned asset for another token - all in a single transaction!
Finally, the user experience will be greatly rewarded, not only by reducing costs and adding temporary smart contract functionality to regular Ethereum wallets but also by enabling fee sponsorship even in DAO organisations where wealthier members can encourage active participation in voting by covering the costs of transaction fees.
This level of automation and flexibility would transform regular wallets into decentralised applications (dApps), giving users tools that used to be available only to developers. It would significantly democratise the use of complex blockchain functionalities, making them accessible to a bigger audience without the steep learning curve typically associated with smart contract programming.
Other EIPs involved
On a more technical level, the rest of the EIPs so far considered for implementation in the next major Ethereum update are:
● EIP-7002: Execution layer triggerable exits. Proposes introducing a new mechanism to allow validators to trigger withdrawals and exits from their execution layer withdrawal credentials (0x01).
● EIP-2537: Precompile for BLS12-381 curve operations. Implementing EIP-2537 could facilitate new applications and optimise existing ones that rely on advanced cryptographic operations on the Ethereum platform.
● EIP-2935: Save historical block hashes in the state to optimise access to historical data, making the verification and querying of old blocks more efficient.
● EIP-6110: Supply validator deposits on chain. The main objective of EIP-6110 is to improve the transparency and security of the validation process by having all deposits available and visible on the blockchain.
● EIP-7549: Move the committee index outside the Attestation to possibly simplify the process and improve efficiency or system security.
● EIP-7685: General purpose execution layer requests. In simple terms, this proposal seeks to introduce a flexible and versatile execution layer within the Ethereum protocol.
● EIP-7692: EVM Object Format (EOFv1) Meta. EIP-7692 is an enhancement proposal for Ethereum known as the "Meta EIP", which lists the EIPs that belong to the proposed EVM Object Format (EOF) in its first version, also known as the "Mega EOF".
Conclusion
Pectra Upgrade is poised to be a transformative upgrade to the Ethereum ecosystem, improving cost, efficiency and user experience.
As the Ethereum community continues to test and refine this approach, it could soon pave the way for more innovative uses of blockchain, further cementing Ethereum's position as a leading platform in the cryptocurrency space.
While there is still much to be improved and implemented in Ethereum, the EIPs proposed for the upcoming Pectra hard fork seem to focus on making Ethereum a highly scalable and secure ecosystem.
Happy fork!
DIMO Project and the DIMO Token
written by Chris
Key Insights
DIMO aims to transform cars into smart, connected devices, enhancing the driving experience with AI diagnostics, autonomous features, and real-time safety alerts.
Car owners gain control over their vehicle data, allowing secure sharing with businesses and developers in exchange for DIMO tokens, fostering innovation and collaboration.
DIMO has secured $20.5m in total funding and has rapidly expanded its network to over 36,000 connected cars. The DIMO token powers the ecosystem, incentivising positive contributions, ensuring sustainability, and enabling democratic governance through token holder participation.
Users can easily connect their cars to the DIMO network using a DIMO-certified device and a web3 wallet, linking their vehicles securely and gaining access to various benefits and services.
DIMO's roadmap aims to build a decentralised, datadriven automotive industry prioritising user control and connectivity.
Introduction
We live in an age of smart devices, yet our cars remain stubbornly stuck in the past. DIMO is setting out to change that with a bold plan to bridge the gap between the automobile and the digital world. Their aim? To turn every car into a smart, connected, and programmable device, revolutionising the transportation industry as we know it. We covered Hivemapper back in MoonMag issue #13, which is similar to what DIMO is doing, so have a look if you haven’t yet.
DIMO, or Digital Infrastructure for Moving Objects, transforms the automotive landscape by making every car smart and programmable. It offers an open platform that integrates vehicle data, connectivity, and commerce, providing a modern solution for the transportation industry.
DIMO enables every driver to access applications, services, and rewards. Anyone with a car from 2008 (or newer) can join the network, enhancing the driving experience with AI diagnostics, autonomous parking, and real-time alerts for family safety.
To simplify it for all of you, car owners gain control over their vehicle data, allowing them to share it securely with businesses and developers in exchange for DIMO tokens, the platform's native token. Developers, in turn, can leverage this data to build innovative applications, while businesses can gain valuable insights into driver behaviour and vehicle performance.
