Cudos

Katherine Ross

Digital asset infrastructure platform Fireblocks is acquiring smart contract firm BlockFold.



Details on the acquisition were not disclosed, though Fireblocks noted it would be integrating the BlockFold team. Co-founder Terence Signakis will also stay on as head of Tokenization Products.



The deal will expand Fireblocks&#8217; tokenization abilities, allowing it to offer advisory services, customization, and distribution to clients.



Additionally, the company said that tokenization project demand rose 350% between 2022 and 2023. The goal is for BlockFold to allow Fireblocks to expand the tokenization opportunity, which it believes could grow into a multi-billion dollar market.



BlockFold most recently was <a href="https://blockworks.co/news/australian-bank-nab-stablecoin-ethereum">involved with National Australia Bank’s first cross-border intra-bank stablecoin</a> transfer. BlockFold assisted with the smart contracts and direct custody of the tokens.&nbsp;&nbsp;



&nbsp;“We already speak a common language in understanding these customers’ requirements at an architectural level. Bringing BlockFold’s expertise in-house means that we can better serve tier-1 financial institutions to quickly and seamlessly bring tokenization projects into production and new assets onto the blockchain,” Michael Shaulov, <a href="https://blockworks.co/tag/fireblocks">Fireblocks</a> CEO, said in a statement.&nbsp;



“In addition, we can continue to innovate and expand our offerings and tailor our approaches as the market continues to mature and evolve.”



The company has been involved in stablecoin projects, including a tokenization project with the Israeli Ministry of Finance and the Tel Aviv Stock Exchange which plans to tokenize the Israeli debt market over the next few years.



&#8220;Fireblocks’ acquisition of BlockFold stands to strengthen its tokenization capabilities and bridge the gap between [centralized finance] and DeFi by allowing financial institutions like TASE to build robust and scalable infrastructures and support well-governed digital asset ecosystems,” said Orly Grinfeld, EVP, head of clearing at the Tel Aviv Stock Exchange.



At the <a href="https://blockworks.co/tag/permissionless">Permissionless</a> conference, <a href="https://blockworks.co/news/fireblocks-ceo-michael-shaulov-fortune-500-mpc">Shaulov said that institutions are focusing</a> on an audience that has not interacted with crypto or Web3, which adds a complicated layer for any company looking to launch a Web3 venture.



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Fireblocks acquires tokenization firm BlockFold

Teneo, the liquidator of Three Arrows Capital (3AC), said Friday that Su Zhu, the failed crypto hedge fund’s co-founder, has been apprehended by authorities in Singapore.



Teneo, in a statement shared with Blockworks, announced Zhu’s apprehension in a press release circulating on social media and stated that the former hedge fund founder faces four months in prison under a committal order.&nbsp;



The arrest is said to have occurred as Zhu sought to leave Singapore by airplane. News of the arrest has yet to be independently corroborated by Singapore authorities.



The order was applied for and obtained by Teneo on Sept. 25 after <a href="https://blockworks.co/tag/su-zhu">Zhu</a> refused to comply with a court order requiring him to cooperate with the liquidators. Teneo added that “a similar committal order was granted against the other co-founder of 3AC, Mr. Kyle Livingston Davies.”



Singapore <a href="https://blockworks.co/news/3ac-zhu-davies-securities-violations-monetary-authority-singapore">recently issued a multi-year market activity ban</a> against both Zhu and Davies, which went into effect on Sept. 13.&nbsp;



The Monetary Authority of Singapore said that 3AC misled the regulator and committed multiple violations between August 2020 and January 2022.



“MAS takes a serious view of Mr. Zhu’s and Mr. Davies’ flagrant disregard of MAS’ regulatory requirements and dereliction of their directors’ duties. MAS will take action to weed out senior managers who commit such misconduct,” Loo Siew Yee, assistant managing director of payments and financial crime at MAS said in a statement at the time.



<a href="https://blockworks.co/tag/3ac">Three Arrows</a> collapsed in the summer of 2022 following the infamous depegging of the <a href="https://blockworks.co/price/ust">UST</a> stablecoin.



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Three Arrows co-founder Su Zhu arrested in Singapore, says liquidator firm

Paul Dylan-Ennis

It’s a hard and brutal truth to accept, but Sam Bankman-Fried single-handedly nuked the opportunity for crypto. This really hit home for me watching a recent BBC Panorama documentary about the collapse of FTX. I watched it hoping a talking-head might suggest SBF’s actions had undermined the positive potential of crypto. I didn’t expect the majority to mention this, but there’d be at least one advocate in the mix. 



But not once did the idea of crypto as good ever turn up. And while I’ve had this feeling for a while, the <a href="https://www.bbc.com/news/technology-66892685">documentary</a> made it crystal clear: We are cooked, done for, to the mainstream. And if you’re no longer likely to be part of the mainstream culture, then where else can you go, but back to your roots, to subculture. 



Crypto is a subculture that got out of hand — but I also believe that crypto will survive to the extent it accepts its status as a subculture. But to get back to our subculture roots, we need to extricate ourselves from a poisonous dynamic: Our reliance on the social media platform X.



Read more:  <a href="https://blockworks.co/news/sam-bankman-fried-trial-starting-soon">Sam Bankman-Fried’s trial starts Oct. 3: What you need to know</a>



Marshall McLuhan’s famous insight that the medium is the message means that the media we use shapes the content we consume. Or the other way around, the content we consume obscures the media we use. The history of crypto is one shaped by its social media, and today we appear trapped in a toxic relationship with one in particular, X (the artist formerly known as Twitter).&nbsp;



When Bitcoin launched in 2009, the discourse around the first cryptocurrency happened on what was already an ailing platform, the bulletin board discussion forum. Bitcointalk was not Athens, far from it, but the discussion forum format did enforce a slower pace and a more traditional call-and-response dialogue tree.&nbsp;



By around 2015, crypto had mostly transitioned over to Reddit. Reddit’s format enabled crypto projects to establish their own niches. The most overarching subreddit, /cryptocurrency, superficially suggested a cohesive movement, while the posts often saw projects sniping at one another in the comments. Reddit as a medium ramped up the antagonism and rivalry by both enabling segregation into echo chambers and then, to pour oil on the fire, gave us one giant messy Parliament, where everyone could mutter under their voices while representatives from the other side gave their speeches.&nbsp;



The current stage was the move toward X.&nbsp;



X is a medium that has had three main corrosive effects on crypto. First, X brought all the absurdity and drama of crypto culture to the eyes of the mainstream. X is not an isolated discussion forum or relatively obscure subreddit, but a global public square where all our shenanigans are magnified. Silly, over-the-top claims about the metaverse could now be shared for likes by an Average Joe looking for an easy dunk. Second, X algorithmically rewards adversarial content. Influencers hell bent on building a following have turned topics as mundane as what consensus mechanism is best into viable careers. You could spend your time analyzing interesting nuances between mining and staking, but it&#8217;s far more lucrative — quite literally since monetization — to spin a conspiracy theory or two for your audience. Third, X as a platform seems almost entirely indifferent to stemming the relentless flow of fake giveaways, airdrops and shady links polluting everyone’s posts.&nbsp;



For most people, this is all they see of crypto, and it shapes their attitudes, hardening them to the thesis that crypto has failed. Not that crypto has potential if it can just get rid of the scammers, but that whatever crypto was supposed to be, what it actually is is Scam City. The medium is the fake airdrop under your friend’s post.



