Bessie Liu

Swiss non-profit organization NEAR Foundation has launched “Chain Signatures,” enabling users to sign transactions on supported blockchains from a single NEAR account. 



Chain Signatures enables accounts and smart contracts on NEAR to sign transactions for different chains. At launch, this will include Bitcoin, Ethereum and Cosmos network chains, as well as DogeCoin and XRP Ledger. It will soon support Solana, TON Network and Polkadot, according to the team.



By enabling Chain signatures, DeFi protocols can utilize assets from other chains without requiring a cross-chain bridge. This is possible because Chain Signatures are designed to be account-based rather than bridge-based.



Read more: <a href="https://blockworks.co/news/near-foundation-top-level-domain">NEAR Foundation applies for .near top-level domain</a>



According to Kendall Cole, director of research and development company Proximity Labs — which supports projects on NEAR and Aurora — Chain Signatures can potentially unlock new use cases for DeFi protocols.



“Users can use XRP as collateral to borrow USDC, or trade DOGE for SOL. This is particularly innovative for non-smart-contract chains like Bitcoin, DogeCoin and Ripple because none of the major bridges support these chains today,” Cole said.



NEAR protocol documents <a href="https://docs.near.org/concepts/abstraction/chain-signatures">show</a> that Chain Signatures link NEAR account addresses to other blockchains <a href="https://eprint.iacr.org/2021/1330">using</a> an Additive Key Derivation. This mechanism enables the single master key to be derived into multiple subkeys. 



When a user wants to transact between different blockchains, a deployed multichain smart contract will make a signature request for the transaction on the target blockchain network, and a Multi-Party Computation (MPC) service will sign the transaction.&nbsp;



Read more: <a href="https://blockworks.co/news/mpc-wallets-security">MPC wallets have a trade-off. Is it worth it?</a>



Once the signature is obtained, the smart contract will return it to the user, allowing the user to send the signed transaction to execute it on the target blockchain.&nbsp;



“Smart contracts on NEAR will be able to custody assets on any chain (since they can sign transactions on any chain via chain signatures), and maintain user balances similar to how single chain lending protocols or <a href="https://blockworks.co/tag/dexs">DEXs</a> do now,” Cole explained. 



The Chain Signatures MPC network will be launched in partnership with <a href="https://blockworks.co/tag/eigenlayer">EigenLayer</a>, which will secure the network <a href="https://blockworks.co/news/eigenlayer-flips-aave-tvl">using its restaked ETH</a>. At launch, there will be ten node providers, including a handful of Actively Validated Services (AVS) infrastructure providers.&nbsp;



“Post-launch, EigenLayer will be used to provide economic security to the network and transition the MPC network to a permissionless version. To participate in the MPC network, prospective node operators will need to re-stake their ETH and will be penalized if they maliciously authorize any transactions that did not originate from a NEAR account,” Cole explained.



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NEAR launches tool for signing transactions on Bitcoin, Ethereum and more

A new brand of crypto collectibles — similar to Bitcoin <a href="https://blockworks.co/news/bitcoin-ordinals-ethereum-flippening">Ordinals</a> — has apparently hit Avalanche, and it’s responsible for more than <a href="https://app.blockworksresearch.com/analytics?search-field=asc-20">95%</a> of its daily on-chain transactions.



The transaction count on Avalanche’s C-Chain (responsible for handling smart contracts) over the past week has set new all-time highs, reaching an estimated <a href="https://app.blockworksresearch.com/analytics?category=avax">2.3 million</a> transactions per day on November 19. Avalanche has historically seen around 450 thousand per day on average.



Like Bitcoin Ordinals, Avalanche&#8217;s &#8220;ASC-20&#8221; tokens use inscription to put information onto a blockchain, Jacob Everly, a technical product manager at Ava Lab, told Blockworks.&nbsp;



“Bitcoin Ordinals involves assigning numbers to Satoshis (sats), which are stored in the witness portion of the Bitcoin transaction. With ASC-20s, the user transcribes information within the Call-Data of a transaction so that information is stored on-chain for a reduced cost compared to the ERC-20 token standard,” Everly said, referring to Ethereum-based tokens.



