In the arena
When people on crypto Twitter are not thinking about the Roman Empire or tokenizing Uranium, they spend their time on SocialFi these days. The combination of finance and social has become popular ever since the launch of Friend.Tech. And as usual, when one thing succeeds, it won't be long until it's copied. Enter Stars Arena, a Social media platform built on Avalanche where one can buy friends' shares to access their chat rooms.
People on Avalanche were bored enough to pile in troves into this new platform, probably hoping for free money. As a result, Avalanche hit a high of 585,000 transactions/day, and its token price increased by 4%.
Things took a turn when an exploiter attacked the platform, draining $3 million in user funds. It's hard to say what's worse. The fact that the team managed to introduce a vulnerability in a contract that was perfectly fine (FriendTech) or the way they responded to the attack with a declaration of war.
The response of Avalanche founder Emir wasn't much better.
It's one thing to point out that the team has the funds to plug the hole, but another to downplay the exploit itself. In the end, Stars Arena found the money to make people whole again and announced they'd re-open after a security audit.
Takeaway: Not every fork of something that is successful will succeed. Also, don't trust a company that only audits after getting hacked.
Bitcoin Mining gone volcano 🌋
Remember the days when El Salvador was all over crypto news because they were the first to make Bitcoin legal tender? It was followed by the suggestion of Bitcoin Island, a sanctuary for Bitcoiners who could live there without interference from normies or the obligation of taxes. While I'm still waiting for a bunch of Bitcoiners to move to that active volcano island, El Salvador has moved on to better things. Mainly Bitcoin mining with clean energy.
The local renewable energy firm Volcano Energy has partnered with the mining software provider Luxor Tech to create the first mining pool in the country that leverages geothermal energy to mine Bitcoin. This is part of a broader effort to integrate Bitcoin into the energy infrastructure, where miners function as a buyer of first and last resort.
Volcano Energy has pledged to mine via Luxor and will contribute 23% of its income to the government. The government then wants to use profits to invest in infrastructure and boost economic growth.
Takeaway: It is quite ironic for a "self-sovereignty" currency to now be used by corrupt governments to prop up its earnings. On the bright side, at least they are using renewable energy and not coal.
Optimism Fraud Proofs
Because Ethereum didn't scale to the level of demand, we're now blessed with an ever-growing number of rollups and layer-2s. Optimism has been a main contender in that arena, with its OP stack now powering BASE and many other apps.
However, so far, it has operated on a "trust me bro" basis. Optimistic rollups simply assume that transactions are valid by default - opening them up to fraudulent activity. To prevent that from happening, Fraud proofs exist.
When introduced, they enable users to question the veracity of transfers. OP has just released its fraud-proof system, which combines a dispute game protocol, a fraud-proof program, and a fault-proof virtual machine to challenge malicious actors.
Once launched, anyone can participate in the dispute game and challenge transactions. It's another step toward being more permissionless and enables trustless transfers between L1 and L2. However, just because fraud proofs are live doesn't mean they'll be used, as the example of Arbitrium illustrates.
Takeaway: For now, pretty much all L-2s are controlled by centralized teams who hold the upgrade key, enabling them to make changes to the protocol. Maybe it was never about trustless but about trusting less.
Also happening onchain: Dating. For the last week, the team at unlonely has been streaming its live dating show featuring popular X shitposters accumulating 1000s of viewers. Turns out that crypto people are really into a little bit of voyeurism, online cringe, and anything that allows them to bet on outcomes. If you too want to be entertained, sign up for the streams: https://lu.ma/loveonleverage 💞
At the same time, Kelly is also looking for a boyfriend, and relies on the Boys Club DAO to help her vet candidates. Dating, the next frontier of onchain activities.
Fact: Did you know that Lava from Volcanoes creates new land? Our continents would all be smaller hadn't it been for these fire-spitting mountains; in fact, the majority of Earth's surface is volcanic rock.
- Naomi from CoinJar
UK residents: Don’t invest unless you’re prepared to lose all the money you invest. This is a high‑risk investment and you should not expect to be protected if something goes wrong. Take 2 minutes to learn more: www.coinjar.com/uk/risk-summary.
Cryptoassets traded on CoinJar UK Limited are largely unregulated in the UK, and you are unable to access the Financial Service Compensation Scheme or the Financial Ombudsman Service. We use third party banking, safekeeping and payment providers, and the failure of any of these providers could also lead to a loss of your assets. We recommend you obtain financial advice before making a decision to use your credit card to purchase cryptoassets or to invest in cryptoassets. Capital Gains Tax may be payable on profits.
CoinJar’s digital currency exchange services are operated in Australia by CoinJar Australia Pty Ltd ACN 648 570 807, a registered digital currency exchange provider with AUSTRAC; and in the United Kingdom by CoinJar UK Limited (company number 8905988), registered by the Financial Conduct Authority as a Cryptoasset Exchange Provider and Custodian Wallet Provider in the United Kingdom under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, as amended (Firm Reference No. 928767).