The Ethereum Foundation made headlines earlier this year when it announced that the Ethereum Blockchain would transition from proof-of-work to proof-of-stake. Months later, the blockchain has completed its London update, and the Ethereum 2.0 upgrade, which will include the new proof-of-stake system, is scheduled to be finished in October. Ethereum and crypto enthusiasts, in general, have been excitedly anticipating this upgrade, and crypto-focused media has been covering all of the events building up to it.

However, blockchains are constantly changing. Why is this one getting so much attention? What will it signify for the rest of the industry once it's finished?

What is Eth 2.0?

Eth 2.0 is an Ethereum Blockchain upgrade that was announced in early 2021 but has been predicted for years. The upgrade's major goal is to address some of the Ethereum network's inherent issues, including scalability, energy consumption, and network power distribution. 

The most significant change brought about by this upgrade is the switch from proof-of-work to proof-of-stake consensus. A proof-of-work consensus is one in which users must digitally validate transactions in order to create new blocks and collect cryptocurrency rewards. It is, in essence, the method by which new cryptocurrencies are developed.

The difficulty with proof-of-work techniques is that they consume a lot of energy, which inhibits certain people from joining the network. A proof-of-stake consensus, on the other hand, asks users to stake their existing tokens as validators. As a result, substantially less energy is consumed, and more people are able to readily engage in the network.

How Will It Affect the Industry?

It's interesting looking at what ETH 2.0 means for the rest of the blockchain industry now that it's on the horizon. First and foremost, we must evaluate the impact on energy usage as well as the popularity of proof-of-stake techniques. PoS is widely employed in the business, with prominent blockchains like Bitcoin and Ethereum employing it. It is, however, divisive, particularly in terms of energy use. 

Tesla had previously announced the cancellation of its prior plans to use bitcoin as a form of payment for its products around the same time as Eth 2.0 was revealed, citing environmental concerns. Indeed, cryptocurrency mining has been discovered to consume as much energy as entire countries in a single year, with the PoS consensus playing a major role in this. 

The Ethereum Foundation stated in its release that the upgrade would lower the amount of energy needed by the blockchain by up to 99%. This transition and energy savings by a blockchain as large as Ethereum (the second most popular cryptocurrency behind bitcoin) may put pressure on other blockchains to follow suit. 

After all, how can the sector advance if it maintains its energy-intensive image? This setting will additionally emphasize network accessibility. The Ethereum blockchain will become considerably more enticing to those who do not have the finances or desire to invest thousands of dollars in mining equipment.

This, combined with a renewed focus on scalability and security, means that the Ethereum network is poised to accept a large number of new users. It could end up competing with the Bitcoin network, which has no intentions to ditch its own proof-of-work consensus system anytime soon. This could be a problem because Ethereum is its strongest competitor in terms of popularity and general usage.

Finally, the most important thing that Eth 2.0 will achieve for the industry is bringing in a new era of responsible energy usage, scalability, and easy access. This announcement was highly needed at a time when the sector is under so much scrutiny. We should expect to see more blockchains adopt the proof-of-stake mechanism in the future, and the proof-of-work method may become obsolete over time due to its high energy requirements.

In a few years, this shift within the industry will be credited specifically to the Ethereum 2.0 upgrade.

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DyDx is actively demonstrating a future in which Ethereum won’t be under the choke-hold of scaling issues. The resulting unbridling would open unimagined possibilities, accommodating innovations from the hyper-growth within the Ethereum ecosystem.

Trading is gradually being decentralized and migrating to able layer-2 containers for better execution and user experience.

DyDx is a crypto derivatives platform presenting several incentives to participants. On the table, traders can margin trade besides accessing other exciting features as you would expect in any other ambitious DeFi protocol. In DyDx, the setup is as a typical DeFi pool. The main difference is the offloading of execution from the base layer to layer-2. This change results in negligibly low Gas fees and lightning-fast settlement.

This is the kind of speed you would expect in Binance and experience in Arbitrum or Uniswap on Optimism. Settlement is quick—and this is precisely what the trading community wants to “feel.” However, unlike Binance, a trader won’t have to take a selfie as part of the verification. All that’s needed is a MetaMask wallet, and everything is good to go.

Powering DyDx is StarkEx by Starkware using ZK-Rollups—(inaccessible to U.S. users).

ZK-Rollups use rollups—just like Optimism—but is not optimistic, meaning that the protocol wouldn’t rely on or trust validators to “act right” and not include a fake transaction in a block.  In place of trust is zero-knowledge-proof mathematics allowing for automatic transaction validation—an effective, privacy-enhancing data integrity measure.

While a trader could mention BNB or FTT as a reason for sticking with Binance or FTX exchange, the rollout of the DYDX governance token is the game-changer. DyDx Exchange borrowed a leaf from Uniswap—the world's largest DEX. There will be 1 billion DYDX tokens as total supply. Out of which a big chunk will be allocated to the community comprising liquidity providers, active traders, stakers, and other stakeholders—it's DeFi, after all. The fuel depends on community participation.

Five hundred million DYDX tokens will then be distributed to early investors, the foundation, the team, consultants, employees, name them all.

Like Uniswap's UNI, DYDX will strictly be a governance token where token holders would help shape the project's trajectory. Holding DYDX and surpassing the threshold requirements would allow token holders to achieve utility functions. They can set risk parameters for the layer-2 protocol, vote for the inclusion of new token listing, govern underlying contracts, vote on market makers that can be added to the liquidity pool, or define safety staking pool payouts if there are losses.

As they hold DYDX tokens, they will, in turn, receive retroactive mining rewards. However, only active traders qualify, and rewards depend on their activity levels--trading rewards—including trading discounts-- to encourage the use of the trading portal—also depending on trading activity and volumes--and receive liquidity provision rewards.

This program will run for five years, during which participants can supply liquidity—provided they meet the protocol's set requirements. All rewards, it should be mentioned, would be distributed after 28 days. DyDx states that the goal is to build liquidity over the long haul steadily.

DyDx is offering niceties while not disappointing on their product offerings, a reason why participation has been exploding in recent weeks. As of writing on September 29, DyDx has a TVL of $653 million, rising 26 percent week-to-date and only tracking Arbitrum with over $1.3 billion under management. The protocol's TVL has more than 20X from December 2020—thanks to Layer-2 integration and the introduction of the DYDX token. Besides the rapid expansion in TVL, there are over 40k cumulative traders. Most of them entered the system after August—during which over 8.5k joined.

Despite all that DyDx Exchange is offering and demonstrating, DYDX token holders don't receive a share of trading fees—a big concern for one observer. What's more, there is no plan encoded for the DAO to allow fees distribution to token holders; neither is there any other use case nor buy backs of the token. Instead, all fees are distributed between DyDx Foundation and the Exchange.

Therefore, while he admits the benefits of DyDx—for instance, its ingeniously crafted liquidity programs--and its position as a leader in Layer-2, DYDX—at spot rates—is over-valued. Accordingly, it might just under-perform competitors, for example, the Perpetual Protocol or the Injective Protocol, which he argues have better rewarding schemes.

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Did you hear the news? Finney is about to tackle OpenSea and the Ethereum blockchain. If you want to be prepared, follow this step by step guide to Metamask.

We found this easy to follow guide from @hodldogofficial on YouTube and thought it was too good not to share. Don’t forget to smash the like button and let him know Finney sent you.

Now that you’ve got yourself a MetaMask wallet you’re going to need to get yourself some Ethereum, make sure you purchase enough ETH to cover the cost of your NFT as well as the gas fees included to process the transaction. Thankfully our friend @hodldogofficial has a video on that too..

Finally you aught to know about the burn mechanics of Finney on ETH. You’re going to be able to upgrade your Finney’s, as you’ve seen before. You can now burn any 3 Finney’s and land yourself an ETH BareMetal Finney which will be 1 of 6 rarities.

Burning two BareMetal Finney’s will land you a surprise… If you’re going to try get yourself that surprise Finney you’ll need a total of 0.36 ETH + the suggested gas fees.

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The path to the moon isn’t necessarily straight.

Ethereum can soar to $10k, perhaps even $40k—or tank to $1k--who knows?

What we know for sure is that the rally (or sell-off) won’t happen overnight or be in perpendicular lines.

In the finance world, unless something extraordinary happens, FOMO-inducing rallies don’t print out in bursts.

Needless to say, market-wreaking drops are typical, and subsequent losses can be devastating. It transpired in January 2015, when the SNB decided to adopt negative rates and remove its peg with the ECB. The resulting was unmitigated chaos.

Losses of such magnitude have also happened in crypto.

Turning back the clock, the bear market of 2018 is an example. For ETH, BTC, and ICO-token maximalists, it was humbling and scary. Ethereum prices tumbled from a record $1.4k to $80 for an over 90 percent drop.

Analysts celebrated the move saying the elimination of speculators from the equation allowed for normal price discovery. Four years later, Ethereum is stronger, trending at more than double 2018 peaks at around $2.9k.

Even still, Peter Brandt is not confident of the current state of Ethereum though he isn’t shorting. He recently picked out a head-and-shoulders pattern in the daily chart. Ordinarily, when this candlestick arrangement prints, it signals peaking prices. And indeed, the rally of July through to September 2021 is capped as ETH bulls appeared limited, exhausted even.

The pullback of September 7 was hinting, while the confirmation of September 20 threw ETH traders and holders into disarray. Out of this, Peter remains skeptical of ETH’s strength, predicting that the coin may post even deeper losses in the medium term. Despite his preview--and perhaps to prevent the backlash from permabulls always set for the moon--, Peter clarified that he wasn’t a hater but a neutral observer.