This system encourages data sharing and collaboration, driving a new era of connected transportation. As DIMO redefines vehicle interaction, it promises to make the automotive industry smarter, more efficient, and more interconnected. In this deep dive, we'll take a closer look at DIMO, exploring the technology behind its ambitious vision, the team driving it forward, and the potential impact this project could have on how we interact with our cars and the roads we travel.
Background & History
DIMO is a DePin (decentralised physical infrastructure network) project. Since its inception, it has experienced significant growth and investment. Backed by Digital Infrastructure Inc., the team behind DIMO has been steadily building its decentralised car data protocol and expanding its community of users.
While DIMO was founded in 2020, the journey began in February 2022 with a successful seed round, raising $9 million from notable investors, including CoinFund, Slow Ventures, and Variant. This early funding provided a crucial foundation for developing the DIMO network and its companion app, DIMO Mobile.
source: cryptorank
Fast forward to January 2024, and DIMO announced a successful Series A funding round, securing $11.5 million. Led by CoinFund, this round saw participation from a diverse group of investors, including Slow Ventures, ConsenSys Mesh, Borderless Capital, and even former General Motors CEO Rick Wagoner. This investment bolstered DIMO's financial resources and added strategic expertise to its board of directors.
A Growing Network
The impact of this funding is evident in DIMO's impressive growth. In 2023, the network experienced a staggering 900% increase in connected cars, expanding from 3,000 to over 36,000. This translates to over $1 billion in assets now connected to the DIMO network, underscoring the project's growing traction and the value it creates for users and developers.
The Road Ahead
With a total of $20.5 million in funding raised to date, DIMO is wellpositioned to accelerate its development and expand its ecosystem further. The company's 2o24 roadmap includes plans for new tools and features to empower developers to build innovative applications on top of the DIMO network.
DIMO's growth and strong financial backing signal a promising future for the project. As the world embraces the concept of decentralised physical infrastructure networks (DePIN), DIMO is at the forefront, paving the way for a more connected and data-driven automotive industry.
Founders
A group of experienced entrepreneurs and technologists co-founded DIMO:
▪ Alex Rawitz: A passionate advocate for using technology to improve the world, Rawitz has a strong background in cryptocurrency and emerging tech like IoT and autonomous vehicles.
▪ Rob Solomon: With extensive experience building and scaling tech companies, Solomon brings valuable business insight to DIMO.
▪ Yevgeny Khessin: As CTO/Co-founder, Khessin is the technical lead, leveraging his software development expertise to bring DIMO's vision to life.
▪ Andy Chatham: Chatham's focus on business development and partnerships is crucial for expanding DIMO's network and fostering collaboration within the industry.
This team's diverse skill set and shared commitment to innovation position DIMO well for success in this diverse and evolving industry.
The DIMO Token
Here are the market stats of the DIMO token at the time of
Tokenomics
Understanding the tokenomics of $DIMO is essential to grasp how this utility token powers the DIMO network. Unlike Bitcoin, which serves as a secure store of value with rigid and predictable issuance rules, $DIMO is designed as a utility token, driving the ecosystem by incentivising participation while fostering innovation.
To ensure the success and sustainability of the DIMO network, the tokenomics are built on several fundamental principles:
1. Incentivising Positive Contributions: The $DIMO tokenomics are structured to reward users who generate valuable data and engage in the marketplace. This includes hardware OEMs facilitating more accessible connections and developers building innovative applications and integrations.
2. Inclusivity for Everyone: The tokenomics are simple and welcoming to all users, including automakers and app developers. Major stakeholders like Ford, Geico, and Uber need assurance that the platform remains open and reasonably priced.
3. Sustainability: The system ensures token burns do not deplete the token supply entirely. Sustainable practices are in place to maintain the network's long-term viability.
4. Predictability: The token supply and pricing mechanisms are designed to avoid rapid inflation and massive price fluctuations, providing more stability.
5. Implementability: The team ensured tokenomics are feasible, commercially enforceable, and compliant with recent regulations.
6. Decentralised Authority: Governance is vested in a community of stakeholders, ensuring aligned interests and democratic decision-making.
Mechanisms
Some exciting mechanics underpin DIMO's tokenomics, ensuring they align with the principles above:
1. Baseline Rewards: This incentivises drivers to keep their vehicles connected to the network by issuing 1,105,000 $DIMO tokens weekly. Vehicles that provide richer data and maintain longer connections earn more. This system is live and aims to build a robust supply side of the network while demand catches up.
