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Japanese Crypto Influencer Calls Ethereum Improvement Proposal 4844 a ‘Layer 1 Middle Ground’

Japanese Crypto Influencer Calls Ethereum Improvement Proposal 4844 a ‘Layer 1 Middle Ground’According to Mai Fujimoto, a Japanese crypto influencer and co-founder of Intmax, the Ethereum Improvement Proposal (EIP) 4844 – also known as proto-danksharding – have emerged as a solid solution for addressing the Ethereum network’s scalability challenges. The EIP 4844 is also significant for scaling solutions such as zero-knowledge rollups (zkrollups) and Layer 2 chains […]

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Taproot Wizards Reveal Bitcoin’s Onchain Payment Struggles During $15M Sale

Taproot Wizards Reveal Bitcoin’s Onchain Payment Struggles During M SaleSending bitcoin onchain remains a poor payment experience despite the hype surrounding the leading crypto asset, according to Taproot Wizards founder Udi Wertheimer. In a recent post-mortem of a high-volume sale using bitcoin, Wertheimer detailed several pain points with onchain payments including long confirmation times, lack of payment amount enforcement, high fees, and insufficient Lightning […]

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Ethereum scaling firm =nil; Foundation introduces security-focused zkEVM

A new Ethereum zero-knowledge proof compiler could address security concerns identified in different zkEVM solutions.

Zero-knowledge technology firm =nil; Foundation has developed a new type-1 zero-knowledge Ethereum Virtual Machine (zkEVM) compiler to address security concerns identified in similar ZK-powered Ethereum scaling solutions.

Speaking exclusively to Cointelegraph, =nil; Foundation CEO and co-founder Misha Komarov says the technology prioritizes security and allows high-level programming code to be compiled automatically into Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARKS) circuits.

The firm’s zkEVM is designed to be compatible with evmone, which is a C++ version of Ethereum’s base execution environment. The key takeaway is that the code of applications is processed and rolled up as proofs submitted to Ethereum in the same format as its EVM.

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Ethereum L2 Starknet aims to decentralize core components of its scaling network

Starknet has laid out its roadmap to begin decentralizing core components of its Ethereum L2 scaling network to defend against censorship and improve robustness.

Ethereum layer-2 scaling network Starknet has outlined plans to improve the decentralization of three core components of its zero-knowledge (ZK) proof rollup solution.

Speaking exclusively to Cointelegraph, Starknet product manager and blockchain researcher Ilia Volokh outlined the firm’s intent to address certain centralized elements of its protocol aimed at defending against censorship and making its system more robust.

Starknet operates as a validity rollup using ZK-proof technology to bundle transactions, with cryptographic proofs submitted to Ethereum to achieve security and finality for layer-2 transactions.

According to Volokh, Starknet’s protocol remains dependent on StarkWare for creating L2 blocks, computing proofs and initiating layer-1 state updates to the Ethereum blockchain.

“In this sense, the operation of the network is centralized. This is not necessarily a bad thing because although Starkware operates the network, it cannot steal money and can’t do any invalid state transitions because they require executing the verifier on Ethereum,” Volokh explained.

While Starkware remains a “centralized gateway” to enter Starknet, Volokh added that the protocol is “100% honest” and cannot falsify transactions or information, as Ethereum’s layer-1 blockchain acts as a filter.

The only tangible way in which Starknet can “misbehave” is either by being idle in not relaying proofs to Ethereum or by specifically censoring certain parties from including transactions or proofs.

“For example, if the sequencer decides to exclude a transaction from a particular entity, they’re free to do so. As long as the other things that they are trying to promote are valid.”

For Starknet, the latter consideration is part of the main reason to decentralize parts of its protocol in an effort to combat two main causes of censorship in consensus-based systems.

Intentional censorship is one consideration, while “non-robust” systems that have a single point of failure present another threat to decentralization, given that all network participants would be “censored” if this central point caused a network or system outage.

“We want to solve both of these problems, and we think the obvious solution to both of them at the same time is to have as many people operating Starknet as possible.”

Decentralizing these different components of Starknet’s system entails varying degrees of difficulty. This includes decentralizing block production through its consensus protocol, decentralizing the proving layer, which is in charge of computing proofs for blocks and decentralizing the process of L1 state updates.

“I want to emphasize that it’s crucial to decentralize each of them because as long as even one of them is centralized, you haven’t achieved much,” Volokh added before unpacking the relevant challenges of each component.

Decentralizing block production has been fairly straightforward given that all blockchains rely on a consensus protocol and sybil-resistance mechanism. Meanwhile, decentralizing Starknet’s prover has required a more novel approach.

