The Protocol: Behind the Scenes as Big-Tent Consensus Goes Up

The crowd has started rolling into Austin, Texas, for Consensus, CoinDesk’s annual crypto conference, which runs Wednesday through Friday. We’re incredibly excited for all the blockchain tech programming, as well as the chance to connect IRL with lots of industry contacts.

Here is our rundown of all the key blockchain tech programming. (Along with a couple handy links to all the side events and parties!) We also have a preview of our planned summit on decentralized AI. (Yours truly will be emceeing the Protocol Village Stage for 1.5 full days as well as interviewing Ordinals/Runes creator Casey Rodarmor on the Mainstage on Friday. We’ll also be doing a live recording of The Protocol podcast on Thursday.)

As things were warming up around town on Tuesday, I made the rounds – attending a summit on how to fund Bitcoin Core developers, an event hosted by the DePIN project Akash with crypto OG Eric Vorhees and a happy-hour party hosted by the Sui developer Mysten Labs, Axelar developer Interop Labs and Big Brain Holdings, an early-stage crypto investment firm. I also took a spin through the show floor, and took some photos. See below.

Implications of ETH ETF approvals (or almost-approvals).
RIP Dogecoin doggy.
Trump pledges to commute Ross Ulbricht’s sentence with time served.
Top picks from the past week’s Protocol Village column: Ledger, Taiko, ENS, Dfinity, Horizon.

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Network news

The Grayscale Ethereum Trust’s discount to its net asset value (NAV) has narrowed with the regulatory progress on Ethereum exchange-traded fund proposals. (Coin Metrics)

ETH ETF IMPLICATIONS – The U.S. Securities and Exchange Commission approved key regulatory filings for proposed exchange traded funds (ETFs) linked to the price of the Ethereum blockchain’s native cryptocurrency, ether (ETH) – after months of speculation that regulators would likely deny the instruments. While most Ethereum supporters likely applauded the step, since the ETH token’s price rallied, the developer shop Consensys couldn’t resist the opportunity to tweet that “this seemingly last-minute approval is yet another example of the SEC’s troublesome ad hoc approach to digital assets.” Consensys, which is suing the agency, argued that the approval might mean Ethereum is no longer under the threat of being declared a security, which would trigger strict regulations. The approval isn’t final, because the SEC only approved 19b-4 filings for the proposals, as opposed to the S-1 registration statements that would be needed before the ETFs can start trading; the green light for those could still take months. (This distinction caused a minor controversy on the prediction-betting platform Polymarket, since some bettors who had put money on a denial argued that they hadn’t officially lost.) What’s clear from the past week is that the SEC won’t allow the ETF issuers to stake their ETH tokens – essentially depriving holders of the instrument to capture the extra yield. From a blockchain security perspective, that might mean that there’s less circulating ETH supply available to put to work in Ethereum’s proof-of-stake consensus mechanism. “The inability for issuers to stake ETH, could have potential downstream implications for the supply dynamics of ETH, the health of Ethereum’s consensus layer and the staking ecosystem as a whole,” according to a report Tuesday from the analysis firm Coin Metrics. Another question might be how well any new ETF buyers would actually understand how the smart-contracts blockchain functions.

DOGE DIRGE: Kabosu, the Shiba Inu dog whose viral meme picture inspired the creation of dogecoin, died last week at 17. DOGE’s success later birthed a whole cohort of dog-themed tokens such as shiba inu (SHIB) and floki (FLOKI), which have since cumulatively become one of the industry’s biggest sectors. The Solana blockchain has dogwifhat (WIF). Tesla billionaire and X owner Elon Musk, whose tweets about DOGE have sent the token’s price soaring in the past, posted that “OG Doge has ascended to heaven.” Within minutes, the price surged as much as 5% to a session high.