2. Promotions and Airdrops: These are mostly used to reward users who contribute to the network's advancement. DIMO has already conducted an airdrop and plans to continue using promotions to expand into new regions, launch new products, and introduce new device categories. These efforts help decentralise governance and incentivise early and ongoing participation.
3. Flat Protocol Fees: A flat fee is currently charged for specific onchain actions, such as adding a car. For example, a 25 $DIMO fee per hardware miner generates network revenue and prompts manufacturers to produce quality devices. Future possibilities include adding fees for vehicle creation, transfer, and data transmission.
4. Lock-up for Licenses: This mechanism requires key stakeholders to lock $DIMO tokens, ensuring they have a longterm incentive to act in the network's best interests. This feature is live for hardware manufacturers and planned for node operators and clients, enforcing a bond similar to a security deposit.
5. Vehicle Data as a Service: Users can monetise their vehicle data, with fees structured for different data types. Currently, 1% of these fees are burned, 9.9% go to node operators, and 89.1% to users. Plans include introducing more node operators and possibly a universal fee structure to enhance competition.
6. Rebates and Direct User Incentives: DIMO allows apps to offer sign-on bonuses and ongoing rewards to holders of $DIMO, encouraging engagement and rewarding participation.
7. Variable Transaction Fees: This is a hypothetical mechanism. It would charge fees based on transaction volume, similar to how credit cards and other payment systems operate. This approach is fairer and could generate significant revenue, but its implementation could be more challenging.
Balancing Flows and Authority
As we all know, protocols need to strike a balance between resource inflows and outflows for a token economy to be sustainable. There is no automated rebalancing mechanism, but $DIMO holders can vote on interventions to maintain this balance. Additionally, drivers, automakers, and app developers need to distribute governance authority to ensure balanced decision-making and network growth.
Payment Denomination and Data Credits
To address the volatility of $DIMO in the market, future tokenomics might price fees and bonding requirements in USD equivalents. This could involve altering nominal $DIMO fees based on market prices or introducing data credits, similar to models used by Helium. Such adjustments would enhance predictability and user convenience.
Adhering to these principles and mechanisms, the DIMO protocol aims to build a robust, inclusive, and sustainable ecosystem, ensuring long-term success and growth for all its users.
Utility of $DIMO Token
As drivers integrate their vehicles with the DIMO network, they receive $DIMO tokens. These tokens not only enrich the user’s experience psychologically but also hold significant value through various key functions.
Transaction Currency
The $DIMO token is central to all operations on the DIMO platform. It is the core token for all transactions, whether buying data or developing DIMOcompatible hardware. When users sell their data, payments are made in $DIMO, and a portion of these tokens is burned, reducing the overall supply and potentially increasing the token's demand. As transaction volumes grow, so does the significance and scarcity of $DIMO.
Enabling Governance
Owners of $DIMO tokens can influence the network's direction. They participate in decisions regarding software upgrades, protocol standards, licensing, fee structures, and reward distribution. This democratic governance ensures the network remains focused on the users' needs and protects against external control.
Aligning Ecosystem Interests
Participants within the DIMO ecosystem, including businesses and app developers, can stake $DIMO tokens. This staking mechanic aligns their interests with the network's success, ensuring they act responsibly and contribute positively. Additionally, data miners must pay in $DIMO tokens, maintaining balance and promoting a robust ecosystem.
Fostering Community Engagement
Holding $DIMO tokens ‘marks membership’ within the DIMO community, granting special access to features, events, and more. This sense of belonging enhances the user experience, making every interaction within the DIMO ecosystem more engaging and rewarding.
The Value of Your Vehicle Data
We all know how important our personal data is. In our case, vehicle data holds substantial value and is sought after by companies for advancements in electric vehicle technology, self-driving systems, and infrastructure planning. According to a McKinsey report, this data could be worth $600/year by 2030. Moreover, a verified connection to your vehicle can result in better loan terms, reduced insurance costs, and more effective maintenance, saving you significant amounts over time.
Advanced Security
Connecting your vehicle to DIMO via blockchain technology ensures complete control over your data. A decentralised system prevents any single entity from monopolising your information, offering a secure and transparent environment. It guarantees freedom and control, which are essential for users and stakeholders.
