The Ethereum (ETH) layer-2 scaling project Starknet plans to kick off its first token allocation this month. In a new announcement, the project notes it will distribute more than 700 million Starknet tokens (STRK) to nearly 1.3 million addresses starting on February 20th. Eligible individuals and groups will have four months to claim their tokens, […]
The post Ethereum Layer-2 Starknet To Distribute Over 700,000,000 STRK Tokens Starting This Month appeared first on The Daily Hodl.
Monthly active developers across the crypto ecosystem fell 28% year-on-year in October, though some have managed to buck the trend.
Ethereum layer-2 scaling solutions Starknet and zkSync are among the few platforms to have increased their total monthly active developer counts over the last 12 months, data shows.
While Starknet and zkSync only recorded increases of 3% and 6% respectively, the likes of Ethereum, Polygon and Solana saw their counts fa by 23%, 43% and 57% respectively over the same timeframe, according to an updated developer report by Electric Capital, which provided data up to Oct. 1.
Total monthly active developers fell 27.7% from 26,701 developers to 19,279, reflecting a wider downward trend in developers over the last 12 months.
Chainlink, Stellar, Aztec Protocol and Ripple also increased their developer counts as of Oct. 1, though their total monthly active developers were lower than zkSync and Starknet.
StarkWare’s Starknet and Matter Labs’ zkSync are layer 2 solutions aimed at scaling Ethereum through zero-knowledge rollups, which have become a focal point in 2023.
Much of Starknet’s focus of late has revolved around its “Quantum Leap” — which went live in July. It can theoretically increase Ethereum’s TPS (transactions per second) from around 13-15 to 37 TPS consistently and up to 90 TPS in some cases.
Starknet and zkSync have also been working on zero-knowledge Ethereum Virtual Machine (zkEVM) solutions to further scale Ethereum throughout 2023.
Developers at zkSync have also been building a network of “Hyperchains” to create an ecosystem of interoperable protocols and sovereign chains as part of its zero-knowledge tech stack. The firm unveiled the solution in June and hope to have a working version of it by end of 2023.
Related: 48% fewer new crypto coders last year: Report
In a thread on X on Oct. 18, Electric Capital software engineer Enrique Herreros noted many of the departing active monthly developers were “newcomers” (less than one year), while the more “established” (more than two years) and “emerging” (one to two years) developers have remained relatively steady over the last 12 months:
“We can see a decrease of -58% in Newcomers, a moderate increase of +11% Emerging Developers and a slight increase of +5% Established Developers,” Enrique said.
.@electriccapital’s Developer October Update is here! This is a lighter weight update as we prepare for our annual report.
— Enrique ⚡ (@eherrerosj) October 18, 2023
We inspected 164M+ crypto commits to find:
• 19.3K monthly active open source developers as of October 1, 2023
• Developers have decreased -27% YoY
•… pic.twitter.com/bHyMHx29El
Enrique noted this is a cyclical trend where newcomers dominate the developer market during bull markets but then fall in numbers when prices begin to plummet.
Electric Capital typically obtains its data from code repos and code commits on open-source developer platform GitHub.
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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.
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.
As always, we published another ecosystem update, highlighting some of the latest projects to join the Scroll ecosystem
— Scroll (@Scroll_ZKP) September 16, 2023
This week, we cover DeFi aggregators and permissionless lending protocols. https://t.co/1G4ErzAB00
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.
As an emerging technology, how can zero-knowledge proofs remedy many issues across the crypto space?
Zero-knowledge proofs (ZK-proofs) are a key technology explored by many in the crypto industry. A zero-knowledge protocol is a cryptographic method that allows one party to prove to another party that something is true without revealing any information.
The technology is vital for Ethereum layer-2 solutions to achieve blockchain scalability, and to the privacy and security of ZK transaction networks. The top ZK tokens, such as Polygon (MATIC) and Zcash (ZEC), have surpassed $9 billion in market cap since their inception.
