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Ethereum Releases Validator Launchpad for ETH 2.0 Testnet

Ethereum software developers finally released the validator launchpad for ETH 2.0, which enabled users to participate in the testnet’s Proof-of-Stake.

Leveling up And Unlocking “Medalla”

The testnet, dubbed “Medalla,” is said to be released on August 4, if all goes well. Ethereum developers behind Medalla have also set up certain criteria that need to be fulfilled for the alternative blockchain to be unlocked.

The test run of the network will be in the hands of the community, and a minimum of 16,385 validators are required for the launch. Each of these users is required to deposit 32 Ether (ETH) coins to access the multi-client testnet. Also, “minimum genesis time” needs to be accomplished, which basically outlines when the earliest launch of ETH 2.0 testnet can be held.

If requirements are not fulfilled, Medalla’s launch will be delayed for 48 hours. The multi-client testnet will only launch if the two criteria are met.

Progress On Unlocking Medalla

So far, it was reported that roughly more than 150,000 ETH tokens have been deposited, meaning that Medalla testnet has achieved 30.5% of the total number of validators it needs for a successful launch next week. Ethereum collaborated with blockchain tech company Consensys and DeepWork Studio to release the ETH 2.0 validator launchpad.

Ethereum Announces Its Testnet Strategy

The blockchain network told its Ethereum crypto community that the multi-client testnet Medalla, they will continue “fine-tuning the interface” in anticipation of the release of the mainnet. In addition to this, Ethereum also explained that as it was transitioning from Proof-of-Work to Proof-of-Stake, Ethereum 2.0 will be launched in at least 3 phases to make sure that all aspects are covered methodically before release.

By breaking up the phases, a different aspect of Ethereum 2.0 can be focused on at each phase and the mainnet can consequently be perfected.

Phases of ETH 2.0

Phases 0, 1, and 2 each outlines a different concept. Phases 0 focuses on all the machinery behind ETH 2.0’s consensus, and it tracks the validators and their transaction balances.

Phase 1’s main objective is to handle the addition and storage of new and old data associated with ETH 2.0.

Finally, Phase 2 adds execution to ETH 2.0, and this simply allows programs to be run on top of it.

Co-Founder Vitalik Pushed for Phase 1

Co-founder of Ethereum Vitalik Buterin has been actively pushing for phase 1 to begin. The Ethereum mastermind wants to get a better grasp of how phase 1 will work in practice. On Reddit, he said that the “clients team” working on Medalla was behind on phase 0, and though that may be the case, they should still start working on phase 1. Buterin justified his strategy, saying:

“There’s no unfinished research required for phase 1; it’s all spec optimization and development.”

Ethereum And Bitcoin “Bull Races”

This year has been a really good year for Ethereum. With their plans of launching ETH 2.0 mainnet, the blockchain platform has also managed to outrank Bitcoin earlier this month, sitting at approximately $2.5 billion and making it the first time since early 2019 that it has outdone its rival BTC.

The latter has however been picking up its pace on the crypto market after months of staying stagnant. Yesterday, it was reported that BTC surged past the $10, 000 mark. BTC as a hedge has also recently been even more of a hot topic, with the depreciation of USD due to economic stimulus packages released by the US government.

Ready, Set, Launch

With Medalla testnet set to launch on August 4, the year 2020 has been good for Ethereum. Medalla is to be the last testnet produced by the dominant cryptocurrency platform before ETH 2.0 mainnet is officially in service and open for public use.

LidoDAO is considering selling or staking its $30 million

The decentralized autonomous organization that is responsible for Lido, which is the biggest Ethereum staking pool, is now debating whether or not it should stake the $30 million in Ether (ETH) that is currently in its treasury or sell it.

Steakhouse Financial, the financial arm of the DAO, put out a proposal on February 14 that examines four potential courses of action. One of these options is the possibility of the DAO staking some or all of its ETH to Lido in the form of Lido Staked ETH (stETH).

Another possibility involves the LidoDAO selling some or all of its 20,304 ETH in exchange for a stablecoin. This would be done with the intention of extending the DAO’s runway.

The suggestion comes at a time when ETH staking withdrawals will soon be possible via Ethereum’s Shanghai and Capella upgrades. According to the Ethereum Foundation, both upgrades are scheduled to take effect at some point in the beginning of this year.

