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Finality refers to the guarantee that a block cannot be altered and removed from the Ethereum blockchain.

The Ethereum network appears to have suffered another technical snag that kept transaction finality from happening for about an hour on Friday. The issue drew fresh concerns about the stability of the network, as it came less then 24 hours after a similar event yesterday.

Like on Thursday, data sources for Ethereum network activity show that the issue was experienced by validators, which propose attestations as the network processes transactions. Ethereum epochs 200,750 thru 200,758 saw a significant reduction in the number of attestations received, according to Data provider Beaconcha.in.

“Ethereum’s Beacon Chain stopped finalizing transactions for roughly an hour,” The Block research director Steven Zheng said. “It is currently unclear what the reason is behind the halts but some people think it was due to some bugs in staking clients or MEV infrastructures.”

“While transactions did not stop on Ethereum they were not finalized which meant the chance of transactions being reverted were higher than if things worked as intended,” Zheng continued.

‘Ethereum did not go down yesterday’

Prysmatic Labs co-founder Preston van Loon said that the issue on Thursday appeared to involve something that “happened to cause several client implementations to work really hard to keep up with the chain.”

As the outage seemed to reappear on Friday, he tweeted that “we’ve tagged v4.0.4-rc.0 for Prysm which has the fix, but we haven’t had time to test it thoroughly.”

“We have identified a few areas where Prysm could perform better in a scenario like we saw yesterday in Ethereum mainnet and we are preparing to release these improvements as fast as safely practical,” he said on Friday, before the issue seemed to reappear. 

He pushed back against worry that the entire protocol had failed. 

“To clarify: Ethereum did not go down yesterday,” he wrote on Twitter. “Blocks weren’t even close to being full, despite limited block capacity. You could have transacted during the epochs struggling to finalize, there was plenty of block space when blocks were produced.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Binance, the world’s largest cryptocurrency trading platform, has had enough with Canada.

The company announced its plans to cease business operations in the North American nation on Twitter.

“Unfortunately, today we are announcing that Binance will be joining other prominent crypto businesses in proactively withdrawing from the Canadian marketplace,” the post read, before waxing sentimental. “Albeit a small market, it held sentimental value for us as the home country of our founder. We had high hopes for the rest of the Canadian blockchain industry.”

Binance also said the nation’s guidance limited operations to the point of being untenable. “We put off this decision as long as we could to explore other reasonable avenues to protect our Canadian users, but it has become apparent that there are none,” the post also said. 

The company, led by CEO Changpeng Zhao, also left the door open for a return to the market, if Canadian regulators come around. “While we do not agree with the new guidance, we hope to continue to engage with Canadian regulators aimed at a thoughtful, comprehensive regulatory framework. We are confident that we will someday return to the market when Canadian users once again have the freedom to access a broader suite of digital assets.”

Binance’s issues with Canada goes back at least couple years. In 2021, the company stopped doing business in the province of Ontario amid a regulatory crackdown. Both Paxos and dYdX left the country this year after the Canadian Securities Administrators published new regulations in February.

The company also stated that its Canadian customers would receive more information by email. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Rune Christensen also proposed to incorporate artificial intelligence-assisted processes into Maker’s governance.

Among the memecoins sliding was PEPE, which lost over 60% over the last 7 days.

Coinbase, the crypto exchange in a bitter dispute with the U.S. Securities and Exchange Commission, is launching a new advisory panel and filling it with former U.S. lawmakers.

Dubbed the Global Advisory Council, the group will “help navigate the complex and evolving landscape of the crypto industry, and strengthen relationships with strategic stakeholders around the world,” Coinbase said in a statement.

Initial members will include former U.S. Senator Patrick Toomey, in addition to former U.S. Congressmen Tim Ryan and ​​Sean Patrick Maloney. Additionally, Chris Lehane, an executive from venture-capital firm Haun Ventures, and John Anzalone, the founder of Impact Research Polling, will also participate.

Coinbase has been ramping efforts to take on what some fear is an increasingly hostile regulatory climate in the U.S., with CEO Brian Armstrong exploring further overseas expansion. Earlier this year, the exchange announced a grass roots initiative aimed at advancing “pro-crypto policy in all 435 Congressional Districts across the U.S.”

