Blockchain
Polygon’s new open-source sidechain developer stack supports ZK-powered layer 2s on Ethereum
In a significant development for the Ethereum ecosystem, Polygon has unveiled its open-source Chain Development Kit (CDK), designed to support the creation of layer 2 (L2) protocols using zero-knowledge proofs (ZK-proofs) for enhanced security and rapid transaction finality. Jordi Baylina, the technical lead of Polygon Hermez zkEVM, shared exclusive insights with Cointelegraph about this groundbreaking toolset, which is now publicly available on GitHub.
The core concept driving this initiative is to simplify and streamline the process for developers to launch ZK-powered layer 2 solutions on the Ethereum network, tailored to the specific requirements of their projects. A noteworthy feature of Polygon CDK is its ability to provide seamless access to liquidity across all Polygon chains and the broader Ethereum ecosystem, thus offering on-demand scalability without compromising liquidity.
Baylina emphasized that a diverse range of projects are already leveraging CDK-powered chains across various use cases, including payment-specific L2s, decentralized finance (DeFi), gaming, social platforms, and creator/nonfungible token (NFT) platforms.
One of the key advantages of Polygon CDK is its adaptability for different appchains. It offers customizations for rollup or validium modes, zkEVM or alternative ZK-powered execution environments, various data availability solutions, native token and gas token customization, centralized or decentralized sequencer mode, and support for permissioned networks with detailed allowlists.
The significance of ZK-proof technology cannot be overstated in this context. Polygon Labs firmly believes that zero-knowledge proofs represent the future of Ethereum scalability. Chains launched using Polygon CDK are automatically integrated into a shared ZK bridge and connected to an “interop layer,” a cross-chain communication protocol.
To illustrate the efficiency gains, Baylina explained, “Suppose there are thousands of chains in the Polygon ecosystem. It’s inefficient for each of these to submit their proofs directly to Ethereum. Instead, the interop layer will receive proofs from chains and submit a single ZK-proof that proves the state of all Polygon chains.” This approach enables sub-minute cross-chain transactions and creates the illusion of a unified single-chain environment.
When asked about the distinctions between CDK and other Ethereum ecosystem programming languages like StarkWare’s Cairo codebase, Baylina highlighted the unique architecture of Polygon CDK, which grants automatic access to shared liquidity through a ZK bridge and an interop layer within an L2 ecosystem secured by functioning ZK-proofs.
In closing, Baylina reiterated his belief in ZK-proofs as the future of Ethereum scalability, citing their swift transaction finality and withdrawal times compared to the extended delays associated with fraud proofs in optimistic rollup L2 solutions. “ZK makes better bridges but also secures chains by rigorous math, without a need for socio-economic components required by fraud proofs,” he concluded.
This innovation marks a significant stride toward enhancing the scalability, security, and efficiency of the Ethereum ecosystem, paving the way for a new generation of ZK-powered layer 2 solutions
Blockchain
US GAO Issues Key Recommendations to SEC Prior to Historic Spot Bitcoin ETF Approval
Blockchain
Bitcoin ETFs Witness Surge in Trading Activity as SEC Approves 11 Products
In a significant development for the cryptocurrency industry, the U.S. Securities and Exchange Commission (SEC) recently approved 11 spot Bitcoin exchange-traded funds (ETFs). This approval comes after a decade-long struggle between regulators and the digital asset industry, marking a watershed moment for the acceptance of digital assets as mainstream investments. Among the approved ETFs are BlackRock’s iShares Bitcoin Trust, Grayscale Bitcoin Trust, and ARK 21Shares Bitcoin ETF.
Unprecedented Inflows:
On the first day of trading, these ETFs saw impressive activity, with $4.6 billion worth of shares changing hands across all the products, according to LSEG data. Bitwise, a crypto asset manager, reported that its spot Bitcoin ETF alone attracted $240 million, making it the most popular among the newly introduced products. Grayscale, BlackRock, and Fidelity dominated total trading activity, according to the LSEG data.
