Modular blockchains could be the next hot crypto market trend in 2023

February 20, 2023 Coin Telegraph

As the crypto industry recovers, a new generation of modular blockchains could replace centralized bridges and exchanges.

The public blockchain sector grew from less than a few million dollars in the last decade to a $1 trillion industry. However, one thing that the space has yet to solve is a decentralized and secure interoperable solution.

Let's take Ethereum (ETH) to Bitcoin (BTC), the largest blockchain network, for example. Till today, centralized exchanges are the only viable solution for shifting from one chain to another.

A centralized solution provider, BitGo, provides the largest pool of liquidity for Ethereum users to gain BTC exposure via Wrapped Bitcoin (WBTC). The BitGo IOU accounts for over 93.6% of the Bitcoin bridged to Ethereum. Users must rely on BitGo partner platforms like centralized exchanges or CoinList to exchange BTC and WBTC.

The dominance of WBTC exposes it to evident centralization and regulatory risks. RenBTC, a platform managed by Alameda Research, dissolved in December after FTX's collapse, and the same might happen with BitGo. The recent regulatory crackdown on Paxos for issuing a USD-backed token, BUSD, could also eventually bring services like BitGo into the U.S. SEC's crosshairs.

The interoperability between smart contract platforms and other application-specific blockchains must also be developed. Sidechains and rollups in Polygon (MATIC), Arbitrum and Optimism comprise 90% of the cross-chain bridge volume from Ethereum. Near's (NEAR) Rainbow and Fantom (FTM) bridges are the only independent blockchains with a notable total value locked (TVL) on bridges with Ethereum.

Ethereum market share of bridges by TVL. Source: Dune

Several major crypto projects, such as Polkadot (DOT) and Cosmos (ATOM), implemented modularity from the ground up to build a secure and scalable cross-chain platform, with the ultimate goal being to establish an interoperable “network of networks.” However, Cosmos has yet to attract sufficient liquidity to its ecosystem, and Polkadot continues to stay in development.

The issue from bridge centralization

The 2021 hype cycle witnessed the emergence of a “multichain future” where various blockchain host specific functions like but are joined together through interoperable solutions. The first generation of bridges was highly primitive and centralized, eventually making them hot targets for exploits.

The next generation of interoperable solutions operate as separate blockchains to include decentralization and enhance security. These include intermediate transfer tokens like Thorchain’s RUNE. However, the daily volume of transfers via Thorchain has stayed below $20 million, suggesting that it has failed to pick up usage.

Threshold, which introduces a trustless and private portal for Bitcoin on Ethereum, will launch in Q1 2023. It will look to replace centralized providers like BitGo in bridging liquidity between Bitcoin and Ethereum.

Some other protocols focus on the interoperability between smart contract platforms.

LayerZero is an omnichain interoperability protocol that allows the development of applications like DEXes and lending protocols on top of it. These protocols can interact with monolithic chains like Ethereum, Cosmos Hub, and Solana. Stargate is the first DEX built using LayerZero and has a liquidity of $324 million across Ethereum, Polygon, BSC and Avalanche.

Celestia is a layer-1 blockchain built using the Cosmos SDK. The platform does support smart contract execution but is only responsible for ordering transactions and making a blockchain’s data more accessible.

It aims to act as an intermediate layer between Ethereum roll-ups and the mainnet by compressing the roll-up data for faster execution on Ethereum layer-1. Celestia does not verify the block data but helps optimize the gas cost and speed of execution. This capability will extend to layer-1 blockchains like Cosmos, Solana and Avalanche.

The team will run an incentivized test in Q1 2023 to start public testing and reward testnet validators with a potential airdrop of native tokens.

Celestia testnet incentives announcement. Source: Celestia’s Discord

Fuel Labs, the team building Fuel Network, also developed the Fuel Virtual Machine (FuelVM) and Sway programming language, which enhances transaction speed. The team launched its second beta testnet in November 2022, and the public testnet is expected to go live sometime in 2023.