How to Get Started with DIMO
source: DIMO Blog
Embarking on your journey with DIMO is relatively straightforward. By connecting your car using a DIMO-certified device, such as the AutoPi, you unlock various benefits and features, all secured and managed via blockchain technology. Here's a simple step-by-step guide to get you started:
1. Download the DIMO Mobile App
First, download the DIMO Mobile app on your smartphone. This app will be your main interface for connecting and managing your car within the DIMO ecosystem. You can download it on iOS and Android; just follow the caption from the picture below.
2. Set Up Your Web3 Wallet
You'll need a web3 wallet like MetaMask or Rainbow to interact with the DIMO network. This wallet will establish your ownership and control over your vehicle, the connected device, and any rewards you earn.
Future updates will also support a native wallet within the DIMO app.
3. Connect Your Device to Your Wallet
Once you have your DIMO-certified device, follow these steps:
▪ Power on the device and connect it to your phone via Bluetooth.
▪ Open the DIMO Mobile app and initiate the pairing process. The app will guide you through claiming your device's digital twin by signing a message with both the device’s wallet and your own.
▪ This step ensures that your wallet owns the device, creating a secure link between the physical hardware and its digital representation.
4. Link Your Vehicle
Next, connect your vehicle to the device:
▪ The device will read a unique fingerprint of your car.
▪ Use the app to generate and sign this fingerprint, which verifies your vehicle's authenticity against DIMO’s database.
▪ Sign a minting transaction to create a unique vehicle ID on the blockchain owned by your wallet.
5. Finalise the Connection
You can complete the pairing process by linking the device to your vehicle. Your wallet now owns both the device and the vehicle, so you can sign a transaction to complete their connection.
This process is like a digital marriage license, securely linking your device to your car.
Benefits of Connecting Your Car to DIMO
By connecting your car to DIMO, you gain access to these:
1. Control and Ownership: Maintain complete control over your data and its use.
2. Rewards: Earn $DIMO tokens for sharing your data and participating in the network.
3. Enhanced Services: Access various apps and services designed to improve your driving experience, from diagnostics to insurance savings.
4. Community and Support: Join a growing community of drivers who value transparency and control over their connected devices.
Final Thoughts
DIMO stands as a beacon of innovation, offering a glimpse into a future where cars are not merely vehicles but intelligent companions. It transforms the relationship between drivers and their cars, creating a harmonious ecosystem that rewards participation, ensures data security, and fosters a community of forward-thinking individuals. Much like the timeless tales of Middle-earth, DIMO weaves a narrative of companionship and no central authorities, empowering drivers to take command of their data and embark on a journey toward a smarter, more integrated automotive experience.
So, the DIMO project is not just about a simple technological advancement; it's about forging a path to a world where trust, transparency, and collaboration are paramount. In this new age of mobility, DIMO invites us all to become part of a grand adventure where every mile driven is a step toward a brighter, more connected world.
Bridging The Investor Gap For Crypto
written by Lisa
Will ETFs bring retail into this bull run?
The quick answer is YES! ETFs have the potential to significantly boost retail participation in the upcoming crypto bull run.
ETFs make it easier for retail investors to gain exposure to cryptocurrencies without dealing with the complexities of wallets, private keys, and exchanges. They provide a regulated and familiar investment vehicle to anyone wanting to dip their toes into crypto. This ease of access, coupled with the growing mainstream acceptance of digital assets, can attract a broader audience, including those who were previously hesitant to invest in cryptocurrencies.
Additionally, the increased visibility and legitimacy that come with ETF approvals can enhance investor confidence, further driving retail investment. As a result, the influx of retail investors facilitated by ETFs could amplify market momentum, contributing to the overall growth and sustainability of the bull run.
Image Source: https://farside.co.uk/?p=997
Below, I break down how Exchange-traded funds (ETFs) can have a significant impact on the cryptocurrency market in various ways:
1. Increased Accessibility and Adoption
● Simplifies Investment: ETFs make it easier for traditional investors to gain exposure to cryptocurrencies without having to directly buy, store, and secure digital assets.
● Broader Market Participation: By offering a more familiar and regulated investment vehicle, ETFs can attract institutional investors and individuals who may have been hesitant to invest in cryptocurrencies directly.