Although changing the ETH to Staked ETH might result in an increase in the number of protocol awards, the DAO is mindful of the possibility that excessive staking could result in the organization not having sufficient Ether on hand “just in case.”

Steakhouse Financial said that in order to “preemptively secure more runway,” it may be required to exchange Ether for a stablecoin. This statement was made with reference to operational expenditures.

With the price of ETH fluctuating between $1,100 and $1,700 over the last few months, Steakhouse Financial observed that with LidoDAO’s current inflows at roughly 1000 stETH each month, the DAO is producing about $1.3 million to 1.5 million per month.

According to Steakhouse Financial, the numbers should be “sufficient to pay monthly operating expenditures” on their own.

However, they are currently considering whether or not it would be beneficial to convert their surplus of stETH into a stablecoin in order to better prepare themselves for any changes in market circumstances that may result in higher operational expenditures.

The Most Unworkable State Law

The cryptocurrency industry has recently criticised a bill that was recently proposed in the Illinois Senate due to its “unworkable” intentions to compel blockchain miners and validators to perform “impossible things.” One example of this would be undoing transactions if a state court ordered them to do so.

The Senate Bill was surreptitiously submitted into the Illinois senate on February 9 by Illinois Senator Robert Peters. However, it does not seem that the community was aware of it until February 19, when Florida-based attorney Drew Hinkes mentioned it in a tweet.

The bill, which would give the courts the authority to alter or rescind a blockchain transaction that was carried out through the use of a smart contract, would be given the title “Digital Property Protection and Law Enforcement Act,” and it would give the courts this authority in response to a valid request from the attorney general or a state’s attorney that is made in accordance with the laws of Illinois.

Any “blockchain network that executes a blockchain transaction originating in the State” would be subject to the act if it were to become law.

When it comes to blockchain technology and cryptocurrencies, Hinkes referred to the proposed legislation as “the most impractical state law” he has ever seen.

“This is a shocking about-face for a state that was previously supportive of innovation. Instead, he tweeted that the state had enacted “probably the most impractical state legislation relating to cryptocurrency and blockchain I have ever seen.”

According to the provisions of the law, miners and validators on the blockchain might be subject to fines ranging from $5,000 to $10,000 for each day that they disobey the instructions of the court.

Hinkes said that it would be “difficult” for miners and validators to comply with the measure suggested by Senator Peters, despite the fact that he acknowledged the need of passing legislation that would increase consumer protection.

Hinkes was also surprised to learn that miners and validators who worked on a blockchain network that “has not adopted reasonably available processes” to comply with the court orders would have “no defense” open to them.

The law also seems to dictate that “any person utilizing a smart contract to supply goods and services” must include code in the smart contract that may be used to comply with court orders. This code can be used to ensure that the terms of the smart contract are followed.

“Any person utilizing a smart contract to supply goods or services in this State should incorporate smart contract code capable of implementing court orders respecting the smart contract,” is the full text of the law.

Other members of the bitcoin community have replied with derision of the measure in a manner similar to what was previously said.

On February 19, the crypto analyst “foobar” remarked to the 120,800 people who follow him on Twitter that court-ordered transactions would need to be changed “without having the private key” of the participants, which he found to be “hilarious.”

Slim Odds of Slashing and Best Practices to Avoid it

A fundamental developer of the Ethereum ecosystem said that since the debut of the Beacon Chain on December 1, 2020, there have only been 226 validators sliced out of a total of 524,060 validators, which is barely 0.04% of the total. This information was provided by the developer. Slashing happens when a validator breaks the rules that govern the proof-of-stake consensus. This often results in the removal of the validator from the network and the loss of a part of the Ether (ETH) that was pledged as collateral. The Ethereum core developer known as “Superphiz” pointed out these low cutting rates in a tweet on February 23. He said that staking ETH should not be a worry since the probabilities of having it slashed are very low.

In addition, Superphiz suggested a total of four up-and-coming best practices as a means of lowering the chance of being reduced even more. Because many slashings are the result of unsuccessful system migrations, one of these procedures is erasing any existing chain data on older staking machines and then reinstalling and reformatting the validator. Additionally, Superphiz advised use a technique known as “doppelganger identification,” which examines the validator’s keys to see whether or not they are operational before beginning the validation process.