“We’re working to update financial systems and rules that were designed over 100 years ago before computers even existed,” Coinbase said on Friday. “We chose to build in America because we want to be part of the solution and believe America would be best served by embracing the potential of crypto and blockchain technology.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

One year ago the Terra blockchain, its algorithmic stablecoin TerraUSD and native token luna were in the midst of a free fall that quickly resulted in a crypto catastrophe that decimated nearly $45 billion of market capitalization.

Upon reflection, for many, Terra’s epic fall now doesn’t seem as shocking as it once was. “Entirely based on faith and speculation, luna was a prime beneficiary of bull market hysteria and one of the first casualties of a return to reality,” said Rich Rines, an initial contributor to Core DAO.

Terra-luna’s gargantuan crash not only evaporated billions of dollars and caused traders of all sizes to lose their money, it also quickly spread into a contagion which, in the frenzied months to follow, infected and ultimately toppled a gaggle of once-celebrated industry titans.

“When luna collapsed, the leverage in the system triggered a massive knock-on effect that ultimately shook the foundations of Celsius, Blockfi and FTX,” said Markus Levin co-founder of XYO Network, a blockchain-powered geospatial data company. “The collapse of Terra led to the collapse of the cryptocurrency industry, one domino after another, and it will never be the same,” added Gartner web3 analyst Avivah Litan.

 

Victims of contagion

Although FTX was arguably the last and most surprising domino to fall in the wake of Terra’s demise, the contagion also claimed, in addition to Celsius and BlockFi, major crypto industry players like Three Arrows Capital and Voyager Digital.

Crypto lender Celsius, hedge fund Three Arrows Capital and Voyager Digital all filed for bankruptcy in July. Trading platforms BlockFi and FTX did the same in November.

But the shockwaves are still being felt inside companies like Genesis, Gemini and Digital Currency Group, which are all still entangled in a mess triggered by the fallout.

As Levin pointed out, one of the biggest problems exposed by Terra were issues related to leverage, or insane overleveraging.

Lessons learned around leverage should, however, prove valuable in the future, said The Block Research Analyst Kevin Peng. “Flushing out all that leverage and accelerating the downfall of bad actors in the space was ultimately a good thing,” he said. “Without all those dramatic collapses it would’ve taken a lot longer for the overall market to recognize all the ways that risk can be built up quietly and interwoven in the crypto ecosystem.”

Not all stablecoins are created equal

The crisis also made the distinctions between regular stablecoins and algorithmic stablecoins like TerraUSD — also known as UST —abundantly clear, said Jane Ma, co-founder of zkLend, a layer 2 money-market protocol. “One major misconception is that all stablecoins are created equal,” said Ma. “Unlike asset-backed stablecoins such as USDT and USDC, which are pegged to the US dollar, Terra’s UST is algorithmically stabilized using a system of incentives and penalties … UST’s stability depends on the proper functioning of the Terra ecosystem, including the luna token.”

Although luna was only valuable as long as people believed it to be so, as it is with all of crypto, its codependent relationship with UST was especially problematic. And once the confidence in luna disappeared and people decided to dump the token, everything crumbled, including the perceived stability and price of UST. 

Many crypto executives are hoping now projects that have better built-in protections will attract more attention from investors.

“The importance of risk management in Web3 projects has become even more evident. Projects embedded with insurance coverage are poised to gain traction as they offer an additional layer of protection against unforeseen events.,” said managing director of the web3 ecosystem builder Tz Apac, Katherine Ng. “By integrating insurance mechanisms, these projects can mitigate potential risks and instill confidence in investors.”

Terra induced PTSD

The Terra-luna disaster and its ensuing damage continues to weigh on the minds of both the once-crypto-keen traditional financial institutions who experimented with digital assets during the bull run and the regulatory arena which failed to better oversee the market.

“Trust in cryptocurrency has significantly eroded, which is so ironic since it was intended to be a trustless currency, i.e. it didn’t need to be trusted as there was no central authority,” said Litan. “Gartner clients in financial services have mainly all backed down from engaging in public cryptocurrency projects and protocols, for good reason … they are waiting for clear rules and regulations to start dipping their toes back in. But for now the cryptocurrency industry seems like a pariah to most of them.”

