Those who closely follow the blockchain world know that things can change quickly, and this is evident in the airdrop of new STRK tokens by the Ethereum layer-2 Starknet network.

But sometimes a new trend takes hold. This is what seems to be happening right now. “Liquid restaking protocols”, and their ” Liquid Restaking Tokens ” or LRTs, are bringing in billions. Sam Kessler, a CoinDesk contributor, weighs in with this week’s article.

Also this Week:

  • Coinbase is under fire after its Commerce payment protocol ended support for third party self-custody wallets.
  • Our Protocol Village columns of blockchain technology updates includes: Solana (Filecoin), COTI (Animoca), Polygon Labs (EOS), Minima and Wicrypt.
  • Where will all the bitcoins come?

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News Network

BASE VS. BITCOIN? A number of posts appeared on social media platform X, complaining that Coinbase Commerce’s online payment protocol did not allow payments from bitcoin wallets in self-custody. CEO Brian Armstrong responded, saying that the company’s executives “believe that paying with crypto will primarily occur on layer 2 in future and that we want to make that happen.” He said that “I believe the market for everyday items paid for on layer 1 is going to be small, no matter what chain it’s on (maybe not Solana). Armstrong wrote that the fastest checkout for the company’s online payments protocol, Coinbase Commerce is “with any ERC-20 token on layer 2” (Base or Polygon). This includes Ethereum, USDC and wrapped Bitcoin, as well as thousands of ERC-20 Tokens. Base is Coinbase’s layer-2 network on top of Ethereum, , which was launched with great fanfare last year. Lauren Dowling, , product leader for Coinbase Commerce, , responded to Armstrong’s post within a few hours. She explained , “the product is changing,” and that “the new Commerce products enforce the details of every payment onchain and supports hundreds of assets across Base, Polygon, and Ethereum (and automatically converts payments into USDC onchain with a guaranteed rate to retailers.” We had to make the hard decision to remove native Bitcoin & UTXO from the Bitcoin blockchain because it was difficult to deliver the features on the blockchain without smart contracts or stablecoins. Dowling said that customers could still use their Coinbase account to pay for bitcoin. Udi Wertheimer, a prominent bitcoiner and member of the Taproot wizards Project, defended Coinbase: “When Brian Armstrong and Coinbase claim that the payment UX for bitcoin is bad they know what they are talking about.”

RESTAKING narrative: The new blockchain projects have reached major financial milestones in just a few weeks after their launch. According to DefiLlama the liquid restaking protocol puffer has passed $1 billion of deposits in less than three weeks since it opened to users on February 1. The third largest liquid restaking Protocol launched the KEP token to allow users to trade otherwise illiquid EigenLayer rewards and points. The core of the issue is ” point farming“, which is traders trying to earn points that are given out by projects to early users.

  • Stellar, a payments-focused blockchain created as a fork of the Ripple protocol in 2014, entered the era of programmability, adding Ethereum-style smart contracts through the two-years-in-the-making “Soroban” project.
  • Starknet, the Ethereum layer-2 based network based upon zero-knowledge encryption, had a market capitalization of $1.4 billion after the much anticipated (and controversy ) airdrops of approximately 700 million STRK tokens of the project. After initially reaching as high as $5,000, the price of the token dropped to $1.91 on day one.

Starknet’s controversial airdrop of STRK tokens. This includes 22% for Ethereum holders and 2.1% for Open-Source developers. (Starknet)

Protocol Village

The top picks from our Protocol Village Column, which highlights key blockchain technology upgrades and news.