While the interoperable space remains underdeveloped and exposed to centralization risks, various teams are working on decentralized solutions that will launch in 2023. These protocols will securely bridge the liquidity across DeFi protocols and other layer-1 blockchains. On top of that, they will also help build a multichain future, where the user experience would be blockchain agnostic and interact with each other seamlessly.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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.

Top 100 DeFi Crypto Project Suffers 20-Hour Network Outage Due to Technical Issue

October 29, 2022 The Daily Hodl

THORChain network resumes following 20-hour chain halt

October 28, 2022 Coin Telegraph

Blockchain

The network was halted on Oct. 27 after the team said a bug had caused “non-determinism between individual nodes.”

Cross-chain exchange and proof-of-bond network THORChain announced it was once again “fully operational” after an outage of more than 20 hours

In an Oct. 28 tweet, the THORChain team said the network was “back online and producing blocks” and had reenabled trading. The network was halted on Oct. 27 after the team said a bug had caused “non-determinism between individual nodes.”

“Turns out to be string manipulation: code was pushing a cosmos.Uint (instead of a uint64) into a string, which causes the string to get the point of the big int instead of the actual value, causing the memo string to be different on different nodes,” said the THORChain team following the chain halt. “Didn’t see this in stagenet because the bad memo never gets written to disk/block, because it gets swapped immediately.”

The network is now fully operational after an outage of approximately 20.5 hours. Post-mortem will be released next week https://t.co/QxttVp6Qvy
— THORChain (@THORChain) October 28, 2022

A THORChain spokesperson told Cointelegraph that the chain had been halted for safety reasons but that it planned to “revert once the source of non-determinism is found.” However, token-swapping platform THORSwap reported during the outage that its platform was still allowing Ethereum and ERC-20 swaps.

Other major blockchains have reported network outages affecting users. Solana co-founder Anatoly Yakovenko said in September that outages — reportedly the result of low-cost transactions — had been the blockchain’s “curse,” with at least seven since its launch in 2020.

Following reports of the outage, the price of THORChain’s native token, RUNE (RUNE) fell from $1.57 to $1.49 — more than 5.6% — within 24 hours, but it has since returned to $1.55.

THORChain network halted following software bug

October 28, 2022 Coin Telegraph

Coin Telegraph

The team stated that the next steps were to find the source of the non-determinism, release an update, and restart the state machine, but there have been no updates since.

Cross-chain exchange and proof-of-bond network THORChain was halted earlier today as the result of a bug causing “non-determinism between individual nodes."

At around 8 pm UTC, the THORChain team initially tweeted that developers were aware of a chain outage and were working to find the root cause of the issue.

Roughly four hours later, the team posted a further update noting that “consensus halts in a distributed state machine are from sources of non-determinism between individual nodes and prevent the ledger from becoming corrupted.”

It stated that the next steps were to find the source of the non-determinism, release an update, and restart the state machine, and while noting that step one was close, there have been no updates since, suggesting the developers are dealing with a fair bit of a headache.

Consensus halts in a distributed state machine are from sources of non-determinism between individual nodes and prevent the ledger from becoming corrupted.

Next steps:
1) Find source of non-determinism
2) Release update
3) Restart state machine

(1) is close https://t.co/sS4EMbYcOQ
— THORChain (@THORChain) October 27, 2022

According to THORChain explorer, the network still appears to be halted at the time of writing. However, token swapping platform THORSwap provided an update of its own, noting that its platform is still operating.

“Update on the current halt of THORChain Swaps/LP. Funds are safe. Ethereum and ERC-20 swaps are fully functioning on ThorSwap via DEX Aggregator. Hang tight, THORChain devs are on the case!” it wrote.

THORChain infrastructure developers Nine Realms were unfazed by the incident, as it suggested that ironing out bugs is just part of the process of improving the THORChain network.

“Each halt is investigated immediately by a security team and core devs—resulting in protocol improvements. As the network matures: halt early, halt often,” it stated.

