A bankruptcy court is ruling that debtors of bankrupt crypto exchange FTX can begin selling hundreds of millions of dollars worth of Grayscale and Bitwise shares. In a new filing, a court in Delaware is granting a motion filed earlier this month that would allow the debtors of FTX and its affiliates to start selling […]
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The Blast team responded to claims that it’s multi-signature upgrade functionality makes it too centralized.
Web3 protocol Blast network has gained over $400 million in total value locked (TVL) in the four days since it was launched, according to data from blockchain analytics platform DeBank. But in a Nov. 23 social media thread, Polygon Labs developer relations engineer Jarrod Watts claimed that the new network poses significant security risks due to centralization.
The Blast team responded to the criticism from its own X (formerly Twitter) account, but without directly referring to Watts’ thread. In its own thread, Blast claimed that the network is as decentralized as other layer-2s, including Optimism, Arbitrum, and Polygon.
On multisig security.
— Blast (@Blast_L2) November 24, 2023
Read this thread to understand the security model of Blast along with other L2s like Arbitrum, Optimism, and Polygon.
Blast network claims to be “the only Ethereum L2 with native yield for ETH and stablecoins,” according to marketing material from its official website. The website also states that Blast allows a user’s balance to be “auto-compounded” and that stablecoins sent to it are converted into “USDB,” a stablecoin that auto-compounds through MakerDAO’s T-Bill protocol. The Blast team has not released technical documents explaining how the protocol works, but say they will be published when the airdrop occurs in January.
Blast was released on Nov. 20. In the intervening four days, the protocol's TVL has gone from zero to over $400 million.
Watts' original post says Blast may be less secure or decentralized than users realize, claiming that Blast “is just a 3/5 multisig.” If an attacker gets control of three out of five team members’ keys, they can steal all of the crypto deposited into its contracts, he alleged.
"Blast is just a 3/5 multisig..."
— Jarrod Watts (@jarrodWattsDev) November 23, 2023
I spent the past few days diving into the source code to see if this statement is actually true.
Here's everything I learned:
According to Watts, the Blast contracts can be upgraded via a Safe (formerly Gnosis Safe) multi-signature wallet account. The account requires three out of five signatures to authorize any transaction. But if the private keys that produce these signatures become compromised, the contracts can be upgraded to produce any code the attacker wishes. This means an attacker who pulls this off could transfer the entire $400 million TVL to their own account.
In addition, Watts claimed that Blast “is not a layer 2,” despite its development team claiming so. Instead, Blast simply “[a]ccepts funds from users” and “[s]takes users' funds into protocols like LIDO,'' with no actual bridge or testnet being used to perform these transactions. Furthermore, it has no withdrawal function. To be able to withdraw in the future, users must trust that the developers will implement the withdrawal function at some point in the future, Watts claimed.
Additionally, Watts claimed that Blast contains an “enableTransition” function that can be used to set any smart contract as the “mainnetBridge,” which means that an attacker could steal the entirety of users’ funds without needing to upgrade the contract.
Despite these attack vectors, Watts claimed that he does not believe Blast will lose its funds. “Personally, if I had to guess, I don't think the funds will be stolen” he stated, but also warned that “I personally think it's risky to send Blast funds in its current state.”
In a thread from its own X account, the Blast team stated that its protocol is just as safe as other layer-2s. “Security exists on a spectrum (nothing is 100% secure)” the team claimed, “and it's nuanced with many dimensions.” It may seem that a non-upgradeable contract is more secure that an upgradeable one, but this view can be mistaken. If a contract is non-upgradeable but contains bugs, “you are dead in the water,” the thread stated.
Related: Uniswap DAO debate shows devs still struggle to secure cross-chain bridges
The Blast team claims the protocol uses upgradeable contracts for this very reason. However, the keys for the Safe account are “in cold storage, managed by an independent party, and geographically separated.” In the team's view, this is a “highly effective” means of safeguarding user funds, which is “why L2s like Arbitrum, Optimism, Polygon” also use this method.