Given the increasing focus on ZK technology and the benefits it can bring to crypto, it’s no surprise it will be one of the hot topics of discussion during the upcoming annual Ethereum Community Conference (EthCC), taking place in Paris from July 17–20.
Some conference-goers, as well as those attending the ZKDay sideline event on July 19, have shared why they believe the technology holds promise in the coming years.
According to Cointelegraph Research, venture capital (VC) activity in the cryptocurrency sector is returning to life following a year of decline. In May 2022, the total amount invested in the industry hit $4.4 billion, plummeting to just under $500 million in January 2023 and climbing back to over $1.1 billion in May.
Forest Bai, co-founder and general partner at Foresight Ventures — a Singapore-based VC firm with over $400 million in assets under management — believes the bear market presented a chance for growth, stating: “The collapse of certain crypto institutions presents opportunities for the emergence of new ones.”
EthCC[6] is now completely sold out.
— EthCC - Ethereum Community Conference (@EthCC) July 4, 2023
All EthCC talks and workshops will be livestreamed
See you in Paris ❤️
For Foresight Ventures, which counts companies like Sei Network, Space ID, Shardeum, Catalyst and Space Nation among its portfolio, emerging tech is a core area of investment interest for the firm. Bai said:
“Combining new technologies such as AI, ZK and blockchain is currently the most fascinating direction we are interested in.”
Although factors such as the collapse of FTX, enforcement actions by the United States Securities and Exchange Commission, and the implosion of Terra have cast a shadow on the sector, Bai remains optimistic about the industry’s recovery, stating, “We can see that crypto tech remains dynamic in regions like Hong Kong, Montenegro, Southeast Asia and South America.”
The motto for the current bear market has been to “build.” As general interest in the cryptocurrency sector fades during difficult economic times, technology companies may see that as an opportunity to take their time to create a lasting product and unveil it as the market enters a recovery stage. This approach is even more evident when discussing emerging sectors and technologies like ZK-proofs.
Related: ZkDay comes to Paris on July 19: A marquee ZK conference amid EthCC
Zero-knowledge, layer-1 blockchain, Manta Network, launched its ZK nonfungible token platform, NPO, a little over one month ago, and has since recorded over 200,000 wallet installs and 300,000 ZK soulbound token mints. Kenny Li, co-founder and chief operations officer of Manta, said that the technology has great potential when it comes to enhancing scalability and user privacy:
“ZK-rollups are specifically used for scalability. There are other applications of ZK which are geared toward protecting users and their privacy/identity. Manta Network uses it to provide compliant private Know Your Customer/identity solutions as a core use case. I think, right now, ZK is being applied in both rollups and on-chain activity, so it would be suited for both.”
According to Li, the primary focus has been to create real use cases for ZK technology. “We are concentrating on on-chain identity paired with the safety and privacy of each user’s wallets and transactions,” he said. The next stage is to apply such solutions to a multitude of use cases across over 80 ecosystem projects and allow them to adopt the technology.
For zero-knowledge technology to spread its wings and increase adoption, some believe that cross-chain solutions are required to mend the issue of blockchain interoperability.
The Polyhedra Network, which focuses on Web3 interoperability and boasts 800,000 monthly active users, aims to bring layer-1 and layer-2 blockchains closer through its zkBridge technology. As Polyhedra CEO Abner Jia puts it:
“ZkBridge uses zero-knowledge proof constructions to efficiently convince the receiver chain that a certain state transition happened on the sender chain. With zero-knowledge proofs, zkBridge offers both strong security without relying on external assumptions and a significant reduction in on-chain verification cost.”
Given how much skepticism there is around bridges and their vulnerabilities to hacks, it’s no wonder that many are searching for new technologies to help improve protocol security.
The ultimate goal for utilizing proprietary ZK-proof systems is to “promote an open, interconnected and scalable blockchain ecosystem, paving the way for the future of blockchain technology,” Jia said.