“As far as I know, we’re the first rollup that has come out with a fairly complete and concrete solution,” Volokh said. He also went on to unpack how competing ZK-rollups all essentially aggregate transactions into proofs and post them on Ethereum, which by extension transfers its own decentralization to rollup solutions.

However, these systems all rely on respective central entities to create and prove blocks, which means these layer 2s are “equally centralized.” Whether end users are concerned about the philosophical implications of the centralized components of L2s is another conversation altogether for Volokh:

“The people who appreciate decentralization do so because they understand that it gives more security, and we share those values more than we think people will like them for commercial reasons.”

Volokh added that Starknet is still in the process of outlining the process of testing and implementing these decentralized mechanics in its network. This is likely to be carried out through a series of interconnected testnets to test the simultaneous functionality of the different components.

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Idealistic Ethereum community-built zkEVM Scroll launching in weeks

Scroll co-founder Ye Zhang is aiming for a community-driven decentralized immutable scaling solution for Ethereum.

After two years of development, a group of Ethereum idealists are close to launching their zero-knowledge EVM (Ethereum Virtual Machine) — Scroll — developed with Ethereum’s values in mind. 

While there are already several zero-knowledge EVMs in existence today, Scroll co-founder Ye Zhang told Cointelegraph at Token2049 that the project was “idealistic” as the team was sticking to the philosophy and the principles that Ethereum already cultivates.

Zhang said that they have been working on this mostly as a “labor of love,” driven by a shared vision to scale Ethereum while staying true to its decentralization principles.

He added that the project was more human interest than simply solving computational problems, “we started in an open source way, in a community-driven way,” he said.

“We can grow this community very organically, and then grow our network effect, not in a very silly way, not in a very marketing-driven aggressive way.”

The new zkEVM is set to launch within weeks, having already undergone extensive testing and carried out audits on the code. Zhang said the Scroll will launch after some final testing and major projects like Uniswap and Aave are ready to deploy on Scroll at launch.

Scroll co-founder Ye Zhang. Source: Cointelegraph

The mathematician believes zk-rollups are the “holy grail” or best-in-class layer-2 scaling solutions, which are also very cheap and secure.

However, Scroll is entering a crowded ecosystem that already has zkEVM solutions from Polygon, Immutable, StarkWare, and ConsenSys’ Linea which launched in August.

Zhang claimed that some of the other systems such as Linea have some “unproven” parts in the circuit but believes Scroll provides a “complete proof” of all Ethereum “opcodes” and components of the transaction.

“So it's not only compared to compatibility, but also a full proof for proving that everything we already have,” he said.

Related: Buterin weighs in on zk-EVMs’ impact on decentralization and security

Scroll is a layer-2 scaling project that has been in development for two years. It uses zero-knowledge proofs to compress data off-chain, meaning only proofs are submitted on-chain — enabling higher throughput.

The EVM component enables full native compatibility with any existing Ethereum software and applications.

The initial setup will still involve some centralization such as sequencers, Zhang said, but the roadmap will decentralize this further over time.

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BNB Smart Chain Optimism-powered layer-2 opBNB hits mainnet

Binance’s Ethereum layer-2 scaling platform, opBNB, is now publicly available, following extensive testing of the OP Stack-based platform.

The BNB Chain blockchain ecosystem is set to tap into Optimism’s rollup technology, powering its newly launched opBNB layer-2 scaling platform.

BNB Chain announced the public mainnet launch of its Ethereum Virtual Machine (EVM)-compatible L2, which delivers lower gas fees and faster transactions to decentralized applications running within the ecosystem.

The opBNB platform reportedly handled over 35 million on-chain transactions and saw more than 150 decentralized applications (DApps) deployed on its testnet. BNB Smart Chain also claims that the platform achieved a peak of 4,000 transactions per second during a stress test of its capabilities.

Related: Can the Optimism blockchain win the battle of the rollups? 

BNB Chain senior solution architect Arno Bauer highlighted scalability and security as top priorities for the scaling solution while meeting stringent criteria:

“This included high availability, 4K transactions per second, rigorous stress testing, reduced gas costs under 0.2 gwei, fast finality under 1 second and enhanced security with multiple external audits.”

As Cointelegraph previously reported, opBNB is based on the Optimism OP Stack and is EVM-compatible, allowing it to interact with Ethereum-based smart contracts, networks and ERC-20 token standards.

This solution makes use of optimistic rollups to scale transactions by assuming that transaction data proven off-chain is valid until proven otherwise. The technology has been important in helping the Ethereum network scale, but critics highlight the week-long lockup of funds in these protocols, while validation checks are processed.

Optimism has seen significant growth in daily transaction volumes processed and an increasing number of active daily addresses, suggesting that the layer-2 solution continues to offer value to users and DApps.