Blast is not the only protocol that has been criticized for having upgradeable contracts. In January, Summa founder James Prestwich argued that Stargate bridge had the same problem. In December, 2022, Ankr protocol was exploited when its smart contract was upgraded to allow 20 trillion Ankr Reward Bearing Staked BNB (aBNBc) to be created out of thin air. In the case of Ankr, the upgrade was performed by a former employee who hacked into the developer’s database to obtain its deployer key.
A widely followed strategist is saying that he is bullish on the Ethereum (ETH) scaling solution Polygon (MATIC) while offering his outlook on three other crypto assets. The crypto strategist pseudonymously known as Bluntz tells his 229,400 followers on the social media platform X that Polygon has more upside potential. Bluntz says that Polygon witnessed […]
The post Top Analyst Says Polygon Has Plenty of Fuel in the Tank, Updates Outlook on Bitcoin, Ethereum and Solana appeared first on The Daily Hodl.
Polygon has been a partner for the Swiss city since at least 2022, providing the infrastructure for its stablecoin.
The city of Lugano, the economic capital of Italian-speaking southern Switzerland, will integrate the Polygon proof-of-stake (PoS) protocol into its crypto-friendly payment app, MyLugano.
According to the announcement on Polygon Labs’ website from Nov. 22, the updated version of MyLugano features a multichain digital wallet for personal custody. The press release mentions “several tokens” already integrated into this app section and the plans to add more.
The network provider for tens of thousands of DApps with $5 billion in secured assets, Polygon has been a partner for the Swiss city since at least 2022. At the time, it became an infrastructure partner for the city’s stablecoin, LVGA, offering its rails solution.
According to the statement, MyLugano is also launching a new NFT collection dedicated to the work of artist Yuri Catania. This is a nonfungible version of a 40-meter-long, 8-meter-high work on the wall of the Palazzo dei Congressi. The art piece will be tokenized on the Polygon network.
Related: Polygon gas fees spike 1,000% amid Ordinals-inspired token craze
Lugano is one of the world’s leaders in crypto adoption. The MyLugano app, built in collaboration with another crypto company, Tether, serves 30,000 users, or almost half of the city population, helping them to pay local small- to medium-sized traders in digital currencies.
In March 2022, Lugano established a Center of Excellence for Blockchain Adoption in partnership with Tether to “become a major European blockchain hub.” The city administration plans to enable citizens and companies to pay cryptocurrency taxes soon. The ultimate goal is to accept crypto for payment of all goods and services, equating it with a fiat currency.
Despite its efforts, Lugano won’t be the first Swiss city to allow paying taxes in crypto, as the canton of Zug and Zermatt municipality have already done it.
Magazine: This is your brain on crypto. Substance abuse grows among crypto traders
New data from market intelligence firm Nansen reveals that Binance is experiencing relatively minimal effects from being charged $4 billion in fines by US regulators. According to Nansen, the world’s largest crypto exchange saw an outflow of $17 million worth of Ethereum (ETH) in one hour and $956 million worth of Bitcoin (BTC) in one […]
The post Binance Experiences Withdrawals, but ‘No Mass Exodus’ of Funds Despite $4,000,000,000 Settlement: Nansen appeared first on The Daily Hodl.
A trader who nailed the floor price of Bitcoin (BTC) during the 2018 bull market believes Solana (SOL) and Polygon (MATIC) are about to witness bursts to the upside. Pseudonymous analyst Bluntz tells his 229,100 followers on the social media platform X that Solana looks ready to rally after pulling back to last week’s low […]
The post Top Trader Predicts Imminent Rally for Solana (SOL) and Polygon (MATIC) – Here Are His Targets appeared first on The Daily Hodl.