Read more from our opinion section: <a href="https://blockworks.co/news/web2-data-web3-threads" target="_blank" rel="noreferrer noopener">Dear Web2, we want our data back</a>



Moving away from X, there’s a more subtle point about the mediums we choose to communicate with. If we ourselves insist on using Web2 social media platforms rather than our own, then why would anyone really buy into our ideas around decentralization, permissionlessness, the ownership economy, etc.?&nbsp;



Because these platforms exist. We already have Lens (similar to Meta), Console (similar to Discord) and Farcaster (similar to X) on Ethereum. These <a href="https://blockworks.co/news/web3-social-media-apps-to-watch">exist now as perfectly functional Web3 alternatives</a>. 



These are our mediums and they offer an escape route. However, psychologically, a transition away from “Crypto Twitter” and its millions of users to any one of these much quieter Web3 platforms would be admitting that crypto is a subculture once again.



But this might be exactly what we need for crypto to succeed.



We have to build out our own Web3 platforms, hopefully eliminating the worst excesses of the Web2 platforms we are currently dependent on. Then maybe, just maybe, when people come across us again, they’ll find a group of people living according to their values and be able to see the good in those values for themselves.



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<div class="wp-block-post-author-biography">Dr. Paul Dylan-Ennis is Lecturer/Assistant Professor in the College of Business, University College Dublin. He is the author of the forthcoming book “The Absolute Essentials of Ethereum” with Routledge. </div>


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If we want crypto to succeed, we’ve got to give X the boot

Jack Kubinec

The Interchain Foundation, a non-profit focused on Cosmos adoption, released a 2024 roadmap previewing next year’s goals for the so-called internet of blockchains.



The 50-page <a href="https://docs.google.com/document/d/1j_VnHsM0Hsi2so9gf2oLFKhy3wVa7csCa3lTjlMYCsI/edit">document</a> primarily discusses Cosmos&#8217; focus on blockchain modularity and interoperability. It also makes multiple references to Ethereum rollups. The ecosystem aims to attract developers who are disappointed with the constraints of layer-2 solutions, with the roadmap itself meant as an onboarding tool. By publicizing its vision, the Interchain Foundation hopes to spark greater enthusiasm about the future of <a href="https://blockworks.co/tag/cosmos">Cosmos</a>.



Cosmos is a network of interoperable blockchains, meaning different protocols in the network can communicate and transact with each other without having to wrap tokens. Several infrastructural protocols in the Cosmos network contributed to the Interchain Stack Roadmap — and seem to have their sights set on Ethereum-based developers in 2024.&nbsp;



Cosmos’ Inter-Blockchain Communication protocol, or IBC, said its “main priority […] is to expand the reach of IBC to [zero-knowledge] and optimistic rollup frameworks.”&nbsp;



Cosmos’ Software Developer Kit, or SDK, claims Cosmos presents developers with greater customizability compared to Ethereum and its rollups. This is due to Cosmos’ flexibility, which comes in part from its modularity, or separation of blockchain functions. Still, Cosmos admits that its modularity toolkit has room to grow in 2024.



Cosmos software is currently “modular in theory, but in practice, it is challenging to swap and/or modify items,” Cosmos SDK wrote.



Maria Gomez, the Interchain Foundation’s managing director, told Blockworks that Cosmos has struggled to market itself to developers without a native token to create financial incentive for adoption. But compelling narratives drive adoption too, and Gomez hopes the 2024 roadmap will hit developers’ imaginations like Ethereum roadmaps have.



“In Ethereum, Vitalik comes with a roadmap, and even if that roadmap doesn’t happen, everybody gets excited around those things and conversations start to happen. And that’s what we were missing,” Gomez said.



Cosmos’ foundational blockchain, the Cosmos Hub, has seen 660 <a href="https://tokenterminal.com/terminal/projects/cosmos">changes</a> to its code in September. This marks an increase in developer activity from July and August, according to data compiled by Token Terminal.

2024: The Cosmos year of rollup integration and modularity

Bessie Liu

Offchain Labs, the research and development team behind Ethereum scaling protocol Arbitrum, has had a busy few months.



Recent milestones include the launch of tools for developers to launch their own Abitrum chains through <a href="https://blockworks.co/news/arbitrum-validation-protocol-permissionless">Arbitrum Orbit</a>, the introduction of a <a href="https://blockworks.co/news/arbitrum-validation-protocol-permissionless">permissionless validation protocol</a> and the release of programming environment <a href="https://blockworks.co/news/arbitrum-stylus-testnet">Abitrum Stylus</a>.



Today, Arbitrum is one of the largest Ethereum scaling platforms. It holds a market share of almost <a href="https://l2beat.com/scaling/summary">55%</a> and has a total value locked of $5.82 billion, <a href="https://l2beat.com/scaling/summary">according</a> to L2beat.



Most recently, the team <a href="https://blockworks.co/news/ethereum-espresso-systems-offchain-labs-transaction-ordering">partnered</a> with Espresso Systems, a decentralized sequencing layer, to further develop Timeboost — a transaction ordering technology optimized for improving first-come-first-serve tendencies in capturing maximum extractable value (MEV).



In an interview with Blockworks at Permissionless II, <a href="https://blockworks.co/tag/offchain-labs">Offchain Labs</a> co-founder Steven Goldfeder said that the decision to work with Espresso Systems was made so that credible, neutral third parties could help drive the scalability of Ethereum.



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Blockworks: Tell me about Timeboost and the decision behind partnering with Espresso Systems to bring the tech to life.



Goldfeder: Timeboost was a proposal that we at Offchain Labs had put out in a few iterations on Arbitrum research forums and elsewhere. The idea comes down to MEV ordering. Historically, there are different schools of thought about how to order transactions. On Arbitrum today, there’s “first come, first serve” ordering, but others say everything should be auctioned — this is the other end of the extreme — which is that you completely pay for ordering transactions in a mempool. Timeboost is sort of an in-between of these two camps, which basically says there are intervals that allow you to bid for placement and have the privacy of transactions built in.&nbsp;



We’re partnering with Espresso. We’re going to provide key research, and they’re going to actually build it out in a way that is compatible with the Espresso sequencer. The reason why we’re not building this out ourselves is because we have to understand the realities of what we build, and how that’s perceived, and the biases that are associated with that. We need something that is more neutral.



When it comes to interoperability, if every different rollup stack is building its own megachain, you don’t really accomplish much. Whether we open source it or not, other chains will not use something we built. I think if you really want to get interoperability, it is by building an Ethereum super chain. The way to do that is to empower credibly neutral third parties, putting our biases down for a second, and I think that’s actually best for the Ethereum community.&nbsp;



Blockworks: There’s a lot of MEV discussion around time-sensitive transactions versus non-time-sensitive transactions. So, with Timeboost’s guaranteed inclusion, how do you determine what transaction should be included? It seems like it would be pretty difficult to choose a good middle ground.