Indeed, prices printed lower lows as ETH broke below $3k to retest $2.8k—a critical support line previous resistance. Despite the deleverage and dump, ETH prices quickly snapped back to $2.9k. The result, at the time of writing, is a double bar bullish reversal pattern bouncing off from $2.8k.

And with this, Peter Brandt said the reversal of prices is already trapping bears.

The technical analyst analyzes that the correction from around $3.6k and retracement from September 2021 highs “washed out weak longs” and might have trapped bears. However, even with his skew and support of ETH bulls, it is clear that prices pierced below the primary support line at $3k and even retested $2.8k.

The short to medium-term trajectory depends on subsequent price action, as the chartists say—and as expected. Only time is what Ethereum requires at this juncture.

Nonetheless, the inconsistency of Peter and the inability to confidently define the short-term trend calls into question the reliability of technical analysis in crypto trading.

Indeed, in regulated markets such as the stock exchange and pretty much every traditional market, chartists and technical analysts can provide guidance and satisfactorily back up their stance.

In Crypto and Ethereum’s case, the community is vicious and marked with tribalism. Of course, if Peter predicts doom and gloom for ETH, saying the coin would go to zero, the analyst might have to block mudslinging moonboys.

Therefore, reaffirming their skew and fanning the long bubble only seems to be the safest bet for Peter—a shield from needless insults—even though his prediction isn’t financial advice.

The technical analysis depends on mathematics and may or may not be lagging—depending on how analysis is done. Price action traders might enter or exit the market promptly, making money. Meanwhile, those relying on technical indicators could miss on opportunities, exposing themselves to market risks.

Since the assumption in technical analysis is that the market is efficient and history could repeat itself, it becomes even riskier in crypto because of its nascence, and well, the market remains under-regulated. That’s not forgetting the hype element—think Dogecoin or SHIBA-INU mania, for example—rendering technical analysis useless.

Ethereum is a six-year-old project and is still in development. Day and swing traders might get lucky from time to time, riding on short-term FOMO or FUD.

The real winners in Ethereum are HODLers. Those diamond hands who think short-and-medium term volatility count for nothing.

Which side do you pick?

It is July 2018, and Vitalik Buterin thinks centralized exchanges “can go burn in hell as much as possible.”

Even then, those were strong words. The co-founder was nuanced in the same interview, acknowledging why it is harder for users to exist in purely decentralized or centralized systems.

Each system provided advantages, and they are mostly symbiotic, ensuring that the end-user easily transits in and out of the developing and nascent cryptocurrency sphere.

A look back, and DeFi is the name, and Layer-2 is proving to be yet another challenge for the gate-keepers of centralized exchanges.

For all we know, and cycling back to Buterin, new users would find it strenuous to plug themselves into the world of crypto without exchanging fiat for crypto. Centralized fiat-to-crypto ramps serve the critical role of onboarding users to the exciting world of crypto either for investment, experimentation, or HODLing.

Accordingly, while they may seem evil and unnecessary for hardliners and Ethereum maximalists, crypto wouldn’t be as round as it is without their liquidity and user onboarding.

However, while they play a critical role, their purpose is threatened by the growth of DeFi and the improvement in Ethereum throughput facilitated by the increasing adoption of Layer-2.

In an ideal situation, centralized exchanges would onboard, allowing users to acquire ETH, USDT, BTC, or any choice digital asset. After this, their role ceases. Once the coin is transferred to a non-custodial wallet like MetaMask, a user is free to do whatever they wish in the expansive and interconnected DeFi—across different chains in some cases. They only cycle back later to cash out or even use a peer-to-peer exchange instead of a centralized exchange.

This utility is why DeFi remains a threat, growing and sucking out liquidity from what would otherwise be lining up pockets of Brian Armstrong, Changpeng Zhao, and many more. The growth of DeFi, specifically in 2020, saw more analysts calling for the quick end of CEX, only forgetting their critical initial role of adding more fire to the DeFi fuel by bringing more users on board.

But even amid the rapid expansion, Ethereum—the home of DeFi—faces scaling challenges. The inability of Ethereum to process not more than 15 TPS proved limiting, causing congestion, which in turn saw fees rise to unmanageable levels. Despite the irresistible features of DeFi, for example, swapping, users couldn’t find the need to exchange a token for another while paying a fortune as network fees.

However, this seems to be coming to an end and being managed by the adoption of Layer-2s. Thing is, Layer-2 solutions are not perfect, but this is what we have now, and it is working. Re-routing transactions from the base layer to an off-chain “container” to ease the main layer is relieving. Fees remain higher, and the impact of Layer-2 hasn’t been felt as expected, but this is a good problem for Ethereum. Demand is high, and ETH holders are bullish because of this.

The widespread use of DeFi and integration of main players like Uniswap and SushiSwap present a bigger threat to centralized exchange than ever before. Interestingly, this was predicted by Vitalik in 2018. During the same interview wishing demise for centralized exchanges, he talked about the efficiency of using off-chain/sidechains to scale the base layer. Then he said these solutions can be as “efficient as centralized servers,” meaning user experience would be enhanced due to lower on-chain fees and faster settlement.

This is what the Ethereum community members find themselves with via DyDx, Loopring, Arbitrum, and more. These layer-2 solutions and exchanges promise to scale the base layer, and trading fees are negligible through their channels. Settlement is faster like it is transacting in centralized exchanges, yet the security is based on the main layer, with all operations done in a non-custodial wallet.

And the demand—the migration—is there for everyone to see. From July, there has been a 10X jump in Layer-2 TVL to $3.2 billion, with the majority held in Arbitrum. What’s even more intriguing and signaling interest is the narrowing of the Polygon—Layer-2 gap. While Polygon has a TVL of around $4.14 billion—in operation for longer, the surge in Layer-2 TVL makes for a pulsating competition in the days ahead. Then again, only launched recently, DyDx—a Layer-2 exchange-- now manages over $410 million complementing efforts on Loopring and DeversiFi.

Are CEXes beginning to “burn”?

DeFi TVL continues to grow on several L1 platforms. The new generation blockchains like Solana, Avalanche and Fantom have seen exponential growth of TVL due to high liquidity mining incentives. While these L1 blockchains have attained investor attention, Layer 2 TVL on Ethereum also crossed $3b some days ago. Presently, Ethereum Layer 2 TVL stands at $3.5b (257%+ up in the last 7 days) as per L2Beat, an L2 research platform and Arbitrum contributes almost 75% TVL ($2.6b) of Layer 2. Maximum capital inflow happened through Arbitrum bridge in the last week continuously. Arbitrum is a Layer 2 platform made by New York-based Offchain Labs and they launched mainnet earlier this month after a lot of testing. 

Ethereum Layer 2 TVL from L2Beat

What is Arbitrum?

Ethereum gas fee is skyrocketing in recent times and the base layer scalability issue is unsolved even after many on-chain upgrades. EIP-1559 implementation is often making ether daily issuance rate negative but it could not create a great impact on rising gas prices. Layer 2 protocols are immediate solutions to bring scalability to Ethereum and Arbitrum is gaining momentum due to its novel approach of bringing scalability. 

Arbitrum uses Optimistic Rollup protocol. It executes transactions outside L1 but posts transaction data on L1. As the transactions are secured by L1, it inherits security from L1. The official blog post says: “An Arbitrum Rollup chain is a super scaled Layer 2 (L2) chain. Like all Rollups, the Arbitrum Rollup chain is built on top of and secured by the Ethereum blockchain, and all transaction data is logged on Ethereum. From a user and developer perspective, interacting with Arbitrum feels exactly like interacting with Ethereum.” Arbitrum has its own custom virtual machine which is called the Arbitrum Virtual Machine (AVM). AVM provides the execution environment for Arbitrum smart contracts. Making a Rollup fraud-proof is very important. The correctness of Arbitrum needs only one honest party validating transactions. The protocol guarantees that a single honest validator can bring the correct outcome even if there are bad actors in the system.

Using Arbitrum

To use Aribitrum, your fund needs to be moved from Ethereum wallet to Arbitrum L2 using their bridge. You need to pay a regular Ethereum gas fee for doing that transaction. Once your fund is moved to L2, you can swap on Uniswap or Sushiswap with a 50X less gas fee than Ethereum mainnet. Withdrawal from L2 takes 7 days as of now. You can check this guide regarding adding Arbitrum to Metamask.

Image Source - Arbitrum ecosystem

At the beginning of 2021, Binance Smart Chain, a Go Ethereum fork, attracted a lot of DeFi TVL. In the spring season, Polygon emerged as a key EVM compatible chain. While Polygon derives its security from Ethereum, it is more like a commit chain. The True Layer 2 ecosystem of Ethereum was at a very nascent stage even some months back. Optimism and Arbitrum aim to change the game and obviously, Arbitrum has got the better momentum now. It is important to note that Arbitrum has no token and there is no additional  liquidity mining incentive on this L2. Liquidity from the base layer is migrating due to Arbitrum's efficient platform and lower transaction fees. Arbitrum is interoperable with the main chain and it provides scalability without compromising with decentralization or security. The user experience on Arbitrum can be similar to using BSC or Polygon but from the developer perspective, deployment is easier as the L2 supports unmodified EVM contracts. Uniswap and Sushiswap’s support to Arbitrum has already boosted liquidity. While transacting on Arbitrum, you pay the gas fee with Ether and it creates a user experience of the main chain. The opportunity seems to be huge. The popular Ethereum DAPPs have just started to support this new L2. Ethereum killers are surely going to have tough competition from the L2 landscape of Ethereum now. Arbitrum autumn has arrived and touched the plains with a rosy hue.

