Ethereum

Why the Ethereum Layer-2 Taiko network is spending $100,000 a day on blobs

Published

8 months ago

9 June, 2024

Why the Ethereum Layer-2 Taiko network is spending $100,000 a day on blobs

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A Ethereum layer-2 The network called Taiko dominates the market for what we call blobsor dedicated data storage for Ethereum scalers, but these efforts result in costs of tens of thousands of dollars every day for the little-known scaling solution, even surpassing the $100,000 mark several times this week.

The Taiko protocol, which went live in late May, aims to offer users cheaper and faster transactions than on Ethereum’s mainnet, while borrowing security elements from the network. Since going online, Taiko has spent a whopping $900,000 in blobs in less than two weeks to funnel user transactions into the Ethereum network.

Meanwhile, Taiko’s competitors, like Optimism network, rarely spend more than $1,000 per day on Blob-related fees. Introduced in March under the name part of an Ethereum upgradeblobs were introduced as a new resource for layer 2 scaling networks to publish Ethereum transactions at a lower cost.

Taiko Labs, creator of the protocol announcement in March, it had raised $15 million in a Series A funding round. By leveraging “zero-knowledge” cryptography in its design, Taiko is working to differentiate its scalable design in a growing field. more competitive that includes dozens of different scalable networks.

“Taiko just launched its mainnet, and there is a lot to discover before it becomes stable,” said Daniel Wang, CEO of Taiko Labs. Decrypt in a written statement. “We knew we would use more blobs than other Layer 2s. This is a design decision, not a bug.

Layer 2 networks often work by aggregating batches of transactions and processing them on a separate chain before sending the receipts back to Ethereum. However, Taiko’s design differs from this formula, in which many transactions are grouped into batches elsewhere.

Instead, the process of ordering transactions, called sequencing, takes place on Ethereum itself. In a blog postTaiko Labs said this process, called “core sequencing,” is more decentralized than other Layer 2s that rely on centralized sequencers, which are controlled by a network’s development team and collect a small part of user fees.

“It seems expensive,” Alexei Zamyatin, co-founder of Bitcoin BOB layer 2 network, known as Decrypt in an interview. “This makes it more secure, but not as secure as [Ethereum]and you are also much more expensive than most layer 2s.”

A game of compromises

Still, Wang said the costs associated with Taiko’s features could easily break even if “Taiko is fully utilized by users,” providing a sustainable amount of gas fees.

Wang added that Taiko is fully aware of the pros and cons associated with its sequencing method, and he hopes that Ethereum researchers will study Taiko’s on-chain data to explore improvements that could allow Ethereum to better support similar scaling networks.

Some Ethereum researchers, including Justin Drake, believe that Taiko’s team is at the forefront of a new form of decentralized sequencing that could solve major obstacles in the Ethereum ecosystem.

“This takes a step forward in decentralization, credible neutrality and composability of rollups,” he said. Decrypt in a written statement.

If more Layer 2 networks moved the sequencing of their transactions to Ethereum itself, then the fragmentation issues holding up all the space could be resolved, he said. Currently, liquidity and assets are widely distributed across different Layer 2s, effectively siloing users and applications within a given scaling solution while all being tied to Ethereum.

When it comes to Layer 2 networks on Ethereum, the introduction of blobs represented a significant change in how these protocols interact with the underlying blockchain. Before blobs were available as a separate paid marketplace, Layer 2s could only publish bulk transactions as Ethereum “call data,” a space for data to be contained within transactions.

Instead of mass-processing user transactions alongside regular Ethereum activity, blobs almost serve as a dedicated lane on a highway, where less congestion can reduce costs. However, the best way to package these transactions before shipping is still up for debate.

Blobs blobs blobs

In some cases, centralized sequencers can be used to paralyze a network, piercing the veil of permissionless activity that is synonymous with crypto. Sometimes centralized sequencers can be abused to delay transactions Also. However, Taiko’s commitment to decentralization may not be the most effective, according to one of its community advocates.