Goldfeder: So even today, before we get Timeboost, there’s this concept of forced inclusion on Abritrum chains. The forced inclusion on Arbitrum chains today is 24 hours, what that means is you can’t censor indefinitely but the sequencer can real-time censor or delay. I think the parameters about transaction inclusion will be up to the different chains that choose to adopt this [technology]. If the Arbitrum DAO adopts it, it can choose to set these parameters.&nbsp;



If you ask me what I think about Timeboost, the parameters we think about are more in the realm of a few seconds. The idea is that what we have today — the chain forcing the sequencer to do something — is very different from Timeboost where a distributed party, the sequencer, has logically agreed to do something. I think that lends itself to much shorter intervals of guarantees.&nbsp;



In a, let&#8217;s say, two-second interval, you can bid for timing, but every user will guarantee that its transactions are being processed quickly. If the Timeboost committee is behaving according to its principles, then that transaction will be included. If this whole time this committee colludes against you, you still can go on-chain and get this other guaranteed inclusion from on-chain.&nbsp;



Blockworks: Do you think shared sequencing is a more pressing issue than permissionless fraud-proof systems?



Goldfeder: No, not really. A lot of people don’t really know what decentralized sequencing means. Say for example with Abirtrum the sequencer has very limited power because there are fraud proofs. Sequencers can’t do anything security-critical. It can’t actually go ahead and steal your money or take it and put it back in a transaction — that’s validators. Validators will challenge one another if they do the wrong thing. Sequencers give you fast confirmations, but those don’t hold any weight on-chain.



In a validation system that doesn’t have any fraud proofs of validators, then the sequencer is basically the dictator. It can submit whatever fraud or whatever state routes it wants In some ecosystems, that is true, but it’s really more about the progress of the sequencer. I think the most important thing here is that decentralizing the security of the system — which Arbitrum does today — among about a dozen different institutions submitting fraud proofs or having the ability to challenge different fraud proofs if necessary. I think that is number one. When we launched Arbitrum, having fraud proofs was non-negotiable.



So, going back to what can a sequencer do? It can’t do anything like include a bad transaction. It can order transactions, but it can’t censor a transaction. It can delay a transaction, but it can’t, as we discussed before, censor indefinitely because there are paths to guarantee a transaction on-chain — and that’s where the decentralizing sequencers come in. 



I think that it’s an important problem, but I think that having live security proofs is more important, and that’s why we prioritize building the security proofs before the decentralization of ordering.&nbsp;



This interview has been edited for brevity and clarity.



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Offchain Labs’ Goldfeder talks Timeboost, transaction ordering and more

Sebastian Sinclair

As the one-year anniversary of FTX’s demise quickly approaches, centralized exchanges continue to fight for a restoration of trust by assuaging customer concerns regarding the legitimacy and purpose of their existence.



They also continue to innovate beyond what has previously been afforded to market participants by ensuring greater transparency around the way in which they conduct their businesses.&nbsp;



At least that’s what’s being promised. To date, no major exchange has yet provided a comprehensive audit of assets held on their platforms, instead opting for a <a href="https://blockworks.co/news/what-are-proof-of-reserves-and-can-they-build-back-trust">proof-of-reserve</a> model.



That model, <a href="https://blockworks.co/news/crypto-proof-of-reserves-solvency-audit">according to some</a>, falls short of canvasing the true happenings behind the scenes at some of the industry’s largest players — which argue they’re getting it right by proving their reserves through a verifiable auditing practice.



In light of past events, OKX President Hong Fang spoke with Blockworks at this year’s Permissionless event on the challenges her exchange continues to grapple with and the innovations taking place, hoping to draw customers back.



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Blockworks: Talking broadly on the vision of OKX, can you describe that? What&#8217;s the vision like and how do you see yourselves moving forward in the next 12 months?



Fang: Ultimately, we all always believe that we are looking at technology. We&#8217;re using technology to really empower individuals and give individuals more control and more transparency. I think that&#8217;s what we&#8217;re here for within crypto and Web3. I think our mission is really to be part of that and really help to build that infrastructure and build toward a different culture that is more trustless.



Blockworks: So how does that align with the crypto industry ethos? And do you think that&#8217;s changed over the years?



Fang: I don&#8217;t think so. I mean, there are many things that change around us. We always say that crypto is fast, crypto is changing all the time. But I do think that there are constant themes.&nbsp;



And those constant themes are actually what matters to us the most, which is one: technology is something that actually really matters. Two, you have to be able to build things that actually matter for the customer — using technology to actually benefit the customer.&nbsp;



And then three is about really what you do, as a platform, as an individual, ultimately decides who you are. We have been around for almost 10 years now. We have always thought about ourselves as a long-term player.&nbsp;



So every decision that we have made in product and business is related to those focused on technology innovation, really focused on doing what&#8217;s right for the customer and focused on building long term.



Blockworks: Can you describe to me some of the largest innovations over a five-year period that OKX is really proud of?



Fang: I think we have made a lot of progress over the last few years. Even over the last year, where there&#8217;s a lot of volatility and uncertainty and unpleasantness out there.&nbsp;



I think our team has been able to really focus and build, we put out our proof-of-reserve program. And I think it&#8217;s probably the only one of the very few who have been very consistently doing it because we actually automate it, we are not manually doing the proof-of-reserve.&nbsp;



We continue to solicit feedback from the community and upgrade the technology behind it and later add the zkSTARK, to really add the layer of privacy and scalability to that program. We&#8217;ve been doing it for 10 months now.&nbsp;



We also have our Web3 wallet. We have been pushing out our wallet and continue to add different features, we added [Multi-party Computation] features to it to make it simple to use without a seed phrase.



We most recently added the <a href="https://www.okx.com/help/okx-wallet-supports-account-abstraction-create-smart-accounts-with-one-click">account abstraction</a> (AA) capability to it as well. You know, if you ask me, is the AA account really usable right now? It&#8217;s probably not to most people, it&#8217;s more talking to special core crypto native people, but still, it&#8217;s part of the infrastructure that we&#8217;re building.



Blockworks: Given that your time in your role as President has been quite limited — nine months — can you highlight any challenges or triumphs that you&#8217;ve experienced over that period?



Fang: I think I&#8217;ve seen our team really put aside the distractions out there in the market. A similar experience I actually had was when I was at Goldman — when I joined Goldman — that was in 2008.&nbsp;



Obviously, it was not a fun time to join the financial industry because everything was falling apart. But the one piece of advice that I&#8217;ve got from my mentor was to really focus on what the customer wants.



When you focus on what customers want and then you actually serve a customer, you forget about those noises and actually keep building and I think that&#8217;s what we have been doing at OKX.



Blockworks: You mentioned Goldman Sachs. How has your traditional finance experience shaped your approach to crypto today?



Fang: I&#8217;ve learned quite a lot there. But related to how I view crypto, there are a few things that I think really matter. One is from my experience there, I&#8217;ve done a lot of stuff at Goldman. I&#8217;ve done, M&amp;A, I&#8217;ve done spin-off, I&#8217;ve done usual IPO follow-up, I&#8217;ve done also more special types of capital pull — warrants offering or convertible — all kinds of stuff.&nbsp;



But what really stands out from those activities is, ultimately, you realize that capital markets are actually a distraction, particularly in the short term. The capital markets figure out long term, if there&#8217;s a substance below the price and price or just signals.