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There is an enormous demand for ETH. In August, Joe Lubin—the billionaire co-founder of ConsenSys noted that the currency is now transitioning into ultrasound money.

Bitcoin is “sound” money and a store of value in crypto circles, at least as things stand.

The Ethereum community is now hell-bent on making a mockery of Bitcoin and releasing a better version of money—a currency that is ultrasound and resistant to the value erosion due to inflation.

Their hopes are anchored on the network’s series of upgrades; all meant to reduce coin issuance amid an expansion in on-chain activity.

Undoubtedly, Ethereum is the most active smart contracting network. There are limits, of course, on throughput. Since there is more to be reaped from connecting to its well-developed infrastructure and becoming part of the vibrant web of an interconnected web, more are overlooking the scaling challenges and are keen more to launch from an established brand.

But just how popular is Ethereum?

There are over 200 DeFi projects—the most, and more than triple those in Polygon and the Binance Smart Chain (BSC). This is excluding the popularity of NFTs and the level of demand for assets minted on Ethereum rails.

Boxing in scaling, the competition for block space has seen fees soar as high as $100, causing congestion.

The rate of demand further coupled with on-chain mechanism which rid the bidding-base fee market for a fixed price and burning via EIP-1559 is the primary reason why ETH holders are permabulls.

According to trackers, to illustrate just how active Ethereum is and the number of ETH destroyed since August 1 when EIP-1559 was activated, over $931 million worth of ETH has been burnt. That’s over 290.29k ETH at the time of writing. Roughly 5 ETHs are taken out of circulation every minute. And this is getting even more interesting:

The popularity of NFTs—not DeFi—is the primary reason why most ETHs are being permanently taken out of circulation. 

As per trackers, over 41.36k ETH have been destroyed since burning began, more than the activity generated from simple ETH transfers of which normal fees are charged. In mid-September, 25.47k ETH had been burned from ETH transfers. This is half the amount of ETH burned from OpenSea alone.

Notably, due to USDT minting on-chain, over 14k ETH has been destroyed as a result. Adding USDC to the equation—and excluding the on-chain DAI brings burned ETH to over 19k.

This rate is astounding.

Based on projections, the Ethereum network would soon be destroying 2.7 million ETH every year, inching closer to the 5.4 million ETHs issued every year.

The moment there would be more ETH burned than issued, the coin would officially be the official ultrasound money, better than gold and BTC.

In this case, there would be little reason not to expect ETH to surge upwards of $5k, even doubling to $10k in the months after new highs are printed. This is assuming the block space demand remains as it is.

And why not?

Crypto, DeFi, NFTs, and blockchain are slowly permeating into the mainstream, with more everyday users aware of the technology’s application and its finance revolution.

Given the pace at which NFTs popularity is burning ETH, the increasing application of ERC-721 and other standards in the multi-billion gaming, innovation in metaverses, and in eCommerce could see even more ETH destroyed. This would be regardless of whether NFTs are moved off-chain to layer-2 like ImmutableX. Settlement will still be in ETH, meaning more coins would be sucked out of circulation.

Meanwhile, over $27 billion of ETH is officially staked in the Eth2 Beacon Chain at the time of writing. These are coins that would be locked for at least one year until the merger happens—that’s when the Proof-of-work machine is shut down for validators.

Validators receive near risk-free yields since Ethereum is one of the most secure networks and miles ahead of other chains in competition. As a hint of just how on-demand ETH staking and validator requirements are stringent, it now takes over a week for a validator to be approved. The queue is growing longer with each passing day and would even take more time after merge when APY shoots, drawing stakers.

So much demand for “fuel” that’s on the path to be ultrasound money. Will ETH be the high paying alternative to treasuries?

We all know how crazy the fees are in Ethereum.

No need to regurgitate everything we already know. It is evident that Ethereum is limited on throughput, yet established projects aren’t moving away.

Judging from present events, intensive dApps are ready to port over to scaling solutions but still root back to the mainnet. Therefore, the prospects of them moving out and establishing themselves elsewhere looks slim to none. 

Ethereum is king.

It reminds one of Denzel Washington’s signature line in the epic crime drama American Gangster:  “Blue magic, it’s a brand name.”

In the dApp world, Ethereum is DeFi, NFTs, and everything in between.  It’s a brand name. Everything else is a “Red Magic”—and whether it will last is doubtful.

The crypto world has no allegiances.

At the moment, though, the Ethereum world is fixated on Arbitrum. Its developers, Offchain Labs, heeded Vitalik Buterin calls and are launching ahead of Optimism though they began development later.

The team also received $120 million on launch day in a Serie B funding round where Mark Cuban participated. What’s more, there is a long list of crypto funds, including Lightspeed Ventures backing the Layer-2 solution.

Mark Cuban thinks Ethereum would be a force only if fees were lower. He puts his hand where his mouth is, walks the talk, and is part of the solution. From an investor’s angle, this is a massive endorsement of Ethereum and Arbitrum.

Let’s also not forget that Ed of Offchain Labs is “straight outta the White House,” and he chose Ethereum.

For those wondering how Arbitrum is differentiated from Optimism, the simplified answer is in the details. Arbitrum seeks to ease the mainnet—and not ironically clog it with intensive fraud-proof resolution—by finding the exact point of disagreement over the transaction history. Optimism, on the other hand, is adopting a more holistic approach to fraud detection. This could possibly, in the months ahead, strain the underlying network.

Optimistic Rollups, as the name suggests, is “optimistic.” That is, Arbitrum and Optimism rely on validators to be trustworthy and publish valid transactions. If there are doubts, these two provide a challenge one week period.

However, note this though, if validators collude to approve a wrong transaction, it would be included in a block and verified. Enhancements looking to resolve this inherent flaw—choices had to be made—are via ZK-Rollups. Smart contracts implementation is a challenge, but the development team could crack this by December this year.

Because of Arbitrum style of fraud detection, the solution is rapidly gaining traction, presently locking over $2 billion in TVL. Besides, there are tier-1 DeFi projects already launching on Arbitrum. Aave, Alchemy, AnySwap, DODO, Coinbase Wallet, and many more are already live. Soon, Uniswap might also launch on Arbitrum.

But for folks looking to tap on Arbitrum near perpendicular surge in TVL, is there a token to invest in?

No.

Arbitrum had to issue a fraud alert on the same.

It seems like folks are getting scammed, buying fake Arbitrum tokens, and breaking their bank accounts.

To clarify, any Layer-2 using Rollups as their core technology won’t be minting their tokens. In Optimism and Arbitrum’s cases, their smart contracts reside in Ethereum. As such, they don’t actually use their currencies like Polygon (a sidechain). Instead, they rely on ETH for Gas payment.

While there is no way ordinary investors can make money from Arbitrum, at least they can transact cheaply, saving thousands of dollars every week. Arbitrum is highly scalable, and by bundling transactions Offchain and confirming them every six minutes or so, DeFi users and active Ethereum users who have bridged to Arbitrum are having an awesome time.

The only concern, for now, is the possibility of censorship and even the unlikely scenario of the developer “running away” with billions. This is a decentralization question that must be addressed.

To execute, Arbitrum utilizes a sequencer to batch transactions. This sequencer is centralized. Therefore, it can be used to censor transactions, though the user remains in control of funds and can at any time exit back to the mainnet.

Additionally, the entire Arbitrum smart contract is upgradable to allow future refinements on further cost reduction and much more—WITHOUT time delays. It means the Arbitrum development team, can at present, decide to do whatever it wants—even locking the billions of assets under their control—and messing up everyone.

An independent member of parliament in Panama is forwarding a proposal to make BTC and Ethereum one of the country’s acceptable payment methods. The bill defines BTC and ETH as crypto assets and options for payments that are not mandatory to use.

There is a lot of buzz around this bill coming hot on the heels of El Salvador making Bitcoin legal tender.

It also coincided with the ETH flash crash of September 7 (just had to mention this).

The buzz in all this is the significance of Panama in global finance.

Panama is a tax haven, and most of its economy relies on the Panama Canal. The lawmaker explains that almost everything economic revolves around banking, and crypto might just help in changing the country’s fortunes.

In a tweet, here is what the lawmaker says (translated):

“Today we present the Crypto Law. We seek to make Panama a country compatible with the blockchain, crypto assets and the internet. This has the potential to create thousands of jobs, attract investment and make the government transparent.”

As is evident, the Crypto Law is about making Panama "crypto ready" while also creating jobs, remaining attractive to investors, and making Panama's government transparent—which I highly doubt—and promoting inclusivity—which crypto does perfectly.

Panama has been accused of being a Laundromat—Panama Papers? Anyhow that's beside the point.

There has been a debate that El Salvador's decision to legalize Bitcoin won't have an effect. The country is "too poor," and Nayib Bukele is a dictator who has rendered the judiciary dysfunctional by installing loyalists; critics slam the move.

However, their incorporation of BTC into their financial system is a historic feat. This decision has already causing reverberation across the financial and legal worlds. It could potentially be the first chip to fall in an expected Domino Effect across Latin America and other emerging economies.

Panama could be the next country on focus. Its economy is 5X that of El Salvador, and the poverty level remains low at about 12 percent.