Magazine: Here’s how Ethereum’s ZK-rollups can become interoperable
Starknet's latest upgrade will scale the ZK rollup's throughput by 50X or more. But capacity is very different to real world usage.
Starknet’s Quantum Leap upgrade has been deployed on testnet, with the Ethereum layer-2 scaling protocol claiming it's capable of processing "hundreds of transactions per second."
If achieved, it would be at least a 50X improvement from its current throughput, thanks to the Version 12 upgrade harmonizing how the sequencer's code interacts with the Cairo programming language.
A Starknet fact sheet states that the "time to inclusion" after the upgrade goes live on mainnet "will be under 15 seconds" meaning DApps will be able to confirm transactions on-chain within seconds.
Co-founder Uri Kolodny was a little more circumspect in an interview with Cointelegraph, stating that the upgrade has hit "triple figures" during testing so far.
If this throughput is mirrored in real-world usage — and high TPS is as much a function of demand from users as technical capability — the upgrade would be a huge leap for Israeli firm StarkWare's decentralized scaling network.
According to L2Beat, Starknet is currently processing just 1.79 TPS, meaning the upgrade could improve transaction speed by 56X or more. It would also easily outshine other Ethereum L2s including the OP mainnet (6 TPS), zkSync Era (8.63 TPS) and Arbitrum One (9.69 TPS), not to mention Ethereum itself (12.29 TPS).
But to put those TPS figures in perspective, it's still a lot less than Solana's 4127 TPS or Visa's 1700 TPS.
"Scaling has been the primary challenge that this ecosystem has been fighting with over the past several years," Kolodny said.
"We believe that Version 12 brings with it this Quantum Leap — in fact there are a whole series of leaps that will roll out through the summer we'll go through. But we are already in the triple digits for transactions per second."
Capacity is very different to usage however, and even after the upgrade if there are not enough users on Starknet that actually make 100 transactions per second, then the protocol will not run at 100 TPS.
Kolodny added that raw TPS is not the best metric of performance, given that complicated transactions are harder to perform than simple ones. But he said the upgrade also enables complicated transactions to make multiple calls "each performing separate logic from a separate contract."
"In terms of Cairo steps per second, we're observing an increase of at least something on the order of 50X compared to what we have today."
Zero Barriers podcast series: Crypto adoption fueled by ZK-rollups
The Quantum Leap upgrade does not solve the data availability problem faced by all ZK rollups. The issue is that there is not enough room on Ethereum to write back all of the required data for the transactions on L2s, which pushes up costs.
As of now, 90% of costs on Starknet are associated with Data availability cost to L1.
— Starknet (@Starknet) June 7, 2023
Ackktually, Starknet will be the first L2 to offer Volition, and reduce fees by up to 85% post its launch later this year.
Moreover, the implementation of EIP4844 on L1 will further lower it.
Kolodny said this would be addressed by the Version 13 Volition upgrade , which is due before the end of this quarter. It will give users granular control that enables them to store crucial or high value data on Ethereum, and less important data elsewhere. This is projected to cut fees by 85% and could pave the way for low fee micropayments or a boom in affordable and fast blockchain gaming.
One of the key components of the upgrade is Cairo-rs, which is a faster implementation of the Cairo virtual machine using Rust instead of Python from venture studio LambdaClass.
Founder Federico Carrone said Quantum Leap was a "historic moment" for blockchains in general.
"This release shows that it's possible to scale blockchains in a safe way thanks to STARKs and enables the creation of new applications that were impossible to think of a few years ago on top of a blockchain."
StarkWare previously announced on June 29 that its validity proof ZK scaling technology had now facilitated more than $1 trillion in transactions.
Magazine: Ethereum is eating the world — ‘You only need one internet’
"NFTfi,” on-chain derivative platforms, decentralized stablecoins and Ethereum L2s are four investment opportunities being looked at closely by one crypto investment firm.
Digital asset investment firms poured $2.7 billion into decentralized finance projects in 2022, up 190% from 2021, while investments into centralized finance projects went the other way — falling 73% to $4.3 billion over the same timeframe.