So I think I&#8217;ve learned to just take the price of signals, and no more than that. The signals are useful over a longer period of time. It tells you whether you&#8217;re in the right direction or not. But short term it&#8217;s very distracting.&nbsp;



And for builders, and even investors, you better focus on what&#8217;s actually underlying, whether there’s any substance, whether you are actually working on something that actually makes sense. I think that&#8217;s one of the biggest things I&#8217;ve learned from my experience there.&nbsp;



The second piece that I think I&#8217;ve learned, that&#8217;s kind of also why I later chose to work in this industry, is I realized that we are not in the free markets, ultimately, the money is not free.&nbsp;



We went through so many cycles — obviously 2008 was one of the big cycles — and you see a malicious cycle of bailing out and then the market broke down, and then bailing out again, and then the [financial] gap increased over time.&nbsp;



I think the fundamental reason was that money is not free and price signals in the market [are] distorted. So I think we want to be able to fix money — have honest money, have the right price signals in the market, so that we can more effectively allocate resources.



And I think that’s fundamentally what we are doing here. The Web3 industry is hopefully built on that honest money, and then we facilitate collaboration through a trustless system. I think that’s ultimately what will provide more productivity to the society, and that’s how I approach crypto itself as well.



Blockworks: What&#8217;s OKX’s approach to crypto regulation? Particularly with everything that&#8217;s happening in the US. How is OKX managing this period in crypto?



Fang: We actually believe that regulation is helpful for the industry and we really embrace it. We need more regulatory clarity to provide more ground rules and also prepare for the next stage when more people come in.&nbsp;



So we as a platform, really welcome and embrace that. We have a lot of conversations and productive engagements with various regulators, we have quite a few licenses and applications that [are] either already approved or in process.



We are also committed to building for the US market longer term. I do think that that&#8217;s an important market. There&#8217;s a lot of spirit of innovation and the spirit of the ethos of crypto and of Web3 is very much in line with US culture.



Blockworks: Given that weekly volumes across centralized exchanges are down to some of the lowest levels in two years, how is OKX managing this landscape?&nbsp;



Fang: From a business perspective, we have always been operating with huge discipline. Cash flow has always been at the top of our minds as we innovate on the product side. So for us, we have always focused on the monthly cash flow scale very responsibly.&nbsp;



If you went back to 12 months ago, or 18 months ago, there were a lot of other players in the market who had chosen a shortcut — they focused on short-term profitability. That turned out to be the wrong decision.&nbsp;



For us, we always focused on the long term and we only operate ourselves as a platform instead of trading against customers taking directional bets, taking on big counterparty risk.



There is a fundamental need for trading as well as for facilitating transactions in the market. So we believe that if we actually develop our products right, the market is always there.



Blockworks: How centralized entities restore trust following the collapse of the FTX and how important is OKX’s role in that endeavor?



Fang: We do see, particularly after FTX’s collapse, a lot more uncertainty in the market, both from the customer perspective, as well as from regulators&#8217; perspective.



From the customer side what we want to do is really to address the underlying gap which is lack of transparency. So what we have really emphasized is really to provide that level of transparency on the centralized exchange with Web3 technology. That&#8217;s where we&#8217;re our proof of reserve program was started.&nbsp;



It&#8217;s important as a way to hold ourselves accountable and is an important way for customers to be able to check. It’s also an important way to remind customers that “hey, look, you should verify. Even if we put out stuff, you should actually try our protocol and try to run it yourself and see if there&#8217;s any issue with the program that we have.”



Promoting that sense of personal responsibility is also part of the solution. You cannot just blindly trust any platform, either government or private.&nbsp;



Regulators also ask questions, and I think it&#8217;s actually good. Because of FTX’s collapse, regulators are also seeing the most vulnerable parts of the industry at this point.&nbsp; And they naturally ask questions around customer protection around customer funds around trading. So I think those are all the right questions to ask.&nbsp;



I think that will help the industry to build more frameworks on the centralized part. That’s actually important to have that on the centralized exchange part because there is a level of responsibility for those platforms to disclose and follow certain rules on the ground.



This interview has been edited for brevity and clarity.



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Tech-first, trust-next: OKX’s roadmap for regaining consumer confidence

Legislation, introduced to the House by Rep. Don Beyer D-VA. on Thursday, aims to bolster transparency around digital asset transfers that are not recorded on a public blockchain.



The Off-Chain Digital Commodity Transaction Reporting Act, being touted as a consumer protection bill, would require digital asset trading platforms to record transfers in a repository registered with the CFTC.&nbsp;



Amendments are being sought within “the Commodity Exchange Act with respect to reporting digital commodity transactions.” Transactions would need to be reported within a 24-hour period after they’re executed, a copy of the <a href="https://beyer.house.gov/uploadedfiles/off-chain_digital_commodity_transaction_reporting_act.pdf">bill’s text</a> reads.



Off-chain transactions can encompass a variety of activities, including private peer-to-peer transfers and the movement of funds between different accounts on a centralized exchange.



“As consumers increasingly turn to large digital asset trading platforms to conduct their business, thousands of transactions each day are conducted off the publicly verifiable blockchain,” Beyer said in a statement.&nbsp;



“Unfortunately, internal record keeping among these private entities can vary wildly and this can leave investors and consumers vulnerable to fraud and manipulation.”



Following the collapse of FTX and other centralized entities, <a href="https://blockworks.co/news/binance-shows-proof-it-has-all-your-bitcoin-critics-arent-sold">criticism by industry proponents</a> has been levied at the way in which digital assets are recorded and transparently communicated to the public.



In response, major exchanges including OKX, Binance and Crypto.com, among others, have attempted to assuage customers using a “<a href="https://blockworks.co/news/what-are-proof-of-reserves-and-can-they-build-back-trust">proof-of-reserves</a>” model, soliciting third-party accounting firms to bolster credibility and legitimacy.



This model seeks to provide a verification mechanism to ensure that customer-held assets align with the reserves the institution maintains on its client’s behalf.&nbsp;



Legislation Thursday could potentially add an additional layer of transparency surrounding the health of a given institution.



“Many platforms maintain internal private ledgers that track transactions, but these records can be of varying quality. Discrepancies can lead to disputes, manipulation, or fraud,” per the statement.



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US House bill pushes for central registry of off-chain crypto trades

Shalini Nagarajan

Remember Multichain, the bridging network that <a href="https://blockworks.co/news/multichain-anyswap-exploit">suffered unauthorized withdrawals</a> of over $130 million, allegedly involving its CEO?



It suspended operations in July after disclosing that CEO Zhaojun and his sister were behind transferring a large amount of tokens from its bridging networks to externally owned addresses.



Now, some of the platform&#8217;s developers are getting back in the game with a new project, ValueRouter, that looks quite a bit like Multichain.



And it&#8217;s safe to say people don’t like it.



Multichain, previously known as Anyswap, enabled users to bridge their cryptoassets across different blockchain networks.&nbsp;



ValueRouter looks similar, as its <a href="https://www.valuerouter.com/">website</a> explains: “Swap any asset for your desired asset across multiple chains in just one transaction.”