Therefore, the Crypto Law bill is of great significance in blockchain and crypto, a reason why it was received with excitement. It also fits for Panamians because, albeit existing development, most of its 4 million people are still unbanked despite the government putting attractive legal and tax structures qualifying it as a tax haven as aforementioned.

Sources within Panama say the lawmaker is an independent member of parliament who vehemently opposes the ruling party. Although it might pass, the ruling party has majority control in the legislature. Accordingly, they might need some convincing for the bill to sail through.

Tough as it may, crypto bears properties making it superior to traditional payment rails, mainly in transaction speed settlement. If eventually Ethereum is acknowledged as a desirable platform that can provide power payments, ETH would demand more.

Ethereum developers recently activated London, effectively making ETH ultra sound money. Supporters say with the continuous burning of ETH; the coin would be scarcer than Bitcoin and gold, lifting the coin to new valuation. Although fewer companies hold ETH than they do Bitcoin, the wave is coming. The first Hong Kong-based company, Meitu, has already been ramping up ETH, making them part of their reserve.

On September 8, a Standard Chartered report said ETH is a global facilitating agent comparing it to the system powering credit companies. As a launchpad, the British bank is more bullish on ETH than BTC, expecting the coin to reach $35k eventually. This is a 10X projection from spot rates.  Lofty as it may, a surge even to $10k would narrow the gap, accelerating the expected flip as ETH dislodge BTC.

This is not forgetting scaling options on the table to help lower transaction fees and make ETH a real currency. As it is, this won't be workable.

Going forward, the crypto revolution in Central and South America is attractive and precisely what the community wants to see. The evolution of what's defined as money is malleable, changing from time to time.

Governments won't easily give up control of money, but the significance of crypto can't also be downplayed—or dismissed. There are benefits to be reaped specifically for the masses, not the elite—a win for Satoshi, Hal Finney, the Cypherpunks, and early crypto adopters, including Vitalik, who predicted what we now have.

“Wealth flows from energy and ideas.” – William Feather

Internet was created to connect computer systems worldwide and it has revolutionized the communication system. It has really opened a plethora of interactional opportunities for individuals and their computational devices irrespective of the geographical locations. While providing a mammoth broadcasting capability, it has also delivered a medium of collaboration to us. But does the internet need improvement in transferring monetary value? The corporate internet giants are obviously making a lot of money but how easy it is to transfer money online? The checkout process while transacting is often difficult and you need to enter your card details. There is no assurance that your local card will be accepted worldwide. Failed transactions happen frequently and your confidential financial details can be leaked anytime to cause nightmares for you.

Let’s talk about more complex transactions like micro-payments, monetising your social media posts, peer-to-peer transactions without any intermediary. Internet is really horrible in this. Think about transferring ownership of your artwork or your real estate online! You may be able to do it after a lot of hassles but paper works must be done to comply with the law of the land and you may find the physical process more convenient rather than opting for the online process.

Along with time, the internet has also evolved. The success of Web 2 came through user-generated content and participatory culture. The wave of Web 2 has not died down but we have started to see a paradigm shift in internet applications. Web 3 movement seems to be more disruptive as it is leading us towards trustless, censorship-resistant and open networks. It is possible to incentivise the long trail of stakeholders associated with work by using a decentralized ledger that offers transparency. Yes, we are talking about blockchain technology now. Bitcoin was the first peer-to-peer permissionless digital money but the transfer of value conducted on-chain through smart contracts was not possible before Ethereum. It really came as a new concept but blasted the ‘digital economy’.

Vitalik Buterin published the whitepaper of Ethereum in 2013 with the primary motto of building applications. Ethereum blockchain was launched in 2015 after successful crowdfunding and it established itself as the second-largest cryptocurrency as per market capitalization very fast. The Initial Coin Offering (ICO) boom happened in 2017 and Ethereum became the preferred method for fundraising. The ICO boom did not last very long due to various scams and failures of the startups. Ethereum developers continued to innovate with various financial applications. Decentralized finance or DeFi originated on the Ethereum blockchain. Various DeFi applications locked billions of dollars and surprised the world with astounding growth. The growth of prediction markets like Augur, Omen, Poly Market etc. also took the media by storm. All traditional financial concepts are being replicated on the Ethereum blockchain in a decentralized way nowadays.

Currently, we can see NFT mania! NFTs are getting amazing investor attention due to their verifiable authenticity and ownership on the blockchain. The collectors are liking the concept of verifiable scarcity and the NFT market is growing like a rocket. Whatever you do on the Ethereum blockchain, you spend ether (ETH) that is the native cryptocurrency of the blockchain, so ETH becomes your money. Stocks, real estate, precious metals, fiat currencies and anything under the sun are being tokenised on the Ethereum blockchain. Ethereum, often dubbed as ‘the world computer’, has always remained imaginative. Now it is proving to be a battle-tested medium to settle values with the support of its broad Layer 2 ecosystem and EVM (Ethereum Virtual Machine) compatible chains. Everything is built around Ethereum.

“It's clear to me now that Ethereum is the new currency of the Internet. It's way ahead of where Paypal was in its day, and it's much more exciting to its customers than Paypal ever was.” – Gil Penchina

The network effect is a phenomenon where the increased number of participants improve the value of goods or services. The internet can be an ideal example of the network effect. Initially, it was used by few users but slowly it expanded its reach as more users gained access to it. Ethereum’s network effect flourished in a similar fashion. The development, improvement and continuous new uses cases of Ethereum drew more users to connect, transact and settle values on-chain. The game has just begun! Ethereum has solved the issue of the transnationality of electronic cash. The ‘global settlement layer’ is already settling financial value across national borders freely. The significance is disruptive internationally. The price volatility of ether and high gas fees remain as challenges but the store of value should become stable in the long run and positive network externalities will help that.  The economy of the internet is finally showing signals to be de-regulated. The road will be full of thorns and spikes but we need to overcome it to obtain a transparent, censorship-resistant virtual commerce for the benefit of mankind. Embrace Ethereum and experience the internet of money.

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The daily issuance of ether (ETH) is often becoming negative post-implementation of the Ethereum network's EIP-1559 upgrade nowadays. The upgrade brought changes to the monetary policy of Ethereum by burning a part of transaction fees in every new block. EIP 1559 was activated on August 5 and about 258,955 ETH has been burnt till now. The burning rate of ETH as of now is 5.10 ETH/min in the last 35 days. While this establishes ETH as a sound store of value, the gas fee issue of the blockchain remains unsolved. With the growing popularity of NFTs, the fees have again gone out of control. Ethereum is the most widely used blockchain now and the base layer is really congested. Many Layer 2 protocols have come up recently with the objective of scaling up Ethereum and Optimism is one of them. The project was founded by some former Plasma group researchers in 2019 and they started their research on Optimistic Rollup, an Ethereum scaling solution. The organization raised significant capital from a few VC funds but remained focused on open-source developmental work.

“Optimism is a Public Benefit Corporation (PBC): a for-profit corporation intended to produce a public benefit and operate in a responsible and sustainable manner. This means that we are obligated to balance the pecuniary interests of our stockholders with the best interests of those materially affected by our conduct, as well as a specific "public benefit charter" we incorporated with.” – Optimism Philosophy

What is Optimistic Ethereum?

Optimistic Ethereum is an Optimistic Rollup based scaling solution that stores funds in a smart contract on the Ethereum blockchain. The end users can enjoy cheap and fast transactions on Layer 2 which acts like a ‘parallel universe’. The Layer 2 structure can provide up to 200-2000 transactions per second (TPS) as it takes the transactions off-chain and thus provides better scalability. Optimistic Virtual Machine or OVM plays a very significant role by making anything possible on Ethereum mainnet possible in the OVM. Moving a DAPP from the Ethereum base layer to L2 becomes a simple matter of deployment due to the presence of the OVM and this is the biggest accomplishment of Optimism. 

The Alpha launch

Optimism launched its Alpha Layer 2 solution for Uniswap via the Optimistic Ethereum (OΞ) mainnet in July 2021. Unlike L1, the transactions on the Optimistic Ethereum get confirmed instantly. How much can Optimistic Ethereum reduce your gas pain? You can check with an Etherscan transaction link or by selecting a preset transaction here.

“Imagine not needing to make any changes to your solidity smart contracts to have a DAPP work natively on an Ethereum L2 with security from Ethereum, massive scaling, no data availability issues, and synchronous interoperability with other DAPPs on L2." - Hayden Adams, Uniswap Founder & CEO

Savings with Optimism - Uniswap v3 swap | From Optimism gas comparison calculator

Using Optimistic Ethereum

To use Optimism, the network will have to be added to your wallet firstly. You can easily add the network to your Metamask by using this tool or you can do it manually. If you have used any EVM compatible chain like Avalanche, Polygon or Fantom with Metamask earlier, the process should be found smooth. After adding Optimism to Metamask, you need to deposit funds from Ethereum via this bridge. This bridge or gateway transfers your fund from Ethereum to Optimism. You need to pay a regular Ethereum gas fee while depositing (all tokens are not supported yet). After depositing the fund, you can check the transaction details in Optimistic Etherscan. Soon, your funds will arrive on Ethereum Layer 2 – Optimistic Ethereum and you will be able to conduct lightning-fast swaps on Uniswap.