The staggering rise in DeFi funding was despite overall crypto funding figures falling from $31.92 billion in 2021 to $18.25 billion in 2022 as the market shifted from bull to bear.
According to a March 1 report from CoinGecko, citing data from DefiLlama, the figures “potentially points to DeFi as the new high growth area for the crypto industry.” The report says that the decrease in funding toward CeFi could point to the sector “reaching a degree of saturation.”
The near three-fold increase in DeFi investment is also a staggering 65-fold increase from 2020, at the start of the last bull run.
According to CoinGecko, the largest DeFi funding in 2022 came from Luna Foundation Guard’s (LFG) $1 billion sale of LUNA tokens in February 2022, which came about three months before the catastrophic collapse of Terra Luna Classic (LUNC) and TerraClassicUSD (USTC) in May.
Ethereum-native decentralized exchange (DEX) Uniswap and Ethereum staking protocol Lido Finance raised $164 million and $94 million, respectively.
Meanwhile, FTX and FTX US were the largest recipients of CeFi funding, having raised $800 million in January — accounting for 18.6% of CeFi funding in 2022 alone. The crypto exchanges, however, collapsed only 10 months later and filed for bankruptcy.
Other areas of investments included blockchain infrastructure and blockchain technology companies, which raised $2.8 billion and $2.7 billion, respectively, a trend that has remained strong over the last five years, said CoinGecko.
Henrik Andersson, the chief investment officer of Australia-based asset fund manager Apollo Crypto, says his firm is looking at four specific sectors within crypto as of late:
The first is “NFTfi,” which he said results from the combination of DeFi and NFTs. These are NFT projects that use DeFi to implement various trading strategies to earn passive income, or long or short-trade NFT projects, among other things.
I haven't bought any NFTFI token
— DeFI Saint (@TheDeFISaint) February 17, 2023
Just waiting for @nftperp to launch a token.
Anything perp derivatives outperforms other categories
Wen launch pic.twitter.com/yaW6HNkIGN
The second and third are on-chain derivative platforms and decentralized stablecoins, which Andersson believes have come about due to the collapse of FTX and recent regulatory action:
“In the light of the FTX debacle and regulatory movements, we have seen renewed interest for on-chain derivatives platforms, such as GMX, SNX and LYRA. All seeing record volume/TVL.Decentralised stablecoins such as LUSD/LQTY has also gained from the current regulatory environment.”
After @LiquityProtocol listed on Binance, combined with the recent crackdown by the SEC against Centralized Stablecoins has put some spotlight on this narrative.
— HC - Capital (@hc_capital) March 5, 2023
Let's check it out of TOP 15 Decentralized Stablecoins pic.twitter.com/XWJvWpaT4l
The fourth vertical Andersson cited was Ethereum-based layer-2 networks. “2023 is set to be the year for L2s, and in particular Ethereum L2s,” he said.
The chief investment officer explained that layer-2 tokens such as Optimism (OP) have performed well of late, particularly in light of the testnet launch of “Base,” which was created by Coinbase and is powered by Optimism.
GMX, SNX, LYRA, LQTY and OP are all investments of Apollo Crypto.
Related: Venture capital financing: A beginner’s guide to VC funding in the crypto space
Last month, cryptocurrency analyst Miles Deutscher predicted in a Feb. 19 tweet to his 301,700 followers that zero-knowledge rollup tokens, liquid staking derivative tokens, artificial intelligence (AI) tokens, perpetual DEX tokens, “real yield” tokens, GambleFi tokens, decentralized stablecoins and Chinese coins would perform well in 2023 on the back of heavy funding:
To make the biggest gains in crypto, you need to position yourself in the strongest narratives.
— Miles Deutscher (@milesdeutscher) February 18, 2023
Some of the trends outlined in this thread still have potential to generate 50x opportunities.
: 8 crypto narratives I'm eyeing right now.
