Blockchain

The EU Parliament’s economic committee just reached a compromise on the digital euro, and the part that matters got almost none of the coverage. Fees and offline payments took the headlines. Underneath them, the French and German data authorities had forced privacy up the agenda, insisting the digital euro behave like cash. They are right to fight that. They are fighting it on far too small a field. Because the digital euro the ECB is actually building is a capped, intermediated, offchain instrument that arrives around 2029. By then the question won’t be whether Europe has a digital euro. It’ll be whether anyone still needs one. The opportunity in front of the ECB right now is larger than the one it is planning for, it is buildable with technology that already exists, and everything standing in the way is a policy choice. None of it is cryptographic. ...

The Ethereum Foundation published its mandate, and a lot of people read it as a change of direction. It’s not. It reads that way because it’s the first time the Foundation has written down, in a single place, what Ethereum was always supposed to be. I support the mandate. And I think most of the surrounding noise is either missing the point or defending an arrangement that happened to be comfortable. ...

If you’ve been following CCP Games’ EVE Frontier development, you know it represents something genuinely different from EVE Online. Not just a new game, but a new economic model. Where EVE Online runs a closed economy that legally cannot connect to the broader world, Frontier puts player assets on a blockchain and actively encourages that connection. The in-game economy can plug into the wider crypto world. EVE Frontier is still in early testing as I write this. But assume it eventually launches and grows. If it reaches the size of EVE Online in terms of player activity and scope, how big could its economy actually become in real, USD terms? ...

If you’ve been watching the rsETH situation unfold over the last week, you’ve probably seen the headlines. A $292M bridge exploit, $13B of TVL fleeing Aave, stablecoin pools pinned at 100% utilization for days, and a slow-motion governance scramble that’s still going on as I write this. It’s tempting to file it as “another DeFi hack” and move on. I don’t think we should. This one is unusually instructive, not because the hack itself was novel (it wasn’t, bridges keep getting exploited, and as I’ve said before, I think bridging is an anti-pattern), but because of what the response showed us about how DeFi actually works under stress. We got to see something here that’s hard to see anywhere else. ...

If you’re like me, having been involved in the blockchain and Ethereum space since around 2018, with a tilt towards TradFi and enterprise use cases, you’ve likely come across numerous private chain initiatives. And with few exceptions, they all missed the point. These initiatives often started life as some R&D effort, looking at new tech and trying to map it to their existing culture and structures. As such, blockchains were approached purely from their technical capabilities. And they found that blockchains were slow and complex, so instead of calling them blockchains they needed to be called DLTs, so that other distributed technology approaches could be included in the stack. ...

I’m old enough to remember when the LAMP stack (Linux, Apache, MySQL, and PHP) was the go-to choice for building websites. Things have changed since then. While PHP is still going strong (think WordPress and similar), many developers now prefer Node.js or other such JavaScript engines when building from scratch, thanks to their flexibility and vibrant ecosystem. TypeScript, and perhaps Postgres or even SQLite then follow. Linux is still a given, so much so we don’t even need to mention it in any acronym. ...

In finance we sometimes talk about a “risk free rate”. It’s a mythical investment with no risk, paying with 100% certainty according to some defined schedule. As any real investment with actual risks should compensate for those, real investments then must pay an appropriate risk premium above the risk free rate. Often, investors will use government bonds as a “good enough” proxy for the risk free rate. If the government can practically print money to pay for their obligations, the risk of a default is seemingly low (at the cost of inflation). We of course know that governments sometimes default on their debts, yet it’s often the best proxy we’ve got. ...

As soon as we started having multiple blockchains, be that numerous L1s or L2s, public or private, and any mix of these, the question of how they interact with each other was asked. There are numerous types of interactions between blockchains, but a typical example is that of “the bridge”. In short, a bridge allows you to lock up a token native to a source blockchain, and then make it available on a target blockchain. It’s important that these tokens are native to the source blockchain, because if they are not they could in theory exist across many and hence don’t need a bridge to begin with. ...

Stablecoins are on the up. If we look at stablepulse, at the time of writing, we’re at over 200B in circulating supply. Volumes are also up, both metrics at all time highs. And while the big actors dominate, their models are by no means decentralized. There’s either an element of cash in a bank, or a link to other TradFi instruments. Or if not that, some other element of centralized control, at best through a DAO. ...

Like I mentioned on LinkedIn a couple of weeks back, Dencun/4844 was Ethereum’s broadband moment. The blob transactions enabled by that hardfork network upgrade enabled a new type of storage space for unstructured data. Very soon after this change, we saw transaction prices on Layer 2s, like Arbitrum, Base, and Optimism drop significantly, often over 10x cheaper than prior to the upgrade. As Ethereum mainnet continues building on these new rails, additional transaction bandwidth will be unlocked, supporting further growth among the L2s. ...