In a postscript to The Protocol’s writeup last week on the disclosures that two top Ethereum Foundation researchers had accepted paid advisory deals with the restaking platform EigenLayer, the foundation’s executive director, Aya Miyaguchi, wrote on X that “we have been working on a formal policy” to address potential conflicts of interest. “It is clear that relying on culture and individual judgment has not been sufficient,” she wrote.

Former U.S. President Donald Trump, running for reelection, pledged to commute Silk Road founder Ross Ulbricht’s life sentence to time served if he wins in November.

Protocol Village

Top picks of the past week from our Protocol Village column, highlighting key blockchain tech upgrades and news.

Ledger’s new ‘Stax’ touchscreen hardware wallet (Ledger)

1. Ledger, the crypto hardware wallet maker, announced that Stax, a new touchscreen device, is now shipping to pre-order customers. According to the team: “Stax is the first-ever secure touchscreen device, bringing clarity and confidence to signing transactions and securing your digital value. It was designed by Tony Fadell, builder of the iPod. New orders for Stax will be available this summer.”

2. Taiko, a fully open-source, permissionless Ethereum-Equivalent ZK rollup, announced Monday it has deployed on mainnet, after two years of work on the project. Ethereum co-founder Vitalik Buterin proposed the inaugural block. “Taiko deployed Based Contestable Rollup (BCR), a type of based rollup that combines based sequencing and a contestation mechanism with multi-proofs,” according to a blog post.

3. Ethereum Name Service Labs, the company behind the ENS domain name protocol, proposed Tuesday to go through a complete architectural redesign that would turn the network into a layer-2 blockchain. The proposal, dubbed “ENSv2,” will overhaul the project’s registry system as part of the transformation into a layer 2, which is an auxiliary network that provides cheaper transaction fees that can then be settled to the base blockchain, Ethereum.

4. Dfinity Foundation, a major contributor to Internet Computer (ICP), announced that its “EVM RPC canister,” described as “a new API that allows ICP smart contracts to read and write data on different chains,” is now live. According to the team: “The EVM RPC is another major milestone in the development of Dfinity’s Chain Fusion framework. It enables Internet Computer smart contracts to interoperate directly with all major blockchains, including Bitcoin, Ethereum, other EVMs, and soon, Solana, without having to rely on any intermediary.”

5. Horizen Labs, a primary developer behind the Horizen blockchain, is launching “zkVerify, a dedicated zero-knowledge proof verification network designed for settlement optimization, to address the largest expense that zkRollups and zkApps currently face which limit scalability and efficiency,” according to the team: “ZkVerify offloads computationally intensive proof verification, enabling blockchains to focus on core functions. It integrates with multiple SNARK proving schemes and reduces verification costs by up to 91%. Currently, it supports Ethereum and Bitcoin L2s, with plans to expand to other architectures.

Consensus 2024 Sneak Preview

Our big annual conference starts Wednesday in Austin, Texas. We made the rounds and took some photos.

Crypto OG Eric Vorhees, who is now working on the permissionless AI chat app Venice.ai, spoke Tuesday in Austin at a side event with Greg Osuri, CEO of Overclock Labs, creator of Akash, an open network that facilitates secure and efficient buying and selling of computing resources. (Bradley Keoun)

At the Bitcoin Network Longevity Summit on Tuesday, investors, developers and business people discussed ways of providing funding to Bitcoin Core programmers. (Bradley Keoun)

Show floor going up. The blink rate will be high. (Bradley Keoun)

CoinDesk programming coordinators run through a dress rehearsal with technical personnel. (Bradley Keoun)

Scene from the happy hour thrown by Sui developer Mysten Labs, Axelar developer Interop Labs and Big Brain Holdings, an early-stage crypto investment firm. (Bradley Keoun)

Money Center

Cysic

, a ZK (zero-knowledge) hardware acceleration company, announced that it has successfully raised $12 million in a pre-A funding round.
Plume has raised $10 million in seed funding for what it says will be the first layer-2 blockchain purpose-built for real-world assets, or RWAs, in a round led by Haun Ventures.