The United States is seeking to bring both Terraform Labs co-founder Do Kwon — main architect of Terra-luna mess — and FTX co-founder Sam Bankman-Fried to justice, beneficiaries of a “cult of personality,” according to Rines. “One of the key lessons learned throughout 2022 is to cautiously evaluate each charismatic influencer who bursts onto the crypto scene,” he said. “Even decentralization-focused crypto-natives can fall prey to the halo effect.”

At least so far, there is the appearance that justice is being served.

Arrested in March after attempting to leave Montenegro on a false passport, Kwon will be freed from jail after posting bail this week. He paid a €400,000 ($436,000) to secure his release, according to local news. The Terraform Labs co-founder still faces legal trouble in both Korea and the U.S. for his role in the collapse of his algorithmic stablecoin.

In the U.S., Bankman-Fried is on house arrest while facing a multitude of criminal charges over FTX’s collapse. His lawyers just this week sought to have most of those charges dismissed.

Regulators regulating relentlessly

While authorities appear eager to hold Bankman-Fried and Do Kwon accountable, the American regulatory picture —  an ineffectual system that failed to protect consumers in those cases — remains murky. U.S. regulators have yet to clearly agree on if cryptocurrencies are a security or a commodity while simultaneously sending a message that the future of digital assets could be in jeopardy.

Europe appears to be clearly ahead of the U.S. in terms of establishing guardrails that could make investing in or using crypto safer. Last month, the European Union officially passed its Markets in Crypto Assets (MiCA) regulation which focuses on the centralized points of the crypto industry while providing clarity over the scope and definitions of crypto regulation.

“Many U.S. based crypto firms are moving or considering moving abroad, especially to Europe where regulation is clearer,” said Litan. “The SEC is cracking down on crypto but … the agency seems to be going after easy benign targets, many of which have not caused any notable damage to investors.”

Not to be forgotten, aside from the corporate and governmental calamity the many investors and holders of cryptocurrency who lost money have been forced to reckon with some harsh realities.

Peng said whoever survived the Terra disaster is at least, likely wiser for it. “Anyone who witnessed the entire cycle from Terra’s rise to its downfall and the contagion that followed,” he said. “If they managed to survive through all that and stay interested in crypto, they definitely learned some really important lessons about how things work and how easy it can be to fool the market into a false sense of security.”

“It’s important to step back and remember that we are still in the early innings of the blockchain movement,” added Levin. “And failures of projects are to be expected. After all, look at the dot-com bubble and how so many ventures back then also failed.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The creation of Bitcoin-based meme coins using the new BRC-20 standard has driven up Bitcoin fees as they use more data than a basic Bitcoin transaction. But while some developers in the Bitcoin community are proposing a filter to block Bitcoin NFT projects, such censorship could run counter to Bitcoin’s open-source characteristics, CoinDesk’s chief content officer Michael Casey argues.

The indicted congressman, who wildly embellished his background, received big donations from FTX executives. That was just one strand in Bankman-Fried’s tangled influence-peddling web.

Crypto Twitter wasted no time in responding to Elon Musk’s Friday announcement that he had named Linda Yaccarino as the new CEO of the social media platform and quickly flooded his replies with memes featuring Pepe the Frog.

Yaccarino, NBCUniversal’s head of advertising, will primarily focus on business operations, Musk said, adding that he would spend his time on product design and new technology.

“Looking forward to working with Linda to transform this platform into X, the everything app,” he wrote on Twitter. Musk, who has served as CEO of the company since acquiring it last year, said yesterday that the new head would be starting in around six weeks. 

Twitter is the favored communication channel for the crypto industry, and Musk is known for moving the price of popular memecoins such as Dogecoin with a single tweet. Earlier this week, he sent the price of Milady NFTs skyrocketing after he tweeted a Milady meme.

Crypto Twitter has been full of pepe chatter this week as the memecoin that references the cartoon character surged earlier this month to hit a market cap of $1.8 billion before plummeting. It’s fallen 24% today, with a market cap of $477 million, according to CoinMarketCap.

Crypto Twitter responds to Musk’s CEO announcement with Pepe memes

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© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.