“The surge in ASC-20s led to the Avalanche Primary Network, which consists of over ~1500 consensus-participating validators, to average 40-plus transactions per second and even approach 100 per second at some moments,” Everly noted.&nbsp;



The block time-to-finality has, however, held firm at roughly one second, Everly added. “Average gas price hovered around 80 nAVAX, resulting in a rough average cost of $0.05 per ASC-20 transaction,” he said.



According to Blockworks Research analyst Dan Smith, there have been over 6.8 million transactions that have interacted with ASC-20 tokens so far.



Still, it appears too early for ASC-20s to be actively traded, as there doesn&#8217;t seem to be any specialized marketplaces as yet (there&#8217;s also no handy portal to view what has been minted). The number of individual users responsible for all the transactions is also unclear. 



Despite the significant jump in transaction count, daily average transaction fees and unique active addresses <a href="https://app.blockworksresearch.com/analytics?category=avax">remain unchanged</a>, Blockworks Research data shows.



In any case, Avalanche is not the only network aside from Bitcoin seeing activity spikes due to inscription minting.



Polygon’s PoS chain also saw similar <a href="https://app.blockworksresearch.com/analytics?category=matic">activity</a> last week , and just like Avalanche, transaction fees and daily unique addresses have remained relatively stable so far.



Litecoin and <a href="https://blockworks.co/news/dogecoin-flips-ethereum-transaction-count">Dogecoin</a> also had their turn earlier this year.



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Avalanche gets the ‘Ordinals’ bump, sets new  transaction record

Darren Kleine

It was not too long ago that the key concern regarding Ethereum’s future was the desperate need for it to scale. High network activity and subsequent gas costs spawned an explosion of layer-2 solutions.&nbsp;



Thus, the most recent developments on Ethereum have been focused on infrastructure and how to reduce the load on the once heavily burdened network. Now, it finally seems to be ready for prime time.&nbsp;



But where did all the traffic go?



“The argument was always, well, if you increase throughput by a hundred X, which has happened, then you should increase transactions by a hundred X, but that hasn&#8217;t happened,” says the head of digital asset trading at GoldenTree, Avi Felman.



On the 1000x podcast (<a href="https://open.spotify.com/episode/7EA1qe6M53JGMMcyONOMSw">Spotify</a>/<a href="https://podcasts.apple.com/us/podcast/what-is-cryptos-bullish-catalyst-1000x/id1554930038?i=1000631076464">Apple</a>), Felman says, “you&#8217;ve just moved all the transactions from ether (<a href="https://blockworks.co/price/eth">ETH</a>) to <a href="https://blockworks.co/tag/arbitrum">Arbitrum</a>, and you&#8217;ve barely increased the overall amount of transactions that are occurring.” 



“Everyone was kind of expecting it to look good on a deflationary basis,” Felman says, “but that&#8217;s just not going to be the case as long as activity is mostly on <a href="https://blockworks.co/tag/base">Base</a>, or mostly on Arbitrum&nbsp; or mostly on <a href="https://blockworks.co/tag/optimism">Optimism</a>.”



<h2 class="wp-block-heading">More lanes = more traffic?</h2>



Goldman Sachs executive director Jonah Van Bourg compares his expectations for <a href="https://blockworks.co/tag/ethereum">Ethereum</a>’s scaling solutions to the constant addition of freeway lanes in California. “Every time they add a new lane, it just brings more cars onto the freeway.”



“I thought the same thing would happen to ETH,” he says, but instead it’s looking more like the network of pipelines in the Permian Basin in Texas.



“Sometimes there&#8217;s just too much oil,” he says. “Everything&#8217;s bottlenecked. So then there&#8217;s this frenzy of pipeline building, which is effectively a scaling solution for an oil field. And then suddenly there&#8217;s just way too much pipeline capacity and not enough oil.”



Van Bourg explains that scaling solutions were overbuilt during a period of particularly high demand in Ethereum’s history. Now, capacity is much greater than demand, Van Bourg says, “so gas prices are just forced into the toilet.”



Read more: <a href="https://blockworks.co/news/ethereum-blockspace-profitability-negative-merge">Ethereum blockspace on track for first unprofitable month since the Merge</a>



Van Bourg expects the pendulum to “swing back the other way hard one day” when people realize, he says, “we have this thing that&#8217;s cheaper and better than AWS for our use case — and probably more permanent.”



