Enterprise blockchain Coti set to become Ethereum privacy-centric layer-2 in 2024

December 13, 2023 Coin Telegraph

Solana’s genesis story: Anatoly Yakovenko’s vision for a high-performance blockchain

November 23, 2023 Coin Telegraph

Solana co-founder Anatoly Yakovenko recounts the “eureka moment” that birthed the blueprint for the layer 1 smart contract protocol aiming to be “hyper-optimized” and “fast as possible.”

“I literally had two coffees and a beer, and I had this eureka moment at four in the morning,” Solana co-founder Anatoly Yakovenko recalls as he leans back thoughtfully.

Speaking to Cointelegraph at Solana’s annual Breakpoint conference in Amsterdam, the co-founder recounts a late-night brainwave of a “hyper-optimized, fast as possible” smart contract blockchain protocol.

“The use case that I was going after was for central limit order books, like how to run something that’s like the Nasdaq, but on a public permissionless blockchain,” Yakovenko explains.

“I thought that there was a clear win there if you have transparent data, everyone has fair and open rights, and all this stuff is running on commodity hardware.”

From surfing to smart contracts

Solana’s roots are intrinsically linked to Yakovenko’s journey as a computer engineer. Having spent the majority of his career at Qualcomm in San Diego alongside co-founder Raj Gokal, Yakovenko’s idea for the platform carries plenty of inspiration from that period of his life.

“Solana comes from Solana Beach. Me and my co-founders lived there, we’d wake up, we’d surf, bike to work, go back home and surf again,” Yakovenko reflects.

“We learned how to do awesome systems programming out there and 2017 is when I kind of had the inception idea for Solana.”

Yakovenko had been tinkering on a side project, building deep learning hardware, deploying graphics processing units and mining cryptocurrencies to test out the project. This paved the way for the genesis of the platform.

The impetus for the idea stemmed from a concept known as time division multiple access. As Yakovenko explains, the technology is tied to how cellular towers alternate transmissions based on time intervals.

*Solana co-founder Anatoly Yakovenko during a fireside chat at Breakpoint in Amsterdam. Source: Solana Foundation*

His idea was to build a system based on technology that Stanford University researchers had been working on called a verifiable delay function. Yakovenko jokes that he thought he discovered something truly novel, which prompted him to begin working on a smart contract layer platform:

“The intuition that I had was that once you have a way to track time in a decentralized way on a public permissionless blockchain, you could use similar optimizations that Qualcomm did for cellular networks.”

Inspired by the advent of smart contract functionality pioneered by Ethereum, Yakovenko and his partners set out to develop a breakout application and use cases powered by smart contract functionality:

“We wanted to build a hyper-optimized, smart contract platform that could give the benefits of trust-minimized computing but without the performance headaches or costs associated with alternatives.”

Two years of work went into the engineering of Solana before its eventual launch in March 2020 just as the COVID-19 pandemic swept the world. The platform enjoyed significant success, fanfare and support, but Yakovenko admits that a fair amount of luck was involved.

“I wish I could say it was all genius, but we didn't raise enough money to build all the features possible. A lot of our competitors raised ten times more than us, literally hundreds of millions of dollars," Yakovenko says.

Solana as a green field for smart contract developers

With just enough runway to build a focused blockchain, Solana honed in on creating “the fastest thing possible.” It didn’t include Ethereum Virtual Machine support or remote procedure call services and “barely had a functioning explorer,” but Yakovenko maintains that this was part of what drew in builders.

“That’s what kind of lit up the developers imagination when we launched, it was so different from Ethereum and so uniquely built for a very specific optimization, making this thing as fast as humanly possible,” he explains.

The co-founder adds that the engineering did not sacrifice decentralization because Solana can operate with a large number of nodes. Carving out a niche attracted a core group of developers which birthed successful projects like decentralized wireless network Helium and smart contract protocol Anchor.

“They recognized something special and they saw that we didn't have any resources to build anything else. They took it upon themselves to go build open source code.”

The Solana ecosystem saw significant capital inflows during the cryptocurrency bull market of 2021, with its native token Sonala (SOL) reaching an all-time high just shy of $250 in November of that year.

