Tag: Ethereum News

This four-week event will help the community better understand Ethereum’s code and technology while improving its security.

The Ethereum Foundation has launched its first “Attackathon,” hosted by Immunefi, offering a $2 million reward pool to encourage security researchers to audit its codebase. This four-week event will have participants search for vulnerabilities in Ethereum’s protocol code, with only significant and rule-compliant reports being rewarded.

One audit competition to rule them all 🏆

Immunefi, in collaboration with the @Ethereum Foundation, presents the first-ever Attackathon to enhance Ethereum’s protocol security. 💪

Become a sponsor and help make history ✨
1/4#EFxImmunefi pic.twitter.com/m1HtH6G2r0

— Immunefi (@immunefi) July 8, 2024

The “Attackathon” kicked off with a technical walkthrough of the blockchain’s code, guiding participants in identifying and understanding potential issues. Participants gain from a structured setup that offers live explanations on Ethereum and security, along with educational material from the Attackathon Academy.

Once the event concludes, the bug bounty platform Immunefi will compile and detail the discovered vulnerabilities in a report. Immunefi is recognized for its expertise in Web3 security, managing a large community of security researchers. They have protected significant user funds across various projects and have a strong track record of identifying and mitigating security risks.

The Ethereum Protocol Security (EPS) team has contributed $500,000 to the prize pool and is seeking sponsors to raise an additional $1.5 million by August 1, when more details will be shared. Sponsors will be awarded NFTs as a token of recognition for their contributions, and their names will be permanently displayed on the Sponsorship Leaderboard.

Hackathons and Security Upgrades

Hackathons are commonplace in the tech world, and the crypto industry frequently hosts such events alongside ongoing bug bounties. These bounties incentivize hackers to disclose exploits rather than use them maliciously. The Ethereum Protocol Security (EPS) team plans to host similar hackathons for every hard fork to address changes to the codebase.

Ethereum’s upcoming “Pectra” hard fork is expected to launch sometime between Q4 2024 and Q1 2025, combining the “Prague” upgrade for the execution layer and the “Electra” upgrade for the consensus layer. One significant update is the introduction of a “social recovery” feature, which could replace the conventional 24-word private wallet key, allowing wallets to have smart contract-like capabilities.

Ethereum’s “Attackathon” aims to enhance the blockchain’s security by leveraging the expertise of the global security research community. This collaboration with Immunefi will enhance the community’s grasp of Ethereum’s code and technology while also bolstering its security.

This recent drop has pushed Ethereum’s Relative Strength Index (RSI) to the lowest level since August 2023, indicating that it might be oversold.

Ethereum’s price has experienced a significant drop, falling by up to 5.78% in the past 24 hours. This decline has pushed its Relative Strength Index (RSI) to the lowest since August 2023, indicating that Ethereum might be oversold. Market veteran Michael van de Poppe reported this sharp decline, which suggests strong bearish momentum in the market.

#Ethereum reaches the lowest RSI (Daily) since the collapse in August '23.#Altcoins have reached their lowest RSI (Daily) ever or of this cycle.

Clear capitulation. pic.twitter.com/9eehaITkQI

— Michaël van de Poppe (@CryptoMichNL) July 5, 2024

As of now, Ethereum’s price is hovering around $2,956. It previously faced key resistance between $3,800 and $4,200, levels it struggled to break through, leading to the recent decline. Ethereum now faces crucial support at $2,480. If the price falls below this level, it could trigger further declines toward $2,145.

Despite this recent drop, Ethereum’s trading volume remains stable, indicating no panic selling. This stability suggests that while market sentiment is currently bearish, there might be a potential rebound or consolidation phase on the horizon.

Impact on Ethereum Investors

An analysis of Ethereum addresses shows that many are “Out of the Money.” These addresses bought ETH at prices ranging from $2,951.47 to $3,400.33 and are currently incurring losses. This indicates that many investors are facing losses at the current price level.