“But that might be a year off, or six months off, or two years off, who knows.”&nbsp;



Van Bourg notes that negative sentiment regarding Ethereum on “crypto Twitter” might pressure holders to think short term. “You read tweets where people who have been ETH-bullish for five years are just like, ‘It&#8217;s over. Never buying this crap again.’”&nbsp;



“You look at your ETH and you look at these tweets and you&#8217;re probably saying to yourself, ‘Crap, I&#8217;m going to get out.’”



“Remind yourself,” he says, “that in 12 or 18 or 24 months when this thing is gassing higher and it&#8217;s trading $5,000 a token, those very same people will be talking about how ETH is the future, how it&#8217;s going to $50,000 a token, how they&#8217;ve been long all the way up.”



<iframe loading="lazy" frameborder="0" height="200" scrolling="no" src="https://playlist.megaphone.fm/?e=BWG6568422498" width="100%"></iframe>







“It&#8217;s a gradient of outcomes,” he says. “It&#8217;s not black and white. ETH is not over. ETH is not the future. It&#8217;s this <a href="https://blockworks.co/news/ethereum-dencun-upgrade-progresses">constantly evolving shade of gray</a>.”



“You have to filter out the noise.”



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Ethereum’s scaling infrastructure is better than ever. So where’s all the traffic?

Without a hint of hyperbole, Blocknative CEO Matt Cutler says that account abstraction is “probably the biggest upgrade to the user experience on Ethereum as anything in the history of the network.”



It’s a difficult concept to fully grasp, Cutler admits. “It took a while for everybody to wrap their minds around it. I was super confused by it. I was reading the papers, and I couldn&#8217;t figure out what the hell was going on.”



On the Empire podcast (<a href="https://open.spotify.com/episode/06gGb49WT3N1yRAXLXhQqK?si=dc4f91a6a9544d00">Spotify</a>/<a href="https://podcasts.apple.com/us/podcast/empire/id1554930038?i=1000629188630">Apple</a>), Cutler explains a mental model for ERC-4337 account abstraction. Instead of changing already-existing infrastructure, “account abstraction introduces a new layer on top of everything else,” he says.



Read more: <a href="https://blockworks.co/news/ethereum-erc4337-account-abstraction-smart-contract">Ethereum’s ERC-4337 account abstraction smart contract is live</a>



With today’s Ethereum wallets, users sign transactions that are sent to the <a href="https://blockworks.co/news/mev-privacy-in-blockchain">public mempool</a>, Cutler says. Smart contract wallets based <a href="https://blockworks.co/news/what-is-decentralized-identity">on the new 4337 standard</a> add a “whole layer on top of that,” he says, where users express “intent” instead.



“These intents are programmable,” Cutler says. “Transactions on Ethereum today are these very fixed things, these very fixed rules that have certain characteristics or properties.”



Account abstraction allows for more flexible bundling of transactions according to user intent, Cutler explains. One advantage Cutler mentions is the ability to “abstract away” gas prices. “You could have your gas price paid in <a href="https://blockworks.co/price/usdc">USDC</a> or any ERC-20 — or even off-chain assets like a credit card or even credit card points or miles.”



This advancement “opens things up,” Cutler says, “for new types of transactions to happen” with bundlers. The bundlers are a “new class of builders,” Cutler says, that can take multiple user intents and “wrap them up, supply the gas and sign the transaction and submit to the network” via “alt-mempools.”&nbsp;



<h2 class="wp-block-heading">A Web2-like experience on Web3</h2>



Bundled user intents directed to alt-mempools allow wallets “to do much more powerful things on behalf of end users,” Cutler says. “You can provide Web2-like transaction experiences, but have it go on <a href="https://blockworks.co/tag/web3">Web3</a>.”