“Gut-wrenching” network outages

The platform has also endured its fair share of hiccups. The collapse of Sam Bankman-Fried cryptocurrency exchange FTX badly hurt the ecosystem. As Cointelegraph previously reported, Yakovenko admitted that he had been left deeply concerned for a number of projects that had received investments from FTX and Alameda Research and those that had held capital on the bankrupt exchange.

Solana has also copped heavy criticism for a handful of outages that took the blockchain offline. Yakovenko described these instances as “gut-wrenching for an engineer” and painful lessons to learn:

“The number one priority is safety. Then it's liveness. When you have a problem like congestion, even if you can like bang out the code in a week, it takes audits and testing to ship it to mainnet.”

Learning from these mishaps has been a crucial part in the ecosystem’s continued operation. It also led to the Solana Foundation assembling a team to build a second validator client.

“The only other major smart contract network with more than one client is Ethereum. That's one of those steps that you have to do to get to full decentralization, in my opinion,” Yakovenko says.

As for the perceived competition between Ethereum and Solana? Yakovenko says there is healthy thought-sharing between open-source developers from both ecosystems. The main points of contention remain — a small pool of developer talent and perceived overlapping features.

Magazine: Slumdog billionaire: Incredible rags-to-riches tale of Polygon’s Sandeep Nailwal

Ethereum layer 2’s will continue to have diverse approaches to scaling — Vitalik Buterin

October 31, 2023 Coin Telegraph

Coin Telegraph

Ethereum co-founder Vitalik Buterin pens an analysis of Ethereum’s layer-2 ecosystem, highlighting diverse approaches to scaling the smart contract blockchain.

The Ethereum layer-2 ecosystem is likely to continue evolving with diverse technological approaches, according to co-founder Vitalik Buterin.

The co-founder of the smart contract blockchain unpacked the current landscape of Ethereum’s scaling ecosystem on his personal blog, with several layer-2 protocols differing in their approaches to bring greater scaling capacity, lower costs and increased security.

As Buterin highlighted, Ethereum Virtual Machine (EVM) rollups pioneered by Arbitrum, Optimism, Scroll and more recently, Kakarot and Taiko, have drastically improved the respective security of their solutions.

Different types of layer 2shttps://t.co/ry4VTtWhJ1
— vitalik.eth (@VitalikButerin) October 31, 2023

Meanwhile, “sidechain projects” like Polygon have also developed their own rollup solutions. Buterin also highlights “almost-EVMs” like zkSync, extensions like Arbitrum Stylus and zero-knowledge proof pioneers Starknet as important players driving scaling technology for the ecosystem:

“One of the inevitable consequences of this is that we are seeing a trend of layer 2 projects becoming more heterogeneous. I expect this trend to continue, for a few key reasons.”

Buterin notes that some projects currently existing as independent layer 1s are looking to bring themselves closer to the Ethereum ecosystem and potentially become ecosystem layer 2s.

This type of transition remains difficult, as an “all at once” approach would cause a decrease in usability given that technology is not at a stage where it can be completely included in rollup technology. Meanwhile, postponing such a transition runs the risk of “sacrificing momentum and being too late to be meaningful.”

Buterin also notes that some centralized, non-Ethereum projects want to give users greater security assurances and are looking to blockchain-based solutions. Historically, these types of projects would have looked to “permissioned consortium chains” to achieve this:

“Realistically, they probably only need a “halfway-house” level of decentralization. Additionally, their often very high level of throughput makes them unsuitable even for rollups, at least in the short term.”

Lastly, Buterin considers non-financial applications like games and social media platforms that want to be decentralized but do not need high levels of security. Highlighting a social media use case, Buterin notes that different parts of the app would require separate functionality:

“Rare and high-value activity like username registration and account recovery should be done on a rollup, but frequent and low-value activity like posts and votes need less security.“

He adds that a chain failure leading to a user’s post disappearing would be an “acceptable cost,” while a similar failure leading to the loss of an account would be far more serious.

Buterin also notes that the costs associated with paying for rollup fees might not be acceptable for non-blockchain users, while previous blockchain users are used to paying far higher prices for on-chain interactions.