The new venture, <a href="https://twitter.com/MultichainOrg/status/1707604474452177006">announced</a> Friday, seems to enable users to transfer or exchange assets between Ethereum, Avalanche, Optimism and Arbitrum blockchains.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">👏 A salute to the former engineers of Multichain! Even after the team&#39;s disbandment, they continue to forge ahead in Web3, bringing forth <a href="https://twitter.com/ValueRouter?ref_src=twsrc%5Etfw">@ValueRouter</a> . 🌟 Explore <a href="https://t.co/zzp2i9nwGd">https://t.co/zzp2i9nwGd</a> for seamless bridging or cross-chain swaps among <a href="https://twitter.com/ethereum?ref_src=twsrc%5Etfw">@ethereum</a> <a href="https://twitter.com/avax?ref_src=twsrc%5Etfw">@avax</a> <a href="https://twitter.com/optimismFND?ref_src=twsrc%5Etfw">@optimismFND</a> <a href="https://twitter.com/arbitrum?ref_src=twsrc%5Etfw">@arbitrum</a>.…&mdash; Multichain (Previously Anyswap) (@MultichainOrg) <a href="https://twitter.com/MultichainOrg/status/1707604474452177006?ref_src=twsrc%5Etfw">September 29, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



“ValueRouter is a unified protocol that simplifies multi-chain asset swaps by integrating Circle CCTP and DEXes, empowering developers to build cross-chain dApps and enabling users to effortlessly route assets to any major DeFi platform,” the team said.



It utilizes a multi-party computation system, similar to a multi-signature wallet, which is much like how Multichain operated.



A Multichain representative told Blockworks that the team members behind the new project are “self-employed engineers who have also fallen victim to Multichain&#8217;s debacle.”



The representative added that there have been discussions about potential grants for the team from angels and other established players.



But the news sparked surprise among some, with crypto sleuth ZachXBT <a href="https://twitter.com/zachxbt/status/1707611733441815010">suggesting</a> the team should address the $125 million that&#8217;s unaccounted for before embarking on a new project. 



Nick SR, who manages social media for the Fantom Foundation, <a href="https://twitter.com/Nick_SR5/status/1707604945816465860">remarked</a>, “Too soon.”



In July, Multichain urged users to halt bridge activities due to unauthorized withdrawals.



The Fantom ecosystem was hit particularly hard by Multichain’s failure; its already suffering total value locked (TVL) cratered following the unauthorized withdrawals, which ultimately <a href="https://blockworks.co/news/multichain-bridge-fantom-dex">forced the Fantom-based SpiritSwap DEX to shut down</a>.


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1432" height="628" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/09/multichain-tvl-defillama.jpg?w=1024&amp;h=1024" alt="" class="wp-image-69481" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/09/multichain-tvl-defillama.jpg?w=1432 1432w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/multichain-tvl-defillama.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/multichain-tvl-defillama.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/multichain-tvl-defillama.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/multichain-tvl-defillama.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/multichain-tvl-defillama.jpg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/multichain-tvl-defillama.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/multichain-tvl-defillama.jpg?w=80 80w" sizes="(max-width: 1432px) 100vw, 1432px" /><figcaption class="wp-element-caption">Fantom TVL; Source: <a href="https://defillama.com/chain/Fantom">DeFiLlama</a></figcaption></figure></div>


Multichain later <a href="https://blockworks.co/news/multichain-founder-family-arrested">revealed</a> that its CEO Zhaojun had been detained by Chinese authorities since late May, and his devices and recovery phrases were confiscated.



Zhaojun&#8217;s family allegedly gained access to the cloud server platform using information from his home computer, and granted only limited access to the team just to address some tech issues.



A Multichain team member earlier <a href="https://blockworks.co/news/multichain-bridge-fantom-dex">told</a> Blockworks that tokens affected by the large withdrawals lacked collateral, leaving users without a quick solution. They added that Zhaojun couldn&#8217;t perform the withdrawals independently as the police controlled the server access.&nbsp;



As of last month, the team had no plans to reimburse users for the unauthorized withdrawals.



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Multichain team pivots after security debacle

Replicating designer merch isn’t a far-fetched idea. A bold few may indeed attempt it, proudly displaying what appears to be genuine accessories.



Web3 startup IYK, which stands for &#8220;If You Know,&#8221; emerged with the concept of ensuring the legitimacy of fashion items and other merchandise, while offering fans unique consumer interactions.



On Thursday, IYK, co-founded by Ryan Ouyang and Christopher Lee, <a href="https://mirror.xyz/iyk.eth/mw-PQ5THEea4NLjLpICEAblFVfgmTJBv7hoffvc6RIA">revealed</a> that it raised $16.8 million in seed round funding.&nbsp;



This round was spearheaded by A16z crypto and included participation from Collab Currency, Lattice Capital, 1kx, Synergis Capital, among others.



IYK — serving clients such as Adidas, 9dcc and VÉRITÉ — is founded on the idea of embedding NFC (near-field communication) chips within merchandise or apparel.&nbsp;



This technology enables consumers to effortlessly tap their smartphones on items like T-shirts to confirm their authenticity.&nbsp;



In exchange, customers receive NFTs and the possibility of exclusive offerings from brands.&nbsp;



Meanwhile, businesses gain insights into their merchandise ownership and maintain direct communication with customers.



Ouyang, one of the co-founders, shared IYK&#8217;s journey in a recent <a href="https://twitter.com/RyanOuyang_/status/1707429724606157269">X thread</a>.&nbsp;



He recounted how he crossed paths with his partner, Lee, in the summer of 2021 on Discord. Together, they ventured into the world of Web3 projects, ranging from NFT sniping bots to online scavenger hunts.



One day, Ouyang found himself frustrated while waiting in a Ticketmaster queue to purchase tickets for a John Mayer concert. Despite being a frequent concertgoer for Mayer’s shows and a top 0.01% streamer, he had to compete against ticket-snatching bots for seats.



This experience made him realize that artists lacked the tools needed to maintain a strong connection with their real-world audience and devoted fans.



The realization sparked the idea that eventually evolved into IYK. After acquiring NFC chips, they set out to create a prototype of their concept.



IYK recently partnered with Adidas for an exclusive limited shirt release tied to NFT NYC 2023. In this collaboration, they created a total of just 152 shirts.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">new drip ⛓️<a href="https://twitter.com/adidas?ref_src=twsrc%5Etfw">@adidas</a> + <a href="https://twitter.com/indigo_herz?ref_src=twsrc%5Etfw">@indigo_herz</a>, powered by iyk <a href="https://t.co/sLCadJSfEb">pic.twitter.com/sLCadJSfEb</a>&mdash; IYK (@iyk_app) <a href="https://twitter.com/iyk_app/status/1646705948327567362?ref_src=twsrc%5Etfw">April 14, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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The company defines its platform as a user-friendly gateway accessible to brands, musicians, artists and creators of all kinds to help them create “digi-physical” products without requiring technical expertise.



IYK&#8217;s recent fundraising is noteworthy in light of the tough funding environment for blockchain startups prevailing today.



The company secured this round after participating in the A16z Crypto Startup School, a twelve-week accelerator program hosted by the venture capital firm, focused on supporting emerging startups within the sector.



Blockchain fundraising has been challenging due to a prolonged slowdown in funding, heightened scrutiny and concerns about the macroeconomic environment.