<iframe loading="lazy" frameborder="0" height="200" scrolling="no" src="https://playlist.megaphone.fm/?e=BWG4323925502" width="100%"></iframe>







Cutler gives an example of an artist rewarding a superfan with exclusive experiences. The artist could just send the superfan an <a href="https://blockworks.co/tag/nfts">NFT</a>, but this would require the recipient to be “crypto aware” and have a crypto wallet, Cutler explains.&nbsp;



An artist could instead work with a platform like Spotify, using credit card numbers to act as <a href="https://blockworks.co/news/crypto-wallet-security-phantom-brandon-millman">account abstraction wallets</a>, he suggests. “You have a private key associated with your credit card wallet, and you can literally drop an NFT into a Visa card.”



When the superfan shows up for an event, Cutler says, the asset associated with their credit card’s abstracted account could give them access to a VIP area, for example.



“Suddenly these experiences get wide open,” Cutler says, “all enabled by Web3, but massively simpler for all members of the supply chain.”



Cutler suggests the blockchain industry needs to “<a href="https://blockworks.co/news/web3-innovation-adoption">meet users where they already are</a> — like existing credit card holders,” for example.



“These things that you already have and know and use and are familiar with will get superpowers,” Cutler says, “because <a href="https://blockworks.co/news/what-are-smart-contract-wallets">account abstraction</a> allows users to become conversant and usable — and secure in this Web3 environment.”



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Account abstraction serving up Web2 convenience to Web3 users: Blocknative’s Cutler

Ethereum scaling solution Offchain Labs is partnering with blockchain infrastructure company Espresso Systems to bring Timeboost — a transaction ordering technology — to life.&nbsp;



The teams will also work on integrating both Timeboost and the <a href="https://blockworks.co/news/espresso-systems-decentralized-sequencer-testnet">Espresso Sequencer</a> with the Arbitrum technology stack.&nbsp;



The Espresso Sequencer is a decentralized sequencing layer that layer-2s can choose to opt into, Ben Fisch co-founder and CEO of Espresso Systems told Blockworks.



“Having Offchain Labs’ support of this vision is a strong signal to us and to the <a href="https://blockworks.co/tag/ethereum">Ethereum</a> community that even teams with strong technology affiliations of their own will continue to prioritize permissionless approaches to coordination and technology,” Fisch said.



What is Timeboost?



Timeboost is intended to improve existing first-come-first-serve (FCFS) tendencies and <a href="https://blockworks.co/news/draft-mev-dydx-chorus-one">become more optimized for maximum extractable value</a>, or MEV.



Existing <a href="https://blockworks.co/tag/arbitrum">Arbitrum</a> chains do not earn any value from MEV, Timeboost is designed so that these chains can internalize the value of ethical MEV whilst simultaneously preventing harmful behaviors such as front-running.&nbsp;



This means that rollup solutions that want to capture value from ethical <a href="https://blockworks.co/tag/mev">MEV</a> practices like arbitrage, Ed Felten co-founder and chief scientist of Offchain Labs told Blockworks.&nbsp;



“It does this by using a special type of sealed-bid auction so that transactions can bid for position within a block. Because the auction is sealed-bid, users cannot front-run others’ transactions,” Felten said.



Timeboost collects fees generated by the chain so that it can identify and manage revenue disposition, Felten explains.&nbsp;



“Transactions submitted to the chain can optionally carry a bid, which is a premium that the transaction is agreeing to pay for each unit of layer-2 gas it uses, above the regular layer-2 gas price,” he said.&nbsp;



Within a block, bids are sorted from highest to lowest, and higher transaction bids will be placed in an earlier sequencer block.



The team at Offchain Labs has been looking into Timeboost transaction ordering for over six months and has <a href="https://arxiv.org/pdf/2306.02179.pdf#:~:text=TimeBoost%20is%20transaction%2Ddata%2Dindependent,created%20by%20an%20FCFS%20policy.">published</a> technical papers on their progress.&nbsp;



“We are now working alongside Offchain Labs on further research around Timeboost and undertaking implementation and integration of the module,” Fisch said.



Fisch added: “The final version of Timeboost will likely be a modification of the protocol described in the paper, favoring a discretized approach to ordering rather than continuous.”



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Offchain Labs, Espresso Systems link up on transaction ordering tech

Blockchain infrastructure provider Skip Protocol has released a new software development kit (SDK) aimed at giving block builders modular control over the order of transactions.