*An excerpt from Buterin’s latest blog post on the Ethereum ecosystem titled “Different types of layer 2s.” Source: vitalik.eth.limo*

The Ethereum co-founder then delves into the trade-offs between different rollup solutions and systems that offer varying scaling capabilities to the ecosystem. The “connectedness” to Ethereum hinges on the security of withdrawing to Ethereum from layer 2s and the security of reading data from the Ethereum blockchain.

Buterin notes that high security and tight connectedness are important for some applications, while others require something looser in exchange for greater scalability:

“In many cases, starting with something looser today, and moving to a tighter coupling over the next decade as technology improves, may well be optimal.”

Ethereum’s next scheduled hard fork is set to introduce EIP-4844, commonly referred to as “proto-dank sharding.” The EIP is expected to drastically increase the amount of data availability of the network. Buterin also notes that improvements in data compression enable greater functionality.

Magazine: Ethereum restaking: Blockchain innovation or dangerous house of cards?

Is 2023 the year genuine cross-chain interoperability takes off?

September 11, 2023 Coin Telegraph

blockchain interoperability

Blockchains need to become interoperable in order for the industry to truly flourish and several innovations will accelerate the ecosystem towards it, say executives.

The future of blockchain will be an interoperable one — with the death of “chain tribalism,” the proliferation of “hundreds of chains” along with an end to cross-chain bridge hacks, according to executives at Korea Blockchain Week.

Backing up the claims are several products slated for release before the end of the year that could see blockchain interoperability efforts move away from current solutions, which execs say don’t make sense and are a “honeypot” for hackers.

Vance Spencer, the co-founder of the crypto-focused venture firm Framework Ventures, told Cointelegraph at KBW that he thinks with many solutions on the horizon, including Chainlink’s Cross-Chain Interoperability Protocol (CCIP), it soon won’t matter what blockchain a project uses.

He said most startups begin on layer-2 solutions such as Optimism or Arbitrum but soon begin to want their own roll-up. “It's like everyone's trying to create the standard,” he said.

Said another way, the interop protocols will accrue more value than L2s themselves over the long term. Especially if there are a lot/too many L2s/chains. The investment is a view on the likely fragmentation of contracts over too many chains, and the value of networking them.
— Vance Spencer (@pythianism) September 7, 2023

In a cross-chain interoperable future, the paradigm will shift and “it's really not gonna matter which roll-up you're on,” Spencer said.

“In the future, it's probably just going to be: ‘Can your contract talk to my contract?’”

Spencer gave the example of CCIP which, he explained, allows a user to have assets on one chain and interact with contracts on another that uses cross-chain messages instead of a blockchain bridge.

ZetaChain core contributor Brandon Truong told Cointelegraph it operates in a similar way to CCIP — the main difference being it’s sent from ZetaChain’s network.

Truong added it sees interoperability becoming standard with new app builders and there will be less “chain tribalism” and more focus on utility.

He added that many older blockchain bridge solutions are “fragmented and often insecure.”

Another product is the upcoming MetaMask Snaps, which will allow developers to launch functionality-expanding apps for the crypto wallet — allowing use with other blockchains, including Bitcoin, Solana, Avalanche and Starknet.

Hundreds of chains

Speaking on a panel at KBW, cross-chain protocol Axelar co-founder Georgios Vlachos believes, at some point, there will be “hundreds of chains” all processing “significant economic activity.”

“At this point, I think it's indisputable given how many people and important companies in this space are building cross-chain and are incentivized to launch their own Layer 1s.”

Vlachos added multiple blockchains are needed as he believes a single blockchain won’t be capable of more than 10 million transactions per day — far below the nearly 530 million daily average transactions payments giant Visa processed in 2022.

Cross-chain … is only the beginning https://t.co/ogJ3DU2R5d
— Axelar Network (@axelarcore) September 11, 2023

“If we want to become foundational architecture for Web2 we need to scale this by an order of magnitude and this is really, really hard,” he said.

“The answer is to scale horizontally and create many, many different blockchains.”

Cross-chain bridges: Removing the hackers “honeypot”

Currently, users wanting to send assets between networks largely use blockchain bridges which Router Protocol founder and CEO Ramani “Ram” Ramachandran thinks are prone to hacks and will soon be replaced by other cross-chain solutions — including one by his protocol.

Ramachandran explained to Cointelegraph at KBW that cross-chain bridges rely on locking up value for it to be represented on another blockchain making them an attractive target and the reason why "so many bridges have been hacked.”

