Category: Cryptocurrency

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Ethereum’s ongoing evolution takes a significant leap towards enhancing the accessibility of crypto wallets with the introduction of ‘EIP-3074’. This Ethereum Improvement Proposal is poised to streamline user experiences, marking a crucial stride in the quest for mainstream adoption.

The Ethereum community’s focus on improving wallet usability has intensified, with developers deliberating on key enhancements for the blockchain’s forthcoming hard fork, Pectra. Among the proposed changes, EIP-3074 stands out, aiming to elevate the functionality and ease of use for wallets on the Ethereum network.

Unlike previous iterations, which aimed to enhance externally owned accounts through concepts like account abstraction, EIP-3074 takes a significant leap forward by empowering smart contracts to authorize EOAs. This shift promises to revolutionize wallet user experience, potentially offering a tenfold improvement, according to Paradigm Chief Technology Officer Georgios Konstatonopolous.

The proposal introduces innovative features, including the ability for users to batch transactions, delegate transaction capabilities to smart contracts, and enable third-party sponsorship for transaction fees. Additionally, it allows users to sign transactions submitted by other parties, offering enhanced flexibility and security.

While EIP-3074 has garnered widespread support within the Ethereum community, it has also sparked concerns, particularly regarding security implications associated with batched transactions. Some members, including Safe co-founder Lukas Schor and Argent wallet co-founder Itamar Lesuisse, have expressed apprehension over potential security vulnerabilities and the risk of wallet exploitation.

Despite these reservations, Ethereum developers remain committed to advancing wallet usability while addressing security concerns raised by the community. As Ethereum continues its journey towards greater accessibility and usability, EIP-3074 represents a significant milestone in achieving these objectives.

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April witnessed a monumental surge in the total volume of stablecoins traded on Ethereum, with DAI emerging as the dominant contributor to this unprecedented growth. The rise in DAI volume can be attributed to its increasing involvement in complex Miner Extractable Value (MEV) transactions, often facilitated by flash loans.

Record-Breaking Month

After several months of stagnant activity, Ethereum’s total monthly stablecoin volume has experienced a consistent uptick for the past three months, culminating in April’s historic milestone. It’s essential to note that flash loan activity is included in these figures, amplifying the overall volume significantly.

DAI’s Role in the Surge

DAI has emerged as the primary catalyst behind Ethereum’s soaring stablecoin volume, with its involvement in complex MEV transactions drawing significant attention. Notably, one transaction alone added nearly $1 billion in DAI volume, showcasing its pivotal role in Ethereum’s ecosystem.

DAI’s April Performance

In April, DAI’s volume surged to $636 billion, constituting the majority of Ethereum’s total on-chain stablecoin volume, which reached nearly $1.2 trillion for the month. DAI’s supply has also experienced substantial growth, adding approximately $1 billion worth of tokens since March 7, bringing the current supply to 5.44 billion.

Potential Challenges Ahead

While DAI’s performance has been stellar, competitors like Ethena’s USDe and Ripple’s upcoming stablecoin pose potential challenges to its dominance. Nevertheless, DAI’s supply has continued to expand, with an additional $220 million added since May 1, as reported by MakerBurn.

Market Response

Despite the surge in DAI volumes, the price of Maker, the token associated with MakerDAO, experienced a decline throughout April. However, a slight uptick in early May hints at potential market resilience amid DAI’s growing prominence in the stablecoin landscape.

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Ethereum (ETH) witnessed a significant decline in daily ETH burned, hitting a yearly low primarily due to decreased gas fees. Gas fees currently range between 5 and 10 gwei, marking one of the lowest levels observed this year.

The Ethereum network experiences a notable decrease in the daily volume of ETH burned, reaching its lowest point this year, largely influenced by a recent decline in average gas fees. Presently, gas fees fluctuate between 5 and 10 gwei, representing one of the lowest levels recorded year-to-date and impacting ETH issuance.

The reduction in network fees translates to a decrease in ETH burned. On Sunday, only 610 ETH were burned, marking a record low for the year, while Ethereum’s gas fees remained minimal. In contrast, the daily volume of ETH burned during the first four months of this year consistently exceeded 2,500–3,000 ETH.

The ongoing decline in gas fees is attributed partly to a shift in activity towards Layer 2 scaling solutions and the increasing adoption of blob transactions introduced with the Dencun upgrade in March, which helps alleviate transaction costs on Layer 2s.

The dynamics of gas fees and ETH burning are closely monitored aspects of the network’s economic model. While low fees benefit network users, the recent decrease in ETH burn impacts Ethereum’s deflationary characteristics.

The London hard fork, also known as EIP-1559, implemented in August 2021, fundamentally altered Ethereum’s fee structure. The upgrade introduced a base fee that is burned and a priority fee acting as a tip to validators. As the base fee correlates with network usage, higher fees result in a greater amount of ETH being removed from circulation through burning.

In the past week, Ethereum’s supply has turned inflationary, with a growth rate of 0.49%, contrasting its previous deflationary trend, as reported by ultrasound.money. If activity surges and more ETH is burned than issued, Ethereum will return to a deflationary state.