Cointelegraph has reached out to THORChain for comment and will update the story if a response is received.

THORChain isn’t the only one to suffer network issues this week, as Meta-owned messaging platform WhatsApp went offline to its 2 billion users for around 2 hours on Oct. 25. Whatsapp attributed the problem to a technical error, but didn’t go into any further detail.

THORChain’s native token RUNE is down 1.4% over the past 24 hours to sit at $1.53, but is still up 6.5% in the past seven days. Zooming out, the asset is down a hefty 92.7% since it's all time high of $20.87 on May 19 2021, according to CoinGecko.

RUNE Pumps 18% as THORChain deactivates non-native tokens

July 19, 2022 Coin Telegraph

Coin Telegraph

The BEP-2 and ERC-20-based variants are being swapped out for the upgraded native RUNE token after THORChain's long-awaited mainnet late last month.

Cross-chain exchange and proof-of-bond network THORChain has finally activated the killswitch that will progressively wind down support of the BEP-2 and ERC-20-based variants of the RUNE token.

BNB.RUNE, and ETH.RUNE, also known as IOU Tokens, are being swapped out for the upgraded and completely native RUNE token after THORChain’s long-awaited mainnet late last month.

Moving forward, these tokens will progressively lose their value over the next 12 months as the project aims to foster adoption of its fully unified variant of RUNE, enabling stronger asset interoperability.

Users who hold their IOU Tokens on centralized changes will have their tokens automatically upgraded to the new native RUNE. Those who keep their tokens in private wallets must create a new wallet supported by THORChain and then click an upgrade button to make the switch.

The THORChain team stated via Twitter on July 18 that killswitch will go live at block 6500000 and that 1:1 exchange rates will “linearly tick down to 1:0 over the next 12 months” as the IOU Tokens become worthless.

Today, the BEP-2 and ERC-20 $RUNE killswitch will be activated at block 6500000. Upgrades will no longer be 1:1. Exchange rates will linearly tick down to 1:0 over the next 12 months.

If you hold $RUNE in a self-custody wallet, ensure your wallet address begins with `thor1...`
— THORChain (@THORChain) July 18, 2022

The team previously stated in a blog post earlier this year that this move was part of a push towards further decentralization of its network, as it highlighted issues with having IOU RUNE spread across two separate networks:

“THORChain is extremely strict in having no 3rd party dependencies, preferring to manage everything in-house. There are no oracles, no off-shored security, and no reliance on external liquidity.”

“However, BNB.RUNE and ETH.RUNE has privileged access to the state machine’s “mint” function. Anyone presenting these tokens can mint fresh RUNE, as well as making THORChain’s state dependent on these two networks,” the blog post read.

The move from THORChain has coincided with a significant 18.6% bounce of RUNE prices to $2.61 over the past 24 hours. Measuring over a broader time frame also shows promising signs, with RUNE gaining 65.9% over the past 30 days, according to data from CoinGecko. However RUNE is still down 87.5% since its all-time high of $20.87 from May 19 last year.

Apart from enabling users to swap assets by liquidity pools across various networks such as Binance Smart Chain, Ethereum, Dogecoin, and Bitcoin, THORChain also supports the trading of synthetic assets, which are tokenized derivatives that mimic the value of other assets such as stocks and commodities.

Under the recently launched mainnet, the project aims to provide enhanced security measures and network stability, greater decentralization, a new governance process, establish new chain integrations, wallet integrations, aggregator implementations, and roll out a single-sided yield feature.

Top Crypto Analyst Michaël van de Poppe Predicts Strong Rallies for Polygon, THORChain and Two Ethereum Rivals

July 17, 2022 The Daily Hodl

Coin Bureau Says DeFi Making Comeback As Uniswap, Aave, THORChain and Two Additional Altcoins Overperform

July 13, 2022 The Daily Hodl

Algorithm Known for Outperforming Bitcoin and Crypto Markets Reveals New Altcoin Picks for the Week

June 27, 2022 The Daily Hodl

THORChain token price up 16% following mainnet launch

June 24, 2022 Coin Telegraph

Coin Telegraph

After four years of waiting, THORChain’s new mainnet “marks the achievement of a fully functional, feature-rich protocol with a large ecosystem and strong community.”