A number of major decentralized finance (DeFi) protocols have also deployed on Optimism to harness its scaling capabilities. This includes the likes of Uniswap, Aave, 1inch Network, SushiSwap and Curve Finance.

Cointelegraph has reached out to BNB Chain to ascertain further details of opBNB’s development and other scaling solutions that may have been considered by the ecosystem.

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

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.

Related: Are ZK-proofs the answer to Bitcoin’s Ordinal and BRC-20 problem?

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.

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3 reasons why Ethereum price is still pinned below $1,900

PayPal’s stablecoin announcement and a handful of Ether ETF applications are bulls’ biggest hopes for a price trend reversal.

Ether (ETH) price has been locked within a tight trading range spanning from $1,800 to $1,900 since July 21. This remarkable lack of volatility has instilled a sense of uncertainty and skepticism among investors, despite recent positive developments which include the launch of PayPal's Ethereum-based stablecoin, and a surge in requests for Ether-based exchange-traded funds (ETFs).

PayPal's entrance into the world of cryptocurrencies could signify a major step toward mainstream adoption for Ethereum. However, this move also raises concerns about centralization and the potential loss of control over personal assets.

At the same time, the United States Securities and Exchange Commission (SEC) has recently witnessed a surge in applications for Ether exchange-traded funds (ETFs), which mirrors a trend of major asset management firms seeking to establish spot Bitcoin ETFs.

ETH’s drop in DApp deposits and active users is concerning

The Ethereum network is having problems because of high gas fees, which are the costs for transactions, including those done with smart contracts. For the past two months, the average transaction fee has been more than $4, which limited the demand for its decentralized apps (DApps).

Ethereum network applications' total deposits in ETH. Source: DefiLlama

There has been a noticeable decline in the total value of deposits locked (TVL) in the Ethereum network. This decrease marked the lowest TVL level observed over the past three years, as reported by DefiLlama.

While there may have been some shifts in this trend over the past week, the current scenario still reflects a substantial reduction in Ether deposits, specifically around 12.9 million, in contrast to the 14.75 million recorded three months ago.

To ascertain whether the decline in Ethereum's TVL correlates with a decline in its user base, investors should monitor the utilization of decentralized applications (DApps). It's important to note that certain DApps, such as gaming platforms and marketplaces, do not require substantial deposits.

Ethereum's 30-day DApp activity. Source: DappRadar

The number of active addresses using DApps is also down, which is concerning. In the last 30 days, the main DApps on Ethereum had 25% fewer active users. This might reflect that investors aren't satisfied about how much it costs to transact on the network.

Now, let's examine Ether derivatives to figure out whether the $1,800 level could actually prove a reliable support based on how ETH investors are positioned.

Derivatives metrics show balanced demand between bulls and bears

Ether quarterly futures are popular among whales and arbitrage desks. However, these fixed-month contracts typically trade at a slight premium to spot markets, indicating that sellers are asking for more money to delay settlement. As a result, ETH futures contracts in healthy markets should trade at a 5 to 10% annualized premium — a situation known as contango, which is not unique to crypto markets.

Ether 3-month futures annualized premium. Source: Laevitas

As per the futures premium, also referred to as the basis indicator, professional traders in the Ether market have remained unable to adopt a bullish stance since July 16. The current level of 5% hovers on the brink of neutral-to-bearish threshold, indicating a state of equilibrium in demand between leveraged long and short positions.

Related: NFT project y00ts to return $3M grant as it ditches Polygon for Ethereum

The recent unveiling of Coinbase's Base network on Aug. 9 could contribute to Ether's challenge in surpassing the $1,900 mark. Several development teams within the ecosystem have announced their offerings for the Base network, which presently incorporates a version of the decentralized exchange Uniswap.

While Ether's bullish prospects are fueled by the potential approval of an ETF and the substantial user base facilitated by PayPal's stablecoin, the network finds itself confronted by the competition from existing smart contract platforms and challengers with ample resources. Such a scenario introduces an element of uncertainty surrounding the resilience of the $1,800 support level.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Healthy competition welcome — Polygon zkEVM lead

Prominent Ethereum development firms have rolled out varying zero-knowledge scaling solutions that drive healthy competition in the ecosystem.

An environment of healthy competition is being fostered between the Ethereum ecosystem’s top development firms building zero-knowledge Ethereum Virtual Machines (zkEVMs) to scale the network, according to one of Polygon’s co-founders.

Jordi Baylina, technical lead of Polygon Hermez zkEVM, spoke to Cointelegraph ahead of the start of EthCC in France. With builders from across the Ethereum ecosystem converging on Paris, zero-knowledge proof (ZK-proof) scaling tools are set to be a major focal point.