Additionally, a recent report from CoinShares highlighted a continued outflow from crypto investment products, totaling $30 million over the past three weeks. Ethereum alone saw a significant outflow of $61 million. In contrast, Bitcoin-related exchange-traded products (ETPs) experienced an inflow of $10 million, bringing the total assets across all Bitcoin ETPs to $67.57 billion.

Interestingly, other digital assets recorded positive net inflows. Multi-asset ETPs attracted $18 million, while Solana, Litecoin, Chainlink, and XRP saw inflows of $1.6 million, $1.4 million, $600,000, and $300,000, respectively. The significant outflow from Ethereum compared to the inflows into other digital assets suggests increased bearish sentiment, specifically towards Ethereum.

In summary, Ethereum is experiencing significant bearish momentum, with its price declining and the RSI indicating oversold conditions. While trading volume remains stable, suggesting no panic selling, the continued outflow from Ethereum investment products indicates growing bearish sentiment among investors.

Buterin proposes a single-slot finality mechanism, similar to the Tendermint consensus, where Block N is finalized before the creation of Block N+1. 

On Sunday, June 30, Ethereum co-founder Vitalik Buterin wrote a blog post about Ethereum’s future. He suggested moving away from the current epoch-and-slot mechanism in its rollup-centric roadmap. Buterin proposed a new “Secure Speed Finality” (SSF) mechanism to greatly reduce transaction times to just milliseconds.

The Ethereum Gasper consensus currently uses a slot-and-epoch system where validators cast votes every 12 seconds in each slot. Validators can vote once over 32 slots, and a PBFT-like consensus algorithm finalizes these votes after two epochs, or 12.8 minutes.

Addressing Major Concerns

Buterin pointed out two major concerns with the slot-and-epoch approach. The first is the complexity and multiple interaction bugs between the slot-by-slot voting mechanism and the epoch-by-epoch finality mechanism while the second is that the 12.8-minute finality period is too slow and inconvenient for users.

To address these issues, the Ethereum co-founder proposed a single-slot finality mechanism, similar to the Tendermint consensus, where Block N is finalized before the creation of Block N+1. Unlike Tendermint, Buterin’s proposal retains the “inactivity leak” mechanism, allowing the Ethereum blockchain to continue and recover even if nearly one-third of validators go offline. Buterin called this the SSF mechanism.

Buterin also highlighted key challenges with implementing SSF on Ethereum. A naive implementation would require every Ethereum staker to publish two messages every 12 seconds, significantly increasing the load on the network. 

“While there are clever ideas to mitigate this issue, including the recent Orbit SSF proposal, it remains a challenge. Although SSF significantly improves user experience by accelerating ‘finality,’ it doesn’t eliminate the need for users to wait 5-20 seconds,” he acknowledged.

To reduce the number of validators signing per slot and address the goal of lowering the 32 ETH minimum staking requirement, Buterin suggested using orbit-like techniques. This approach might increase the slot time to approximately 16 seconds. He noted that designs like Orbit SSF are very recent, indicating that the design space of slot-and-epoch mechanisms, incorporating ideas like Orbit SSF, is still under-explored.

Kang believes the ETH/BTC price ratio, currently at 0.054, could drop to as low as 0.035 next year. 

Andrew Kang, co-founder and partner at crypto-focused venture capital firm Mechanism Capital, warned that Ether (ETH) could see a significant drop in value, potentially reaching as low as $2,400.   

According to CoinGecko, Ether is currently trading at $3,410. If it falls to $2,400, that would be almost a 30% drop.  

In a June 23 post on X, Kang mentioned that Ether is less appealing to institutional investors than bitcoin. He also noted several reasons for converting spot Ether into an ETF and that the network’s cash flows haven’t been solid.   

EThereum’s Predicted Price?

He further noted that the predicted price drop would be a significant setback for Ether, which had climbed over $4,000 in March when bitcoin hit a new all-time high. Ether nearly reached that high again just before the U.S. Securities and Exchange Commission (SEC) approved Ether ETFs.  