“Unfortunately, it’s a bit expensive,” pseudonymous cryptography researcher arixon.eth. said on Twitter (aka X). “Due to sequencing, we need to release a blob every 12 days. [seconds]and if there isn’t enough [transactions]then we just won’t fill the blobs.

Due to based sequencing we have to release a blob every 12 seconds and if there aren’t enough transmissions we simply won’t fill the blobs.

Unfortunately it’s a bit expensive, so we really need preconfs based on

– arixon.eth (@arixoneth) June 1, 2024

Taiko Labs’ Wang said changing this pace could be a potential solution adopted soon, stating that the Taiko community is “considering reducing the block proposal frequency a bit.”

The constant flow of blobs, no matter how full they are, has made Taiko one of the top users. On Sunday, for example, Taiko released 25% of all blobs on Ethereum, according to a popular poll. Dune Dashboard. That day, Taiko spent nearly $63,000 in blob-related fees.

On Thursday, Taiko paid $123,000 in fees for blobs, representing 73% of all costs paid for Layer 2s, which was its second day in a row with a six-figure fee total. And while most Layer 2s pass on the cost savings to their users through lower fees, the premium Taiko pays for decentralization, for now, is not a bill users must foot.

“For the moment, it is partially subsidized by the team”, arixon.eth saidadding that the process could be changed in the future so that “blocks are missed until there are enough blocks.” [transactions] in the mempool for a proposer to push a block to [Ethereum] profitably.”

On Wednesday, during the first airdrop of TAIKO tokens, the network’s native cryptocurrency, Layer 2 averaged about 6.42 transactions per second, according to L2BEAT. Meanwhile, Ethereum recorded around 13.6 transactions per second itself.

The performance of Taiko’s token has been rocky so far. After crashing 40% an hour after its launch, from $3.80 to $2.27, the token’s price recovered to $2.45, at the time of writing, showing a drop of almost 3% over the last day, according to CoinGecko.

Edited by Andrew Hayward

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Ethereum

Cryptocurrency liquidations surpass $200 million as Ethereum and Bitcoin plummet

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Bitcoin and Ethereum Tank as Crypto Liquidations Reach $150 Million

Cryptocurrency market liquidations hit their highest level in a week on Wednesday as the price of Bitcoin fell below $60,000.

Over the past 24 hours, over 74,000 traders have been liquidated for $208 million, CoinGlass the data shows it.

The majority of those losses, about $184 million, went to investors holding long positions who had bet on a price rise.

The largest liquidations hit Ethereum investors, at $55.5 million, almost entirely on long positions, the data showed.

Current issues surrounding US monetary policy, geopolitical tensions, and the upcoming US presidential election in November are expected to impact the price of the leading cryptocurrency throughout 2024.

Bitcoin abandoned The stock price fell from $62,200 to $59,425 intraday. The asset has since recovered its losses above $60,200, but is still down 3% over the past 24 hours.

In the meantime, Ethereum East down 3% During the same period, the stock price fell from a high of $3,425 on Wednesday to a low of $3,254. It is now trading at $3,300.

Solana, the world’s fifth-largest cryptocurrency by market capitalization, was the worst hit among the top 10 cryptocurrencies, down about 8% to $140. Solana had been riding high on New York investment management firm VanEck’s filing of its Solana Trust exchange-traded fund late last month.

Major cryptocurrencies have been falling over the past month. Ethereum has fallen more than 12% over 30 days despite growing interest in the launch of Ethereum spot ETFs.

Some analysts predict that new financial products could begin marketing in mid-Julywith at least one company predicting that the price of ETH will then take offBitcoin is down 12% over the same period.

Certainly, analysts always see further price increases this yearThe current market cooling represents a precursor to another major price surge in the coming months, Decrypt reported Monday.

On Wednesday, analytics firm CryptoQuant released a report examining Bitcoin Mining Metrics and highlighted the conditions for a return of prices to current levels.