“It's highly inefficient and a big honeypot risk because then you have a billion dollars locked up in the bridge and hackers around the world are literally salivating, licking their chops, trying to hack in and take a piece out."

Ramachandran said one workaround to negate the issue is to source liquidity from multiple wallets — a solution Router plans to launch in the coming weeks.

#PeckShieldAlert @MultichainOrg has been drained of ~$126M worth of cryptos, ranking it at #6 on our cross-chain bridge exploit leaderboard.
Additionally, #PolyNetwork, which was exploited for ～$25M, stands at #8.

As of today, ~$1.92B associated with cross-chain bridges has… pic.twitter.com/UvJF8BwQfs
— PeckShieldAlert (@PeckShieldAlert) July 7, 2023

It would see those wanting to move funds between chains use a tool more akin to a peer-to-peer transfer with a middleman taking on the role of fulfilling orders for cross-chain swaps for a fee.

“This middleman acts as a courier. [They] fulfill the destination side and then submit a proof saying ‘Okay, I've done this. Now give me my money,’” Ramachandran explained.

“There’s no locked, steady liquidity on a bridge or semi-centralized bridge, this all stays in the intermediary wallets.”

Adapt or perish

However, the need for immediate cross-chain interoperability isn’t only for the benefit of users but is needed for the industry to cement its legitimacy by providing real-world use cases, Chainlink co-founder Sergey Nazarov said in a keynote at KBW.

He believed successful Web3 apps must be able to connect to all blockchains easily and users can seamlessly use apps across chains “without any concern.”

With Swift, multiple leading market infrastructures and the largest major financial institutions now clearly seeing the value of tokenization, we are nearing an inflection point for blockchain adoption in capital markets.

Chainlink and CCIP are key infrastructure to enable this… pic.twitter.com/uCiQtQzxGh
— Sergey Nazarov (@SergeyNazarov) September 8, 2023

He said the idea of choosing one blockchain and being “stuck” there with its market and infrastructure “really doesn't make sense because that's not how the internet works.”

“Our industry is going to be based on [the] ability to provide reliable use of systems that don't exist today,” Nazarov said. He added if a user puts value into an app it should be safe and reliably accessible to them when it moves somewhere else.

“If we don’t meet that minimum standard, then we will remain in a place where this will look like a toy to people or would look like a confused idea.”

Nazarov opined the banking system would bring in the next level of Web3 usage and adoption due to their value.

“Frankly, our industry needs to find a way to take the value in banks and get that value into blockchains.”

He said banks and the global financial system see a lot of value in blockchain and digital assets and Chainlink is working on how to connect banks both to each other and to public blockchains so the bank's value “flows into the public blockchain world.”

The issue Nazarov sees is the technical and legal barrier between the banks and blockchains and both are wanting to come together.

“It's, at least to me, completely obvious that the banking and the public blockchain world want to connect, but they can't for two reasons: There isn't legal clarity on how they connect and the technical process of connecting doesn't exist.”

“Frankly,” he added, “the more value flows into our industry the more we all benefit.”

Magazine: ZK-rollups are ‘the endgame’ for scaling blockchains, Polygon Miden founder

Polygon makes new sidechain developer stack opensource, supporting ZK-powered Layer 2s on Ethereum

September 1, 2023 Coin Telegraph

Chain Development Kit

Polygon’s Chain Development Kit allows developers to freely build, customize and deploy layer 2 chains connected to the wider Ethereum ecosystem.

The Ethereum (ETH) ecosystem could welcome a variety of new layer 2 (L2) protocols built on Polygon’s newly open sourced codebase Chain Development Kit, which harnesses zero-knowledge proof (ZK-proof) technology to ensure security and fast finality.

Jordi Baylina, technical lead of Polygon Hermez zkEVM, spoke to Cointelegraph exclusively about the new tool set which is publicly available on a Github repository:

“The motivating idea is simple: it should be easy and seamless for developers to launch a ZK-powered Layer 2 on Ethereum, tailored to the requirements of their project.”

Baylina added that a key aspect is that Polygon CDK enables automatic access to liquidity across all of Polygon’s chains as well as the wider Ethereum ecosystem, providing “on-demand scale, without fragmenting liquidity".