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A16z gets ‘digi-physical’ with $17M funding for IYK

The Securities and Exchange Commission has delayed decisions on several other bitcoin ETF proposals just days after delayed <a href="https://blockworks.co/news/sec-decision-date-bitcoin-etf">decisions for Ark 21Shares and GlobalX</a> until January.



The anticipated <a href="https://www.sec.gov/files/rules/sro/nasdaq/2023/34-98606.pdf">delays</a> filed Thursday focused on BlackRock, Valkyrie, and <a href="https://www.sec.gov/files/rules/sro/nysearca/2023/34-98607.pdf">Bitwise’s</a> bitcoin ETF applications. The SEC initially delayed its decision on the fund on Aug. 31.



On Wednesday, the SEC moved to delay Hashdex’s bitcoin ETF which was expected on or around Oct. 6.



Bloomberg’s James Seyffart <a href="https://twitter.com/JSeyff/status/1707488041663697200">said</a> the delays are trickling in now to get ahead of an expected government shutdown. In a hearing in DC earlier this week, SEC Chair Gary Gensler said a shutdown would leave the regulator with a “skeletal” staff.&nbsp;



BlackRock is the <a href="https://blockworks.co/news/blackrock-clout-bitcoin-etf-approval">most highly anticipated of the bitcoin ETF</a> applications, with the $9 trillion asset manager having an impressive record of approvals from the SEC. Bloomberg’s Eric Balchunas and Seyffart have said that the record stands at roughly 575-1.



Read more: <a href="https://blockworks.co/news/sec-bitcoin-etf-grayscale">Is another SEC bitcoin ETF denial politically untenable?</a>



Prior to the second delay, many of the fund hopefuls had deadlines in mid-October, though — as Blockworks previously reported — industry experts have stressed that the SEC can delay its rulings until the end of the 240-day deadlines.



The delays have left some questioning whether the SEC plans to appeal the Grayscale decision, in which a <a href="https://blockworks.co/news/grayscale-sec-spot-bitcoin-etf">panel of judges sided with Grayscale</a> and asked the SEC to re-examine its application to convert its Bitcoin Trust (GBTC) to an ETF.



As Blockworks noted, there is a 45-day window from the Aug. 29 decision for the SEC to appeal. That would mark Oct. 13 as its final day.&nbsp;



However, as the bitcoin ETFs face further — though expected — delays, the SEC is pushing forward with Ethereum futures ETFs.



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SEC delays BlackRock, Valkyrie spot bitcoin ETFs decision

Ben Strack

While the fate and timeline around US spot bitcoin ETFs remains opaque, the Securities and Exchange Commission appears to have given its blessing to ether futures funds.&nbsp;&nbsp;



Crypto-focused investment firm Valkyrie had filed with the SEC in August <a href="https://blockworks.co/news/valkyrie-eth-futures-etf">to change its Bitcoin Strategy ETF</a> — which holds bitcoin futures contracts — to one that also invests in ether futures. 



The attempt was successful.



The Valkyrie Bitcoin Strategy ETF began adding exposure to ether futures contracts Thursday, a Valkyrie spokesperson told Blockworks in an email. The fund’s new investment strategy is set to become formally effective on Oct. 3, the representative added — at which point its name will change to the Valkyrie Bitcoin and Ether Strategy ETF (BTF).&nbsp;&nbsp;



<a href="https://blockworks.co/news/volatility-shares-eth-futures-etf">Volatility Shares kicked off the latest wave of ether futures ETF proposals</a> with a July 31 filing. Others, including Grayscale Investments, Bitwise Asset Management, ProShares, VanEck, Direxion, and Roundhill Investments <a href="https://blockworks.co/news/eth-related-etf-proposals">quickly followed suit with similar proposals</a> the following week. 



Read more: <a href="https://blockworks.co/news/sec-consider-ether-futures-etfs">SEC now ready to consider ETH futures ETFs, sources say — but what’s changed?</a>



Valkyrie’s different approach — by amending the investment strategy of an existing fund — had put its potential effective date ahead of other proposed issuers.&nbsp;



Industry watchers expect other ether futures ETFs to launch in short order.



Volatility Shares said last month it planned to launch its Ether Strategy ETF (ETHU) on Oct. 12. VanEck posted a video on its X page Thursday — in tandem with a press release — teasing the “upcoming launch” of the VanEck Ethereum Strategy ETF.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">When you’re ready, ENTER THE ETHER. The VanEck Ethereum Strategy ETF ($EFUT) is coming soon. Read our press release: <a href="https://t.co/4QPOVd5nB2">https://t.co/4QPOVd5nB2</a> <a href="https://t.co/vSF3HzMuvC">pic.twitter.com/vSF3HzMuvC</a>&mdash; VanEck (@vaneck_us) <a href="https://twitter.com/vaneck_us/status/1707419473337033075?ref_src=twsrc%5Etfw">September 28, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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A VanEck spokesperson did not return a request for comment on the exact timing of that launch.&nbsp;



Eric Balchunas, senior analyst at Bloomberg Intelligence, said in a Thursday X <a href="https://twitter.com/EricBalchunas/status/1707394842827882826">post</a> that the SEC could look to speed up the launch of ether futures ETFs before a potential government shutdown.



The SEC had submitted a range of filings this week delaying its decisions on a number of planned ETFs, including <a href="https://blockworks.co/news/sec-decision-date-bitcoin-etf">a spot bitcoin ETF proposal by Ark Invest and 21Shares</a>. The regulator was not expected to weigh in on that proposal next until Nov. 11.



Segment observers speculated the earlier-than-expected disclosures were also due to the looming shutdown, which Gary Gensler said during a Wednesday hearing would leave the commission with a “skeletal” staff.&nbsp;&nbsp;



Valkyrie’s success in modifying its existing fund to hold ether futures contracts comes nearly two years after the first bitcoin futures ETFs hit the US market.&nbsp;



ProShares launched its bitcoin futures product just days before similar funds by Valkyrie and VanEck went live — a first-mover advantage that <a href="https://blockworks.co/news/bito-on-track-to-be-first-fund-in-history-to-hit-1b-in-aum-in-two-days">helped it quickly amass $1 billion in assets under management</a>.&nbsp;



Several issuers, including Grayscale Investments, filed for ether futures ETFs in May before halting such plans. Sources told Blockworks at the time that the SEC signaled it was <a href="https://blockworks.co/news/sec-ether-futures-etfs">not ready to approve such products</a>.



The SEC did not return a request for comment.



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Valkyrie is the first to provide ether futures exposure in an ETF

As a range of firms chase a spot bitcoin ETF, Ark Invest expects to differentiate by ultimately bringing more exposures than rivals to market, the company’s chief operating officer said.&nbsp;



The Securities and Exchange Commission approving a spot bitcoin ETF would be “just the beginning” for the US crypto ETF space — spurring a “metamorphosis” for digital asset access for TradFi users, <a href="https://blockworks.co/tag/ark-invest">Ark Invest</a> Chief Operating Officer Tom Staudt told Blockworks in an interview.



“We believe firmly that we will have the most encompassing, most complete, most diverse and deepest crypto suite of products in the ETF wrapper in the United States,” he added. “We want to be the crypto solution for the ETF market.”