Uniswap connected to Optimism – Screenshot by the author

Optimism delivers Web 2 experience in the environment of Web 3. The network is still in a nascent stage but it is working fine. Uniswap Optimism analytics can be found here and the network is drawing decent volume. 1inch Exchange and Synthetix are also supporting the Optimism network. Optimism has $143M TVL including all DAPPs currently as per L2BEAT, a research website for Ethereum Layer 2 scalability solutions. Withdrawal from L2 to Ethereum L1 currently takes 7 days but improved solutions are coming soon. It is undeniable that Ethereum has established itself as the value settlement layer as almost everything in the decentralized finance world is built around it. Optimism can provide a smooth transition from the base layer of Ethereum as it can be considered as an extension of the blockchain and it derives security from the base layer. Will Optimism emerge as a new scalability stack for Ethereum like Polygon? It is too early to have a verdict but the Ethereum developers have already started to deploy their DAPPs on Optimism and the project seems to be committed to consistently demonstrate L1 compatibility.

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Two things happened this week:

• Ethereum broke past stubborn liquidation levels; and

• NFTs have asserted their status once more (everyone saw this coming).

Then,

We could have talked about Gas, but it isn’t news anymore, right?

Everyone seems to be comfortable shelling $70 for a single transaction in Ethereum. Cheap? Absolutely. Crypto folks are super rich.

Only that not everyone is impressed.

High trading fees mean inactivity from scaring away newbies—eventually proving counterproductive.

Even so, the big news around NFTs—which is blamed for the chaotic scenes around Gas—is the possible entry from GameStop.

So far, nothing official from GameStop, but we know that they are “heavy” in NFTs and want to connect the old and the modern.

The experimentation is because they had a massive windfall back in Q1 2021, thanks to the massive short squeeze that lifted their valuation to billions. While a 10X rise is nothing new in crypto, such rapid valuation expansion is rare in traditional circles. A miracle—courtesy to the WSB moonboys of Reddit—did spark innovation in GameStop, and here we are.

Back in late May, GameStop “silently” announced their presence in NFTs. They had all the rosy, flowery terms to describe NFTs. Immutable, scarce, digital, blockchain, and all were sprinkled right there on the official GameStop NFT site. 

Their official statement said they were keen on “changing the game” and giving power back to the gamer, the content creator, and to collectors.

Alongside this announcement was their desire to on-board gifted solidity developers and other--“exceptional engineers (solidity, react, python), designers, gamers, marketers, and community leaders.” Those interested would drop their resume in the email provided.

Three months down the line, they appear to be walking the talk—and this is where it gets interesting.

Earlier on, there were hints:

GameStop released their GME token, as per Etherscan records.

The token was created 101 days ago—as of September 3—and is an ERC-20 token held by one person.

Besides that, GameStop has an NFT site. The problem is, the platform is sparse, showing an illustration of a Nintendo Game Boy-type device and a spinning screen relaying their intention of empowering players.

Now, a Twitter user has put together a massive thread saying GameStop’s move to NFTs on Ethereum would be something big to the ecosystem. 

Per his prediction, there would be a massive surge of users to the pioneer smart contracting platform once GameStop gets moving.

His research reveals GameStop has successfully onboarded Solidity talents, including a Sushi grant developer behind SushiSwap. It turns out the developer is also an NFT enthusiast and the official owner of CryptoPunk #4257.

Other developers in GameStop corner include Sai Gopal Kodi, David Nicholson, Alexander Cyr, Mark Finestone—who previously led the development of Loopring and is now the Head of Blockchain-- and more are now part of the fold. These developers have stacked years in blockchain development and are exceptional because of their prior experience.

However, Jordan Holdberg is quite noticeable and is now part of GameStop hires, leading this NFT drive as the Principal Engineer at GameStop.

At the same time, GameStop is partnering with players in eSports and those with even deeper experience in NFTs and metaverses.

However, the real tailwind that could lift GameStop even higher, allowing them to link gaming with NFTs, is the recent announcement that DNS can now be integrated into ENS. What it means is that DNS name, once importation is complete, can be used to send crypto, create web3 usernames, and so much more.

This, according to analysts, brings another level of clarity never seen before in NFTs, further extending functionality.

One of the biggest concerns hindering the rapid expansion and adoption of NFTs, especially by big players, is intellectual property laws. There are rough edges that can lead to protracted legal challenges if institutions aren't careful. 

Therefore, the integration of DNS in ENS is massive, allowing big players to deploy their intellectual properties in a verifiable and understandable manner—a trigger for network effects and an explosion of NFTs.

In their master plan, GameStop plans to ride on the programmability of Ethereum, the possibilities of NFTs, and tap supportive changes addressing IP to take the gaming world to the next level.

The only reason why NFT holders have been spared from rug pulls, and other vices common in DeFi, Qiao Wang observes, is because we are “very early on.”

Malicious agents, he analyzes, are yet to explore the composability/programmability aspect of NFTs fully. This exploration could probably discover loopholes for exploitation. 

It is no doubt that many newbies are aping into NFTs, experiencing the thrill of trading limited-edition pieces or collections for top-dollar. NFT has morphed into a high-energy, fluid, and lucrative marketplace dominating Ethereum.

According to an analysis by Kaiko, NFT marketplaces and dependent dApps are now the most active, even surpassing Uniswap. 

Axie Infinity—which has gathered a large following in the Philippines—generates more revenue for miners than some of the most active DeFi dApps. 

As an illustration, the top Ethereum-based marketplace, OpenSea, generated over $3.5 billion in monthly trading volumes in August 2021 alone. This subsequently lifted the all-time sales of Axie Infinity and CryptoPunks collectibles to above the $1 billion mark. The uptick in activity also saw NFT platform’s tokens like RARI float into green, tapping the popularity of NFTs.

So, is it that hackers are “too lazy” to exploit, subtly giving up on NFTs?

Looking back at DeFi’s history, financial dApps were inundated with a barrage of discouraging exploits running into hundreds of millions of dollars. A deluge, DeFi got a bad rap, worsened with the announcement of flash loans from Aave. With near-zero funds, a hacker—or a group—could wreak havoc in the ecosystem causing massive losses, staining the industry’s repute.

The frequency has been tamed with well-thought-out patches, and the space’s been forced to “grow” faster.

NFTs, on the other hand, are quite complex. They are not fungible tokens that can be swapped easily or even channeled to an exchange and liquidated instantly. Instead, they are digital representations of physical or digital assets. There have been partnerships where artists couple with leading art houses resulting in multi-million sales. 

Meanwhile, marketplaces are a convenient portal for talented artists to mint and auction their assets. If anything, it has been a win-win for stakeholders. Take, for instance, the success of CryptoPunks, which were distributed for free. In early September, purchasing any of them from the secondary market would offset a prospective buyer millions worth in ETH.

According to Qiao, hackers could be burning the midnight oil, dissecting applicable minting standards to pick out flaws that give them remote control of valuable NFTs. 

The weakness of NFTs lies in the details, the programmability behind the scene—which, if any, would render these limited-edition tokens useless. Ordinarily, in the build environment, smart contracts’ programmability or composability gives the user more choice and therefore better user experience. 

It is so because there are no barriers that would prevent a user from using an idea and implementing it in a new use case. As a result, developers can take advantage of composability to bootstrap without necessarily building from scratch and deploy them via Ethereum—a sandbox with a global audience.

Now, while NFTs are not inter-changeable—unique via identifiers—they do exist in a composable environment—a smart contracting platform allowing transferability. That is why NFTs can be composed and merged, with say, DeFi allowing owners to take out loans. 

However, loopholes can exist since the minting and burning of NFTs is dissociated and not defined by the NFT standard—ERC-721, ERC-998, ERC-1155—or others. 

What’s more, the digital file—video, image, or audio—is stored elsewhere—usually a server or decentralized file storages like IPFS—and referenced by an URL. Storing digital artwork on the chain can be prohibitively expensive because of large sizes. 

Kelani Nichole of Transfer Gallery, in an interview, expressed her shock that the ERC-721 standard had gained massive popularity quickly despite inherent risks when digital artwork—that define the NFT—are referenced using URLs.

While it could be crashing to lose the artwork—the file—hackers might not be successful in bending those who pin the value of the NFT on the defining smart contract. This, for supporters, presents a deterrence. 

Yet for others who hold that artwork define the NFT, a hacker taking control of the referencing URL or hacking the centralized server—even the marketplace-- where these files are held or auctioned—wouldn’t be incentivizing enough since the space is, after all, a bubble that would soon pop.

The circus around BitBoy’s YouTube channel dominated crypto headlines last week.

Everyone knows YouTube has had its guns on cryptocurrencies for a while. The parent company announced strict measures at the height of ICOs and the scams that came with a bang in 2018. Those rules prevented crypto companies from advertising using their channels.

They said it was for the best of the community, preventing gunslinging—which they said ended up disastrously in the Wild-West that crypto is.

And it may have helped a lot—judging from the number of dead projects that couldn’t survive the chilly winter of 2018. Additionally, later reports indicated that most of them were vaporware, scams.

Rules have since been relaxed, with only a few regulated cryptocurrency exchanges allowed to advertise.

YouTube, however, remains a complex battling ground between the crypto community and the centralized megalith.

There are regular complaints of them haphazardly banning crypto-dedicated channels without notice. Many of those affected usually air their complaints on Twitter, claiming how YouTube “unfairly” destroyed their livelihood, yet they weren’t on a shilling mission.

Often, they receive sympathy.

So, it wasn’t something out of the ordinary when BitBoy took the same route to announce to the wider cryptosphere that YouTube had taken out his channel with over 1.1 million subscribers—phew.

Of course, this is BitBoy’s work spanning several years.

Yet, this news had mixed reception.