Named The Block SDK, the new toolkit features a set of primitives for the Cosmos SDK and ABCI++, which allows chains to customize their blocks.&nbsp;



Cosmos chains today rely primarily on a conventional block construction method called CometBFT which has limited applicability.



The typical implementation of CometBFT block construction faces vulnerabilities linked to maximal extractable value or MEV. This presents challenges like transaction frontrunning and sandwich attacks.&nbsp;



The Block SDK is designed so that individual blockchains can turn their blocks into so-called lanes, each with its own unique functions, according to Maghnus Mareneck, the co-founder of Skip.



“The lanes have their own verification, inclusion and ordering rules.They can be tailored towards transactions related to MEV, Oracle updates, light client updates [for example], you can configure each lane to treat transactions differently, and you can order lanes relative to each other,” Mareneck told Blockworks.



<h2 class="wp-block-heading">Building blocks</h2>



Usually, when using a blockchain, a transaction is submitted from the frontend, orderflow, or relayer and stored in the mempool.&nbsp;



The mempool is eventually executed as a block, wherein the transaction will be iterated in order and executed against the transaction.&nbsp;



According to Mareneck, it’s at the mempool layer that Skip’s new kit has an impact.&nbsp;



A transaction that comes into the mempool layer is normally added to the end of a long list of transactions, he explained. With The Block SDK, transactions are filled in different places and matched to different lanes.



“The mempool then becomes a block proposal and sent to all validators. Because the validators have the same sort of mempool structure, they can see if the proposer did the right thing with each transaction,” Mareneck said.



<h2 class="wp-block-heading">Orienting block space for apps</h2>



The overall purpose of this new SDK, Mareneck argued, is to accelerate the thesis that app chains are powerful, especially when compared to monolithic blockchains wherein all functionality exists on the base layer.



“[App chains] can orient their block space to their application,” he said. “If you’re a super high-speed order book chain, you might require a different mempool structure than a generalized smart contract chain [for example].”



The Block SDK is live on mainnets among several smaller blockchains in the Cosmos ecosystem, according to Mareneck.



He said the Skip team is also in conversation with larger app chains on Cosmos, including Cosmos and Neutron, about adapting its toolkit.



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Skip introduces a new way to build blocks on Cosmos

Sebastian Sinclair

Bitcoin just processed more transactions in a single day than at any point in its 14-year history — thanks to Ordinals.



The daily <a href="https://bitinfocharts.com/comparison/bitcoin-transactions.html#alltime">number</a> of Bitcoin transactions surged beyond 568,300 on Sunday — nearly 78,000 more than its previous peak during the top of the 2017 bull run.&nbsp;



Over 307,000 of those transactions were Ordinals, the most on a single day ever and a 16% jump on the previous record set on Saturday, per a <a href="https://dune.com/dgtl_assets/bitcoin-ordinals-analysis">Dune dashboard</a>.



That means Ordinals contributed around 54% of Bitcoin’s daily transactions at its all-time record.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1698" height="592" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=1024&amp;h=1024" alt="" class="wp-image-53941" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=1698 1698w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=80 80w" sizes="(max-width: 1698px) 100vw, 1698px" /><figcaption class="wp-element-caption">More Bitcoin transactions than ever before (source: <a href="https://blockchair.com/bitcoin/charts/transaction-count" target="_blank" rel="noreferrer noopener">Blockchair</a>)</figcaption></figure>



<a href="https://blockworks.co/news/cant-ignore-bitcoin-nfts" target="_blank" rel="noreferrer noopener">Debuted in January</a>, Ordinals allow data such as audio, art or even <a href="https://blockworks.co/news/play-doom-bitcoin">video games</a>, to be attached (or “inscribed”) to individual satoshis, BTC’s smallest unit.&nbsp;



The result is a unique digital asset in the same vein as an Ethereum-based NFT, for example. Although, the relevant data exists entirely on the Bitcoin blockchain, rather than hosted externally, as is often the case.



More than 2.39 million Ordinals have been inscribed to date, per Glassnode, which said it has seen a “marked character shift” in Bitcoin mempools this year (Bitcoin mempools store unconfirmed bitcoin transactions).