Like a handful of other fund groups, Ark Invest — in tandem with Europe-based crypto ETP issuer 21Shares — has a proposed spot bitcoin <a href="https://blockworks.co/tag/etfs">ETF</a> in front of the SEC. The Cathie Wood-led firm is <a href="https://blockworks.co/news/sec-decision-date-bitcoin-etf">set to receive a ruling on that product</a> from the securities regulator by Jan. 10.



The firms have also, similarly to competitors, <a href="https://blockworks.co/news/ark-21shares-ethereum-etf">filed for an ETF that would invest in ether futures contracts</a> — a type of fund <a href="https://blockworks.co/news/bitcoin-etf-race-news">expected to launch next month.</a>&nbsp;



But Ark Invest and 21Shares have planned other crypto offerings, such as a fund that would invest in both bitcoin futures and ether futures contracts. Another would blend bitcoin futures exposure with crypto- and blockchain-related equities.&nbsp;



Read more: <a href="https://blockworks.co/news/ark-21shares-spot-bitcoin-etf">Amid spot BTC ETF effort, Ark and 21Shares seek to launch other crypto funds</a>



The two companies then made headlines earlier this month by <a href="https://blockworks.co/news/21shares-ark-filing-for-spot-ether-etf">filing for a spot ether ETF</a>.&nbsp;



“Right now we have seven filings; we don’t think that’s where this will end,” Staudt said. “We think that the regulators and the market are both going to approve and demand more solutions for deeper exposures and more specific exposures.



“Obviously the obstacles and the big opportunities are still ahead of us,” he added.



Though Ark intends to ultimately have the most comprehensive crypto suite, it is not the only one chasing multiple crypto products.&nbsp;



ProShares was <a href="https://blockworks.co/news/first-bitcoin-futures-etf-nears-1b-on-first-day-of-trading">the first to launch a bitcoin futures ETF</a> in October 2021 and also filed for various ether futures-related strategies last month. VanEck, Valkyrie and Bitwise also have live bitcoin futures offerings and intend to broaden their ETF lineups with exposure to ether futures, spot bitcoin and, in VanEck’s case, a spot ether product.



It’s not a stretch for Ark Invest to believe they can become a US leader in the segment given 21Shares is the world’s largest provider of ETPs, according to Nate Geraci, president of The ETF Store. The challenge, he added, will be navigating the “absolutely brutal competitive environment,” particularly when it comes to fees.&nbsp;



“Ark isn’t exactly known as a low-cost leader with their existing product lineup, so the question is how committed will they be to fighting for crypto ETF assets based on fees?” Geraci told Blockworks.



The company has a competitive advantage when it comes to marketing, however, he argued — an asset industry watchers have said will be crucial given the crowd of fund issuers seeking to launch similar funds.



“Nobody in asset management markets their firm and products the way Cathie Wood does,” Geraci said. “That could be a game changer if their crypto ETFs are competitively priced.”



Ark’s focus on the pending US crypto ETFs comes as the firm’s other main priority is bringing its existing, non-crypto innovation strategies to Europe. Last week, the company acquired thematic fund specialist Rize ETF Limited, giving the firm an entry point into that market.&nbsp;



Though Europe already has its share of crypto ETPs trading, Ark could seek to bring some differentiated crypto-related offerings to Europe — and other global markets — down the line, Staudt said.



But the executive noted that right now, getting its crypto ETFs approved in the US is more pressing.



“We’re really intending to not take our eye off the ball at what we think is a critical juncture,” Staudt added. “It’s pretty fair to say the US crypto ETF market is on the precipice of the inflection point.”



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Ark anticipates win in US crypto ETF battle with ‘deepest’ suite, COO says

Darren Kleine

It was only a year after the launch of the Ethereum mainnet that Nick Johnson began building the Ethereum Name Service, or ENS — a tool for assigning human-readable names to otherwise-complicated sequences of letters and numbers that describe Ethereum addresses.&nbsp;



“It was one of the first projects I started working on at the Ethereum Foundation and then spun out to its own organization,” he says, “and we&#8217;ve been building it ever since.”



“I&#8217;m incredibly impressed with what we&#8217;ve achieved,” he says, “but, you know, it&#8217;s only the beginning of what we&#8217;re working on.”



On the 0xResearch podcast (<a href="https://open.spotify.com/episode/6lpKK9idoD1T45FKeuBGYF?si=e89d054e65534682">Spotify</a>/<a href="https://podcasts.apple.com/us/podcast/ens-funding-public-goods-dao-governance-l2-scaling/id1651683074?i=1000629542109">Apple</a>), Johnson details his vision for the future of the service, with plans to make the service “even more useful” with <a href="https://blockworks.co/tag/layer-2-2">layer-2</a> support, an improved user interface and greater functionality.



One priority, Johnson says, is that a user should expect to be able to enter an <a href="https://blockworks.co/tag/ens">ENS</a> name anywhere that an ether (<a href="https://blockworks.co/tag/eth">ETH</a>) address can be entered. A user should “be surprised when it isn’t supported rather than having to check that it is,” he says. “I think we&#8217;re close, but not there yet for that.”



Another crucial element of the vision involves increasing transparency and lowering costs. “That’s our big focus at the moment.”



This work involves rolling out layer-2s for low-cost registrations, Johnson explains, as well as adding enhancements that make it easier for users to issue subnames. These improvements would enable organizations like <a href="https://blockworks.co/tag/coinbase">Coinbase</a> to use either a layer-2 or “host names entirely off-chain.”



With these improvements, name owners would have greater control over the “trust model” of how their names and subdomains are managed, Johnson says. “We&#8217;re focusing on that mostly at the moment by building tooling that makes it easier for people to work on [layer-2],” he says.



<h2 class="wp-block-heading">Do you know Google’s IP address?</h2>



Johnson adds that while it’s been possible to host names on layer-2 for more than a year, it needs to be easier to set up. “What&#8217;s been missing is the easy plug and play tooling that makes it trivial for someone to do that,” he says.



“At the moment, the integration overhead is a bit higher,” he admits. “So that&#8217;s our main focus on the back end. And then on the front end, it&#8217;s all corresponding work to make the usability meet the feature set on the back end.”



Johnson says the company has been speaking to wallet providers to enable the naming of wallets, “which has always been a long term vision of mine.”&nbsp;



“The wallet sign-up flow should include naming the wallet,” he says. “You shouldn&#8217;t have to even know or care what your Ethereum address is any more than you do what your IP address is.”



<iframe loading="lazy" frameborder="0" height="200" scrolling="no" src="https://playlist.megaphone.fm/?e=BWG6556519778" width="100%"></iframe>







“If I asked you what Google&#8217;s IP address was, you couldn&#8217;t tell me because there&#8217;s no reason you would know that — and there&#8217;s no reason you would want to know that,” he says. “And IP addresses are a lot shorter than Ethereum addresses. They&#8217;re a lot easier to memorize.”



“The same degree of usability ought to apply to <a href="https://blockworks.co/tag/ethereum">Ethereum</a>, to crypto in general.”



Setting up a wallet should involve picking a name, Johnson says, that can be pseudonymous and disconnected from other wallets to ensure privacy. “Ultimately, we create accounts because we want to transact with them,” he says.&nbsp;



“At some point, that involves giving that address to someone else or some third party or site or whatever, and this just makes that an order of magnitude easier.”