BitBoy, his critics maintain, is a “frustrating” shiller and allegedly a scammer (a harsh description). He, they add, is an expert clickbaiter, misleading and boxing newbies to unethically line his pockets.

Indeed, browsing this channel reveals that his live streams are well attended with interesting discourses on various, often peripheral, projects. These are unicorns, he would claim, and “must-buys” since they are hidden gems that can easily net 100X, a decent ROI.

He has, nonetheless, managed to build a big following.

BitBoy may have his weakness, but this is not to say his content is trash. They could be clickbait—true, shilling—yeah, him reportedly not walking what he preaches, but overall, his channel continues to introduce many newbies to gems, stirring their interest in cryptocurrencies.

This is one reason to cut him some slack.

Yet, from a different perspective, BitBoy isn’t violating any of YouTube community rules whenever he shills and promotes projects. Plus, YouTube is an arm of one of the largest data collecting companies in the world. BitBoy has millions of followers across the globe, some of whom invest in cryptocurrencies while others trade.

By this virtue alone, he has managed to be reinstated despite boos.

Away from BitBoy, isn’t it just funny how the cryptocurrency community is fixated on a centralized company doing what they can do without consulting anyone? YouTube rules are flexible. They can be changed to suit their money-minting interests at any point of time.

Yet, YouTube banning a dedicated crypto channel isn’t a laughing matter. Instead, it should be a trigger to promote decentralized options since crypto, after all, rides on the premise of decentralization. The over-reliance on centralized entities to promote a power diffusing, liberating solution only reinforces centralized corporations to “nip the bud” by restricting information dissemination. It is crypto’s Achilles’ heel.

As such, it won’t matter if you like BitBoy or not; instead, the primary concern here is censorship. As aforementioned, YouTube rules are evolving and flexible to mostly suit their interests. How, then, the near future will define “shilling” is what makes upcoming “influencers” split their hair. 

Think of the millions of BTC/ETH/all-round crypto channels that might be taken down, without initial strikes or warnings, for reportedly misleading viewers (potential investors) acting on their shilling? 

This crackdown, in my view, will only stop once YouTube perhaps breaks from Google and becomes an independent entity, dissolves its corporate structure—like ShapeShift—and releases its token, say, YouTube tokens to “decentralize.” Only then will rules change and “shilling” be legalized.

Only that YouTube won’t break away anytime in the near future.

So, for now, due diligence is the immediate shield to stand on firm ground and not sink. Towards that end, Ethereum, a few hours after BitBoy’s banning (and later unbanning), published a “Safety Tip” page. Under the Social Media and Community Platforms section, they note that YouTube scams are abundant (with a typo—any pun intended?) and come in various forms.

Obviously, developers are aware of scams, sometimes proliferated by the so-called influencers on YouTube.

Problem is, their hands are tied. Your duty, under these extra-ordinary circumstances, would be to play safe!

“If I’ve ever offended you, just know that from the bottom of my heart, I really don’t give a sh*t.”

Those are the immortal words of the world’s naughtiest bear in the movie Ted.

Talking of Ted—which you should definitely watch at some point, it featured one Mila Kunis.

She’s talented both in acting and her social and business choices. Her partner, Ashton Kutcher, needs no introduction. Kutcher has it all; the looks, the glamour, and yes, the girl.

How about we focus on the lesser known aspects of this dude instead.

Like him being an avid tech enthusiast--Yeah, the man is keen on tech, often making investments, and has an eye for crypto (obviously). Kutcher has scooped some really high ROI from some of his calculated crypto investments. 

He’s a shrewd investor.

Mila seems to have taken the cue. 

Because just the other day, her Orchard Farm Productions broke Ethereum.

She did her homework and realized that folks here love cats and so she went back and came back with Stoner Cats.

Cats smoking weed? 

Well, this could get interesting.

Just in case you are wondering why you have been shelling close to $9 in single smart-contracts free transfer in the past few days, Mila Kunis’ firm’s NFTs were the reasons why.

The jostling by the community for her masterpieces clogged the chain. Soon enough, there was a 3X rise in Gas from $3 to slightly above $9—for normal transfers—the figure was even higher for heavy Gas guzzling transfers.

Beginning July 27, 10,420 “sentient” Stoner Cats were available for sale.

All of them were sold in a record 35 minutes netting the team close to over $8 million.

And it wasn’t an auction.

If you wanted a piece of any of these high-value NFT, all you had to do is shell out 0.35 ETH—a fixed fee.

As expected, it was a race, and winners had to outbid the competitor to get a hand on these gems.

In crypto, it seems, the first always pocket big profits in the secondary markets. Just for information, each NFT of Stoner Cats is upwards of $1.3k at OpenSea.

In the recent few days, since mid-May to be precise—when Vitalik Buterin decided to destroy mushrooming “dog” projects—Gas has been descending, shrinking to manageable levels.

However, it seems like Mila Kunis’ creations might just change this, helping miners line up their pockets—after all, they are a business, and GPUs are super rare—no, not the NFT marketplace.

The hype around these NFTs stems from its cast, which included revered celebrities—including Kutcher and Chris Rock—the comedian in other funny animated series like Shrek and Madagascar. The adult cartoon series also features Vitalik Buterin (he can’t sing—we know  neither can he dance—lol), the lord himself. 

On another angle, the series could also be the first animated show to be converted into an NFT, riding the subscription model and pay-walls.

As details emerged, the show was entirely funded from the sale of NFTs—each at slightly above $780 (0.35 ETH). Owners of would be granted access to the show’s content.

Going forward, the production team will continue doing voice overs, provided funding goals are met. In all, 3k NFTs would be minted each episode in subsequent series—as such, expect more network clogs.

This phenomenon, in all, is an irrefutable demonstration of blockchain and smart contracting power in action.

Indeed, not all tokens are pumps and dumps, and not all NFTs are mounds of garbage, as critics claim.

Mila Kunis's Orchard Farm Productions doing their homework and settling on NFTs as a new means of funding what would perhaps be the new model of raising capital is massive. 

What they describe as “fan-driven, creator-friendly content” has been illustrated to be a mega success.

There will be a direct link between content creators and fans. All the “bureaucratic bullshit,” as they put it *bluntly, is thrown out the window.

Without red-tape and needless shenanigans, the creator's creativity is unbridled—resulting in content like Stoner Cats. 

There might have been changes in Gas due to these collectibles, but developers are about to “rectify” the situation on Aug 4 when London visits.

Ethereum is the most popular blockchain for building DAPPs or decentralized applications. There have been numerous so-called Ethereum killers but the blockchain has remained a favourite for the developers due to its high composability. DeFi or decentralized finance originated on Ethereum and till now majority DeFi activity is taking place on this blockchain only. The growth of DeFi has been really exponential post-pandemic and people are really loving to take part in the lending-borrowing activity without the intervention of a third party. The problem is that DeFi has made the blockchain overloaded. Ethereum is facing terribly high congestion for the last few months and transaction fees have skyrocketed. Crypto Twitter is flooded with frustrated users complaining about paying astronomical fees for doing a $20 swap over DeFi platforms. The base layer scalability of Ethereum is a distant game but the Ethereum developers are working on some major EIPs or Ethereum Improvement Proposals to address various issues.

EIP- 1559: Transaction fee reform

EIP-1559 is an Ethereum improvement proposal scheduled to be implemented during the London hard fork (July 2021). Ethereum has an auction-style model for processing transactions.  Ethereum’s gas fee is the fee paid to the miners for validating a transaction.  The price of gas is dependent on the market mechanism, and it is difficult to predict fees. EIP-1559 will make the transaction fee predictable even during high transaction hours. The proposal changes the current bid-based model to a base fee structure.  If the blockchain utilization rate is more than 50%, the base fee will increase automatically, and if the utilization rate is less than 50%, the fee will decrease. It will bring changes to the economic model of the blockchain and be considered one of the most important updates of Ethereum. EIP-1559 proposes to burn a portion of the transaction fee. EIP-1559 proposes to burn a portion of the transaction fee. You can compare it with ‘buyback of ETH’ technically. There is a high possibility that EIP-1559 will make Ethereum a deflationary asset besides reducing transaction fees. The community is already calling ETH ‘ultrasound money’ to compare it with the ‘sound money’ concept of BTC.

EIP-3074: Introduces batch transactions

EIP-3074 is another improvement proposal to improve the user experience of Ethereum. It is slated for the Shanghai hard fork (October 2021). EIP-3074 will reduce transaction costs by creating support for batch transactions. Currently, batch transactions are not supported in the base layer of Ethereum. Batch transactions can happen in a smart contract i.e., only DAPPs can support. The proposal wants to allow a wallet to avail batch transactions. Their blog post says, “a good analogy for the benefit this EIP provides is that it’s similar to allowing any EOA to become a smart contract wallet without deploying a contract.” The proposal is really very different as it aims to allow users to delegate control of their EOA (externally owned accounts) to a contract. EIP-3074 is motivated by ‘sponsored transactions’ i.e., it wants to make users able to send transactions in which the fees are paid by a different party. EIP-3074 should reduce the Ethereum transaction fee by 20% as the intrinsic gas cost will be reduced by batch transactions. 

EIP-3675: Chain merge

EIP-3675 is an improvement proposal created for the network’s upcoming chain merge. Ethereum is moving to PoS (proof-of-stake) from PoW (proof-of-work) and this proposal formalizes the chain merge. EIP-3675 implementation date is not clear as only the pull request has been created on Github. After the launch of the Beacon Chain, Ethereum 2.0 has become the second-largest staking network and the chain merge will initiate high inflow to the one-way deposit contract of Ethereum 2.0. Liquid ETH in the circulation will be decreased dramatically.  