Edited by Sebastian Sinclair.

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Ethereum

Volume up 90%: good for ETH price?

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Ethereum (ETH) has emerged as a beacon in the sea of blockchains, with a staggering 92% increase in decentralized application (dApp) volume over the past week. But the news comes with a layer of complexity, revealing a landscape of both opportunity and potential setbacks for the leading blockchain.

Cheap gas fuels the fire

Analysts attribute the explosion in decentralized application volume to the Dencun upgrade in March, which significantly reduced gas costs – the cost associated with processing transactions on the Ethereum network.

Lower transaction fees have always attracted users, and this recent development seems to be no exception. The surge in activity suggests a revitalized Ethereum that is likely to attract new projects and foster a more vibrant dApp ecosystem.

NFT craze drives numbers up

While overall dApp volume (see chart below) paints a positive picture, a closer look reveals a more nuanced story. This surge appears to be driven primarily by an increase in NFT (non-fungible token) trading and staking activity.

Source: DappRadar

Apps like Blur and Uniswap’s NFT aggregator have seen significant surges, highlighting the rise of the NFT market on Ethereum. This trend indicates a thriving niche in the Ethereum dApp landscape, but raises questions about the platform’s diversification beyond NFTs.

A look at user engagement

A curious problem emerges when looking at user engagement metrics. Despite the impressive increase in volume, the number of unique active wallets (UAWs) on the Ethereum network has actually decreased.

Ethereum is now trading at $3,316. Chart: TradingView

This disconnect suggests that current activity could be driven by a smaller, more active user base. While high volume is certainly a positive indicator, seeing broader user participation is essential to ensuring the sustainability of the dApp ecosystem.

A glimmer of hope ?

A positive long-term indicator for Ethereum is the trend of decreasing holdings on the exchange, as reported by Glass nodeThis suggests that ETH holders are moving their assets off exchanges, potentially reducing selling pressure and contributing to price stability.

If this trend continues, ETH could potentially target $4,000 this quarter or even surpass its all-time high. However, this price prediction remains speculative and depends on various market forces.

Ether price expected to rise in coming weeks. Source: CoinCodex

Ethereum at a Crossroads

Ethereum is at a crossroads. Dencun Upgrade has clearly revitalized dApp activity, particularly in the NFT space. However, uneven dApp performance and the decline of the UAW are raising concerns about the long-term sustainability of this growth. Network growth, measured by the number of new addresses joining the network, is also slowing, according to Santiment, which could potentially hamper wider adoption.

The short-term price outlook for ETH remains uncertain. While long-term indicators, such as declining exchange holdings, suggest potential for price appreciation, slowing network growth could lead to a price decline in the short term.

Look forward to

The coming months will be crucial for Ethereum. The platform must capitalize on the renewed interest in dApps by attracting a broader user base and fostering a more diverse dApp ecosystem beyond NFTs. Addressing scalability issues and ensuring user-friendly interfaces will also be essential to sustain growth.

If Ethereum can overcome these challenges, it has the potential to cement its position as the premier platform for decentralized applications. However, if it fails to adapt, other waiting blockchains could capitalize on its shortcomings.

Featured image from Pexels, chart from TradingView

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Ethereum

Ethereum, Bitcoin, and XRP Behind $1.5 Billion Losses in Cryptocurrency Scams

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Ethereum, Bitcoin, and XRP Behind $1.5 Billion Losses in Cryptocurrency Scams

The first half of 2024 has seen a surge in major hacks in the cryptocurrency sector. Ethereum (ETH)Bitcoin (BTC) and XRP have resulted in losses of over $1.5 billion due to cryptocurrency scams. This year, over 200 major incidents have resulted in losses of approximately $1.56 billion.

Cryptocurrency Scam Losses Reach $1.5 Billion

According to data from Peck Shield Alert, only $319 million in lost crypto funds have been recovered. Furthermore, this year’s losses represent a staggering 293% increase over the same period in 2023, when losses totaled $480 million.