Polygon’s zkEVM uses ZK-proofs to reduce transaction costs and increase the throughput of the Ethereum network, while taking advantage of the security and finality of the layer-1 blockchain.

ZK-proofs have proved to be an important scaling tool for the Ethereum ecosystem. The technology allows protocols like Polygon’s zkEVM to handle transaction computations off-chain before providing a resource-lite proof to the Ethereum mainnet without revealing any of the associated data.

Related: Ethereum scaling protocols drive zero-knowledge proof use in 2023

Baylina, who is at the helm of Polygon’s zkEVM, says the breadth of development being done with ZK technology has been hugely beneficial to the wider Ethereum ecosystem:

“Having different projects adds a lot of experience, and it’s also a way to test different approaches, ways of handling things or solving things.”

Baylina added that various projects emulate good advances and try to make them better, while failings act as a learning for all ZK-based projects in the space.

Polygon zkEVM unique addresses. Source: Polygon zkEVM

Polygon zkEVM is live on mainnet, and the network is closing in on 250,000 unique active addresses. Its daily active Polygon zkEVM addresses are also trending upward, with both metrics suggesting that user adoption is growing.

Related: ConsenSys launches Linea zkEVM to further scale Ethereum

Meanwhile, Baylina highlighted the number of applications that are building on Polygon zkEVM as the most important metric for his team. This, in turn, leads to a wealth of information and feedback from developers, which is shaping changes to the protocol:

“Hearing from developers the issues that they have, if they notice something that can be improved or the quality of the tooling that they have on top of that for me, these are the real metrics we are working hard on.”

Baylina provided a working example where developers had identified issues with timestamps that were critical for the operation of decentralized finance oracles. Bayina’s team found a workaround solution while a long-term fix was being developed. Nevertheless, the input from builders is helping improve the protocol as more join the ecosystem.

“Important projects are coming to the network, and we are getting a lot of experience and knowledge on the needs of different applications.”

Polygon co-founder Sandeep Nailwal previously told Cointelegraph that Polygon’s zkEVM is the “holy grail of Ethereum scaling,” allowing the protocol to submit proofs to the Ethereum mainnet without the layer-1 blockchain having to rerun computations. 

The technology is envisioned to drastically scale Ethereum, allowing developers to build decentralized applications while being unencumbered by the base blockchain’s network performance. 

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Ethereum scaling protocols drive zero-knowledge proof use in 2023

Ethereum scaling remains the primary use case behind zero-knowledge proofs, according to a report from ZKValidator.

Ethereum scaling protocols dominate the use of zero-knowledge rollups (ZK-rollups), with major launches, new research and healthy competition key points in a sector report published by ZKValidator.

The node infrastructure operator’s “State of ZK Q2” report reflects on significant events across the ZK ecosystem, with notable launches of ZK-powered layer 2’s highlighting the use of the technology for scaling in comparison with other market segments.

ZK-proofs use cryptography to allow one party to prove to another party that certain information is correct without revealing any data. They present a solution to trust and privacy in digital environments, and have been pivotal in scaling layer-1 blockchain protocols.

A poll put to the 18,000 followers of the Zero Knowledge Podcast provided a sample for a community gauge on the most important applications of ZK-proofs. Of the respondents, 42% selected “ZK for Scaling” as the segment that would experience the highest growth in the coming 12 months.

ZK use cases. Source: State of ZK Report Q2 2023.

ZK for privacy and identity followed at 23.8% and 22.2%, respectively, while zero-knowledge machine learning was the least selected segment.

The poll reflects the real-world applications of ZK-proofs, with several major Ethereum scaling protocols hitting mainnet in the first half of 2023.

This includes Polygon’s announcement of its forthcoming “2.0” multichain system, which will use ZK-proofs to transfer assets between networks and zkSync Era’s ZK Stack, which will allow developers to build ZK-rollups and proprietary layer-3 “hyperchains.“

ConsenSys also began onboarding partners to its mainnet Linea network on July 11. Linea is another prominent layer 2 that allows developers to build or migrate decentralized applications for Ethereum.

Related: Are ZK-proofs the answer to Bitcoin’s Ordinal and BRC-20 problem?

The sector has also attracted investment across several segments, including new zk-based layer 2’s and zkEthereum Virtual Machines (zkEVMs), as well as ZK-proofs for off-chain computation.

Ethereum scaling firm StarkWare, which helped pioneer zk technology, and the Ethereum co-founder Vitalik Buterin, invested in Kakarot — a zkEVM running on StarkWare’s technology that aims to build layer-3 applications.

The report also highlights a $115 million raise by Worldcoin to continue the development of its zk-powered digital identity application and ecosystem. Swiss nonprofit Anoma Foundation also features in the report after its latest $25 million raise to continue building its third-generation blockchain architecture for decentralized applications.

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