There is no doubt that Ethereum is the preferred value settlement layer now. All these EIPs will be implemented phase-wise, but these will make Ethereum an attractive blockchain for the retail DeFi traders. Layer 2 Ethereum projects line Polygon, Arbitrum and Optimism are already making roars in the market but base layer usability matters. 2021 is going to be an exciting year for Ethereum with major protocol updates and nice progress towards Ethereum 2.0. The positive growth of price also justifies market sentiment regarding Ethereum. While this article was finished, ETH was trading above USD 2300 and ETH/BTC ratio was waiting for a breakout moment.

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Ethereum has a robust decentralized security model and that’s why it has remained the preferred blockchain for the DAPP developers but the base layer scalability is a big issue for Ethereum. Ethereum 2.0 is going to solve many problems but the roadmap seems to be very long. While Ethereum has become the most popular value settlement layer with the exponential growth of transactions, the arbitrary gas fee of Ethereum often makes the network unusable for retail investors. The user experience isn’t really good for many Ethereum DAPP users. A blockchain application can’t be unnecessarily expensive and some use cases like blockchain games make no sense with the current speed of transactions or transaction fees. A blockchain must be scalable enough to match the throughput of Paypal or Visa for mass adoption and nobody will like to pay a $50 fee for doing a transaction of $100. Is such scalability achievable in the base layer of Ethereum? No, it’s a distant dream.

Ethereum Layer 2 solutions aim to make Ethereum scalable without compromising the decentralization and security. Layer 2 solutions are basically off-chain solutions and they take away the transactions from the main chain just like the Lightning Network of Bitcoin. Many developers are currently working on Ethereum Layer 2 solutions and a few projects have already delivered working platforms. While Layer 2 solutions have their own issues and vulnerability, the ‘world computer’ definitely needs Layer 2 to fulfil its original vision. Let’s try to analyze the state of adoption or potential of adoption of a few popular Layer 2 projects.

Polygon

Vitalik Buterin proposed Plasma architecture in 2017.  Plasma is a side-chain solution that creates side-chains and bonds them with the main chain. Polygon is based on Plasma architecture. Withdrawal time from Plasma is one week and that’s a big problem. It’s really painful for DAPPs or users who are looking for instant withdrawal. The PoS bridge of Polygon, launched sometime back, provides PoS security and faster exit with one checkpoint interval. Polygon is seeing great traction nowadays and it’s the number 4 DeFi platform as per defipulse with $7B+ TVL. Mark Cuban, the billionaire investor, has recently invested in Polygon and the price of MATIC, the native token of Polygon, soared up heavily. Polygon has been integrated with many popular platforms like Opensea, Sushiswap etc. and the Ethereum users have embraced the network to escape from the high gas fee. The exchanges supporting withdrawal and deposit for Polygon (mainnet) are MXC, Ascendex, Okcoin.

Optimism

Optimism was founded by some former Plasma group researchers in 2019 to implement an Ethereum scaling solution – Optimistic Rollup. Optimism is a non-profit organization as of now. The construction of Optimism is similar to Plasma and mimics the almost infinite scalability of Plasma to run an EVM compatible Virtual Machine called OVM (Optimistic Virtual Machine). Optimism offers almost feeless and instant transactions. Synthetix, a popular DEX, is working with Optimism to offer easy Layer 2 migration. Staking on Synthetix is already live on L2 testnet of Optimism experimentally. Here is the official blog post of Sytnthetix which describes why Optimism was chosen. Uniswap has also declared to adopt Optimism. Optimism isn’t completely production-ready now.

Arbitrum

Arbitrum is an open-source platform built by Offchain Labs. Arbitrum uses Optimistic Rollup protocol. The official blog post says: “An Arbitrum Rollup chain is a super scaled Layer 2 (L2) chain. Like all Rollups, the Arbitrum Rollup chain is built on top of and secured by the Ethereum blockchain, and all transaction data is logged on Ethereum. From a user and developer perspective, interacting with Arbitrum feels exactly like interacting with Ethereum.” Migrating contracts from Ethereum to Arbitrum is damn easy. Bancor contracts are already live on Arbitrum testnet. A recent Uniswap poll launched by Compound founder Robert Leshner signals Uniswap may accept Arbitrum. Okex has declared to support direct deposits and withdrawals onto Arbitrum.

StarkWare

StarkWare is powering DeFi platforms of DeversiFi & dydx currently. StarkWare uses STARK technology and provides cryptographic proofs that are zero-knowledge, succinct, transparent and post-quantum secure. The L2 scalability solution of StarkWare can be deployed as ZK-Rollup or Validium.

zkSync

zkSync is Matterlab’s trustless scaling & privacy engine built on ZK-Rollup. The project has given emphasis to create nice user and developer experiences. The official blog post says: “zkSync is designed to bring a VISA-scale throughput of thousands of transactions per second (TPS) to Ethereum while keeping the funds as secure as in the underlying L1 accounts and maintaining a high degree of censorship-resistance.” zkSync has been integrated with Gitcoin for easy payment.

Loopring

Loopring uses ZK-Rollup. The ZK-Rollup of Loopring has a maximum throughput of 2K TPS on ETH 1.0. On proposed ETH 2.0, the max throughput is going to be rocking 20K+ TPS. The Loopring V2 DEX was launched some months ago and their liquidity mining attracted significant users.

This writeup doesn’t aim to enlist all Ethereum Layer 2 projects but the cited projects have generated buzz. While we are hating the congestion of the Ethereum network, the congestion itself is proof of demand. If people can trade on Ethereum DeFi and NFT platforms with such a high gas fee, Layer 2 solutions can definitely draw a huge number of users by providing instant economic finality and cheap transactions. It is important to note that all Layer 2 solutions settle the final value on the Ethereum blockchain only. So, they basically don’t compete with Ethereum. The Ethereum developers can migrate their DAPPs to Layer 2 networks with minimal coding and thus it keeps the migration process smooth. The liquidity on Layer 2 was a big problem earlier but as big centralized exchanges (CEXs) and popular decentralized exchanges (DEXs) are supporting the Layer 2 phenomenon, mass adoption is bound to happen. The competition between Layer 2 Ethereum projects and Ethereum killers is going to be very exciting in the near future. The large-scale production-ready Layer 2 projects are already showing high promise.

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There is a deliberate, concerted effort from the upper echelon to discredit and water down the impact of blockchain and the sphere’s most valuable networks.

Their cross-hairs are on Bitcoin, Ethereum, and all Proof-of-Work powered systems.

It’s political.

Given, their strategy has been well-executed and very consequential for Bitcoin and crypto.

Why is this?

Blockchain and crypto adoption is just picking up, gaining momentum. However, a big part of this euphoria is by newbies, most of whom are in the game, mostly for quick profits.

Are they scaring the dog by killing chicken?

The rise of Dogecoin and Dogecoin-inspired memes are good examples.

Pump-and dump-schemes as well. Greed.

Funny enough, Elon Musk seems to be the godfather, the Dogefather spearheading this wave of misinformation.

The result is a bad rap to Bitcoin with the same hostility spilling over to Ethereum.

That Bitcoin, Ethereum, and similar networks are energy-inefficient and “making the world a bad place” got to be one of the jokes of the year.

Serious.

It’s a shame that it came from Elon Musk, the CEO of Tesla. Tesla is reliant on charging ports that are ironically powered by fossil fuels.

Tesla uses Cobalt from artisanal who exploit children while also damaging the environment in the Democratic Republic of Congo (DRC).

Almost every part that makes the physical world tick directly and negatively affects the environment.

On the other hand, Ethereum and Bitcoin are utilities existing in the digital realm. If anything, they are technologies behind one of the greatest disruptions in the last few decades.

What’s more, most of the Bitcoin and Ethereum mining, after all, use renewable energy.

Solid numbers are proving how Bitcoin, for instance, has inspired investment in renewable energy and how miners, say in Sichuan China, mop out excess energy from the grid.

But there would be nothing to discuss given the resistance from the status quo and their chugging machinery spewing senseless propaganda, frightening people.

Blockchain and Ethereum are innovations that will underpin the digital economy.

Tired of sub-one percent and negative interest rates? Have you heard of DeFi?

You an artist or in eCommerce and want to fight counterfeit, considering NFTs?

There are far too many ways of how blockchain and Ethereum can change the world for good.

DeFi commands upwards of $80 billion in TVL, and artists are already earning millions from the NFT wave.

We are in the very early phase of crypto and Ethereum adoption, and how quickly DeFi and NFTs have exploded to command billions is a testament to its utility.

Soon, a merger of the two (NFT and DeFi) would demonstrate the direct benefits of Ethereum as a technology and how it supersedes the FUD around energy.

At present, Ethereum might just be energy-intensive using the Proof-of-Work consensus algorithm. But this is for the good of the network and the incredible asset capital running, confident of its decentralization.

In fact, the absence of ASICs in Ethereum may actually be bad since these specialist rigs do convert electricity into something worthwhile: Hash power and better security in Ethereum.

The Age of Validators

Ethereum pointed out possible limitations of proof-of-Work, especially as adoption increases and ways of addressing it from its inception.  We are at the tail end of Ethereum 1.0, and in the next phase, Ethereum 2.0, the network would be energy efficient, secure, and scalable—via Layer-2. Instead of miners who have to solve complex math and confirm blocks, validators will be randomly selected to approve blocks.