<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">We can see a shift in preference as it relates to inscription types. Image Inscriptions 🟧 dominated until very recently, but have been surpassed by text based 🟦. Over 2.39M Inscriptions have been added to the <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a> ledger, adding 9.3GB in data, and paying 212 <a href="https://twitter.com/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$BTC</a> in fees. <a href="https://t.co/KZPy074WoP">pic.twitter.com/KZPy074WoP</a>&mdash; glassnode (@glassnode) <a href="https://twitter.com/glassnode/status/1652804155839500288?ref_src=twsrc%5Etfw">April 30, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption">Text-based Ordinals inscriptions are apparently growing in number.</figcaption></figure>



Ordinals aside, most other bitcoin transactions right now are monetary in nature, often triggered by crypto exchanges, according to Glassnode.



“Importantly, Inscriptions represent approximately 30% to 40% of mined transactions — 10% to 20% of fees paid,” Glassnode said.



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Bitcoin Just Processed More Transactions Than Ever Before

Bitcoin network activity is buzzing. And that’s driving a healthy uptrend in transaction fees.



Select on-chain metrics shows the world’s oldest crypto still has the juice to compete with younger chains on the block, including on a per-transaction basis.



Using a 50-day simple moving average (SMA) to track the total transaction count on the Bitcoin network, the metric is now at its highest point in more than two years, data from <a href="https://cryptoquant.com/asset/btc/chart/transactions/transaction-count-total?window=DAY&amp;sma=50&amp;ema=0&amp;priceScale=log&amp;metricScale=linear&amp;chartStyle=column" target="_blank" rel="noreferrer noopener">CryptoQuant</a> shows.



While there have been outliers based on specific days (see just after FTX’s demise), the moving average helps to smooth out inconsistencies in the data, providing a clearer picture.



The last time transactions had clocked a 50-day SMA transaction count above 318,000 was on Feb. 28, 2021 — at a time when bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) had just completed its first run up near $60,000.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1595" height="853" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/04/CQ-BTC.png?w=1024&amp;h=1024" alt="" class="wp-image-52750" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/04/CQ-BTC.png?w=1595 1595w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/CQ-BTC.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/CQ-BTC.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/CQ-BTC.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/CQ-BTC.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/CQ-BTC.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/CQ-BTC.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/CQ-BTC.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/CQ-BTC.png?w=80 80w" sizes="(max-width: 1595px) 100vw, 1595px" /><figcaption class="wp-element-caption">Bitcoin Transaction Count; Source: CryptoQuant</figcaption></figure>



In almost every instance in the last two years, bitcoin has crossed an average count of 320,000 transactions on its network, price has followed suit in a big way.



Looking at first quarter performance in 2019, bitcoin rose from $3,732 on March 4 to $5,300 on April 30 only after transactions had crossed the given threshold. The same occurred again two years later when prices jumped from $34,000 on Jan. 12 to $57,000 by Feb. 21.



There are exceptions, of course, including in February and August 2020 — though in both those instances the 320,000 count preceded strong run ups in bitcoin’s price.



Transaction fees paid to bitcoin miners are up about 70% year-to-date, an important metric <a href="https://blockworks.co/news/bitcoin-mempool-surges-new-life-for-blockchain">for network security</a> over the long term in the face of declining block rewards due to <a href="https://blockworks.co/news/bitcoin-halving-a-year-out">the quadrennial halving</a>.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1200" height="600" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/04/2023-04-19-transaction-fees.png?w=1024&amp;h=1024" alt="" class="wp-image-52752" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/04/2023-04-19-transaction-fees.png?w=1200 1200w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/2023-04-19-transaction-fees.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/2023-04-19-transaction-fees.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/2023-04-19-transaction-fees.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/2023-04-19-transaction-fees.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/2023-04-19-transaction-fees.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/2023-04-19-transaction-fees.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/2023-04-19-transaction-fees.png?w=80 80w" sizes="(max-width: 1200px) 100vw, 1200px" /><figcaption class="wp-element-caption">Transaction fees trending up; Source: Blockchain.com</figcaption></figure>



Another metric used to judge the buzz of network activity includes daily active addresses. Data shows, again using a smoothed moving average, the figure stands at five-month highs.