The purpose of these steps is to make the process of staking ETH more safe and to convince users that the chance of having their stakes lowered is quite low. Staking Ethereum is an essential component of the Ethereum network since it contributes to the network’s overall security and offers a passive revenue opportunity to users who donate Ether. The move from a proof-of-work consensus algorithm to a proof-of-stake consensus algorithm is scheduled to take place as part of the next Ethereum 2.0 update. This change is expected to make staking ETH even more significant.

Users should have trust in staking their Ethereum (ETH) because to the low rate of slashing that occurs within the Ethereum ecosystem as well as the best practices that are advised by Superphiz. Users have the ability to further mitigate the risks associated with staking and contribute to the overall security of the Ethereum network by following the established best practices and taking the required safeguards.

Solana Network Experiences Slowdown in Block Production Following Upgrade

After an update to the validator software on February 25, the Solana network saw a decrease in the rate at which blocks were produced. Transactions were disrupted as a consequence of the event, which prompted validators to downgrade the software in an effort to restore network speed.

At around 6:00 AM (UTC), a technical problem began, which prompted validators to downgrade to version 1.13 in an attempt to get transactions back up throughout the network. However, the downgrade was not sufficient to return Solana to regular operations, and as a result, the decision had to be made to restart the network on version v1.13.6.

“A considerable delay in block production was reported by the network about the same time as an upgrade to the validator software was being implemented. The engineers are currently investigating the underlying reason of the problem “Noting Solana’s webpage for the compass

The problem is related to the upgrading from version 1.13 to version 1.14, which slowed down the process of finalizing blocks. The Solana network is in the process of being restarted, and in order for activities to continue, it is essential to have 80 percent of active stake online:

“As additional validators finish their restart, this number will climb in accordance with the amount of stake they have delegated: this implies that bigger validators such as CEX have a disproportionately high influence on restart timeframes.”

Within the first few hours after the issue was reported, Solana’s validators got together and brainstormed potential solutions to the problem. Infrastructure provider Chorus One pointed out in a Tweeter that the event “demonstrated how really decentralized the network is.” The first chorus continued: “If we didn’t have to spend so much time debating, we could get back up in an hour. However, every step along the route is up to controversy, including whether or not to downgrade, whether or not to restart, and whether to transition from an approach of downgrading to one of restarting. Voting occurs. In the end, it takes us between 8 and 10 hours to recuperate, rather than only 1.”

This is a developing story, and further information will be posted as it becomes available. Please check back for updates.

Rogue Validator Outsmarts MEV Bots, Resulting in a $25 Million Loss

In a recent incident, MEV bots attempting sandwich trades suffered a massive loss of $25 million in digital assets due to a rogue validator. The bots were trying to execute sandwich transactions, which involves intercepting a trader’s transaction to profit from it. However, as the bots began to swap millions, the reverse transactions were replaced by a validator who went rogue, resulting in significant losses.

The losses included $1.8 million in Wrapped Bitcoin (WBTC), $5.2 million in USD Coin (USDC), $3 million in Tether (USDT), $1.7 million in Dai (DAI), and $13.5 million in Wrapped Ether (WETH). At the time of writing, most of the funds had been transferred to three different wallets.

In a Twitter thread, blockchain security firm CertiK explained that the vulnerability was due to the centralization of power with validators. As the MEV bots tried to perform front-run and back-run transactions for profit, the rogue validator swooped in to back-run the MEV’s transaction, resulting in significant losses.

The attack highlights the risks associated with MEV bots, despite their potential to earn vast amounts of digital assets. MEV bots have become increasingly popular in the crypto market, as they can execute complex trading strategies with speed and accuracy. However, they are also vulnerable to hacks and exploits, as seen in previous incidents.

CertiK warned that this attack could affect other MEV searchers conducting strategies such as sandwich trading. The team noted that there is a possibility that MEV searchers may become wary of non-atomical strategies due to this exploit.

The CertiK team emphasized the need for greater decentralization to reduce the vulnerability of validators to such attacks. This incident underscores the importance of blockchain security and the need for continuous monitoring and upgrading of security protocols to prevent such incidents.

