TLDR Crypto 2024-04-02

L2s vs L3s 🚄, Vitalik on ‘The Purge’ 🧼, Binance’s recent struggles ⚖️

Markets & Business

MakerDAO proposes allocating $600 million worth of DAI into USDe (2 minute read)

DAI-issuer MakerDAO is considering adding $600 million DAI into Ethena’s yield-bearing USDe and sUSDe stablecoins via the Morpho lending protocol. It added an initial $100 million on March 29th, enhancing DAI yields with USDe’s funding rate arbitrage strategy. Some DAO members are hesitant to ramp up Maker’s exposure to the relatively new protocol so quickly, though the proposers maintain that the risk parameters are acceptably low.

Deep Dive into Binance’s recent struggles (3 minute read)

Binance is struggling with regulatory issues as multiple countries, including France, the Netherlands, Belgium, and Nigeria, have taken legal action against the exchange for operating without proper authorization. The Nigerian complaint, centered on allegations of money laundering and financial instability, escalated with the detention and escape of a Binance executive. This regulatory scrutiny highlights a pattern of Binance prioritizing expansion over adherence to security and compliance standards, which could lead to increased legal challenges and a push for tighter regulations on crypto exchanges.
Innovation & Launches

Reward curve with tempered issuance: EIP research post (22 minute read)

Ethereum researcher Anders Elowsson outlines the reasoning behind moderating Ethereum staking reward issuance. The idea is to use a curve that gradually decreases staking rewards as the amount of staked ETH increases beyond what is seen as a sufficient level. Though it may seem controversial, the argument is that Ethereum only needs so much security before paying validators becomes redundant. Elowsson argues there should be more non-staked than staked ETH to ensure the network stays neutral.

BSX, a CLOB perp exchange launches on Base (2 minute read)

BSX is a trading platform for highly liquid perps. It aims to offer DeFi traders a CEX-like trading experience with instant execution, transparent pricing, and liquidity. The platform is advised by Arthur Hayes, the founder of cryptocurrency exchange BitMEX.
Guides & Resources

Verifiable Computing Narrative Explained (6 minute read)

This thread explains the premise of verifiable computing and compares it to a GPU for smart contracts. Verifiable computing enables the execution of complex tasks like computing ML models while retaining the benefits of trustless execution that blockchain provides. There are two approaches: the first uses a network of nodes to perform an off-chain computation and prove it on-chain using zero knowledge proofs, while the second is to build specific ZK coprocessor hardware that can efficiently handle verifiable computation.

Vitalik on next steps in the Purge (5 minute read)

Vitalik Buterin breaks down the next steps in the “Purge” – the plan to simplify the Ethereum protocol. The idea of the Purge is to remove complexity caused by underutilized opcodes and precompiles, consequently adding security guarantees. One significant upcoming change is EIP-4444, which removes Ethereum blocks from nodes after a certain time, similar to blobs today. These upgrades will make client development easier and node operation more achievable.

Why L3s? (2 minute read)

Offchain Labs/Arbitrum co-founder Steven Goldfeder explains the value of Layer 3s. Layer 3s reduce the onboarding cost compared to L2s since they do not require L1 bridging transactions or transfers. Similarly, chain operators have the benefit of significantly lower fixed costs to post to an L2 like Arbitrum instead of to Ethereum, especially during times of lower L3 use. This allows L2s like Arbitrum to eventually become settlement layers for an ecosystem of Layer 3s.

Polygon Labs CEO says L3s take value away from Ethereum (2 minute read)

Polygon Labs CEO Marc Boiron criticizes L3 networks, claiming they exist mainly to siphon value from Ethereum, jeopardizing its value and network security. He suggests that if L3 networks consolidate their transactions onto a single L2 platform, Ethereum may lose transaction fees, reducing the incentive for validators to secure the network, potentially devaluing Ether and threatening Ethereum’s economic future.
Quick Links

Telegram enables ad purchases and revenue sharing via Toncoin (2 minute read)

Channel owners with over 1,000 subscribers will get half of the ad revenue, with future options to withdraw rewards through the Telegram-affiliated Fragment platform or to reinvest in various Telegram services.

Vitalik writes about “Degen Communism” (6 minute read)

"Degen communism" is a new political ideology that embraces the chaos and dynamism of markets and social media while tweaking rules to align outcomes with the common good.

A summary of the discourse on L2s/L3s (3 minute read)

L3s have similar risks as L2s, which have a single centralized sequencer that is able to censor transactions, but they sit on top of an L2, whereas L2s sit on a decentralized and censorship-resistant L1.

The first deal closes on Echo, raising $300,000 for Ethena (1 minute read)

Echo users are now able to create invite-only groups and restrict deal access to certain members.
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