Kang expects spot Ether ETFs to attract about 15% of the investment that spot Bitcoin ETFs have received, which aligns with the 10-20% range estimated by Bloomberg ETF analysts Eric Balchunas and James Seyffart.  

Kang mentioned that spot Bitcoin ETFs received $5 billion in new funds in the first six months, not counting those converted from spot form.

Based on data revealed, similarly, spot Ether ETFs might receive around $840 million in new funds during the same period.

“I believe that the expectations of crypto natives are overinflated and disconnected from the true preferences of tradfi allocators,” Kang said.   

Kang and Ethereum 

Kang argued that Ethereum’s appeal to investors as a decentralized financial settlement layer, a world computer, or a Web3 app store might sound compelling. However, he believes it’s a tough sell when you examine the data.  

He stated that Ethereum seemed promising as a cash flow generator in the past, especially during periods of high fees from decentralized finance and non-fungible tokens. However, that development has not continued, and now Ethereum might appear to some as just another expensive tech stock. 

Meanwhile, asset management firm VanEck believes that spot Ether ETFs could help boost Ether’s price to $22,000 by 2030.   

Kang believes the ETH/BTC price ratio, currently at 0.054, could drop to as low as 0.035 next year.

SEC has approved the first spot of Ethereum exchange-traded funds. This approval is a landmark event for the crypto industry.

The U.S. Securities and Exchange Commission (SEC) has approved the first spot of Ethereum exchange-traded funds (ETFs), marking a significant milestone for the cryptocurrency industry. This decision allows asset managers such as Grayscale, Fidelity, and Bitwise to launch ETFs that directly track the price of Ethereum (ETH).

BOOM!! APPROVED! There it is. The SEC just approved spot #Ethereum ETFs. What a turn of events. It's really happening.

h/t @PhoenixTrades_ pic.twitter.com/KQ39mDyCbT

— James Seyffart (@JSeyff) May 23, 2024

Following the announcement, Ethereum saw a 1.32% increase and was trading at $3,797, according to CryptocurrenciesToWatch data. The SEC’s approval comes after a period of uncertainty and skepticism among market analysts. Bloomberg analyst Eric Balchunas had previously estimated only a 25% chance of approval by May 23, noting the SEC’s lack of engagement compared to the Bitcoin ETF approval process.

The Ethereum ETFs Approval

The SEC has approved 19b-4 forms for Ethereum ETFs from BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton. However, before trading can commence, these ETF issuers must have their S-1 registration statements go into effect.

The SEC has recently begun conversations with issuers regarding their S-1 forms, but the duration of this process remains uncertain. Some analysts speculate that it could take weeks.

Bloomberg ETF analyst James Seyffart commented, “I think that if they work extremely hard, it can be done within a couple of weeks, but there are plenty of examples of this process taking 3+ months historically.”

The approval of Ethereum ETFs follows a rigorous application process and extensive market analysis. Grayscale’s Chief Legal Officer, Craig Salm, noted that the SEC had already addressed key issues during the approval of spot Bitcoin ETFs, which are also relevant for Ethereum ETFs. These issues include the creation and redemption processes, cash versus in-kind transactions, and custody concerns. Salm emphasized that the SEC’s prior engagement with Bitcoin ETF issuers laid the groundwork for Ethereum ETFs, highlighting the strong correlation between ETH futures and spot prices as a compelling factor for approval.

This approval is a landmark event for the crypto industry, reflecting the growing interest in crypto-asset financial products among traditional investment firms. As the market responds to this development, stakeholders will closely monitor the performance and impact of these newly approved ETFs.

The dollar value locked in active Ethereum futures contracts surged 25% to a record $14.05 billion in the past 24 hours.