And the Eth 2.0 is already primed, with over $12.7 billion of ETH earning a decent yield.

Encouragingly, the merger has been expedited and scheduled for later this year, not in 2023.

This will set the ball rolling for the docking and deactivation of the Proof-of-Work machine and the era of unparalleled energy efficiency.

Sigma Prime’s prototype has demonstrated that Eth2 would be more than 99 percent more efficient than Eth1.

Parallel experiments also reveal how a 10,000 mAh power bank can power 10 Proof-of-Stake validators on a Raspberry Pi for straight 10 hours.

The Bitcoin, Ethereum, and Proof-of-Work energy debate is political. Crypto operators are energy and environmentally conscious, not rapacious dweebs as mainstream media describe them.

If they fought the internet, they will vehemently fight an innovation that’s much better.

Last week, Vitalik Buterin chose violence. Not with words and shit posting as crypto Twitter is so accustomed to, but through action.

This time, he set his cross-hairs on SHIB and a variety of Dogecoin-inspired meme coins.

So, he decided to go for the jugular and do what meme coin creators couldn't expect from the Ethereum founder.

Vitalik aimed for their hearts, and the dagger went right through, literally tanking the tokens’ valuation and liquidity.

The events of May 12 unfolded like a movie. Scripted? Nah. Vitalik Rugggeeeed SHIB! It was unbelievable.

The Ethereum co-founder created instant enemies by dumping their donations and donating proceeds to the India COVID-19 Relief fund.

He's now being loved—described as a "sick" legend by protagonists-- and loathed by the afflicted.

However, War on Rugs—a telegram group who ironically hate rug pulls—are crying foul on behalf of SHIB token investors. They now want revenge, retaliating since they believe Vitalik’s actions were detrimental to innocent investors.

They fully understand that the task ahead may be insurmountable, but they know where it pains the most for Ethereum folks and especially the co-founder.

When the dust had settled, Vitalik had withdrawn roughly $56 million or 13,500 ETH, removing 100 percent of SHIB’s liquidity on Uniswap.

What’s more, the remaining 50.6 trillion of illiquid SHIB tokens worth over $1 billion (at that time) were sent to the fund.

Quite the benevolent act, and people would have a soft spot for him since the money went to charity. 

The question is: How will the creators of the fund sell the illiquid and hammered SHIB tokens?

The same question is being asked by SHIB holders and a majority of the crypto community.

Still, to get back to Vitalik and avenge for his alleged “misdeeds,” the Rug Ethereum $RETH drama token is now live on the Binance Smart Chain (BSC) and trading on the Uniswap copy, PancakeSwap.

The objective is simple: Rug ETH and boost BNB prices.

By doing this, they hope to pile more misery on Ethereum, a platform presently choking with high Gas fees and slowly being killed by miners.

RETH isn’t an “ordinary meme token.” Instead, it would be incentivized. Beyond fee distribution to RETH holders, a portion of fees would be used to borrow ETH from Venus and dumping the coin for BNB at a low-risk ratio. 

Traders of RETH would contribute to this “final retaliation” by trading in and indirectly pumping BNB and dumping ETH.

Their action may be impassioned, and many are full of sour grapes for sure, but we must look at what preceded this rug pull.

Ethereum miners may be “killing” the network by only accepting higher bids and exploiting the loophole in the current first-come auction mechanism. 

However, we must also not forget that block utilization remains at over 99 percent, according to data from Etherscan. The competition for immediate transaction confirmation is high. 

The problem is, the primary source of this needless competition was due to the proliferation of the dog meme coins who wanted to replicate the success of Dogecoin. 

From late April to early May, these puppies were nothing but nuclear explosions. 13X gains were not out of the ordinary, causing innocent investors to purchase duds listing for below one cent aggressively.

Prior to the frenzy, attempts had been made by increasing the block Gas limit to 15 million—a consensus that miners agreed to since it directly benefits their bottom line. Then Dogecoin soared, and several dog meme tokens were minted, clogging the network and forcing Gas to over $60—the highest since Ethereum launched.

Therefore, supporters claim the Rug was justified for the sake of Ethereum and network users—not just DeFi.

Second, “War on Rugs,” the creators of RETH, had noted a vulnerability in the Shib Inu token earlier on. They discovered that Vitalik Buterin had a huge stake in SHIB, and this was a weakness that came to haunt them on May 12.

The bad thing is that Vitalik didn’t actually ask for any of these tokens.

Instead, in their wisdom, creators of these intensive projects, minted quadrillions of tokens and sent a majority to Vitalik to create this illusion that Vitalik endorses them and that VITALIK (a Monk caring less for what money can buy) WOULD NEVER TOUCH THEM. It’s crazy that Vitalik had control of these projects at any time. holding roughly 50 percent of the total supply.

By liquidating a big chunk of these tokens—and doing the unexpected, Vitalik opted to save technology and right away give SHIB, AKITA, and others his back. According to many observers, this was the first attempt to help dump down Gas fees that were skyrocketing as a wave of alleged scam tokens flew in Ethereum like a deluge.

Gas eventually dropped over 80 percent to around $20 early this week. 

Over 9,800 RETH holders are hurting and seeking revenge.

Did Vitalik f*uck up?

Written by William Peaster

Ethereum, like Bitcoin, is a new kind of global public good underpinned by blockchain. 

Yet unlike Bitcoin, which is designed singularly for payments, Ethereum is designed to to be an internet of value for powering an array of different applications, including financial ones, artistic ones, gaming ones, and beyond. 

What makes Ethereum special, then, is how it’s built and managed by its own users. This open-source, community-run model is what makes Ethereum like a decentralized app store that’s open to anyone, anywhere, and any time. 

In this way, Ethereum offers a platform for using and building permissionless, trustless, and anti-fragile apps. Permissionless, because an internet connection is your only gate to using Ethereum. Trustless, because you don’t have to trust a centralized third party to use its apps. And anti-fragile, because Ethereum’s apps are backed by smart contracts that can run in automated fashion without outside interference indefinitely. 

You can’t get these kinds of powerful guarantees wrapped up in one package through mainstream, centralized avenues. There’s simply never been anything like Ethereum before, and it’s opening up new horizons of opportunity for the 21st century’s increasingly globalized frontiers. 

On Ether (ETH)

At the heart of Ethereum is ether (ETH), the native cryptocurrency of the platform. Akin to how the United States has the dollar or the European Union has the euro, ether is a medium of exchange (MoE) and store of value (SoV) in the Ethereum ecosystem. 

As such, ETH is used as a type of money for payments and as a commodity to fund Ethereum transaction activity, like paying for goods or services offered around the network. 

Lastly, ETH can also be used as a capital asset, i.e. an asset that can generate value over the long term. This is on account of Eth2 staking, in which Ethereum users are paid in ETH rewards to lock up an ETH stake, with these stakes used to secure the Ethereum network. 

In this sense, having stakeable ETH is akin to being a cryptocurrency miner with an ASIC mining device that will never be deprecated. 

Ethereum, the Home of DeFi, NFTs, and More

The wide variety of promising apps that have bloomed atop Ethereum have led to the blockchain becoming the most developed and used in the whole world. 

For example, according to the cryptofees.info resource, Ethereum notched nearly $9 million USD worth of transaction fees over the last 24 hours -- more than double Bitcoin’s $3.5 million across the same span. In fact, even Ethereum’s third-largest app presently, Uniswap, just bested Bitcoin with $3.8 million in fees on the day.

In being the first-mover smart contract platform where all this activity is surging to, Ethereum’s become the de facto home to the cryptoeconomy’s most popular rising sectors, namely decentralized finance (DeFi) and the non-fungible token (NFT) arena. 

Both these spaces are just the start of more to come, but they’re already impressive in the here and now.

For instance, consider DeFi. There’s now $20 billion worth of assets being put to use across dozens of DeFi apps!

Source: DeFi Pulse

And we’ve seen an interesting range of apps in DeFi to date, as well. There are permissionless borrowing and lending protocols, including Maker, Aave, and Compound. There are decentralized trading protocols like Uniswap and Sushiswap. There’s also derivatives platforms like Synthetix, yield aggregators like Yearn and Harvest Finance, and savings games like PoolTogether. 

In other words, there’s something for everyone in this alternative, open Wall Street! It’s a meritocratic system, where a high school dropout can enjoy the same level financial playing field as an elite investment fund. And it’s an ecosystem where every project can leverage one another as composable “money legos,” a dynamic that has no analogue in the mainstream. 

This brings us next to NFTs, which you can understand as “media legos.” Just like you can tokenize any asset on Ethereum, you can also tokenize any piece of media: art, music, collectibles, gaming assets, and pretty much anything else you can imagine. 

Source: NonFungible

As such, NFTs empower creators with novel avenues to monetization, like automated secondary sale royalties. They offer artists and beyond a way to release their work on their own terms, without having to pay outrageous cuts to middlemen, companies, and so forth. 

The Future Is Here

Ethereum is the future of finance and the future of culture for the increasingly digital 21st century. 

The network still has a ways to go to fully actualize, of course. But Ethereum is on track to do just that. And the teeming ecosystem of third-party builders that are innovating atop Ethereum right now will only boost progress and adoption that much further. 

For now, the task at hand is scaling Ethereum so it can easily handle mainstream usage. The good news is that’s happening as we speak since layer-two scaling projects like Optimism, Fuel Labs, and many more are stepping up to the plate and building out the infrastructure necessary to help Ethereum ascend to its complete potential.

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