Overview of Cryptocurrency Scams in 2024, Source: PeckShieldAlert | X

Additionally, DeFi protocols have been the top targets for hackers, accounting for 59% of the total value stolen. More than 20 public chains have suffered major hacks during this period. Additionally, Ethereum, Bitcoin, and XRP top the list for the amount lost via cryptocurrency hacks.

Additionally, Ethereum and BNB Chain were the most frequently targeted, each accounting for 31.3% of the total hacks. Meanwhile, Arbitrum followed with 12.5% of the attacks. One of the most significant incidents occurred on June 3, 2024.

Bitcoin DMMa major Japanese cryptocurrency exchange, reported a major breach. Attackers stole 4,502.9 BTC, worth over $300 million at the time. The incident highlighted the vulnerabilities of exchanges, especially those that handle large volumes of digital assets.

Major XRP, ETH and BTC hacks

A week after the DMM Bitcoin attack on June 10, UwU Loana decentralized finance (DeFi) lending protocol, was compromised. The breach resulted in a loss of approximately $19.3 million in digital assets. The hack underscores the ongoing risks associated with DeFi platforms, which often operate with less regulatory oversight. The platform later offered a $5 million reward to catch the hacker.

Earlier this year, on February 3, 2024, Ripple co-founder Chris Larsen confirmed a major security breach involving his personal wallets. Initially, rumors circulated that Ripple itself was targeted. However, Larsen clarified that the hack involved his digital wallets and not Ripple’s corporate assets.

The hackers managed to transfer 213 million XRP tokens, worth approximately $112.5 million. Additionally, on-chain detective ZachXBT first alerted the community about the suspicious transactions. In response to the theft, Larsen and various cryptocurrency exchanges took swift action to mitigate the impact.

Several exchanges, including MEXC, Gate, Binance, Kraken, OKX, HTX, and HitBTC, collaborated to freeze a significant portion of the stolen funds. Binance alone froze $4.2 million worth of XRP to aid in the investigation.

Additionally, on April 2, 2024, FixedFloat, a Bitcoin Lightning-based exchange, experienced a security breach. Unauthorized transactions resulted in financial losses exceeding $3 million. This incident highlighted ongoing security issues for FixedFloat, following a similar breach earlier in the year.

The company has also faced significant challenges securing its platform against repeated attacks. Additionally, in February, hackers stole $26 million worth of Ethereum and Bitcoin from FixedFloat. These digital assets were then transferred to exchanges for profit.

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Ethereum

Ethereum’s Year-Over-Year Revenue Tops Charts, Hitting $2.7 Billion

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Ethereum fees drop to seven-month low as L2 competition heats up

Ethereum blockchain has been in first place for a year incomesurpassing all major blockchains.

According to data provided by Lookonchain, Ethereum generated $2.72 billion in annual revenue, surpassing the Bitcoin network by a margin of $1.42 billion. The data shows that Bitcoin accumulated $1.3 billion in revenue over the same period.

Defi Llama Data watch that Ethereum is still the leader in decentralized finance (challenge) with a total value locked (TVL) of $58.4 billion, or 60.9% of the entire market. The blockchain recorded a 30-day fee revenue of $131 million, according to the data aggregator.

Bitcoin’s TVL is currently set at $1 billion.

The network of the second largest cryptocurrency, ETH, witness a 155% year-over-year increase in its fee revenue in the first quarter of this year, as the cryptocurrency market saw a bullish trend.

Tron comes in third with annual revenue of $459 million. Solana and BSC also recorded nine-figure revenues of $241 million and $176 million, respectively.

Notably, Tron is the second largest chain in the challenge scene with a TVL of $7.7 billion. BSC and Solana take third and fourth place with TVLs of $4.8 billion and $4.5 billion, according to Defi Llama.

Avalanche, zkSync Era, Optimism and Polygon reached the top 10 with $68 million, $59 million, $40 million and $23 million in year-over-year revenue, respectively.

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