The dollar value locked in active Ethereum futures contracts, known as notional open interest, has surged by 25% to a record $14.05 billion in the past 24 hours, according to data from Coinglass. This surpasses the previous peak of $13.2 billion set on March 15. The increase likely reflects investor optimism about the potential approval of the spot Ether ETF by the SEC.

The Wall Street Journal (WSJ) reported that the SEC’s Trading and Markets Division instructed asset managers on Monday to amend and refile their applications. These applications, known as Form 19b-4, inform the SEC of proposed rule changes and require the agency’s approval before the spot ETF can become effective.

Ether Price Surges on ETF Approval Optimism

Ethereum futures have become more popular due to a sudden positive shift in sentiment regarding the potential approval of spot ETH exchange-traded funds (ETFs) in the U.S. This surge indicates a renewed influx of capital into the Ether market, mainly on the bullish side. ETH, the second-largest cryptocurrency by market cap, rose nearly 22% to $3,778, according to data from CryptocurrenciesToWatch. The increase in open interest, along with a price rise, confirms an uptrend.

According to Bloomberg’s ETF analysts, the likelihood of the U.S. Securities and Exchange Commission’s (SEC) approval of the spot ETH ETF has increased. The analysts have raised the odds of spot Ether ETF approval to 75% from 25% after hearing that the SEC may be changing its stance on this issue. Additionally, the SEC has requested exchanges interested in listing and trading potential spot Ether ETFs to promptly update their 19b-4 filings, indicating that the regulator intends to expedite the process.

If the spot ETH ETF is approved, it will be a true shock to everyone I know in DC who's close to this process.

That doesn't mean it won't happen.

It means approval could signal a major shift in US crypto policy after the SAB 121 vote, perhaps more important than the ETF itself. https://t.co/ru0iD0GJIC

— Jake Chervinsky (@jchervinsky) May 20, 2024

The crypto community on X is speculating that the SEC might approve a spot ETH ETF, which could indicate a more positive regulatory approach to crypto. The SEC is expected to decide on the VanEck spot Ether ETF on May 23. For ETFs to start trading on stock exchanges, they need to receive SEC approval for both the 19b-4 filings and the S-1 registration statements.

Vitalik Buterin has outlined future steps to enhance user and node operator experiences.

Vitalik Buterin, the co-founder of Ethereum, has outlined future steps to enhance the network’s permissionlessness and decentralization. Writing from an Ethereum developer interop in Kenya, Buterin highlighted ongoing technical improvements and addressed community issues. He emphasized the need to improve user and node operator experiences.

At the Kenya interop, significant progress was made on important Ethereum advancements such as PeerDAS, the Verkle tree transition, and decentralized history storage through EIP 4444. These innovations aim to increase the network’s capacity and reduce energy consumption. Buterin emphasized the rapid pace of Ethereum development and the community’s ability to implement significant features that benefit both Layer 1 (L1) and Layer 2 (L2) users.

Ethereum Technical Enhancement

In his discussion of block builders, Buterin primarily addressed the Miner Extractable Value (MEV). Previously, miners used a straightforward method to create Ethereum blocks, but MEV has introduced complexity by exploiting certain activities in DeFi protocols.

To mitigate the effects of MEV, two new policies have been proposed: MEV quarantining and MEV reduction. MEV quarantining aims to maintain decentralization and fairness by separating the responsibilities of validators and builders. MEV reduction, on the other hand, focuses on limiting the information accessible to block producers.

The Ethereum staking ecosystem currently relies heavily on centralized providers and DAOs like Lido and RocketPool. Vitalik Buterin has emphasized the need for a robust solo staking environment, citing the 32 ETH minimum and technical challenges as major barriers.

To address these issues, research and development efforts are focused on reducing hardware requirements, simplifying the setup process, and enabling smaller staking minimums. Key technologies such as Verkle trees and EIP 4444 are crucial, as they reduce the hard disk space needed for staking nodes and allow near-instant synchronization, thereby lowering entry barriers for solo stakes. Additionally, exploring penalties capping and 0x01 withdrawal credentials can enhance decentralized staking pools and mitigate risks associated with private key management.