2. Liquidity Enhancement
● More Trading Volume: The introduction of crypto ETFs can lead to increased trading volumes in the underlying assets, thereby enhancing liquidity in the market.
● Price Stability: Greater liquidity generally leads to less volatility, as larger buy and sell orders can be absorbed more easily without causing significant price swings. (As we can see with the Bitcoin ETF Flow chart, which shows large outflows with little movement to the current price.
3. Market Legitimisation
● Regulatory Approval: The approval of crypto ETFs by regulatory bodies can serve as a validation of the cryptocurrency market, potentially leading to greater trust and legitimacy.
● Institutional Confidence: With the regulatory stamp of approval, more institutional investors may feel confident to enter the market, which can lead to increased capital inflows.
4. Price Impact
● Demand Surge: If an ETF becomes popular, the increased demand for the underlying cryptocurrencies can drive up prices.
● Arbitrage Opportunities: ETFs can create arbitrage opportunities between the ETF and the underlying asset, influencing market prices.
5. Market Sentiment
● Positive Sentiment: The launch of a crypto ETF is often perceived as a positive development, leading to bullish market sentiment and potential price increases.
● Speculative Behaviour: Investors might speculate on the approval of ETFs, leading to increased volatility and price fluctuations based on news and rumours.
● Bitcoin and Major Cryptos: Bitcoin ETFs can have a significant impact on Bitcoin's price and, by extension, on the prices of other major cryptocurrencies.
● Diverse Crypto ETFs: ETFs that include a basket of cryptocurrencies can affect multiple assets simultaneously, potentially leading to a more diversified impact across the market.
7. Potential Risks
● Market Manipulation: There is a risk of market manipulation due to the large inflows and outflows associated with ETFs.
● Regulatory Changes: Changes in regulations or negative regulatory news can adversely impact the value of crypto ETFs and the broader crypto market.
As more ETFs are added, like Ethereum and Solana, the added growth in retail and institutional participation will likely bolster the cryptocurrency market's expansion. These ETFs not only simplify the investment process but also enhance market legitimacy and liquidity, attracting a wider range of investors. The inclusion of diverse assets within ETFs will allow for broader exposure, spreading interest across multiple cryptocurrencies and potentially reducing volatility, which is not ideal but may help with market adoption.
Moreover, as regulatory approval for these financial products continues to build, confidence in the crypto market's stability and longevity will grow. This convergence of factors positions the market for a robust and sustained bull run, driven by increased adoption, higher trading volumes, and greater overall market capitalisation
Image Source: https://blockworks.co/bitcoin-etf
BlobSpace
written by Daniel
It has been three months since protodanksharding, a protocol-level enhancement activated in Ethereum, bringing the novel concept of 'blobspace' (aka blobs), a new data storage solution for Ethereum that improves network scalability and performance.
With Ethereum's 'accumulation-based' roadmap, blobs become a fundamental part of Ethereum's immediate future as it moves towards the implementation of full Danksharding, which represents a long and complex path that has incentivised Ethereum developers and researchers to come up with alternative rollup-centric strategies.
From the user's point of view, this has translated into a tangible improvement in the use of protocols built on top of Ethereum (Layer 2) while opening up the possibilities of a new alternative gas tariff market, which promises to unlock milliondollar opportunities on the horizon for the most visionary speculators.
But what are blobs?
Blobs are efficiently processed temporary chunks of transaction data.
Blobs were introduced as a core feature of Ethereum's Dencun update on March 13th, 2024, to attempt to reduce transaction costs on Layer 2 networks significantly.
Also known as EIP-4844 or "protodanksharding," blobs allow Layer 2s to use this feature instead of a function called "calldata" to temporarily store data while executing transactions, resulting in cheaper end costs for users.
“Blobspace introduces blob-carrying transactions”
How blobspace works
Blobspace stores large data sets, such as images and videos, off-chain and makes them available on-chain via a reference by using a new type of transaction called a blob-carrying transaction. Transactions that carry blobs are similar to regular Ethereum transactions (sender, nonce, receiver, and others) but include an additional field containing a reference to the blob stored off-chain: blob_version_hashes.
When a transaction carrying a blob gets included in a block, the reference to the blob is stored on the blockchain using a "sidecar," allowing other users to download the blob from the off-chain storage location using the reference in the transaction.
At a more advanced level, the transaction contains two additional fields:
1. max_fee_per_blob_gas : the rate of how much the sender is willing to pay for the blob.