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Phishing attacks within the crypto industry decreased by 46% to $38 million in April, marking the lowest amount recorded this year, according to the security firm Scam Sniffer. Notably, this decline aligns with CertiK’s findings, indicating that crypto-related exploits and scams reached a historic low of $25.7 million in April.

April’s Phishing Attack Insights

According to Scam Sniffer’s analysis, the Coinbase-backed Ethereum layer-2 network Base experienced a notable surge of 145% to $8.2 million in phishing incidents during the past month. Interestingly, two of the top 10 largest single thefts occurred on this chain, constituting 21% of the month’s total theft.

ERC-20 tokens faced the brunt of these attacks, with a staggering 88% of the stolen assets belonging to this class.

Tools and Tactics Employed by Attackers

Scam Sniffer has pinpointed fake accounts on the social media platform X (previously known as Twitter) as the primary tool utilized by scammers. These attackers impersonated prominent projects like Renzo, Avail, Ether.fi, Wormhole, and Omni. These fake accounts often displayed counterfeit verification marks, giving them an appearance of authenticity that was exploited to lure unsuspecting users.

Using these fake accounts, the attackers posted deceptive comments on social media platforms to redirect unsuspecting individuals to malicious sites where their assets could be stolen.

Additionally, the attackers frequently utilized phishing signatures such as Permit, IncreaseAllowance, and Uniswap Permit2. These malicious signatures enabled the attackers to access their victim’s funds without their knowledge.

Scam Sniffer further added that despite wallets increasing phishing alerts for certain signatures, wallet drainers are actively finding ways to circumvent these alerts by using legitimate contracts like Disperse and Uniswap Multicall, along with variants of value normalization.

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MetaMask, the leading Ethereum crypto wallet, is unveiling a new feature called Smart Transactions this week, aimed at mitigating the impact of maximal extractable value on users.

Smart Transactions, an optional feature, enables users to submit transactions to a “virtual mempool” before they are officially recorded on the blockchain. Developed by ConsenSys, the company behind MetaMask, this virtual mempool defends against certain MEV strategies by simulating transactions behind the scenes to secure lower fees for users.

MEV represents additional profit blockchain operators can extract by manipulating transactions before they are processed, similar to front-running in traditional financial markets. MEV significantly influences Ethereum’s functionality, inflating costs, slowing transaction speeds, and occasionally causing transactions to fail.

Jason Linehan, director of ConsenSys’ Special Mechanisms Group, highlighted the prevalence of wasted funds due to MEV-related issues, emphasizing the urgent need for solutions to enhance user experience.

MetaMask’s virtual mempool initiative mirrors private mempools, which enhance transaction privacy and guard against MEV. This marks the platform’s initial step in an ambitious roadmap, aimed at revolutionizing MetaMask’s transaction routing methods on Ethereum.

Linehan clarified that MetaMask’s virtual mempool is distinct from conventional private mempools and is essential for addressing Ethereum’s substantial hidden expenses.

Smart Transactions operate by leveraging Ethereum’s existing infrastructure, with MetaMask’s virtual mempool financially penalizing builders and searchers if they deviate from quoted transaction prices. Linehan noted that the majority of Ethereum’s current operators have already opted into MetaMask’s virtual mempool program.

In addition to securing better prices for users, Smart Transactions simplify transaction tracking within MetaMask, eliminating the need for users to navigate external block explorer websites.

Linehan described Smart Transactions as a foundational step towards MetaMask’s broader objectives, envisioning future developments such as intent-based architectures.

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Robinhood Markets Inc. (NASDAQ:HOOD) disclosed in a regulatory filing on Monday that it has received a formal warning from regulators regarding potential enforcement action related to its cryptocurrency operations.

The warning, known as a Wells notice from the US Securities and Exchange Commission, specifically pertains to Robinhood Crypto and various aspects of its cryptocurrency business, including listings, custody procedures, and platform operations.

According to the filing, the SEC’s staff informed Robinhood that they have made a “preliminary determination” to recommend that the SEC pursue enforcement action against the company.

Potential outcomes of this action could include an injunction, a cease-and-desist order, disgorgement of profits, and other penalties or restrictions on business activities.

Robinhood stated that it had previously received a subpoena related to the investigation and has cooperated with the SEC throughout the process.

It’s important to note that a Wells Notice provides the company with an opportunity to respond to the SEC’s allegations, and the issuance of such a notice does not necessarily guarantee that enforcement action will ultimately be taken.

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Cryptocurrency exchange Coinbase (NASDAQ:COIN) exceeded expectations in its first-quarter earnings report, outperforming both revenue and earnings projections. The company reported revenue of $1.64 billion, surpassing estimates of $1.32 billion, with adjusted earnings per share (EPS) reaching $4.40, exceeding the projected $1.07.