Also Read: Grayscale Court Decision Crucial in SEC’s Approval of Bitcoin ETFs, Says Chairman Gary Gensler
Bitwise’s Chief Investment Officer, Matt Hougan, expressed optimism about the future, stating, “We think that this will become a market measured in the tens of billions of dollars.” This surge in interest highlights a growing acceptance of Bitcoin and other cryptocurrencies among traditional investors.
Competition and Fee Wars:
The SEC’s approval has sparked intense competition among issuers to gain market share. Franklin Templeton, reacting swiftly, slashed the fee for its Bitcoin ETF to 0.19 percent, the lowest in the market. Additionally, the company waived fees entirely on the product’s first $10 billion in assets under management until August. Valkyrie, another player in the space, reduced its fees to 0.25 percent after its ETF started trading. This fee war is indicative of the fierce competition among ETF issuers to attract investor capital.
Grayscale’s Transition to ETF:
Grayscale, a prominent player in the cryptocurrency investment space, received approval to convert its existing Bitcoin trust into an ETF. This move instantly made it the world’s largest Bitcoin ETF, managing over $28.6 billion in assets. Despite this success, the ETF experienced outflows of $95 million on the first day of trading. The ability of Grayscale to navigate this transition will be closely watched, as it sets a precedent for other trusts considering a similar shift.
Regulatory Caution:
While the SEC’s approval is a significant step forward, it is important to note that SEC Chair Gary Gensler emphasized that the decision should not be interpreted as an endorsement of Bitcoin. Gensler referred to Bitcoin as a “speculative, volatile asset,” highlighting ongoing concerns about investor protection. The regulatory nod indicates a willingness to explore the potential of digital assets, but caution is warranted as the market continues to evolve.
Conclusion:
The approval of 11 spot Bitcoin ETFs by the SEC marks a turning point for the cryptocurrency industry. The influx of billions of dollars within the first day of trading demonstrates a growing acceptance of digital assets among traditional investors. The fee wars among ETF issuers and Grayscale’s transition into an ETF further highlight the competitive dynamics and challenges in the market. As the cryptocurrency market matures, ongoing regulatory scrutiny and investor sentiment will play crucial roles in shaping the future of these innovative financial products.
Blockchain
Tether CEO Advocates for Real-World Use Cases in Crypto Without Blockchain or Tokens
In a recent exclusive interview with Cointelegraph, Tether CEO Paolo Ardoino has voiced his belief that the future of the crypto industry lies in providing real-world use cases without necessarily relying on tokens or blockchain technology. Ardoino argues that the next breakthrough in the industry should focus on the fundamental value proposition offered by cryptography, emphasizing peer-to-peer transactions and privacy protections.
“Crypto doesn’t need a blockchain. It doesn’t need a token,” Ardoino stated, challenging the conventional reliance on these technologies. He proposes that the industry should shift its focus towards practical applications that offer tangible benefits to users.
Ardoino suggests that potential killer apps in the crypto space could take the form of everyday solutions, such as a booking system or a competitor to ride-sharing services like Uber. The key, according to him, is to leverage the core strengths of cryptography in facilitating secure and private peer-to-peer transactions.
One of the primary concerns raised by Ardoino is the centralization and regulatory scrutiny associated with token issuance. He argues that introducing a token creates a centralized point of failure, increasing the likelihood of regulatory challenges. Ardoino notes that many projects that issued tokens are currently under the scrutiny of regulatory bodies like the U.S. Securities and Exchange Commission (SEC).
“To be decentralized, this system wouldn’t need blockchain technology, which is slow and requires a global shared state,” Ardoino explained. He cited BitTorrent as an example of a decentralized system that achieved success without relying on blockchain technology.
The Tether CEO contends that departing from the conventional blockchain and token model could lead to more innovation and adoption in the crypto industry. By focusing on the core principles of cryptography, projects can potentially avoid regulatory challenges and offer solutions that resonate with a broader audience.
Also read:Bitcoin-Centric Firms Surge in Pre-market as BTC Soars Past $45K
As the crypto industry continues to evolve, Ardoino’s perspective challenges the status quo, encouraging a shift towards real-world applications that prioritize user experience and practicality over traditional blockchain and token-centric approaches.