In conclusion, the attack on MEV bots attempting sandwich trades by a rogue validator resulted in significant losses of $25 million worth of digital assets. The vulnerability was due to the centralization of power with validators, highlighting the need for greater decentralization to reduce the risks associated with such attacks. This incident underscores the importance of blockchain security and the need for continuous monitoring and upgrading of security protocols to prevent such incidents.

Google Cloud Becomes Validator on Polygon's PoS Network

On September 29, 2023, Google Cloud made a significant move by joining Polygon’s Proof of Stake (PoS) network as a validator. The development was confirmed by both Polygon Labs and Google Cloud Singapore through their respective Twitter accounts. Google Cloud will utilize the same infrastructure that powers its flagship services, such as YouTube and Gmail, to contribute to the security and governance of Polygon’s network.

Google Cloud’s entry into Polygon’s PoS network is a milestone for multiple reasons. First, it adds a layer of institutional credibility to the network, which already boasts over 100 validators. Google Cloud is renowned for its high-quality, secure, and reliable services, making it a valuable addition to the validator set. This is particularly important for enhancing the security protocols for Heimdall, Bor, and Polygon PoS users.

In the Polygon PoS network, validators are entities that produce new blocks and confirm transactions. They play a crucial role in maintaining the network’s integrity and security. Validators are chosen based on the amount of MATIC tokens they have staked as collateral. The more MATIC staked, the higher the chances of being chosen to validate transactions and create new blocks.

Polygon’s PoS network has a diverse range of validators, each contributing to the network’s collective security and governance. According to the latest data from Polygon’s staking technology website, Staked leads with 47,714,780.75 MATIC staked. Infosys follows with 20,927,642.45 MATIC. Other notable validators include Ethermon Validator with 21,413,514.21 MATIC and Worldpay from FIS with 14,524,984.72 MATIC staked. Google Cloud’s stake is comparatively modest but significant, with 25,391.67 MATIC staked at a commission rate of 100%.

Polygon Labs has provided a dashboard accessible at Polygon’s staking technology website. This dashboard allows anyone to monitor the performance and checkpoint signatures of all validators, offering a transparent view into the network’s operations.

Fantom Foundation Lowers Staking Threshold to 50,000 FTM

The Fantom Foundation, overseeing the layer-1 blockchain network Fantom, has implemented a significant reduction in its validator staking requirement. This change, confirmed by the foundation in a January 15 post and following a governance vote concluded in June 2023, marks a strategic shift in Fantom’s approach to network security and decentralization.

Previously set at 500,000 FTM tokens, the staking threshold for validators on the Fantom network has been dramatically reduced by 90% to 50,000 FTM, equivalent to approximately $19,500 at current market rates. This move aims to enhance network security by increasing the number of validators, thereby making it more challenging for malicious actors to compromise the network.

The rationale behind this decision is grounded in the principle that a higher number of validators strengthens a decentralized network’s resilience against attacks. Validators on the Fantom network play a crucial role by bundling transactions and sharing them with other validators, with finality achieved once a consensus is reached by at least two-thirds of them. The foundation asserts that this increase in validators will expedite transaction validation without compromising network speed or security, maintaining the network’s 1-2 second time to finality.

In addition to enhancing security, this reduction in the staking requirement democratizes access to validator status, allowing more participants to contribute to the network’s operation. Despite this change, the foundation reassures that the network’s performance will not be impacted negatively, as the security and efficiency of transaction validation remain proportional to the amount staked by validators, rather than the sheer number of validators. Therefore, a larger validator with a higher stake holds equivalent power to several smaller validators with lesser stakes.

This initiative by the Fantom Foundation is not the first of its kind. The discussion around lowering the minimum FTM requirement for running a node began as early as February 2022. As of the latest data, Fantom’s network comprises 58 validators, a figure modest compared to larger networks like Ethereum, which boasts over 1.1 million validators.

Despite the positive implications for network security and decentralization, the recent changes have not significantly impacted FTM’s market performance. As of this writing, FTM’s price has seen a decline of 1.4% on the day, trading at $0.389. This decline is part of a broader trend, with FTM prices down 89% from their October 2021 peak.