2. blob_version_hashes ; the list of blob hashes since a single transaction may come with multiple blobs.
Why blobs: Origin of the problem
One of the bottlenecks Ethereum has had in recent years has been the availability of data at the execution layer, which makes Layer 2 solutions, such as rollups, able to convert this data into scalable execution.
According to data from Dune Analytics, the costs of publishing batch-to-L1 transactions by March 2024 rose to their highest peak in a year, reaching $41.09m, with Scroll, Arbitrum and OP Mainnet leading the gas fee spending among the various rollup options.
This figure is estimated to be only half of the total expense incurred by the various L2s to package and execute transactions for the users looking for cheaper and faster options to interact with the thousands of decentralised applications (dApps) on Ethereum.
Add to the above the regulatory challenges, unpredictable expenses due to market volatility, and potential disruptions to applications deployed on the various L2s options due to the operational costs of rollups that depend on Ethereum data availability, where pricing errors can cause the total expense to increase making it uneconomical for rollups to publish on a regular cadence.
Rollups have emerged as a lifeline to meet the considerably high demand for the relatively small supply of blocks (around 15 million gas per block) in the search for solutions to increase the block space but without increasing the load on the nodes that make up the network.
However, to work, cumulative packages need data regardless of their nature or technological foundation (Optimism or zkProofs). Before proto-danksharding, this data got published on the network through the 'calldata' function, which is expensive and subject to the market dynamics (i.e. competition) of other regular transactions, which resulted in data becoming the new gold mine where the gas fee is the fuel to extract it.
On the other hand, operator rollups have both costs (L1 data, blob data, L2 operator costs, and others) and revenues (TXN fees, token issuance, and others) that get motivated by "raw materials" like calldata, usage, dev activity, etc.
Ethereum's team of developers and researchers found encouragement in the previous to propose proto-danksharding as an alternative to solve these circumstances within the rollup economy through the concept of blobspace
The goal is simple: scale Ethereum without sacrificing the average user. As a result, you, my user friend, interact with the dApp of your choice for pennies on the dollar!
Cost of gas to use Layer-2 in Ethereum. Source: L2Beats
Key aspects of blobs
Without delving into highly technical details, you, as an average user or investor, should be aware of the following aspects of blobs to understand market dynamics:
● Blobs are not stored forever in the Ethereum network. They last approximately 18 days (or 4096 epochs).
● Each block in the chain can have up to 6 blobs. With Danksharding, the space will likely expand to 16 blobs (~2MiB per block) in the future.
● Each blob-carrying transaction can have 1 or 6 blobs.
● Each blob stores up to 128 kb of data, and if the transaction sender does not use it in full, they will still pay for 128 kb of blobspace.
● There is a target of 3 blobs per block. If demand is below the target, the blob's base rate decreases. Otherwise, it increases.
● To download a blob from blobspace, a user needs to know the reference to the blob (blob_version_hashes). They can then use this reference to retrieve the blob from the off-chain storage layer.
● The blob fee market completely decoupled from the L1-run grid fee markets. Therefore, if the demand for a DeFi protocol rises, it will not affect the gas fee for a mint NFT if your favourite rollup increases the gas fee in L1.
Who uses blobs
The Dencun Upgrade enables 'blobs' or objects that store large amounts of data, which L2s can use to publish their transaction data. These L2s are essentially the submitters who have been driving a dynamic blob space demand market for the past three months.
Although blob demand is below target, the data indicates that the curve is gradually starting to lift, with more and more blocks taking advantage of the maximum limit of blobs they can host (~30%).
Amount of blobs per block: 0xRob | Dune analytics
Within this market, Ethereum sequencers, builders/proponents and validators play a fundamental role in this new economy, as they are ultimately the proponents of transactions and the verifiers that all the data necessary to confirm execution at Layer 2 is available.
While downstream users may at some point need to download a blob and access the data available in it off-chain, the demand structure of blobs is primarily set up for the use of L2 solutions as they operate a resource-intensive business on Ethereum, where the L1 cost is their principal operating cost, as we noted above.
Generally speaking, transactions involving large datasets, such as those used in decentralised applications (DApps) for gaming, social networking and streaming, are the main demands for using blobspace.