Ethereum (ETH) scaling solution Polygon (MATIC) processed the highest number of daily transactions in the blockchain’s history last week. On November 16th, the Polygon blockchain saw 16,449,264 transactions, marking a sudden and massive increase from the average of below three million per day. In a post on social media platform X, Polygon founder Sandeep Nailwal […]
The post Polygon Handled Over 16,000,000 Transactions in Single Day and ‘Didn’t Even Blink,’ Says Founder Sandeep Nailwal appeared first on The Daily Hodl.
A popular crypto analyst is predicting that one Ethereum (ETH) competitor is on the verge of a massive collapse. Pseudonymous trader Altcoin Sherpa tells his 197,900 followers on the social media platform X that Avalanche (AVAX) could decline by more than 22% from its current value. “AVAX: really key level for this one in my […]
The post Trader Predicts One Ethereum Competitor To Plunge by Double Digits, Updates Outlook on Dogecoin and Polygon appeared first on The Daily Hodl.
Bitcoin and select altcoins are showing strength, a possible sign that the bull trend has resumed.
Bitcoin (BTC) succumbed to profit-booking on Nov. 13 and 14, which pulled the price below $35,000. Corrections are a normal part of every up-move and are considered healthy as they shake out the weak hands and allow the stronger hands to add to their positions.
A note of caution to the eager dip buyers is that Glassnode data shows the number of whale wallets with more than $1,000 Bitcoin dropped to its lowest level in about a month. This indicates that some whales may have sold into the recent strength.
DecenTrader co-founder Filbfilb said in an interview with Cointelegraph that a drawdown could come before the rally leading into Bitcoin halving in April 2024. Filbfilb believes Bitcoin could pick up pace after that and reach $46,000 to $48,000 by halving.
Could Bitcoin and the select altcoins resume their uptrend, or will higher levels attract solid selling by the bears?
Let’s analyze the charts of the top 10 cryptocurrencies to find out.
Bitcoin re-entered the ascending channel pattern on Nov. 13, which may have trapped the aggressive bulls. That started a liquidation, which pulled the price to the channel’s support line on Nov. 14.
The strong bounce off the support line suggests that lower levels continue to attract buyers. The bulls will try to push the BTC/USDT pair above the resistance line, but may encounter strong selling by the bears.
If the price turns down and breaks below the channel, it will suggest that traders are rushing to the exit. That may yank the price to the $32,400 to $31,000 support zone. The bulls are expected to aggressively buy at lower levels. The bulls will be back in control after they shove the price above $38,000.
Ether (ETH) turned up on Nov. 13, but the long wick on the day’s candlestick suggests selling at higher levels. The selling continued on Nov. 14, and the price slipped below the psychological level of $2,000.
The failure of the bulls to flip the $2,000 level into support is a negative sign, but a solace is that buyers held the 20-day exponential moving average ($1,921) on the downside. If buyers retain the price above $2,000, it will indicate vigorous buying at lower levels. The ETH/USDT pair may then retest the overhead zone between $2,137 and $2,200.
Conversely, if the price turns down and breaks below the 20-day EMA, it will signal that the bears are back in the game. That could clear the path for a decline to the 50-day SMA ($1,745).
BNB (BNB) broke below the 20-day EMA ($239) on Nov. 14 but snapped back from the solid support at $235. This suggests robust buying at lower levels.
The upsloping moving averages and the relative strength index (RSI) in the positive territory suggest that bulls have a slight edge. Buyers will try to push the price to the $258 to $265 overhead resistance zone.
Sellers are expected to protect this zone with vigor. If the price turns down sharply from $265, the BNB/USDT pair may drop to $235 and oscillate between these two levels for some time.
XRP (XRP) pierced the $0.74 resistance on Nov. 13 and then turned down quickly, indicating aggressive selling at higher levels.
The selling continued on Nov. 14, pulling the price below the 20-day EMA ($0.62). This level is likely to witness a tough battle between the bulls and the bears. If the price maintains below the 20-day EMA, the next stop could be the 50-day SMA ($0.56). Such a move suggests that the XRP/USDT pair may swing between $0.56 and $0.74 for a while.
The bulls will be back in the driver’s seat after they propel the price above the overhead resistance at $0.74. The pair may then climb to $0.85 and later to $1.