“Key on-chain metrics, such as daily active addresses, addresses with a non-zero balance, and unique on-chain entities holding at least one BTC, all evince the growing adoption of Bitcoin as a store of value and means of payment,” market analysts at Bitfinex told Blockworks via email.



Bitcoin <a href="https://blockworks.co/news/new-bitcoin-ordinals-marketplace">inscriptions are helping</a> to drive some of that activity, though interest has likely been due to several factors, <a href="https://blockworks.co/news/bitcoin-mirror-bear-market">including market structure</a>.



Those include the tailwind effects of the US banking crisis, uncertainty in macroeconomic conditions and renewed investor interest in digital assets with a <a href="https://blockworks.co/news/shapella-institutional-interest-blockchain">return to confidence</a>.



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Bitcoin On-chain Pattern Shows Potential for Further Price Gains

Ornella Hernandez

The Coinbase Wallet now has an updated order preview screen that lets users simulate the outcome of a transaction on a decentralized application (dapp) before hitting confirm.



The wallet is a general purpose dapp not limited to interacting with the Coinbase exchange. The new “Transaction Preview” feature gives users an estimate of how their token balance will change once they buy a token or an NFT, based on a simulation of the transaction on the blockchain.



The company tweeted that the goal of this feature is to provide users with a “better understanding of how a dapp or smart contract will interact with your wallet” and “greater peace of mind.”



<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">1/ By automatically simulating the code that would execute when you authorize a transaction on an EMV-compatible network, we provide you with an estimate of which assets will leave your wallet and any assets you’ll get back in return.&mdash; Coinbase Wallet (@CoinbaseWallet) <a href="https://twitter.com/CoinbaseWallet/status/1593375216293511168?ref_src=twsrc%5Etfw">November 17, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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This feature may come in handy for retail users wary of bad actors in the space, given the amount of scams and frauds that have plagued the crypto world this year.&nbsp;



The recent <a href="https://blockworks.co/news/worse-than-enron-sbfs-ftx-has-a-complete-absence-of-trustworthy-information" target="_blank" rel="noreferrer noopener">FTX saga</a> is one in a string of events that shed a light on the risks of centralized finance, but those who self-custody can fall victim to fake investment opportunities and romance-linked fraud, if they’re not careful. 



Over <a href="https://blockworks.co/news/frauds-and-scams-top-1b-since-2021-ftc-says" target="_blank" rel="noreferrer noopener">$1 billion was traced in losses in crypto-related scams</a> between the start of 2021 and the first half of 2022. Most victims were targeted on Instagram, Facebook, WhatsApp and Telegram and then tricked into making transfers on crypto exchanges like Coinbase.



Ethereum wallet Argent also has a preview trade screen with a transaction summary, but Coinbase Wallet adds additional information for users, such as an alert if a URL is associated with a phishing attempt.&nbsp;&nbsp;



Auston Bunsen, co-founder of infrastructure provider QuickNode said the preview feature will make it &#8220;significantly harder&#8221; for hackers and scammers to steal funds from Coinbase Wallet users. He added that it &#8220;gives more visibility and power to users to protect their funds — making self-custody even more attractive in the wake of FTX.&#8221;



For institutional customers, Coinbase has another screening tool that helps mitigate the risk of transacting at scale. Called the Know Your Transaction (KYT) API, it enables clients to determine if an entity or transaction is facilitating illegal or fraudulent activity. It also generates risk scores for user addresses, using the <a href="https://blockworks.co/news/google-signals-major-crypto-push-with-ethereum-solana-support" target="_blank" rel="noreferrer noopener">Google Cloud</a>.



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Coinbase Wallet Feature Takes Aim at User Safety

Ben Strack

<div id="highlights-block_61b7b42b719c2" class="highlights">
 <ul>
 <li>Both banks will use Baton Systems’ Core-FX distributed ledger technology </li>
 <li>Technology allows the bank to settle funds on-demand with HSBC in more currencies than CLS Group allows, according to co-head of macro at Wells Fargo Corporate and Investment Bank</li>
 </ul>
 
</div>



Wells Fargo and HSBC are using blockchain technology for the first time in the settlement process of cross-border payments.