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Ethereum Name Service is getting easier and cheaper to use, says founder

The DAO that governs Ethereum layer-2 network Arbitrum is currently voting to determine whether or not it should invest 50 million ARB ($41 million) into active projects in its ecosystem.



An initial <a href="https://snapshot.org/#/arbitrumfoundation.eth/proposal/0x5e0057920df9a278918e4de4ee1e6de7e2415d2af985e40a6c7a1a4b47a4ce01">snapshot</a> temperature check saw over 65% of participating ARB token holders voting in favor of allocating 50 million ARB to ecosystem participants. 35% of ARB token holders voted to allocate 25 million ARB, and no ARB holders voted against a short-term incentive program.



According to <a href="https://defillama.com/chains">information</a> available on DeFiLama, Arbitrum currently has a market cap of $1.7 billion and a market cap to total value locked (TVL) ratio of 0.64.



The proposal was drafted following community calls and active workshops between Arbitrum stakeholders and will span between two voting rounds where projects applying for grants will be reviewed.



Four different types of grants will be available to <a href="https://blockworks.co/tag/arbitrum">Arbitrum</a> ecosystem contributors. The smallest grant, Beacon, will distribute 200,000 ARB per grant and will require the project to have been on Arbitrum for at least 2 months and have an estimated trading volume of at least $1.5 million. Siren Grants, which will give out up to 750,000 ARB, expect the project to have been live on Arbitrum for at least 4 months and have a $4 million TVL.



Lighthouse Grants will hand out less than 2 million ARB tokens, and eligible projects must have been live on Arbitrum for at least 6 months and either have a $15 million TVL or a $100 million 30-day trading volume.&nbsp;



The largest category of grants, Pinnacle Grants, will hand over 2 million ARB tokens to projects that have been live on the network for at least one year and have either a $30 million Arbitrum network TVL or a $200 million 30-day cumulative trading volume.&nbsp;



The voting period for the <a href="https://www.tally.xyz/gov/arbitrum/proposal/92535731414466076465748260699234569033779695239254902723866669906112586724812">proposal</a> will end on Oct. 9. During this time, ecosystem participants can submit grant proposals for their projects. DAO participants will have until Oct. 3 to review all the proposals, and a voting period to determine which projects should receive funding will begin on Oct. 4 and end on Oct. 11.&nbsp;



So far, a total of <a href="https://docs.google.com/spreadsheets/d/1cXSWgnmpv2LEbDSTzkkGVr-zqV4q4Pti59cgZlx_Jqg/edit#gid=326656725">105 different projects</a> have applied for grant funding, information compiled by Blockworks Research shows. This means Arbitrum DAO members must independently review all proposals within the week and determine which projects should be funded.&nbsp;



The short-term incentive program will be a one-time distribution. Recipients will be required to keep ARB distributions and will not be able to convert the tokens to other assets or participate in any governance activities.



A 5/9 <a href="https://blockworks.co/news/what-are-multisig-wallets">multi-signature wallet</a> will be established and will have the capability to retrieve funds from projects that violate the agreement and stream funds to selected projects on a bi-weekly basis.&nbsp;



Grant recipients will be held accountable by reporting data and dashboards and providing performance insights on a regular basis. Each project that receives funding must create Dune dashboards that show daily TVL, transaction volumes, unique addresses and transaction fees, unless otherwise specified in the application.



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Arbitrum DAO looking to bet $40M on network protocols

Ripple is abandoning its planned acquisition of Fortress Trust, according to CEO Brad Garlinghouse.&nbsp;



The acquisition was announced in early September, with <a href="https://blockworks.co/tag/ripple">Ripple</a> saying at the time that it would buy the company in a cash-and-equity deal. Further details of the deal were not disclosed.



“The Fortress team is incredibly talented, and has built products solving real customer problems. While this outcome is different from what was originally planned, we’ll continue to support them and hope to work together in the future!” Garlinghouse <a href="https://twitter.com/bgarlinghouse/status/1707455045942292954">said</a> in a post on X, formerly Twitter.



When it announced the potential <a href="https://blockworks.co/tag/M&amp;A">acquisition</a>, Ripple called Fortress Trust a “financial institution that provides licensed Web3 financial, regulatory and technology infrastructure for blockchain innovators.”



Ripple was an early investor in Fortress, and <a href="https://blockworks.co/tag/brad-garlinghouse">Garlinghouse</a>’s social media post on Thursday said that, while the acquisition had fallen through, it would retain its stake in the company.&nbsp;



“We’ve had a chance to get to know the team, its vision and technology,” Garlinghouse said when Ripple announced its plans to acquire the company on Sept. 8. “They’ve built an impressive business with recurring revenue and a strong roster of both crypto-native and new-to-crypto customers.”&nbsp;



A few days after the acquisition announcement, Fortress Trust CEO Scott Purcell told <a href="https://fortune.com/crypto/2023/09/12/fortress-trust-12-to-15-million-hack-bitcoin-usdc-usdt-ripple/">Fortune</a> that the firm had lost around $12 million to $15 million worth of bitcoin, USDC and USDT in a hack. However, Purcell said the company “covered it right away.”



Fortress Trust did not immediately return a request for comment.



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Ripple ditches plan to buy Fortress Trust

James Cirrone

Blockchain validation. Payments between different network layers. Digital asset recommendations in the metaverse.&nbsp;



These are some of the areas <a href="https://blockworks.co/tag/paypal">PayPal</a>’s research and development efforts appear focused on, according to a slate of recently published patent applications.



The most recent application, published Thursday and originally filed in March 2022, delves into the details of how validators or miners should be selected during the process of adding transactions to the blockchain. The <a href="https://image-ppubs.uspto.gov/dirsearch-public/print/downloadPdf/20230306418">document</a> states that the company’s disclosed techniques could “advantageously allow steering of blockchain requests to a desired subset of miners/validators.”



Three other patent applications, released on Sept. 21, were also filed in March 2022.



<a href="https://image-ppubs.uspto.gov/dirsearch-public/print/downloadPdf/20230298001">One</a> offered up supposedly new “methods and systems” to enable off-chain transactions through NFT marketplaces.&nbsp;



<a href="https://image-ppubs.uspto.gov/dirsearch-public/print/downloadPdf/20230298008">Another</a> mentions the concept of a so-called omniverse, which in this context suggests a product that deals in multiple metaverses. PayPal says it developed an “online transaction processor” that would provide recommendations for which digital assets a user should buy based on the user’s blockchain preferences and which metaverses they interact with most.&nbsp;



<a href="https://image-ppubs.uspto.gov/dirsearch-public/print/downloadPdf/20230298005">A third</a> describes another conceptual online transaction processor. This processor’s goal is to facilitate payments between users and merchants operating on different network layers (layer-1s and layer-2s) in a more efficient manner.&nbsp;



The applications, in sum, offer a window into PayPal’s thinking as it builds out its suite of crypto products and services.&nbsp;



For instance, with <a href="https://blockworks.co/news/paypal-launches-stablecoin">PayPal releasing a stablecoin</a> in August, these proposed provide a window into the direction of PayPal’s use of the technology for payments. Venmo, the firm’s popular payment app that <a href="https://blockworks.co/news/venmo-crypto-transfers-coming">enabled crypto transfers in May</a>.



PayPal did not immediately respond to Blockworks’ request for comment.



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