To analyze Coinbase’s performance, Steve Jang, Founder and Managing Partner of Kindred Ventures, joins Market Domination Overtime. Jang highlights the approval of bitcoin ETFs as a positive factor for Coinbase, particularly benefiting its consumer trading segment. He emphasizes Coinbase’s transition into its “second chapter” post-IPO, positioning itself as a key service provider for major financial institutions globally.

Drawing parallels to tech giants like Facebook (NASDAQ:FB) and Amazon Web Services (NASDAQ:AMZN) in their early stages, Jang commends Coinbase’s forward-looking strategy, particularly in creating a platform for developers. He predicts that this approach will drive Coinbase’s long-term growth, stating, “Coinbase is, was, and continues to be the best company to build the pillars that create the gateway for crypto and traditional finance.”

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Led by CEO Jack Dorsey, payments firm Block (NYSE:SQ) has commenced a dollar cost averaging initiative to expand its substantial bitcoin reserves. Starting in April, the company allocated 10% of its monthly bitcoin-related gross profit to purchase additional bitcoin, intending to continue this practice throughout 2024.

During the first quarter, Block reported $80 million in bitcoin gross profit. If this level persists for the remainder of the year, the company will accumulate approximately $24 million worth of bitcoin under this program, further bolstering its balance sheet.

Block already holds a significant amount of bitcoin, having acquired 4,709 bitcoins in October 2020 and an additional 3,318 tokens in early 2021. With bitcoin’s current price hovering around $59,000, these holdings are valued at approximately $4.7 billion.

In addition to this initiative, Block has released its Bitcoin Blueprint For Corporate Balance Sheets. This blueprint outlines the methodology behind its large-scale crypto acquisitions, detailing how the company acquires significant amounts of cryptocurrency without causing significant market fluctuations. It also elucidates Block’s processes for custody, insurance, and accounting of these holdings.

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Vodafone (NASDAQ:VOD)is gearing up to address the anticipated surge in cryptocurrency demand on mobile phones by leveraging SIM card technology. David Palmer, the telecom giant’s blockchain lead, discussed with Yahoo Finance Future Focus how Vodafone is spearheading blockchain utilization on mobile devices to streamline crypto transactions.

Palmer emphasized the integration of mobile phone SIM cards with digital wallets, identity management, and blockchains, utilizing the cryptography embedded in SIM cards for seamless blockchain integration.

Anticipating a significant increase in blockchain-based digital wallets, Palmer projected that by 2030, there could be as many as 5.6 billion such wallets worldwide. He underscored their pivotal role as gateways to financial services.

Palmer highlighted the adoption of public blockchains like ethereum, noting their enhanced speed and security. However, he acknowledged regulatory challenges, particularly in mainstream financial services due to sanctions.

Vodafone’s innovation in this realm includes the PairPoint Digital Asset Broker platform. This platform facilitates transactions between public and private blockchains, enabling seamless integration through smart contracts.

The PairPoint platform builds on Vodafone’s earlier experiments with peer-to-peer micro-payment transactions and the integration of SIM card technology with blockchain, introducing interoperable ‘digital identity passports’. These passports, anchored on the blockchain, securely store private keys to digital wallets within the SIM card’s hardware module.

This evolution led to the development of Vodafone’s Pairpoint platform, empowering internet of things devices with decentralized digital identities, enabling them to transcend organizational and system boundaries.

Palmer illustrated potential scenarios where devices equipped with hardware wallets could autonomously authenticate and execute transactions, such as electric autonomous vehicles paying for charging at a station.

Despite the promise of these advancements, Palmer cautioned about the imperative of securing these wallets against cyber threats, recognizing them as prime targets for hackers.

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Coinbase announced a remarkable first quarter, with revenue reaching $1.6 billion, marking a substantial 72% increase from the previous quarter and a significant rise from $736 million in the same period last year. The company also reported a notable swing in net income, posting $1.18 billion for the quarter compared to a loss of $79 million in the previous year’s corresponding period. Additionally, Coinbase generated $1.01 billion in EBITDA, surpassing expectations with earnings of $4.04 per share, exceeding the consensus estimate of $1.15 per share.

The surge in revenue reflects Coinbase’s strategic investments in product expansion, operational discipline, and favorable market conditions, according to the company’s earnings statement. Notably, the company observed increased market share in US spot and derivatives, achieving all-time highs on Coinbase Prime, and witnessing growth in USDC market capitalization.

Transaction revenue for both consumer and institutional clients experienced a substantial uptick, totaling $1.08 billion for the quarter. Institutional transaction revenue notably grew by 113% from the previous quarter to $85 million. Coinbase’s consumer-facing business remained its primary revenue stream, generating $935.2 million from consumer transactions. The company also reported growth in user numbers alongside revenues collected from its subscription service.

Looking ahead, Coinbase anticipates continued growth, stating that it generated over $300 million of total transaction revenue in April, with expectations for Q2 subscription and services revenue to fall within a range of $525-$600 million.

Despite surging nearly 9% in regular trading, Coinbase shares dipped about 3% in after-hours trading to $222 as of 4:32 p.m. ET. Nonetheless, Coinbase shares have seen a remarkable increase of nearly 50% over the past year.

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