For this reason, we note that the centre of gravity lies with popular Ethereum layer2 solutions such as Base, Taiko, Arbitrum and Optimism, in that order, as the principal blob submitters in the ecosystem.
Metrics - Blobspace Future Outlook
EIP-4844 has introduced a new segmented data space market in Ethereum, a new gas blob market. This market operates under one target blob per block (currently 3), which serves as a reference for the blob's base rate to increase or decrease depending on whether there are more blobs in the block than the target or vice versa.
Since March 2024, publication costs have decreased substantially, allowing the L2 market to have experienced a tangential transformation in this segment, compared to similar costs of using the 'calldata' function before the blobs.
To explain the previous, if the release of the 145.1 GB of blob data had happened before EIP-4844, the various L2 solutions would have had to fork out almost $127 million additional dollars in the three months since the Dencun Upgrade.
Blob fees in red. Source: Ultrasound.Money
Base, for example, has diminished the cost impact of publishing data on L1 by almost 93% after implementing blobs on Ethereum. At the same time, it managed to increase its profits by close to 40% in the same period.
The Base data is just one example of blob's potential throughout the Ethereum ecosystem and in Layer 2 solutions.
Within a month of going live on the network, blobs set the blob space fee market on fire by increasing the base blob fee by as much as 582 gwei due to the euphoria around Ethscriptions
Questioning the viability of blobs as a mechanism to reduce fees and relieve congestion on Ethereum demonstrates that this market has the potential to become active in the medium term as the projected demand for L2 blob data reaches the sustainable target level (10 times the current market).
The current data shows that the blobs market has left only about $2.6m in fees in a short period and under very bullish market conditions. Add to this that not all L2 protocols have reached sufficient maturity to exploit the $1T market by 2030, which VanEck's report predicts. Isn't it promising?
Percentage of gas attributable to inscriptions, Avalanche in red. Source: Hildobby | Dune analytics
Consider that blobs are still an emerging market in full development and coupling by its principal beneficiaries (L2s rollups), which are constantly researching how to optimise their use in search of greater operational efficiency.
Arbitrum, for example, does not post at regular intervals but posts based on user activity on their network. Starknet, on the other hand, when we look at blob usage, we see that they are posting blobs at intervals of every 8 hours.
True Value Locked of L2s in USD. Source: L2Beat
Blobs submitted on L1 by tagged senders. Source: Ephema | Dune analytics
The previous indicates that at a blob gas price of 1 WEI, it is not very attractive for L2s to rush to use the 128kb of blobspace. However, the hope is to normalise this situation for a better user experience where the purpose of transactions is not affected by the search for a balance between high speed and low cost.
I believe the blob fusion to save costs and optimise space utilisation proposed by BlobFusion, as well as the research around a blobspace derivatives market as a strategic hedge against volatility challenges driven by former Apple engineer (Tamara Tran); are certainly part of the solutions we will see driving a more dynamic market that seeks to capitalise on the scalability in Ethereum.
As dcrapis pointed out in Ethereum Research, price discovery effectively does not begin until the data demand load surpasses the block target. This discovery can occur within one to two years as solutions such as Arbitrum, Optimism, and Base continue to drive blob use.
Final thoughts
Ethereum is a sea of opportunity, and every improvement applied to its protocol offers the most visionary, new, and innovative options for getting involved in the sound of digital money.
If you are an ETH holder or plan to become one, you are perhaps at one of the best times to run a validator node on the network. Validators are a fundamental part of the profit-making scheme that the emerging blob market can become.
In the blobs market, two related fees go to the validator as priority fees, while the rest are burned as the network's base fee.
The blob data fees paid to build and propagate the blob 'sidecars' in Ethereum's Consensus Layer are an example of the potential that is about to open up. In addition, transaction-related fees that point to/refer to the compressed transaction data on the blobs (blob transaction fees) are part of the new revenues that also go to the Validators.
Whether running a lightweight node or a full node, Validators, Sequencers, and Block Proposers/Builders will play a pivotal role in the new economy that is about to be unlocked as blobspace becomes so ubiquitous in every user transaction of rollup solutions.
Opportunities are just beginning to emerge: from the availability of decentralised storage to resisting the censorship that some Sequencers want to impose to developing decentralised video streaming platforms that use blobspace to store video streams. These examples are part of the varied options that the market is beginning to consider for implementing one of the most significant enhancements to the Ethereum network.