The price of THORChain’s token RUNE is up 16% since the project announced the official launch of its mainnet on June 22.

The team announced the mainnet launch on Wednesday, alongside the rollout of a “Rune in a Million Campaign” on Binance that contains a total of $1 million worth of RUNE rewards for users of the exchange.

The announcement has been followed by a 16% bump for RUNE to $2.18 at the time of writing, and the price is up 31.6% over the past seven days. The surge has provided some much-needed relief for RUNE, though the price is still down 31% from $3.21 at the start of June.

THORChain is a cross-chain exchange and proof-of-bond network that enables users to swap assets by liquidity pools across various networks such as Binance Smart Chain, Ethereum, Dogecoin and Bitcoin. The exchange also supports the trading of synthetic assets (tokenized derivatives that mimic the value of other assets).

According to the project, it has processed more than $3.7 billion worth of native on-chain swaps, and has roughly $299.7 million worth of total value locked (TVL).

“Mainnet marks the achievement of a fully functional, feature-rich protocol with a large ecosystem and strong community. It has been a long time coming and the community is very excited about this important milestone,” the team stated.

Notably Binance, Crypto.com, Coinspot, Swyftx and Ku Coin have all stated they will support the asset.

1/ @THORChain Mainnet is opening up the floodgates! @binance, @kucoincom, and @cryptocom all announced they'll support native $RUNE the past few days. What an exciting time to be a #ThorChad! LFG!
— ImpossibleHunter77⚡ (@ImpossibleHunt7) June 23, 2022

The project launched in 2018 and THORChain is transitioning from its beta version dubbed the “multichain chaosnet," which went live in April 2021. It was the subject of multi-million dollar hacks in the past .

The team notes it has also transitioned over the last four years from a fully centralized project to a community-driven one whose “network is solely controlled by 100 decentralized nodes.”

While the introduction of the mainnet doesn’t necessarily bring forward any fundamental changes to how the protocol operates apart from less bugs and network stability/security, it will provide key changes to how the project is governed and adopted, and marks Thorchain’s development into a fully fledged network.

Prior to launching its own blockchain, THORChain initially launched with two variants of its token on Binance Chain and Ethereum, and the team has expressed concerns with the minting features behind these two assets in the past, along with divided the trading markets for the asset.

As part of the mainnet launch, THORChain is hoping to wind down these two variants of RUNE over the next six months as part of push to phase in the new fully native and unified variant of the token. The team stated that this will also help more wallets provide support for the asset.

THORChain validators started the vote on initiating the IOU RUNE token “kill switch” this week.

The @THORChain node operators have begun voting to active the Kill Switch

Details on the importance https://t.co/ZbsguIfC45 pic.twitter.com/kV5fg2h3ZU
— Dan Smith (@smyyguy) June 20, 2022

Moving forward the team stated that it will work on developing an Architecture Design Record (ADR) to keep track of network changes and the governance process. It will also look to establish new chain integrations, wallet integrations, aggregator implementations and a single-sided yield feature. Further decentralization has also been earmarked as a key goal.

“Centralized points of failure must be removed as they are a risk to the future of the network. The largest remaining centralized point is Treasury management. Treasury plans to hand over full control to the community soon,” the team wrote.

The RUNE rally this week follows the sharp surge of native DeFi tokens from competing platforms such as synthetic derivatives trading platform Synthetix, which has seen its SNX pump 75% over the past seven days to sit at $3.06.

The price appears to have surged in response to Synthetix Improvement Proposal 120 that went live last week which increased the speed of trade on the platform.

Crypto Analyst Says Bitcoin Capitulation Imminent, Updates Outlook on Ethereum, Solana and One More Altcoin

May 29, 2022 The Daily Hodl

THORChain

The issue from bridge centralization

Share this video