Venture capital funding in the crypto space has, however, fallen over the last three consecutive quarters, amid tough market conditions.
According to statistics recorded this week on Tuesday and Wednesday, the layer two scaling project Arbitrum’s transaction count has surpassed Ethereum’s. On Wednesday, Arbitrum processed 1,090,510 transactions, compared to Ethereum’s 1,080,839 transfer count. L2 Scaling Solution Arbitrum’s Daily Transfers Skyrocket Layer two (L2) scaling networks have become popular over the last two years as secondary […]
Since The Merge, Ethereum’s onchain fees have been considerably lower. However, combined transaction volume on layer two (L2) chains Arbitrum and Optimism has outpaced Ethereum’s onchain transaction output. On Saturday, Jan. 14, 2023, Ethereum processed 1.10 million onchain transactions, while combined transactions on Arbitrum and Optimism reached 1.32 million for the same day. Rise of […]
After announcing the non-fungible token (NFT) marketplace seven months ago, the American consumer electronics and gaming merchandise retailer, Gamestop, has officially launched the company’s NFT market on Immutable X. In addition to NFTs, Gamestop’s marketplace also features Web3 gaming with games like “Gods Unchained,” and the DC Comics NFT trading card game “Hro.” Gamestop Reveals […]
While layer-2 protocols have been focused on “scalability,” layer-3 protocols would serve a much different purpose, says Ethereum co-founder Vitalik Buterin.
While Ethereum-based layer-2 solutions have been focused on hyperscaling the network, Ethereum co-founder Vitalik Buterin believes layer 3s will serve a far different purpose — providing “customized functionality.”
Buterin shared his thoughts in a Saturday post, providing three “visions” of what layer 3s will be used for in the future.
The Ethereum co-founder said a third layer on the blockchain makes sense only if it provides a different function to layer 2s, which have been used mainly to enhance scaling via zero-knowledge (zk) Rollup technology:
“A three-layer scaling architecture that consists of stacking the same scaling scheme on top of itself generally does not work well. Rollups on top of rollups, where the two layers of rollups use the same technology, certainly do not.”
But, “a three-layer architecture where the second layer and third layer have different purposes, however, can work,” said Buterin.
One of layer 3’s use cases would be what Buterin describes as “customized functionality” — referencing privacy-based applications which would utilize zk proofs to submit privacy-preserving transactions to layer 2.
Another use case would be “customized scaling” for specialized applications that don’t want to use the Ethereum Virtual Machine (EVM) to do computation.
Buterin also said that layer 3 could be used for “weakly-trusted” scaling through Validiums, a zk-proof technology. Buterin said this may be beneficial for “enterprise blockchain” applications by using “a centralized server that runs a validium prover and regularly commits hashes to chain.”
But, Buterin added that it’s still unclear whether layer-3 structures will be more efficient than the current layer-2 model when it comes to building customized applications on Ethereum.
Related: A beginner's guide to understanding the layers of blockchain technology
“One possible argument for the three-layer model over the two-layer model is: a three-layer model allows an entire sub-ecosystem to exist within a single rollup, which allows cross-domain operations within that ecosystem to happen very cheaply, without needing to go through the expensive layer 1,” Buterin said.
But, Buterin said that because cross-chain transactions can be executed easily and cheaply between two layer 2s that have committed to the same chain, building layer 3s may not necessarily improve the efficiency of the network.
Buterin’s comments on possible layer 3 use cases come as StarkWare’s newly produced recursive validity proofs appear to have possibly put an end to Ethereum’s scalability concerns.
Declan Fox, the product manager at Ethereum software firm ConsenSys, recently told Cointelegraph that “with recursive rollups and proofs, we theoretically can infinitely scale.”
These recursive proofs have been well tested in production, with StarkWare co-founder Eli-Ben Sasson recently telling Cointelegraph that its recursive proofs have rolled up as many as 600,000 nonfungible token mints in a single transaction on Immutable X and that 60 million transactions could soon be on the cards “with more engineering and tweaking.”