  1. According to the Filecoin Team , Solana has integrated with Filecoin. “Solana uses Filecoin in order to make its historical block history more accessible for infrastructure providers, indexers, explorers and anyone who needs to access it.” Filecoin can help Solana achieve data redundancy and scalability while maintaining its decentralized ethos. CoinDesk’s 20 assets: SOL and FIL
  2. COTI a layer-1 Blockchain, has unveiled a garbled-circuits encryption paradigm. According to the team, “This is the very first time that garbled-circuits have been successfully implemented on the blockchain. This brings on-chain privacy and a computation speed of up to 1,000 times quicker than other encryption systems such as fully homomorphic cryptography (FHE). Garbled Circuit Technology is a type of multi-party computing (MPC), which uses specialized cryptographic techniques to allow parties to work together to perform a computation that requires private information without disclosing it to anyone else.
  3. EOS has introduced the upgrade to Leap 6 . The team says that this upgrade “transforms the ecosystem using the Savanna algorithm” and “boosts transaction speed by 100 times.” It is scheduled to be released on July 10. This upgrade enhances security, decentralization and user experience. Infrastructure providers and their partners should take note of key dates. The hard fork is set for July 31, 2018.
  4. Minima is a layer-1 Blockchain focused on DePIN solutions (decentralized physical infrastructure networks). According to the team, Minima has partnered with Wicrypt, an intelligent WiFi network. The goal is to “democratize internet access and make it cheaper for all”. Wicrypt embeds Minima nodes in WiFi routers. These will be able grant network access for Minima users. Minima routers will run Minima nodes, allowing each router to become an active router. This decentralizes the network infrastructure and makes it more resilient.

The Liquid Restaking tokens, or “LRTs”, revived Ethereum DeFi. Can the hype last?

This year, the number of liquid restakers who have “locked in” their total value or deposits has risen dramatically. (DeFiLlama)

The decentralized finance model on Ethereum is booming, and the old promise of high returns has returned thanks to new crypto assets: “liquid restaking Tokens,” or LRTs.

In just the last month, millions of dollars were poured into Ethereum-based liquid restaking platforms like , Ether.Fi, and Puffer. Each project has its own LRT. The new platforms are engaged in a fierce turf war to replace Lido’s staked Ethereum (stETH), as the preferred asset for DeFi traders.

The whole trend is based on the development of EigenLayer. This protocol launched a “restaking system” for Ethereum in June, a first. It is developing a way to allow blockchain networks and apps to borrow Ethereum’s security systems. In a 24-hour period, it attracted more than $1 billion of new deposits. The platform now has a total of over $7 billion. This means that it is responsible for more than 1.5% all ether tokens (ETH) in circulation. , according to DefiLllama.

These platforms act as intermediaries between EigenLayer and users: They “restake”, or exchange, user deposits for newly-generated LRTs. Users can continue trading, even though their deposits are used to restake.

Money Center

Deals and Grants

  • QR has received $3 million to help DeFi Bitcoin.
  • Starter International Holdings partnered with Atlanta Blockchain Center to revamp its acclaimed crypto-launchpad, promoting diversity and innovation. The team stated: “The collaboration introduces base chain support in order to fill the VC sector’s diversity gaps. Starter has raised $45M and supported over 60 IDOs, and is destined to foster a more inclusive ecosystem by bridging blockchains and communities. Discover how this partnership is redefining blockchain fundraising and empowering minority founders at”
  • According to the Silicon Valley incubator‘s request for startups list published last week, stablecoin financing is a category on its updated list.

Data And Tokens

Policy, Regulatory and Legal

Where are all those bitcoins coming from?

continues to flow into recently approved bitcoin ETFs, earmarked for the purchase of BTC. Analysts are trying to figure out where the bitcoins could come from. Alex Leishman of River, a bitcoin-focused financial company, , tweeted a graph that suggested that spot bitcoin ETF flow could amount to almost 1 million BTC in a year. This is for a cryptocurrency that has a limited supply of 21 million and that most of it has already been mined. Cameron Winklevoss of Gemini tweeted “Bitcoins ETFs take 10x more bitcoins off the market each day than they are being mined.” If the inflows continue through the quadrennial halves expected in April, then “Bitcoins ETFs will take 20x more.” The crunch could get worse if the price of bitcoin moves past $50,000 and attracts more retail investors. Galaxy Digital analysts wrote that if BTC were to regain the $50k mark, it would also encourage investors who had been sidelined to reconsider their BTC positions in the lead up to the halves. River’s Leishman presented a diagram purporting show different categories of bitcoin holders and their holdings.

  • March 12-13: Sub0 Asia, Polkadot developer conference, Bangkok
  • Amsterdam, June 11-13, Apex and the XRP Ledger developer summit.
  • The EthCC is in Brussels from July 8-11.

Bradley Keoun is the editor.