The two financial services titans will jointly use a shared settlement ledger to process US dollar, Canadian dollar, British pound sterling and Euro transactions, the firms announced Monday.&nbsp;



The companies have plans to extend the platform to settle additional currencies and could choose to add more participants, introducing a central Financial Market Infrastructure provider.



The platform runs on <a href="https://batonsystems.com" target="_blank" rel="noreferrer noopener">Baton Systems</a>’ Core-FX distributed ledger technology.



Adopters of the technology are no longer restricted by currency-specific cut-off times and can agree with their counterparties on when and how often they settle. It allows for multiple settlements a day and a settlement process that can be completed in three minutes.



Riskless settlement, or payment-versus-payment (PvP) settlement, has previously only been achievable with legally enforceable settlement finality through <a href="https://www.cls-group.com/products/settlement/clssettlement/">CLS</a><a href="https://www.cls-group.com/products/settlement/clssettlement/" target="_blank" rel="noreferrer noopener"> </a><a href="https://www.cls-group.com/products/settlement/clssettlement/">Group</a>.



Market participants prefer to settle via PvP because the currencies are simultaneously settled — eliminating the risk of a firm having made a payment to a counterparty that then defaults on its obligations, said Alex Knight, head of EMEA at Baton Systems



But access to PvP settlement through CLS is restricted to CLS member firms and only available across 18 currencies, he explained.



“Today’s announcement means that all [foreign exchange] businesses can now access PvP settlement protection across all currencies,” Knight told Blockworks. “We’ve used distributed ledger technology to achieve this, delivering a level of transformation that’s well overdue.”



<h3 class="wp-block-heading">Traditional finance embracing the space?</h3>



Banks currently transmit files to CLS and then get funds settled the next day between accounts held at CLS, said Mark Jones, co-head of macro at Wells Fargo Corporate &amp; Investment Bank, adding that the funds are held up during the waiting period. 



“This new technology would allow us to settle funds on-demand with HSBC in any array of currencies we choose,” Jones told Blockworks. &#8220;[It] also provides greater visibility into transactions and funds flow because both of our operations teams at [Wells Fargo] and HSBC are utilizing the same dashboard at the same time.”



Large banks sharing technology infrastructure with shared transaction visibility is a new concept, the Wells Fargo executive added.&nbsp;



David Tawil, president of multi-strategy crypto asset fund ProChain Capital, said that banks that do not look to implement blockchain and accept cryptocurrency more broadly could be hurt over the long term.



“I know that right now it’s incredibly difficult for those banks to participate in cryptocurrency broadly because of the lack of regulation,” he said. “But certainly there should be education and development going on inside of those banks to be able to act and get involved once they are allowed to.”



Tawil argued that financial institutions should work together to figure out how they can use blockchain technology collectively to facilitate transactions and perform other processes across their systems.&nbsp;&nbsp;



“Right now the decentralized aspect of this is a runaway train without them,” he noted. “If they don’t have a pre-planned way to go ahead and transition to getting onto that locomotive, they certainly could be left behind.”



Knight said that Baton Systems is in discussions with nearly all of the large foreign exchange banks about its technology, noting that some are evaluating its impact on their businesses.



<h3 class="wp-block-heading">Continuing to adopt</h3>



Mark Williamson, global head of FX partnerships and propositions at HSBC, said in a statement that the firm will continue to grow its FX Everywhere network, which has settled roughly 3 million intra-bank trades worth about $2.5 trillion since it launched in 2018. 



HSBC also intends to position itself to be able to transact in new forms of regulated digital currencies, such as central bank digital currencies (CBDCs), he added.



Wells Fargo labeled cryptocurrencies as a “viable investment asset” <a href="https://www.wellsfargoadvisors.com/research-analysis/reports/rationale-cryptocurrencies.htm" target="_blank" rel="noreferrer noopener">in a report</a> published earlier this year. It noted that crypto could see continued growth, further compression in price volatility and a possible role as portfolio diversifiers over the long term.



“We are now utilizing blockchain technology, and expect that trend to continue to grow,” Jones told Blockworks. “As it relates to the crypto ecosystem, it’s clearly evolving fast and we are paying close attention to how the regulatory structure unfolds around it.”



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