The Ethereum developer pointed to a number of different projects building CDK-powered chains across a variety of use cases, including from payment-specific L2s, DeFi, gaming, social-specific platforms, and creator or NFT platforms.

Baylina also highlighted the customizability of CDK for different appchains, featuring customizations for rollup or validium mode, zkEVM or another ZK-powered execution environment, various data availability solutions, native token and gas token customization, centralized or decentralized sequencer mode as well as permissioned networks with granular allowlists.

The importance of ZK-proof technology is another factor that Baylina stressed, highlighting Polygon Labs’ belief that zero-knowledge is the future of scaling Ethereum. As the Hermez zkEVM lead explains, chains launched with Polygon CDK are automatically connected to a shared ZK bridge and plugged into an “interop layer,” which is a cross-chain communication protocol.

“Suppose there are 1000s of chains in the Polygon ecosystem. It’s inefficient for each of these to submit their proofs directly to Ethereum. Instead, the interop layer will receive proofs from chains and submit a single ZK proof that proves the state of all Polygon chains.”

Baylina said the technology unlocks sub-minute cross-chain transactions and creates the perception of a single chain environment.

Cointelegraph also queried the key differences between CDK and other Ethereum ecosystem programming languages like Zk-proof pioneers StarkWare’s Cairo codebase.

Baylina explains that the architecture unlocked by Polygon CDK is different in that it enables automatic access to shared liquidity through a ZK bridge and interop layer of an L2 ecosystem secured by working ZK-proofs.

He finished by reaffirming the belief in ZK-proofs as the future of Ethereum scalability given its fast finality and withdrawal times, when compared to week-long delay by fraud proofs that feature in Optimistic rollup L2 solutions.

“ZK makes better bridges, but also secures chains by rigorous math, without a need for social-economic components required by fraud proofs.”

Cointelegraph previously explored the Ethereum layer 2 ecosystem, unpacking the basics of Ethereum rollups and the different approaches to scaling the smart contract blockchain.

Magazine: Recursive inscriptions: Bitcoin ‘supercomputer’ and BTC DeFi coming soon

Solana-based Clockwork to shutter citing ‘limited commercial upside’

August 29, 2023 Coin Telegraph

clockwork

Clockwork’s planned closure comes about a year after receiving $4 million in a seed round led by Multicoin Capital.

The developers behind Solana-based smart contract automation project Clockwork is set to turn off key infrastructure for the protocol at the end of October, citing “limited commercial upside."

In a series of X (Twitter) posts on Aug. 27, Clockwork founder Nick Garfield Garfield said he and the team will stop active development of the protocol and on Oct. 31 will turn off its nodes on devnet and mainnet.

Garfield cited “simple opportunity cost” as the reason for the team stepping back from Clockwork, admitting there were limited commercial benefits to continuing its development and the team had a growing interest in exploring other opportunities.

Clockwork is a protocol that allows users to schedule transactions on the Solana network and create smart contracts automated to run applications when triggered by an event.

Garfield said Clockwork’s code will remain open-source and freely available online and gave his “full endorsement to fork and ship” to anyone looking to continue work on the protocol.

Developers may continue to use the software as written, but we will shut down our nodes on devnet and mainnet as of Oct 31.

The on-chain programs will be frozen, and the code will remain open-source and free to fork on GitHub.

2/
— Nick (@time_composer) August 27, 2023

According to Crunchbase data, last August Clockwork raised $4 million in a seed round co-led by venture firms Multicoin Capital and Asymmetric along with participation from Solana Ventures.

Asked by one X user whether the seed money would be returned to investors, Garfield responded it still has a meaningful portion of the funds but he will take time “before deciding one way or the other.”

We still have a meaningful portion of our seed funding. Fully shutting down is an option, but I need to take a minute to reset myself before deciding one way or the other.
— Nick (@time_composer) August 27, 2023

Clockwork’s closure follows the shuttering of other Solana protocols such as the decentralized finance (DeFi) platform Friktion in January and its peer Everlend Finance a month later.

In late June the Solana-based nonfungible token (NFT) protocol Cardinal also said it was winding down due to economic conditions after raising $4.4 million around a year earlier.

Magazine: BitCulture: Fine art on Solana, AI music, podcast + book reviews

protocol