If convicted, Anton Peraire-Bueno and James Pepaire-Bueno could spend 20 years in prison for each count.  

The United States Department of Justice has apprehended two brothers concerning an alleged $25 million crypto exploit on the Ethereum blockchain.  

On May 15, the Justice Department filed charges against brothers Anton Peraire-Bueno and James Pepaire-Bueno for conspiracy to commit wire fraud and money laundering. The U.S. noted that the brothers stole $25 million in crypto within roughly 12 seconds. Users are now doubtful about the security of the blockchain.   

“These brothers allegedly committed a first-of-its-kind manipulation of the Ethereum blockchain by fraudulently gaining access to pending transactions, altering the movement of the electronic currency, and ultimately stealing $25 million in cryptocurrency from their victims,” Thomas Fattorusso, a special agent from the New York Field Office of IRS Criminal Investigation, said.  

Up to 20 Years In Prison

The exploit targeted the maximum extractable value (MEV) in the Ethereum blockchain. Allegedly, the brothers executed a sequence of test transactions, forcing the blockchain to release the entire content of a proposed block prematurely and steal the crypto asset.  

After the exploit, the U.S. stated that the siblings declined requests to return the stolen funds and concealed the assets through shell companies and foreign crypto exchanges. They also transferred the digital assets across multiple wallets. They could face up to 20 years in prison for each charge if found guilty.  

Not the First

Aside from the $25 million exploit, other protocols have suffered significant losses due to exploit. For example, popular decentralized finance (DeFi) platform Prisma Finance was compromised earlier this year, resulting in the loss of approximately $10 million worth of crypto assets. The attackers exploited a code vulnerability to transfer funds from different liquidity pools and protocol functions.

Similarly, in April 2024, DeFi and on-chain token vesting platform Hedgey Finance suffered the same fate, with the exploiter stealing $44.7 million worth of assets.

According to CertiK, crypto hacks, exploits, and scam victims lost approximately $25 million in April, marking the lowest monthly figure since 2021.

EIP-7706 aims to reduce gas fees for transactions with a large amount of calldata but minimal on-chain computations.

Ethereum co-founder Vitalik Buterin has introduced a new draft of the Ethereum Improvement Proposal, EIP-7706, to include a new type of gas for the transaction “calldata” and integrate the three gas types into a coordinated system.

Ethereum transactions currently encompass two main types of gas: one for execution, which covers the computational effort required to process a transaction, and one for storage, which is the cost of storing data with blobs (introduced in EIP-4844). Buterin’s proposal suggests creating a third type of gas specifically for calldata. 

Unveiling EIP-7706

EIP-7706 introduces a separate fee market for calldata. This means that the Ethereum network will charge specific fees for the data transferred in transactions. These costs will be distinct from the costs associated with executing contract code or storing data. The aim is to reduce gas fees for transactions with a large amount of calldata but minimal on-chain computations.

Furthermore, the proposal introduces a new transaction type incorporating three variations of maximum base fees and priority fees as a vector. This allows the same code paths to handle all three types of gas. The proposal aims to simplify basefee adjustment rules by unifying the methodology for all three gas types and ensuring that the more robust mathematical features of the EIP-4844 basefee adjustment algorithm apply to all three gas types.

This EIP-7706 was introduced just days after Buterin, along with co-authors Sam Wilson, Ansgar Dietrichs, and Matt Garnett, proposed improvements to account abstraction in EIP-7702.

According to CryptocurrenciesToWatch (CTW), Vitalik Buterin introduced EIP-7702 last week. Positioned as an alternative to EIP-3074, EIP-7702 aims to enhance user interaction with the Ethereum blockchain. It allows regular accounts to temporarily function like smart contracts for a single transaction, offering greater flexibility and security.

This advancement could simplify gas fee management and transaction batching, improve security, and result in a more user-friendly experience.