The bears tried to start a correction in Solana (SOL) on Nov. 13, but the bulls stepped in and arrested the decline at $51 on Nov. 14.
Buying continued on Nov. 15, and the bulls are trying to overcome the barrier at $64. If they manage to do that, the SOL/USDT pair could start the next leg of the uptrend. The pair may then rally to $77 and subsequently to $95.
The risk to the upside move is that the RSI has been in overbought territory for the past several days. That suggests the rally is overextended in the near term and may witness a correction or consolidation.
Cardano (ADA) remained above $0.38 from Nov. 10 to 12, but the bulls could not build upon the next leg of the uptrend. That may have tempted short-term traders to book profits, pulling the price to the 20-day EMA ($0.34) on Nov. 14.
The ADA/USDT pair rebounded sharply off the 20-day EMA, as seen from the long tail on the candlestick. Buyers will try to propel the price to the $0.38 to $0.39 resistance zone. If bulls overcome this obstacle, the pair could rally to $0.46.
Instead, if the price turns down and plunges below the 20-day EMA, it will open the doors for a possible decline to $0.32. Such a move will indicate that the pair may consolidate between $0.24 and $0.38 for a few days.
Dogecoin (DOGE) failed to sustain above $0.08 on Nov. 11 and 12, resulting in a correction to the 20-day EMA ($0.07) on Nov. 14.
The bears pulled the price below the 20-day EMA, but the long wick on the candlestick shows solid buying at lower levels. The bulls will again try to push the price to $0.08, where they are likely to encounter strong selling by the bears.
If the price turns down from $0.08 and breaks below the 20-day EMA, it will indicate that the DOGE/USDT pair may stay range-bound for a while. Contrarily, a break and close above $0.08 will signal the start of the next leg of the up-move to $0.10.
Related: 3 reasons why Bitcoin price failed to break $37K
Polygon (MATIC) witnessed huge volatility on Nov. 13 and 14, as seen from the large intraday ranges. This indicates an intense battle between the bulls and the bears.
The failure of the bulls to sustain the price below the $0.89 level suggests that the bulls are trying to flip the level into support. The bulls may again face stiff opposition from the bears at the psychological level of $1.
If the price turns down from this level but does not slip below $0.89, it will increase the likelihood of the resumption of the uptrend. Above $1, the MATIC/USDT pair could reach $1.20. On the contrary, a fall below $0.84 could start a correction to the 20-day EMA ($0.77).
Chainlink (LINK) is correcting in a strong uptrend. The price dipped to the 20-day EMA ($13.16) on Nov. 14, which is likely to act as a formidable support.
If the bounce off the 20-day EMA sustains, the bulls will try to push the price to the local high of $16.60. This is a critical level to watch out for because a break above it will signal the resumption of the uptrend. The LINK/USDT pair could next rally to $20.
Contrary to this assumption, if the price turns down from $16.60, it will suggest that the bears remain active at higher levels. That could keep the pair stuck between $16.60 and the 20-day EMA for some time.
Toncoin (TON) found support at $2.31 on Nov. 12, but the rebound was short-lived. The price turned down and plummeted below $2.31 on Nov. 14.
The failure of the bulls to defend the 20-day EMA ($2.31) suggests that the positive momentum is weakening. Both moving averages have flattened out, and the RSI is near the midpoint, indicating a range-bound action in the near term.
On the downside, if the 50-day SMA cracks, the TON/USDT pair could fall to $2 and thereafter to $1.89. Buyers are expected to guard this level with vigor. The bulls will have to propel the price above $2.77 to indicate the start of the next leg of the up-move.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
A popular crypto trader has a long-term bullish outlook on the blockchain scaling solution Polygon (MATIC) as well as two additional altcoins. The pseudonymous digital asset analyst known as Rekt Capital tells his 368,100 followers on the social media platform X that MATIC is “on the cusp of entering a new macro uptrend” after taking […]
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